= 2nd UPDATE: Norway Fund Pulls Investment In Norilsk Nickel
NLKNY | Quote | Chart | News | PowerRating -- (Adds response from Norilsk Nickel.)
By Elizabeth Adams
Of DOW JONES NEWSWIRES
Norway's Finance Ministry said Friday it has excluded Russia's Norilsk Nickel (GMKN.RS) from the country's vast global pension fund portfolio on the grounds it has breached the fund's environmental guidelines.
"The [fund's] council on ethics finds it probable that Norilsk's operations are contributing to extensive environmental damage that will have effects far into the future. This is...in breach of the ethical guidelines for the Fund," the Ministry said.
The decision was made after an assessment of Norilsk Nickel's Polar Division on the Taymyr Peninsula in Siberia which showed many years of heavy sulfur dioxide and heavy metals emissions have inflicted "extensive, lasting damage on the environment."
Emissions from the company has destroyed forest and vegetation and led to deteriorate water quality in the area surrounding Norilsk's operations, the ethics council said. It also pointed to health problems and illnesses among people around unit who have been subjected to prolonged SO2, nickel and heavy metals exposure.
A spokesman for Norilsk Nickel said the company's leaders understand the problems are serious.
"They are doing their best to solve them but it takes time to implement programs," he said, adding the company is currently in the process of modernizing operations at the Polar and Kola division aimed at reducing "unfriendly" emissions in water and air.
"Some production processes aren't as modern as we would like. We are doing our best to modernize," the spokesman said.
Information was obtained by the fund's ethics council from a wide range of sources, including the company, Russian authorities and U.N. and World Bank studies.
Norway's Finance Ministry said Norilsk Nickel responded to its own enquiry acknowledging the severe environmental damage and saying it believed an action plan to reduce emissions to 2015 is a success. But the council said the targets are unrealistic, and it "does not regard it as probable that the extensive emissions reductions that are necessary to reduce serious harm to the environment and human health will take place in the near future."
It has therefore sold its stake in the company as of Oct. 31 2009.
Finance Ministry Web site: www.regjeringen.no
-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386; elizabeth.adams@dowjones.com (Devon Maylie in London contributed to this article.)
(END) Dow Jones Newswires
11-20-09 0625ET
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