Norway Wealth Fund Drops G4S on Gulf Migrant-Worker Abuses
Bloomberg
Published Nov 14, 2019 05:58
Norway Wealth Fund Drops G4S on Gulf Migrant-Worker Abuses
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Norway’s sovereign wealth fund has dropped U.K. security firm G4S Plc (LON:GFS) from its portfolio, citing abuses of migrant-worker rights in Qatar and the United Arab Emirates.
The central bank in Oslo, which manages the $1.1 trillion fund, said it took the step “due to unacceptable risk that the company contributes to or is responsible for serious or systematic human rights violations,” according to a statement on Thursday.
Shares in G4S (CSE:G4S) dropped as much as 3.7% in London trading. The fund held a 2.33% stake in G4S at the end of 2018, valued at the time at about $91 million. The fund’s policy is to sell shares in a company before an exclusion announcement is made.
G4S (CSE:G4S) couldn’t immediately comment, but said it was preparing a statement.
The decision to exclude G4S (CSE:G4S) follows a recommendation from Norway’s Council of Ethics, which said it had assessed the company’s operations in the two Gulf countries, where it employs about 18,000 migrant workers from countries including India, Pakistan and Nepal.
The investigation showed that workers paid recruitment fees to be able to work for G4S (CSE:G4S), that a substantial part of their salaries went to pay debt related to those fees, and that many were paid less than agreed. In the Emirates, workers saw their passports confiscated, the Council said. The probe also revealed that workers were exposed to long days, no overtime compensation and instances of harassment.
The Council said in its report that G4S (CSE:G4S) had itself acknowledged the risk of human rights abuses and was setting a cap on recruitment fees. But it hasn’t indicated it would end the practice altogether, or taken any measures to prevent misleading information about wages or working conditions, the report said.
Norway’s wealth fund, the world’s biggest of its kind, is managed according to a set of ethical principles. It’s barred from investing in tobacco and certain kinds of weapons, as well as in companies responsible for serious environmental damage or human rights abuses. The investor currently has 156 companies on its exclusion list.
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(Updates with G4S (CSE:G4S) statement pending in fourth paragraph, details from report)
Written By: Bloomberg
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