Hypocrisy too weak a word for Norway fund’s oilsands divestment
On Wednesday, it was announced by Norway’s sovereign wealth fund that it had divested from four large Alberta companies involved in the oilsands.
Canadian Natural Resources Ltd., Cenovus Energy Inc., Suncor Energy Inc., and Imperial Oil
Ltd. were excluded by the Norges Bank Investment Management after its “Council on Ethics recommended to exclude the companies because of carbon emissions from production of oil to oil sands. (sic) It is the first time this criterion is being applied.”
That same day, my Postmedia colleague Chris Varcoe asked Alberta Premier Jason Kenney to comment on this latest blow to Alberta during the daily COVID-19 media briefing.
“To be blunt,” said Kenney, “I find that incredibly hypocritical. That entire sovereign fund owes its genesis to oil revenues coming from the North Sea reserves of Norway. It’s the pot calling the kettle black in this instance. Norway is actually engaged in exploring to develop new, massive, offshore fields to increase their production of oil.
“This, I think, underscores the hypocrisy that lies at much of the ESG discourse that’s going on,” he said referring to the environmental, social and governance factors that are used to measure the sustainability and societal impact of an investment.
Well, it’s unlikely that even Kenney knew just how hypocritical this divestment decision is and how truly unethical many of its investments truly are.
According to the Canadian Energy Centre, Norges Bank’s investments in those four Canadian oilsands companies as of 2019 totalled US$1.2 billion. By comparison, Norges Bank has US$42 billion in equity holdings in countries designated “Not Free” by Freedom House.
“Norges Bank’s overall equity holdings in Canada were $17.8 billion compared to $35.9 billion in China, $3.6 billion in Russia, and $2.5 billion in other Not Free countries,” including United
Arab Emirates ($888 million), Egypt ($530 million), Saudi Arabia ($415 million), Vietnam, Qatar, Oman and Bahrain.
“Norway’s investments in autocracies and dictatorships are twice its investments in Canada,” states the CEC fact sheet.
Canada gets a lofty ranking of 98 out of 100 by Freedom House, a U.s.-based not-for-profit that ranks countries by how free they are. China scored a measly 10 points and actually received a score of minus one on political rights. Russia received just 20 points.
Saudi Arabia got the lowest score of just seven out of this dubious grouping of countries; Bahrain scored 11, the UAE 17, Vietnam 20, Egypt 21, Oman 23 and Qatar 25.
One has to wonder what the Norges Bank’s council on ethics does for fun? Its ethically based decisions amount to holding a party and kicking out the guy with some tar on his shoes but opening the doors wide to a motley crew with blood all over their hands.
Freedoms measured by Freedom House include rule of law, civil liberties, freedom of expression and belief, political pluralism, political rights, personal autonomy and individual rights.
“Norges Bank has justified its exclusion of Canadian oilsands companies that emit carbon emissions, based on its Council of Ethics recommendations. Norges Bank has thus turned a technological challenge — reducing carbon emissions — into a moral and ethical matter, while it concurrently continues to invest in nations that rank poorly on multiple freedom measurements, freedoms that Norwegians and Canadians take for granted.”
The CEC points out that “Freedom House notes that ‘China’s authoritarian regime has become increasingly repressive in recent years. The ruling Chinese Communist Party (CCP) is tightening its control over the state bureaucracy, the media, online speech, religious groups, universities, businesses, and civil society associations,’ and gives China a score of minus one out of 40 on political rights and 11 out of 60 on civil liberties.”
The CEC also says that when it comes to Saudi Arabia, Transparency International notes that “almost total opacity in public accounting prevents ordinary Saudis from understanding how much of the state income generated by massive oil revenues ends up as private wealth for the royal family and its clients.”
Also, a 2019 United Nations commission that investigated the murder of Jamal Khashoggi, a Saudi-born Washington Post journalist in Turkey, concluded that his murder “constituted an extrajudicial killing for which the State of the Kingdom of
Saudi Arabia is responsible” and where Freedom House notes the country’s “absolute monarchy restricts almost all political rights and civil liberties.”
This divestment for those four Alberta companies is undoubtedly a blow at a time when Alberta
Norway’s investments in autocracies and dictatorships are twice its investments in Canada.
is already down in the ditch, but frankly, that fund keeps pretty lousy company.
The plan by Norges Bank to divest from energy companies with holdings in the oilsands “is based on categorizing carbon emissions as an ‘ethical’ issue as opposed to a technological challenge to be solved. In so doing, and as Norges’ own investment decisions indicate, it looks to have ignored the longstanding, obvious ethical issues that implicitly exist with investments in countries such as Russia, China, Saudi Arabia and others ranked as ‘Not Free’ and whose injuries to civil and political rights are a matter of record,” concludes the CEC.
In short, this kind of moral and ethical dissonance needs a new word. Hypocrisy just doesn’t cut it.