Norway fund drops Page Inds. over human rights breach risk

Norway's $1 trillion wealth fund said it had excluded Taiwan's Formosa Chemicals and Fibre, Formosa Taffeta and India's Page Industries from its portfolio, saying they posed an "unacceptable risk for violation of human rights".

The world's largest sovereign wealth fund sells holdings before announcing such exclusions to avoid excessive market moves.

Formosa Chemicals and Fibre declined to comment. An official reached by telephone at Formosa Taffeta said the company was closed for the day. Page Industries was not immediately reachable for comment.

In recent years, the fund, which operates under guidelines established by the Norwegian parliament, has focused on working conditions in textile factories in Asia, excluding companies it thinks pose an ethical risk to its investments.

Set up in 1996 to preserve Norway's oil revenues for future generations, the fund holds around 1.5 per cent of globally listed shares and its decisions are often followed by other investors.

At the end of 2019, NBIM held a 0.84 per cent stake in Formosa Chemicals & Fibre, valued at $144 million, and a 0.64 per cent stake in Formosa Taffeta valued at $12.2 million.

The stake in Page Industries at that time stood at 0.42 per cent, with a market value of $15.4 million.

The fund said in the statement that its management will also scrutinise oil firm PetroChina's work, engaging in active ownership in the hope of boosting the company's anti-corruption practices.

PetroChina had been under observation for possible exclusion since 2017 and had not responded to inquiries from the fund's ethics watchdog, the Council on Ethics, Norges Bank said.

The board of the Norwegian central bank, which manages the fund, concluded "active ownership" was therefore appropriate.