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Wednesday, July 17, 2024

Oil fund helped curb child labor

The financial muscle of Norway’s so-called “oil fund,” one of the world’s largest pension funds, has helped convince several major companies to curb their use of child labor. Instead of just selling off its holdings in firms like Monsanto, fund officials reportedly pressured them into re-examining their practices.

“Norway can be proud,” Kjersti Fløgstad of Unicef Norge told newspaper Dagens Næringsliv . “Through active ownership, the oil fund managed to set an important standard for how companies should be run.”

The child labor trouble began three years ago, when news emerged that US-based Monsanto had allowed the use of children as young as eight to work 14 hours a day to produce seeds in India. Many of the children were orphans, and were exposed to dangerous chemicals.

Norway’s oil fund, formally called Statens pensjonsfond utland , had invested around NOK 1.5 billion in Monsanto and is known for selling off its stakes in firms that don’t meet Norway’s ethical standards. The fund made headlines a few years ago, for example, when it threatened to dump stock in Wal-Mart over the retailer’s labor practices.

Finance Minister Kristin Halvorsen, who has ultimate responsibility for the oil fund, urged fund managers to instead try complaining to Monsanto, and urging the company in turn to improve its practices.

Today, Monsanto and three other major firms in its field — Bayer, Syngenta and DuPont — have agreed to oppose use of child labor within seed production. The companies have agreed to meet a new industry standard that aims to eliminate child labor among suppliers and other firms within the seed sector.

“This is a major breakthrough in our efforts to fight child labor,” Yngve Slyngstad (photo, above) told Dagens Næringsliv . “We believe in maintaining a dialogue with companies and now we’ve won some concrete results.”

Anne Kvam leads the oil fund’s division for managing its ownership stakes and says the dialog with Monsanto was positive. “We are a relatively large, persistent and patient owner,” Kvam said. “Therefore they listened to us.”

She also thinks dialog is a better strategy than exclusion. “I want us to try influencing the companies instead of just selling out,” Kvam said. “That wouldn’t solve the problems or lead to less child labor.”

Norway’soil fund also recorded solid gains againthis week, after logging heavy losses when stock markets crashed late last year.



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