Norges Bank, Norway’s central bank, which manages the $1.03 trillion Government Pension Fund of Norway, has added rubber producer Halcyon Agri Corp to the fund’s list of excluded investments for being “responsible for serious environmental damage.”
The decision by the bank’s executive board to exclude the company were based on a recommendation from its Council on Ethics.
Halcyon Agri produces specialized products made of natural rubber and owns rubber plantations and processing plants in Cameroon, Ivory Coast, and Malaysia. At the end of 2017, the fund owned the equivalent of 0.1% of Halcyon’s shares, worth NOK5.5 million ($645,000).
The ethics council’s assessment relates to the Halcyon’s rubber plantations in Cameroon, where it holds three concessions covering a total of 366 square miles, and is in the process of converting tropical forest into plantations. According to the council, Halcyon’s concessions lie in a region of uniquely rich biodiversity, and is home to more than 20 species on the International Union for the Conservation of Nature (IUCN) Red List of Threatened Species.
Additionally, it said two of the concessions comprise dense rainforest and freshwater swamp forest, and share a 20.5 mile boundary with the Dja Faunal Reserve, a UNESCO World Heritage Site.
“Plantation farming could damage the Dja Faunal Reserve’s unique standing as a world heritage site, particularly due to the substantial influx of workers,” said the ethics council in its recommendation. “Halcyon has not substantiated that the measures it has implemented will be sufficient to remedy this.”
The council concluded in its investigation that the scale of deforestation “in an area of exceptionally rich and unique biodiversity and many endangered species,” as well as the risk that the operation will harm a world heritage site, qualify as serious environmental damage.
“The measures that the company has implemented will almost certainly be insufficient to reduce the environmental damage caused by plantation farming,” said the council. “There is also a risk that the areas which the company has actually set aside for the protection of endangered species are too small and fragmented to maintain viable populations of such species.”
Norges Bank said that before deciding to exclude a company, it considers whether the use of other measures, such as the exercise of ownership rights, may be better suited. However, the bank’s executive board decided that it is not appropriate to use other measures with Halcyon.
“Conversion to plantation use will lead to irreversible changes in the ecosystems contained within an area of exceptionally rich biodiversity and in which many endangered species live, qualifies as serious environmental damage,” said the council.