Norway’s wealth fund ditches 33 palm oil firms over deforestation

A truck carrying oil palm fruits passes through Felda Sahabat plantation in Malaysia. (Reuters)
Updated 28 February 2019
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Norway’s wealth fund ditches 33 palm oil firms over deforestation

  • Norway’s Government Pension Fund Global (GPFG) sold stakes in more than 60 companies due to deforestation — including 33 firms involved in palm oil
  • As the world’s most widely used edible oil, palm oil is found in everything from margarine to biscuits and soap to soups, as well as in biofuel

KUALA LUMPUR: Norway’s $1 trillion sovereign wealth fund, the world’s largest, has pulled out of more than 33 palm oil companies over deforestation risks during the last seven years, a green group said on Thursday.
Norway’s Government Pension Fund Global (GPFG), which released its annual report on Wednesday, sold stakes in more than 60 companies due to deforestation — including 33 firms involved in palm oil — Rainforest Foundation Norway said.
“It’s great to see that the GPFG is taking action against deforestation,” Vemund Olsen, a senior policy adviser at the Oslo-based group said on Thursday.
“The divestments should be seen as a warning shot to those investors and companies still involved in deforestation,” Olsen, whose group has monitored the GPFG’s investments since 2010, told the Thomson Reuters Foundation.
As the world’s most widely used edible oil, palm oil is found in everything from margarine to biscuits and soap to soups, as well as in biofuel.
But in recent years, the industry has come under close scrutiny from green activists and consumers, who have blamed it for clearing forests for plantations and causing fires, along with the exploitation of workers.
Green groups have often accused Norway of double standards by investing billions of dollars in palm oil or soya farmers while also giving cash to nations from Brazil to Indonesia to slow deforestation.
Norway signed a $1-billion deal with Indonesia to help protect its tropical forests in 2010, and the first payment for reduced emissions was agreed last week.
Since 2012, the GPFG has become a more active shareholder and now pushes sustainability and ethics among its investments and drops firms that fail to meet its standards.
Marthe Skaar, spokeswoman at Norges Bank Investment Management, which manages the fund, confirmed that more than 60 divestments had been made due to deforestation risks, including 33 palm oil firms, since 2012.
Divestments in two palm oil companies happened as recently as last year, said Skaar, adding that the fund does not disclose the names of such companies. Most palm oil is grown in Indonesia and Malaysia.
In a report released earlier this month, GPFG said that it engages with companies it owns stakes in to push them to cut their ties to deforestation.
It is currently asking banks in Indonesia, Malaysia and Brazil to adopt no deforestation criteria for their loans to the agricultural sector, the report said.
“The GPFG has realized that deforestation reduces its long term returns on investments,” says Olsen.
“It’s increasingly clear that companies involved in deforestation, directly or through their supply chains, are a major liability to investors.”


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
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Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.