Norway’s US$1 trillion wealth fund said it had excluded Taiwan’s Formosa Chemicals & Fibre Corp (FCFC, 台灣化纖) and Formosa Taffeta Co (福懋興業) along with India’s Page Industries Ltd 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.
FCFC declined to comment, while an official reached by telephone at Formosa Taffeta said that it was closed for the day.
Page Industries was not immediately reachable for comment.
In the past few 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 managed by Norges Bank Investment Management (NBIM) holds about 1.5 percent of globally listed shares and its decisions are often followed by other investors.
At the end of last year, NBIM held a 0.84 percent stake in FCFC, valued at US$144 million, and a 0.64 percent stake in Formosa Taffeta valued at US$12.2 million.
The stake in Page Industries at that time stood at 0.42 percent, with a market value of US$15.4 million.
The fund said that its management would also scrutinize oil firm PetroChina Co’s (中國石油天然氣) work, engaging in active ownership in the hope of boosting the firm’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 bank’s board concluded that “active ownership” was therefore appropriate.
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