The Government Pension Fund of Norway 590083 225622146 2008-07-14T16:32:00Z 194.248.134.162 /* Debate */ '''The Government Pension Fund of Norway''' comprises two entirely separate [[sovereign wealth fund]]s owned by the [[Government of Norway]]: * The Government Pension Fund - Global (formerly The Government Petroleum Fund) * The Government Pension Fund - Norway (formerly The National Insurance Scheme Fund) ==The Government Pension Fund - Global== '''The Government Pension Fund - Global''' ({{lang-no|Statens pensjonsfond - Utland}}) is a [[fund]] where the [[surplus]] [[wealth]] produced by [[Norway|Norwegian]] [[petroleum]] income is put<!-- Any chance we could link/otherwise explain where the non-surplus stuff is spent? One is naturally curious what percentage of petroleum sales goes into the fund and what to other things.-->. The fund changed name in January 2006 from its previous name ''The Petroleum Fund of Norway''. The fund is commonly referred to as ''The Petroleum Fund'' (Norwegian: ''Oljefondet''). As of the valuation in June [[2007]], it is the largest pension fund in Europe and the second largest in the world <ref>{{cite web |url=http://www.pensionfundsonline.co.uk/statistics/statistics.aspx |author=Pension Funds Online |title=Statistics}}</ref> with a value of [[Norwegian krone|NOK]] 1.939 [[1000000000000 (number)|trillion]], although it is not actually a pension fund as it derives its financial backing from oil profits and not pensions. The purpose of the petroleum fund is to invest parts of the large surplus generated by the Norwegian [[petroleum industry|petroleum sector]], generated mainly from taxes of companies, but also payment for license to explore as well as the [[State's Direct Financial Interest]] and dividends from partly state-owned [[StatoilHydro]]. It is predicted that revenue from the petroleum sector is now in its peak period and will decline over the next decades. The Petroleum Fund was established in 1990 after a decision by the legislature assembly [[Storting]] to counter the effects of the forthcoming decline in income and to smooth out the disrupting effects of highly fluctuating oil prices. The fund is administered by '''Norges Bank Investment Management''' (NBIM), a part of the [[Norges Bank|Norwegian Central Bank]]. It is currently the largest pension fund in [[Europe]] and similar in size to the [[California]] public-employees pension fund ([[CalPERS]]), the largest public pension fund in the [[United States]]. NBIM forecasts that the fund will reach NOK 3.044 trillion by the end of [[2009]]. Since [[1998]] the fund has been allowed to invest up to 50% of its portfolio in the international [[stock market]]. ===Debate=== Due to the large size of the fund relative to the low number of people living in Norway (4.7 million people in 2006), the ''Petroleum Fund'' has become a hot political issue, dominated by three main issues. * Whether the country should use more of the petroleum revenues on the [[State budget of Norway|state budget]] instead of saving the funds for later. The main matter of debate is to what degree increased government spending will increase [[inflation]]. * Whether the high exposure (around 40% in 2003) to the highly [[volatility|volatile]], and therefore [[Investment risk|risky]], stock market is financially safe. Others claim that the high differentiation and extreme long term of the investments will dilute the risk and that the state is losing considerable amounts of money due to the low investment percentage in the stock market. * Whether the investment policy of the Petroleum Fund is [[ethics|ethical]]. ===The Ethical Council=== Part of the investment policy debate is related to the discovery of several cases of investment by ''The Petroleum Fund'' in highly controversial companies, involved in businesses such as [[weapon|arms]] production and [[tobacco]]. The Petroleum Fund’s Advisory Council on Ethics was established [[November 19]], [[2004]] by royal [[decree]]. Accordingly, the Ministry of Finance issued a new regulation on the management of the Government Petroleum Fund which also includes ethical guidelines. ===Excluded companies=== The following companies have been excluded from the Government Pension Fund of Norway due to activities in breach of the Ethical Guidelines <ref>{{cite web|title=NBIM Annual Report 2007 |url=http://www.norges-bank.no/Upload/NBIM/Reports/2007%20Part4.pdf |author=[[Norges Bank]]}}</ref> {| class="wikitable" style="font-size:95%;" ! Company ! HQ ! Date of exclusion ! Reason |- | [[Alliant Techsystems|Alliant Techsystems Inc]] | {{USA}} | June 30, 2005 | Production of components to cluster munitions<ref name=eight>{{cite web |url=http://www.regjeringen.no/nb/dokumentarkiv/Regjeringen-Bondevik-II/Finansdepartementet/234231/234458/atte_nye_selskaper_utelukket_fra.html?id=256666&epslanguage=NO| title=Åtte nye selskaper utelukket fra Petroleumsfondet |author=[[Norwegian Ministry of Finance]] |date=2005-09-02 |language=Norwegian}}</ref>. |- | [[BAE Systems|BAE Systems Plc.]] | {{UK}} | October 11, 2005 | Production of nuclear missiles to the French Air Force through the company [[MBDA]]<ref name=uttrekk>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2006/Uttrekk-av-selskaper-fra-Statens-pensjonsfond---Utland.html?id=103778&epslanguage=NO| title=Uttrekk av selskaper fra Statens pensjonsfond - Utland |author=[[Norwegian Ministry of Finance]] |date=2006-01-05 |language=Norwegian}}</ref>. |- | [[Boeing|Boeing Company]] | {{USA}} | October 11, 2005 | Maintenance of ICBMs to the U.S. Air Force<ref name=uttrekk/>. |- | [[DRD Gold Limited]] | {{ZAF}} | January 29, 2007 | Serious environmental damage<ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2007/Gruveselskap-utelukkes-fra-Statens-pensj.html?id=462551&epslanguage=NO| title=Gruveselskap utelukkes fra Statens pensjonsfond - Utland på grunn av medvirkning til alvorlig miljøskade |author=[[Norwegian Ministry of Finance]] |date=2007-04-11 |language=Norwegian}}</ref>. |- | [[EADS|European Aeronautic Defence and Space Company EADS N.V.]] | {{FRA}}/<br>{{GER}}/<br>{{NED}} | June 30, 2005 | Production of components to cluster munitions<ref name=eight> and production of nuclear missiles to the French Air Force through the company [[MBDA]]<ref name=uttrekk/>. |- | [[Finmeccanica|Finmeccanica Sp.A.]] | {{ITA}} | October 11, 2005 | Production of nuclear missiles to the French Air Force through the company [[MBDA]]<ref name=uttrekk/>. |- | [[Freeport-McMoRan|Freeport McMoRan Copper & Gold Inc.]] | {{USA}} | March 28, 2006 | Serious environmental damage<ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2006/To-selskaper---Wal-Mart-og-Freeport---trekkes-ut-av-Statens-pensjonsfond---Utland.html?id=104384&epslanguage=NO| title=To selskaper - Wal-Mart og Freeport - trekkes ut av Statens pensjonsfond - Utland |author=[[Norwegian Ministry of Finance]] |date=2006-06-06 |language=Norwegian}}</ref>. |- | [[GenCorp|GenCorp Inc]] | {{USA}} | November 15, 2007 | Production of nuclear weapons<ref name=vapen>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2008/En-klasevapenprodusent-og-to-kjernevapen.html?id=496485 |author=[[Norwegian Ministry of Finance]] |title=En klasevåpenprodusent og to kjernevåpenprodusenter utelukket fra Statens pensjonsfond - Utland |date=2008-01-11 |language=Norwegian}}</ref>. |- | [[General Dynamics|General Dynamics Corporation]] | {{USA}} | June 30, 2005 | Production of components to cluster munitions<ref name=eight/>. |- | [[Hanwha|Hanwha Corporation]] | {{KOR}} | May 15, 2007 | Production of cluster munitions<ref name=vapen/>. |- | [[Honeywell|Honeywell International Inc.]] | {{USA}} | October 11, 2005 | Simulations of nuclear explosions<ref name=uttrekk/>. |- | [[L-3 Communications|L3 Communications Holdings Inc]] | {{USA}} | June 30, 2005 | Production of components to cluster munitions<ref name=eight/>. |- | [[Lockheed Martin|Lockheed Martin Corp]] | {{USA}} | June 30, 2005 | Production of components to cluster munitions<ref name=eight/>. |- | [[Northrop Grumman|Northrop Grumman Corp.]] | {{USA}} | October 11, 2005 | Maintenance of ICBMs to the U.S. Air Force<ref name=uttrekk/>. |- | [[Poongsan Corporation]] | {{KOR}} | September 30, 2006 | Production of cluster munition <ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2006/Sorkoreansk-klasevapenprodusent-utelukket-fra-Statens-pensjonsfond-Utland.html?id=437728&epslanguage=NO| title=Sørkoreansk klasevåpenprodusent utelukket fra Statens pensjonsfond - Utland |author=[[Norwegian Ministry of Finance]] |date=2006-12-06 |language=Norwegian}}</ref>. |- | [[Raytheon|Raytheon Company]] | {{USA}} | June 30, 2005 | Production of components to cluster munitions<ref name= eight/>. |- | [[Safran|SAFRAN SA]] | {{FRA}} | October 11, 2005 | Production of nuclear missiles to the French Navy<ref name=uttrekk/>. |- | [[Serco Group|Serco Group Plc]] | {{UK}} | November 15, 2007 | Maintenance of British nuclear weapons through the [[Atomic Weapons Establishment]]<ref name=vapen/>. |- | [[ST Engineering|Singapore Technologies Engineering]] | {{USA}} | March 22, 2002 | Production of anti-personnel landmines<ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/tema/andre/Etiske-retningslinjer/historikk/Notat-2-av-220302-Om-investeringer-i-Singapore-Technologies-Engineering-.html?id=413441&epslanguage=NO| title=Petroleumfondets Folkerettsråd - Notat til Finansdepartementet |author=[[Norwegian Ministry of Finance]] |date=2002-03-22 |language=Norwegian}}</ref>. |- | [[Thales Group|Thales SA]] | {{FRA}} | June 30, 2005 | Production of components to cluster munitions<ref name= eight/>. |- | [[United Technologies Corporation|United Technologies Corp.]] | {{USA}} | October 11, 2005 | Production of engines to ICBMs in the U.S. Air Force<ref name=uttrekk/>. |- | [[Vedanta Resources|Vedanta Resources Plc]] | {{UK}} | August 28, 2007 | Environmental and human rights abuses<ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2007/Metall--og-gruveselskap-utelukkes-fra-St.html?id=488626&epslanguage=NO| title=Metall- og gruveselskap utelukkes fra Statens pensjonsfond – Utland |author=[[Norwegian Ministry of Finance]] |date=2007-11-06 |language=Norwegian}}</ref>. |- | [[Wal-Mart|Wal-Mart Stores Inc.]] | {{USA}} | March 28, 2006 | Breach of human rights and labour rights <ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2006/To-selskaper---Wal-Mart-og-Freeport---trekkes-ut-av-Statens-pensjonsfond---Utland.html?id=104384&epslanguage=NO| title=To selskaper - Wal-Mart og Freeport - trekkes ut av Statens pensjonsfond - Utland |author=[[Norwegian Ministry of Finance]] |date=2006-06-06 |language=Norwegian}}</ref>. |} The Government Pension Fund - Global excluded [[Kerr-McGee|Kerr-McGee Corporation]] on April 29, 2005 for conducting petroleum surveying in occupied [[Western Sahara]]<ref>{{cite web |url=http://www.regjeringen.no/nb/dokumentarkiv/Regjeringen-Bondevik-II/Finansdepartementet/234231/234458/forste_selskap_utelukket_fra_petroleumsfondet.html?id=256344&epslanguage=NO| title=Første selskap utelukket fra Petroleumsfondet |author=[[Norwegian Ministry of Finance]] |date=2005-06-06 |language=Norwegian}}</ref>. This position was reversed on June 30, 2006, after Kerr-McGee had concluded its involvement in Western Sahara<ref>{{cite web |url=http://www.regjeringen.no/nb/dep/fin/pressesenter/pressemeldinger/2006/KerrMcGee-Corporation-tas-inn-igjen-i-Statens-pensjonsfond---Utland.html?id=271732&epslanguage=NO| title=KerrMcGee Corporation tas inn igjen i Statens pensjonsfond - Utland |author=[[Norwegian Ministry of Finance]] |date=2006-09-01 |language=Norwegian}}</ref>. == The Government Pension Fund - Norway == '''The Government Pension Fund - Norway''' (Norwegian: ''Statens pensjonsfond - Norge'') was established by the ''National Insurance Act'' (''Folketrygdloven'') in 1967 under the name '''National Insurance Scheme Fund''' (Norwegian: ''Folketrygdfondet''). The name was changed at the same time as the former Petroleum Fund on [[January 1]], [[2006]]. This fund continues to be managed by a separate board and separate government entity still named '''Folketrygdfondet'''. The Government Pension Fund - Norway had a value of NOK 106.9 billion at the end of 2006. Unlike the Global division, it is instructed to invest in domestic companies on the stock market, dominantly on [[Oslo Stock Exchange]]. Due to this, the Government Pension Fund - Norway is a key stock owner in many large Norwegian companies. == References == {{reflist}} == See also == {{Portal|Energy}} * [[Economy of Norway]] * [[Sovereign wealth fund]] * [[Economy of Norway#Energy Resources|Energy Resources of Norway]] * [[Ethical investing]] == External links == *[http://www.norges-bank.no/Pages/Article____41137.aspx The Government Pension Fund - Global: Official site] *[http://www.regjeringen.no/en/dep/fin/Selected-topics/The-Government-Pension-Fund.html?id=1441 Norwegian Ministry of Finance: On the Pension Fund] *[http://www.ftf.no/ The Government Pension Fund - Norway: Official site] *[http://www.regjeringen.no/en/dep/fin/Selected-topics/andre/Ethical-Guidelines-for-the-Government-Pension-Fund---Global-/Companies-Excluded-from-the-Investment-U.html Excluded companies] {{DEFAULTSORT:Government Pension Fund of Norway, The}} [[Category:Norwegian government agencies]] [[Category:Energy economics]] [[Category:Energy in Norway]] [[Category:1967 establishments]] [[Category:1990 establishments]] [[Category:Sovereign wealth funds]] [[Category:Government and pension funds]] [[Category:Public finance of Norway]] [[fr:Government Pension Fund-Global]] [[ko:노르웨이 정부연기금]] [[ja:ノルウェー政府年金基金]] [[no:Statens pensjonsfond]] [[pl:Norweski Państwowy Fundusz Emerytalny]] [[pt:Fundo petrolífero da Noruega]]