Excludes Norilsk Nickel from investment portfolio

The Russian nickel plant in the town Nikel near the border to Norway.

The Norwegian Government Pension Fund’s council of ethics that says the Russian mining and metallurgical combine Norilsk-Nickel factories are afflicting environmental damages which clashes with the fund’s guidelines.

Air pollution from Norilsk Nickel’s copper and nickel factories in Norilsk at the Taimyr Peninsula have been the direct cause for serious and visible damage to nature, including forest death. The conclusion to exclude the combine from the investment portfolio comes after an evaluation of the situation in Norilsk.

-This is deemed to be in breach of the ethical guidelines for the fund, Norway’s Ministry of Finance says in a press statement published on the ministry’s website.

Last month, Norway’s Foreign Minister, Jonas Gahr Støre, confronted the Russian Foreign Minister; Sergey Lavrov, with the extensive environmental problems from Norilsk Nickel’s factory in Nikel, just some few kilometers from the border to Norway.

-This is just not good enough, Sergey, Støre told Lavrov at the joint press-conference at the Barents Council meeting in Murmansk on October 15th, according to the newspaper Aftenposten.  Jonas Gahr Støre’s comment come after Lavrov said it is less pollution from Nikel today than before.

On their way to the Barents Council meeting in Murmansk, both Støre and his Swedish colleague Carl Bildt made a short stop in Nikel.

-It was sad to see the factory in Nikel, which alone is still polluting five times as much SO2 as the entire Norwegian amount of SO2 annually, Aftenposten quoted Støre saying at the Barents Council press conference.  

BarentsObserver reported earlier this year that last year’s pollution from Norilsk Nikel’s plant in Nikel and the nearby town of Zapolyarny emitted 97,7 thousand tons of sulphur dioxide in 2008, according to the combines own figures.

The Norwegian Government Pension Fund’s Council is aware that there have been criticisms in regard to the Kola Peninsula operations on the northern border of Norway, claiming that the company has been causing serious environmental damage over a long period of time without taking measures to reduce emissions from its smelter operations. The Council has not assessed the company’s operations on the Kola Peninsula.  

The Council on Ethics writes that their conclusion is based on a broad range of sources and amongst others, placed importance on reports prepared by the Russian environmental protection agency (Rosprirodnadzor), which is subordinate to the Ministry of Natural Resources.

Even if a part of the pollution problem is due to plant operation before Norilsk entered the picture, the Council does not regard the company’s actions to reduce emissions and discharges of metals now and in the future as being adequate. To the Council’s knowledge, the company’s ambitious targets for emissions reductions adopted in 2003 have not been realized, and the Russian authorities have pointed out that the company’s emissions to the air and discharges to rivers etc. exceed permitted thresholds. Nor does the company have plans to clean up the contamination of the soil by heavy metals in and around the city of Norilsk. It is clear to the Council on Ethics that the company has not done enough to prevent or reduce environmental damage, according to the information placed on the Ministry’s website.

The sale of all shares in the company has now been completed. The decision to sell is being made public after the shares were sold, so as not to affect the sale. The shares which were sold has a value of NOK 328,6 million (€ 39 million). That is approx. 0,4  percent of the shares in Norilsk-Nickel.

The newspaper Vedomosti wrote on Friday that Norilsk Nickel admits that the environmental situation is serious, but says they believe that the pollution will be reduced due to the combine’s environmental reconstruction plan during the period till 2015.