HUMAN RIGHTS IN TRANSNATIONAL INVESTMENT POLICY AND PRACTICE. A case study of Norway’s Sovereign Wealth Fund and the Marlin mine

Abstract

Conflict between extractive industries and indigenous peoples has become commonplace. What is novel in the case of the Marlin mine is activists appealing to a corporate shareholder in a third country -- Norway’s Sovereign Wealth Fund. I attribute, not exhaustively, the phenomenon to factors in global political economy: the amoral character of the corporation, the impact of extractive industries on indigenous peoples’ rights, state failure to protect human rights, and the rise of Sovereign Wealth Funds (SWFs). Among SWFs, Norway’s is exceptional for ostensible incorporation of ethical considerations such as human rights in its investment decisions. In the case of the Marlin mine, Norwegian and Guatemalan activists collaborated to appeal to the Fund, but were unsuccessful. I study the Fund to understand how a large sovereign wealth fund factors human rights considerations into its investment decisions. It seems to occur primarily through two mechanisms: its advisory Council of Ethics and the fund manager’s mandate. Although the former has been the focus of philosophical, legal, political and economic academic discussion, I discovered incidentally that Norwegian civil society organisations have been campaigning and advocating for human rights to be an expanded priority in the latter. From a broader perspective, the Fund’s responsible investment approach has implications for corporate conduct and mimetic influence on institutional investors in Norway and abroad. It may be worth considering such institutional shareholders as an avenue for defence of human rights. However, the presence or absence of (democratic) accountability in the owner may constrain potential for leverage.