The IUF and two Norwegian affiliates, the General Workers' Union Fellesforbundet and the Food and Allied Workers' union NNN, have publicly called on Norway's State Pension Fund to maintain existing restrictions on investing in private equity and hedge funds. The government fund, Norway's oil-funded sovereign wealth fund with some USD 300 billion in assets, does not currently invest in either private equity or hedge funds but maintains an ongoing discussion with regard to new investment classes. The fund is regarded as a standard-setter with regard to ethical investment, having disinvested from Wal-Mart (2006) in response to the company's record of labour and human rights violations, and more recently from mining giant Rio Tinto in response to the company's environmental destruction in Indonesia.
The letter, signed by the three organizations' general secretaries and sent to the Finance Ministry on November 29, outlines the risks to both investors and to the global financial system arising from heavily leveraged investments and stresses the destructive employment impact of private equity buyouts. Recalling the global standard-setting role of the Fund, the letter states: "Investment in private equity and hedge funds would take the State Pension Fund into areas which violate its basic principles, add to global financial instability, impact negatively on working people's lives and livelihoods and undermine the standard-setting role of the Fund. We strongly believe that opening even a limited percentage of the Fund's investments to these "alternative assets" would have a destructive impact globally.
"Any discussion of lifting the existing restrictions on investment in 'alternative assets' - which we understand to be ongoing - calls for extensive, wide-ranging public debate which can take into account the many-sided impact, today and tomorrow, of these investments."
The full text is available here.