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Fighter jet deal strains Norway’s ethics drive

November 21, 2008

Norway sees itself as a champion of ethical investment, applying pressure on corporations in worthy causes ranging from production of indiscriminately lethal weapons to ending child labour and increasing environmental responsibility.

If companies fail to meet its strict standards, they are blacklisted from Norway’s $300 billion oil fund. So far 27 firms have been banned from what many admirers call the most transparent sovereign wealth fund in the world.

Norway is rightly proud of its efforts to make companies more accountable to broad-based guidelines defined in documents on ethics and corporate governance from the United Nations and the OECD club of the world’s most developed countries.

But its decision to pick Lockheed Martin — a company the oil fund had blacklisted in 2005 — to supply 48 fighter jets in Norway’s biggest ever military contract shows the limits of its ethics drive.

After all, if Norway chose not to own Lockheed Martin shares on ethical grounds, because the U.S. group makes cluster bomb components, isn’t it hypocritical to hand the defence contractor a deal seen worth $20 billion?

Government officials like to publicly discuss their ethical approach to financial market capitalism, even though the state itself is not obliged to follow the rules set for the oil fund, which only invests in foreign stocks and bonds.

Norwegian government officials do not see any discrepancy, saying the Lockheed Martin offer was better than one from a rival Swedish contractor, which is not blacklisted. They have said that if the government had to comply with the oil fund’s rules, its hands would often be tied in defence contracts.

Balancing ethics and business is never easy, but this time there is little doubt over which has won out in Norway.

Comments

The political elite here in Norway got their own laws they follow. It’s kind of like corruption.

Posted by Frode | Report as abusive
 

SAAB isn’t blacklisted, but BAE is, and they’re heavily involved in the Gripen, so it wasn’t like it could live up to the oil fund standards either. Given how interconnected the defense industry is, finding a suitable fighter jet that did would likely be futile.

Posted by Mappe | Report as abusive
 

Every civilization in history has ended after a point when it considered itself enlightened.
Norway in particular, and Europe in general are so obsessed with their so-called high ethics and PC it has become an obsession. They have redefined the notion of “more pious than the pope”
Meantime, the new barbarians are waiting in the wings.

And choosing the best fighter aircraft for the defense of Norway? Who cares?! As long as Norge can still be pious and pure.

Posted by graeme anderson | Report as abusive
 

I always thought that the Norwegians were pragmatic, sensible people. It’s a pity they put fools in charge of their oil fund.

Posted by Andy | Report as abusive
 

Its being more and more obvious that the cooperation between the nordic countries is failing as Norway and Denmark has choosen to follow a different strategy. They seem to forget that even as they obey their master they need to have good relations with their neighbours. Spitting us in the face all the time will not be done unanswered in the future and i can only see negative on the future of Swedish-Norwegian relations..

Posted by Gargamel | Report as abusive
 

One assumes other countries such as Sweden are 100% ethically pure. No country can claim to be pure.

The issue with Norway is have they set themselves up to be criticized? Yes, and you lose the opportunity to be pragmatic because of it.

We have a lot to learn from rising powers like China. They are progressing and have not become ‘holier than thow’ and can make decisions based on pragmatism and they are not criticized for being pragmatic. The west has something to learn or slide into oblivion.

Posted by buffalojump | Report as abusive
 

Balancing ethics and business can be a sticky situation. I’m glad to see country holding companies more accountable and to higher ethical standards, but sad to see they fall short. Even if Lockheed Martin did offer Norway a much more lucrative and better deal than a company that is not blacklisted Norway should not have given the business to Lockheed Martin. Ethics went right out the window.

Posted by Carl Phipps | Report as abusive
 

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