Oslo: The ethics council that makes recommendations for the $820 billion (Dh3 trillion) Norwegian sovereign wealth fund is zeroing in on companies in textile manufacturing for breaching its standards, the head of the watchdog said.
In a study of about 400 textile manufacturers the group has chosen to concentrate on “two handfuls” that it has contacted, said Johan H. Andresen, chairman of Norway’s Council on Ethics, in an interview Thursday at his office on the outskirts of Oslo.
“We will see whether we think that they are willing and able to make changes in their conduct,” he said.
The world’s biggest wealth fund takes into account ethical rules encompassing human rights, some weapons production and the environment. It has excluded more than 60 companies after recommendations from the council.
It’s not the only big investor looking more closely at the textile industry. Nordea Asset Management, a unit of Scandinavia’s biggest bank which oversees about $320 billion, said in August it has investigated textile suppliers to Hennes & Mauritz AB as part of its effort to ensure it only holds ethically sound assets.
Andresen said his council’s studies of the textile industry have found “strong indications of forced labour at least in the past and we will have to judge if that will be a possibility also in the future.”
It has studied manufacturing across regions in several countries, he said.
“You have instances of everything from forced labour, forced overtime, to loss of bonuses when you are sick,” he said. “We’re not necessarily looking so much at living condition as at working conditions.”
The textile manufacturing industry made global headlines in 2013 with the collapse of the Rana Plaza complex in Bangladesh that killed more than 1,100 people. A nationwide strike by garment workers in Cambodia last year also left three dead.
The council’s work has already had real impact. People contracted by the group in an unidentified country saw a similar building to Rana Plaza and alerted an American customer that went in and physically fixed it, reinforcing the building, he said.
“If there are gross violations of safety that could be a gross violation of human rights, workers’ rights,” Andresen said.
While the council isn’t looking at the full supply chain up to the eventual brand name, the study could have a broader impact.
“But of course the customers might find it in their interest to put some pressure on the companies in question if they know.”