SUSTAINABILITY SMORGASBORD: THE OSLO CSR CONFERENCE

C O N F I D E N T I A L OSLO 000330

SIPDIS

SIPDIS

EUR/NB (RAY DALLAND),EB/IFD/ODF (CHRISTOPHER WEBSTER),
STATE PLEASE PASS TO USTR

E.O. 12958: DECL: 04/03/2017
TAGS: PREL EAID ENRG ECON EPET EINV KPIR NO
SUBJECT: SUSTAINABILITY SMORGASBORD: THE OSLO CSR CONFERENCE

REF: A) OSLO 302 B) OSLO 254 C) OSLO 29

Classified By: CDA Kevin M. Johnson, Reasons 1.4(b) and (d)


1. (C) Summary. On March 28 through March 30, Norway
hosted "Partnerships for Sustainable Development: The Oslo
Conference on Good Governance and Environmental
Responsibility." Gathering public and private sector
leaders, NGOs and international experts, including Nobel
Laureate Muhammad Yunus and former Vice President Al Gore,
the conference covered many issues under the umbrella of
Corporate Social Responsibility (CSR). Topics included human
rights, ethical and environmental supply chain management,
migration challenges, microfinance, CO2 reduction and
anti-corruption. Ambassador Whitney participated in a
roundtable discussion focusing on the governmental role in
CSR. Several Norwegian ministers participated in the
conference, including Environment Minister Bjoernoey, Foreign
Minister Stoere and International Development Minister
Solheim, who was surprisingly frank in expressing an
anti-business bias. Speakers from the multi-billion dollar
Norwegian Pension Fund and the Fund's Ethical Council also
raised ethical investing issues, discussing the Fund's recent
delisting of Walmart. The conference often voiced
contradictory messages, stressing the need for private/public
partnerships while simultaneously viewing private sector
actors with suspicion. End Summary.

People, Planet and Profit
--------------


2. (U) The conference consisted of several roundtable
discussions and presentations. In a seminar dedicated to
doing business in developing countries, speakers covered
issues including the balance between private sector actors'
need for reasonable profit expectations and the public sector
mandate of safeguarding human rights. Creating international
norms for ethical business practices were reviewed, in line
with the U.N. Global Compact. Speakers also tied in the need
for the private sector to recognize employee health
(particularly those suffering from HIV and malaria),as a
solid sustainability pillar. The Norwegian Environmental
Minister emphasized the GON's goal to strengthen CO2 capture
technologies, stressing the need for public and private
cooperative initiatives. Other environmental issues
discussed included the use of biofuels and global fuel use,
focusing on Indian and Chinese consumption. Concerning
anti-corruption, panelists addressed the challenges facing
corporations who are confronted with bribery demands from
public officials.


3. (U) Nobel Laureate Yunus was featured in a roundtable
discussion concerning microfinance. He stressed that
governments could actively support micro-lending initiatives
through development assistance, which would be administered
through microlending NGOs. Yunus strongly advocated changes
to current international banking legislation which would
allow NGOs and private sector contributors to establish
lending institutions. Broader acceptance of commercial risks
by "traditional" lenders, and the opportunities for venture
capital investors, were also highlighted. During the
conference's closing, he remarked that "poverty is not
created by poor people," but is rather "an artificial
imposition on human beings."


4. (U) Former Vice President Gore presented his slideshow,
"An Inconvenient Truth," to a capacity audience. Introduced
by Foreign Minister Stoere, the audience included many
dignitaries, such as the Norwegian Queen and Crown Prince.
The presentation was well received.


5. (U) The entire conference program may be found at
www.csr-oslo.org.

Minister Solheim Speaks His Mind....
--------------


6. (C) International Development Minister Solheim
participated extensively in the conference and made several
controversial statements. The Socialist Left Minister, who
recently launched a major CSR initiative with U.S. Senator
Richard Lugar (ref B),stressed that CSR must adhere to a
fair distribution of growth, including active employer
participation, and corporate entrepreneurship. Solheim's
view on CSR includes transparency, environmental stewardship,
preventing money laundering, and tackling financial
corruption, a recipe he views as integrating environmental
needs, peace and prosperity.


7. (C) Discussing the governmental role in encouraging CSR,
Solheim referred to Iran. The Minister spoke of how he
advocated Norwegian engagement in that country during the
Khatami regime, stating that the West lost an opportunity to
bolster a "moderate and secular" Iranian government, because
many countries did not, as Norway, invest in Iran. He
declared that "Iran would be a different place if the U.S.
took the opportunity to invest" in that country, which would
have "transformed" the Middle East.


8. (C) He stated that Norway could not now demand that
Norwegian corporations which previously invested under the
Khatami regime disinvest, implicitly referring to
government-controlled Norsk Hydro's and Statoil's Iranian
projects. He stated business could not be expected to make a
huge investment one day, and revoke that investment on
another day.


9. (C) Solheim spoke of East Timor, alluding to a corporate
investor with questionable business practices. He stated
that "even bringing in a company with a poor human rights
record can help."

....And Shows His Bias
--------------


10. (C) While pointing out that he is suspicious of
business, Solheim supported setting high standards for
corporate behavior, and advocated external reviews of
corporate projects. Reviewing the history of lending, he
noted that in many cultures, money lenders were viewed as
thieves or criminals. This is because "poor people depended
on the money lenders, who destroyed their lives." His
overall tone made it clear that he, like his party, is
anti-capitalist.

Ambassador Whitney Participates in Roundtable
--------------


11. (U) The Ambassador, joined by members of several
organizations, including the MFA, UN and Amnesty
International, fielded questions on public/private
partnerships, climate change and the UN Global Compact. The
roundtable, with an estimated audience of 300 conference
attendees, allowed the Ambassador to speak on private sector
CSR activities which further government development goals.
His discussion of the USAID Global Development Alliance, for
example, highlighted the value of joining together with
private sector actors.

Pension Fund issues
--------------


12. (C) The Norwegian Pension Fund's ethical investment
guidelines were raised throughout the Conference. The Fund,
recently discussed in reftel A, manages approximately 300
billion USD. Knut Kjaer, the CEO of Norges Bank Investment
Management, noted that the Fund maintains up to a 5 percent
stake in over 3,000 companies. He emphasized that the Fund
must provide a financial return to its beneficiaries, while
strictly following certain ethical norms. The Pension Fund
has delisted several American companies, including Walmart,
based upon alleged human rights violations or ethical
infringements. (Comment: The Walmart blacklisting was based
upon a superficial reading of source materials which, in
themselves, were often questionable at best. Norway has
numerous investments in companies which are clearly not
transparent and make available little, if any, public
information on their business practices. Thus Norway can be
rewarding companies which may perpetrate egregious human
rights violations, while punishing transparent enterprises
which follow open corporate disclosure guidelines. End
Comment).


13. (C) Kjaer explained that although the Fund hopes to
influence board of director votes, the fact that the Fund's
regulations bar holding a majority stake in one company means
that the Norwegians often seek to rally other investors to
raise issues at corporate annual general meetings. He and
other European pension fund leaders recently met with the
Securities and Exchange Commission Chairman to discuss ways
the funds could gain greater influence in appointing
directors to a board. Kjaer summed up his strategy as
engaging companies, building alliances with fellow investors,
and persuading them that following the Norwegian plan of
ethical investing makes sense in increasing long-term
returns. Kjaer noted that the Fund also recognizes that
lobbying is crucial. (Comment: Despite this presentation, we
have seen the Fund more apt to pull out of companies than use
shareholder rights to promote change, but believe the GON is
seriously considering an increased use of shareholder rights
in the future. End Comment).


14. (C) Gro Nystuen, the Chair of the Ethical Council that
reviews Pension Fund holdings, spoke about the need for
accountability. She briefly described the various criteria
which the Council reviewed when assessing whether an
investment should not be recommended or divested, including
the production of certain weapons (contrary to humanitarian
principles) or a catch-all provision that covers the risk of
contributing to serious violation of ethical norms. U.S.
delisted companies include Walmart and Freeport McMoran
Mining. Nystuen supported those exclusions. When fielding a
question concerning the Walmart delisting, she claimed that
the Council based its recommendation on "good and solid"
information. (Comment: Post has engaged the GON regarding the
Fund's delisting of U.S. companies, most notably Walmart,
voicing our concerns that the Ethical Council's review
process suffers from inadequate procedural protections for
accused companies. End Comment).

Foreign Minister Stoere's Concluding Thoughts
-------------- -


15. (U) The Foreign Minster formally closed the conference,
praising participants who engaged in a "network of values."
He stressed the need to increase public and private
partnerships. When discussing whether CSR should be part of
national legislation for every country, he emphasized the
difficulties of applying state CSR laws extraterritorially.
He cited the recent case in Norway where a U.S.-owned hotel
chain, abiding by the Cuba Assets Control Regulations, denied
rooms to a Cuban delegation. The event caused a stir (see
ref C which outlines the fallout over Hilton's decision).
He stressed that governments have the responsibility to be
convening powers, supporting meetings such as the conference
to foster ideas.

Comment: A Sustainable Smorgasbord?
--------------


16. (C) The conference gathered an impressive array of
speakers, attempting to increase attention on important
issues with global implications. The conference pooled
substantial resources from various Norwegian ministries. The
official conference program noted a GON challenge to
attendees, asking if the world can "operate as we always
have, or must humanity think and act in a radically different
way?" A lofty goal, but the conference, a smorgasbord of
disparate ideas, tried to force square pegs into round holes.
The conference provided few specifics for going forward,
while evidencing, amidst successful joint efforts, instances
of Norwegian tensions between public and private sector
cooperation. For example, Stoere stated in his closing that
climate change problems were "all caused by rich people."
This type of blanket statement did not further action and did
not seem to match other more concrete calls for increased
corporate and public sector partnerships.


17. (C) Stoere's negativity toward wealth was minor
compared to the charged statements of Minister Solheim, which
were often bellicose toward business. His less-than-subtle
rhetoric seemed incongruous within the context of the
conference's professed goals and within the framework of CSR
itself, which values vibrant private/public partnerships.
This strain of GON contradiction was amplified throughout the
conference. For example, the Pension Fund's delisting of
Walmart evidences a contradiction, as the government
professes a need for greater cooperation with the private
sector while simultaneously divesting from a business,

relying upon dubious research and questionable reasoning. On
a minor scale, we note that the sustainability conference
served up whale meat in one of the luncheons, yet another
contradiction. While Post certainly supports efforts to
raise CSR awareness and tackle pressing global challenges
which degrade human dignity, the conference, beyond its
inconsistent discussion of public private cooperation, also
provided few answers or next steps. Despite some impressive
attendees, the conference, like most buffets, left attendees
wanting more.
JOHNSON