Norwegian Pension Fund Blacklists Petrobras


General News - Jul 1, 2016

Norway's largest pension fund KLP has decided to exclude Brazil's state-controlled Petrobras from its investment portfolio in the wake of a colossal corruption investigation into the firm.

"There is an unacceptable risk of future corruption within the company," according to KLP, which manages over 550bn kroner ($67bn) in assets. Petrobras says KLP had already notified it of the decision, while it has started to share more information with KLP about its efforts to improve its corporate governance.


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KLP's decision comes as Petrobras looks to raise funds to keep its more modest upstream growth targets on track. The firm is expected to release a diluted five-year business plan, covering 2016-20, in the coming months. New chief executive Pedro Parente says the firm is committed to decision-making based solely on its own corporate requirements after years of government interference.

Brazil's senate on 21 June passed a bill tightening the criteria for board members of state-controlled firms and excluding politicians from being appointed. The measure, which should be signed into law by interim president Michel Temer shortly, is considered an important step in the fight against corruption.

KLP would like to see Petrobras take certain measures to boost its governance, KLP head of responsible investment Jeanett Bergan says. These include investigating potential corruption at the firm's operations outside Brazil. The company should also carry out anti-corruption training and due diligence audits of suppliers. It should strengthen its board and executive management's anti-corruption competence, and ensure that its senior leadership team acts in accordance with the company's anti-corruption commitments.

Source : Argus Media

Published on Global Energy World: Jul 1, 2016

 
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