Tuesday 24 October 2017

Norwegian fund quits Fanning's San Leon over ethical worries

Oisin Fanning of San Leon
Oisin Fanning of San Leon
Michael Cogley

Michael Cogley

Dublin-based oil explorer San Leon, whose executive chairman is former Smart Telecom chief executive Oisin Fanning, has been excluded by a Norwegian pension fund's investment universe.

The Norwegian Government Pension Fund is excluding the firm because its ethics council deemed that San Leon "contributes to serious violations of fundamental ethical norms through its onshore hydrocarbon exploration in Western Sahara on behalf of Moroccan authorities".

The fund has a market value of €755bn and has generated an annual return of 5.8pc since its inception in 1998.

Erik Hagen of the Western Sahara Resource Watch (WSRW), a collection of activists campaigning against companies working in the area, explained the scene and the consequences of the ruling.

"Western Sahara is labelled by the United Nations as the last unresolved colonial question in the world. Morocco has no right to explore for oil in Western Sahara without the consent of the people of Western Sahara and if the people of Western Sahara are not to benefit from it.

"Morocco has no right to look for the oil; San Leon is doing it, so therefore they're kicked out (of the investment fund)."

International law states that the interest of the local people is paramount. In 2002, the then secretary general for legal affairs and legal council at the United Nations, Hans Corell, wrote: "Exploitation of natural resources may be acceptable if it is carried out in accordance with the wishes and interests of the local population."

In San Leon's statement, it said that it satisfied the interests of the local people following counsel with the elected representatives in the region.

Both natives and non-natives of the region vote in the election, which Fanning outlined had one of the "highest voting turnouts in Morocco".

Fanning said that it was in the interest of the government of Morocco and San Leon that any revenue derived from natural resources would benefit the local community.

Hagen said that shareholders in San Leon had expressed concern about the firm's activities in the area.

When asked about shareholders' concerns, a spokesperson for the company had no further comment.

The company also added no further comment on the ruling from the Norwegian fund and refused to confirm or deny that the investment fund had shares in the company.

It is understood that the pension fund had an investment of 1.5m Norwegian krone - about €160,000 - which is said to equate to around 0.43pc in the firm.

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