Norwegian pension fund divests from Caterpillar over Gaza War
The Norwegian pension fund KLP recently made this headline after it dumped its $70 million stake in the U.S. industrial tycoon Caterpillar on allegations of human rights abuses in Palestine, which it occupies. Norway’s most prominent private pension manager announced on Wednesday that the divestment took place because Caterpillar equipment may be used in a manner that supports abuses and violations of international law in the West Bank and Gaza.
Caterpillar makes bulldozers and heavy vehicles and equipment. Israel has been modifying Caterpillar D9 bulldozers for military use for years and has been using them to raze homes and other structures in the occupied Palestinian territories. They have also been deployed in warfare, bringing another primary concern of ethics and possibly the law.
KLP, which previously owned shares in Caterpillar worth 728 mill Norwegian crowns (approx. USD69 million), has been discussed with the U.S. company. Nevertheless, KLP stated that it needed proper assurance on how Caterpillar had addressed the threats of infringing on individuals’ rights.
Kiran Aziz, KLP’s head of responsible investments, explained the decision: “For many years, Caterpillar has provided bulldozers and other equipment that have been used to pull down Palestinian homes and structures to pave the way for Israeli settlers’ action. ” Aziz further added, “The company’s equipment is also believed to be being used by the Israeli Defence force concerning the military operations in Gaza following the Hamas attack on October 7 last year.
KLP oversees approximately $90 billion and disposed of its CAT position on the 17th of June. This step can also be appreciated in connection with the general approach of KLP as an ethical investment company; in April this year, the company also decided on the non-investment in companies associated with illegitimate settlements in the West Bank, for example, Motorola – the world’s largest telecommunications equipment manufacturer. With the help of other states, Iraq includes these settlements in the list of violations of international law, and Norway is among them.
Recently, similar to Spain and Ireland, Norway decided to recognize Palestine as an independent state based on the borders of 1967. Norway’s Prime Minister Jonas Gahr Store said that stability in the Middle East occurs only with the acknowledgment of Palestine.
KLP’s divestment from Caterpillar is evidence of the level of attentiveness and ethical standards investors apply to their investments. While, beyond this analysis, Caterpillar was at least willing to dialogue with KLP, the company’s answers proved inadequate in addressing the risk of involvement in human rights violations and violations of international law.
Based on the international pressure targeting firms associated with controversial business practices such as KLP, there are indications that other institutional investors may be forced to shift based on similar ethical considerations. This move also underlines Norway’s activist approach to the Palestinian issue and the search for peace in the Middle East.
