Weighing ethical and environment concerns more than profits, Norway has blacklisted and divested its holdings in the US cluster bomb making company, Textron Inc. Corporation and the Canadian mining company Barrick Gold Corporation from the $300-billion Norway's Government Pension Fund, the county's sovereign wealth fund.

Among the largest global pension funds, it was earlier called The Petroleum Fund of Norway. In January 2006, the fund changed its name to Government Pension Fund, Statens pensjonsfond - Utland, into which the surplus income from by Norwegian petroleum sales is deposited. fund is managed by the Norwegian Central Bank on behalf of the ministry of finance.

Excess Return 1998-2007

The blacklisting followed after the Council on Ethics advised the Norwegian government that its two investments, one harming the environment and the other manufacturing the deadly cluster bombs were contravening its ethical investments rules.

The blacklisted names include some of the most powerful global corporations, including BAE, Boeing, EADS, Honeywell, Lockheed Martin, Northrop Grumman, Raytheon, Rio Tinto, Vedanta and Wal-Mart on grounds ranging from environmental damage an labour practices to weapons manufacture. (See: Table)

Textron, the US manufacturer of corporate jets, Bell helicopters and Cessna aircraft, was blacklisted after the Norweigian sovereign wealth fund, holding $67 million of the company's stock found that one of its defense units was manufacturing cluster bombs.

Cluster munitions release dozens of smaller bombs over a large area and if some of them do not explode on impact, can kill or maim a person for life long after the conflict is over. During the Iraq wars, the US air force was reported to have widely used these cluster bombs to decimate the Iraqi Republican Guards and had earlier also used theses in Vietnam and Afghanistan.

Norway was one of the key countries that lobbied for banning the manufacture of these deadly bombs, which led to 93 nations signing a treaty in Oslo in December banning the production of cluster bombs although many countries including the US, refused to sign it.

The Norwegian government's pension fund has blacklisted nine other global firms that manufacture cluster munitions since 2005.

Norwegian finance minister Kristin Halvorsen said in a statement, "The company produces cluster weapons, which are banned pursuant to the Convention on cluster munitions. We cannot participate in the funding of this type of production."

Textron was one of the companies named by researchers at the University of Massaxhusetts Amherst, as the 60th-largest corporate air polluter in the US by releasing approx 600,000 pounds of toxic chemicals annually into the air.

The blacklisting of the biggest global gold mining company, Barrick Gold of Canada, followed the completion of an investigation which started in 2005 over severe environmental damage caused by its mining operations at the Porgera Mine in Papua New Guinea.

According to the Council on Ethics, Barrick Gold's disposal of waste from the mine was causing extensive and irreversible damage to the natural environment and the council believed that the miner's "unacceptable practice will continue in the future".

Kristin Halvorsen, said, "In its assessment, the Council on Ethics concluded that Barrick Gold Corporation is causing severe environmental damages as a direct result of its operations. I have therefore decided to follow the Council's recommendation on exclusion of Barrick Gold from the investment universe of the fund."

The $200-million stock in Barrick Gold and the $67 million of Textron stock was sold off quietly in October by the Norges Bank and the sale was made public only last month as the fund did not want any upheaval in both the companies stock value in the market.

The Norwegian government puts its surplus money accrued from the export of oil and natural gas in its sovereign wealth fund, which is currently worth approx $300 billion and it has invested a major part of the money in more than 7,000 companies globally.

In 2004, Norway set up the Council on Ethics to advise the fund against investing in companies involved in human rights abuses, environmental damage, or the production of certain weapons and nuclear arms.

Based on its recommendations, the finance ministry decides whether to exclude any of the companies in which the fund invests.

The fund has banned 29 companies so far, including miners like Vedanta Resources, Freeport McMorRan of the US, South Africa's DRD Gold, and more recently, Rio Tinto for environmental reasons while Wal-Mart Stores, the world's largest retailer, was blacklisted for labour rights abuses at its suppliers in Africa, Asia and Central America as well as discrimination against women and employees for not allowing them to form unions in the US.