Norway's Ministry of Finance has excluded 17 companies that produce tobacco from the Government Pension Fund Global (GPFG) as a result of a recommendation from the Council on Ethics.

The decision was made following a debate on whether to exclude tobacco producers from the fund, and it was decided, under some doubt, said Minister of Finance Sigbjørn Johnsen, that this was the correct option.

"After the Graver Committee submitted its recommendation, there have been international and national developments through the entry into force of the WHO Framework Convention on Tobacco Control and the tightening of the Norwegian Tobacco Act," explained Johnsen. "We have taken these changes on board and believe - amongst others in light of the consultative input in connection with the evaluation of the ethical guidelines - that it is timely to exclude tobacco from the Fund. It is important that the ethical guidelines reflect at all times what can be considered to be commonly held values of the owners of the Fund."

The Ministry proposed to exclude tobacco producers from the fund in Report No. 20 to the Storting on the Management of GPFG, and the National Budge for 2010 detailed the specific delimitation of the tobacco criterion.

Particular emphasis was placed on finding a delimitation that fits with the structure of the current ethical guidelines, including existing rules for negative screening of certain weapons manufacturers, in the drafting of a new criterion on screening tobacco producers. A rule has been adopted that will exclude all production of tobacco in principle, regardless of the percentage of business represented by tobacco production, meaning it will be possible to exclude a few more companies than those listed under the "tobacco" classification by the index provider. The new criterion does not include associated products, such as filters and flavour additives.

The Council on Ethics has said that it may return with further recommendations for exclusion.

The excluded companies are: Alliance One International Inc., Altria Group Inc., British American Tobacco BHD, British American Tobacco Plc., Gudang Garam tbk pt., Imperial Tobacco Group Plc., ITC Ltd., Japan Tobacco Inc., KT&G Corp, Lorillard Inc., Philip Morris International Inc., Philip Morris Cr AS., Reynolds American Inc., Souza Cruz SA, Swedish Match AB, Universal Corp VA and Vector Group Ltd.

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