Eramet: Why is the Norwegian sovereign wealth fund excluding the French company from its portfolio?

A major player in the global financial system is withdrawing from Eramet following the environmental risks posed by the group's activities to indigenous peoples in Indonesia. Overseen by the Norwegian central bank and fueled by Norway's enormous energy revenues, this fund is the largest in the world, worth more than 20 trillion kroner (nearly $2 trillion) with stakes in some 8,500 companies worldwide.

"The Norges Bank Executive Committee has decided to exclude Eramet SA due to an unacceptable risk that it contributes to, or is itself responsible for, serious environmental damage and flagrant human rights violations," the fund said in a statement.

As of June 30, the fund held a 0.44% stake in Eramet, valued at about $6.8 million, according to its data. The decision was made based on a recommendation from the fund's ethics council, which cited "an unacceptable risk" that the company was causing or contributing to environmental damage and "serious human rights violations against isolated indigenous peoples . "

Specifically, the council pointed to "Eramet's stake in the joint venture (between the Indonesian group Antam and the Singaporean company Strand Minerals, editor's note) PT Weda Bay Nickel, which mines nickel on the island of Halmahera, in Indonesia." WBN claims to represent 17% of global nickel production in 2023. Criticized for its impact on the surrounding forest, this mine covers 45,000 hectares on this island in the Maluku archipelago, in the east of the country.

According to the Norwegian sovereign wealth fund's ethics council, mining leads to the deforestation of rainforest areas and "the loss of critical habitats for endangered and endemic species," while threatening the survival of indigenous populations living "in voluntary isolation."

Eramet said it "deeply regrets" the fund's decision. "As a minority shareholder (of WBN), Eramet strives to promote best practices in mining, environmental management, and social responsibility among its partners, in line with the group's values ​​and commitment to responsible mining," the group said.

An AFP investigation in June documented the effects on members of one of the country's last isolated hunter-gatherer communities, the Hongana Manyawa indigenous tribe. The community claims the forest they have traditionally relied on for food and shelter is being destroyed by deforestation and environmental degradation linked to the mine. WBN rejects the allegations and says it is committed to "responsible mining and environmental protection."

The indigenous rights organization Survival International welcomed the decision by the Norwegian sovereign wealth fund, which coincides with the Indonesian authorities seizing 150 hectares of the concession encroaching on unlicensed forest areas . "The company is now as toxic as its mining operations, and we call on all its other shareholders to divest as well, until a no-go zone (intended to protect) the Hongana Manyawa is established," Caroline Pearce, the NGO's director, told AFP.