OSLO – A leading Taiwan textile business which lists as its customers Levi’s, VF Corp, Gap and Tommy Hilfiger has been been placed under observation by a major global investment group due to an “unacceptable risk of serious systematic human rights violations.”
Taiwan’s Nien Hsing Textile Co is one of several businesses which are now being monitored by Norges Bank Investment Management, the arm of Norway’s central bank that manages the country’s trillion dollar oil fund. Nien Hsing is engaged in the manufacture and distribution of garments and textile products and produces denim and casual wear, denim cloth, casual cloth and ring-spun yarns.
Among businesses to be completely excluded from the fund are Chinese fabric producer Luthai Textile Co due to an “unacceptable risk of serious or systematic human rights violations,” according to a statement from NBIM. At the end of 2017, the oil fund is said to have held a US$5.7m stake in Luthai Textile, equal to a 0.57 per cent holding in the company.
The decisions on exclusion by NBIM are said to be made on the basis of recommendations from the fund’s Council on Ethics.
The executive board of NBIM has also decided to counteract child labour as part of the fund’s active ownership efforts over a period of five years. The Norwegian Ministry of Finance has issued specific guidelines for the oil fund with criteria for observation and exclusion which are endorsed by Norway’s parliament.
Norges Bank decides on the exclusion of companies from the fund’s investments, or to place them on an observation list. There are currently 145 companies excluded from the fund and 23 under observation.