Norway’s wealth fund to review stake in Indonesian palm oil producer Astra International

Visual from the company page. October 2015

Norway’s sovereign wealth fund should monitor its investment in Indonesia‘s Astra International to ensure its palm oil operations don’t break ethical guidelines, the Norwegian central bank said on Tuesday.

The decision gives the company four years to meet the $856 billion fund’s ethical standards. If it fails, Norway could sell its 0.3 percent stake, worth $73 million according to Thomson Reuters data.

Astra International is one of the biggest companies listed on the Jakarta stock exchange, with a market value of around $18.5 billion and businesses spanning auto distribution and palm oil to mining equipment and financial services.

It held a 79.7 percent stake in palm oil producer PT Astra Agro Lestari Tbk as of end-June, the data shows.

The Norwegian central bank, whose board supervises the sovereign wealth fund, said on Tuesday the fund should put Astra International under observation due to its involvement in turning tropical forest into palm oil plantation via PT Astra Agro Lestari Tbk.

The fund does not invest in a range of companies that contradict its ethical aims, including firms involved in producing tobacco, nuclear weapons or cluster munitions.

In 2013, the fund divested from 23 firms involved in the destruction of rainforests.

Joko Supriyono, a director at Astra Agro Lestari, declined to comment when contacted by phone.

In June Astra International said it would immediately cease all logging and land conversion while developing a new sustainability strategy.

The independent body that recommends possible exclusions by the Norwegian fund, the council on ethics, said Astra International should be put under observation.

“The Council recommends an observation period of four years to allow the progress and impact of the company’s new policy to be assessed,” it said in a statement published on Tuesday and dated June 23, 2015.

The fund has excluded 64 companies and, following Tuesday’s announcement, put two companies under observation.

(Editing by Ruth Pitchford)

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.