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Norway's fund is world's largest sovereign wealth fund

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Has been a focus for divestment campaigners

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One company excluded, one more under consideration

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Watchdog's review has cleared most companies

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Current ethical framework 'works well' -deputy fin min

(Updates May 5 story with comment from deputy finance minister

in paragraphs 13-14, bullet point)

By Gwladys Fouche

OSLO, May 5 (Reuters) - Norway's $1.8 trillion wealth

fund should divest from all companies that aid Israel in the

occupied Palestinian territories, a leader at Norway's powerful

LO trade union told Reuters, intensifying an ongoing divestment

campaign.

LO, the biggest confederation of trade unions in Norway, is

aligned with the governing Labour Party and often exerts

influence on policy beyond traditional workers' rights issues.

"We want the fund to pull out of the companies that have

activities in the occupied Palestinian territories," Steinar

Krogstad, deputy leader at LO, said in an interview.

LO's general policy is that Norway's sovereign wealth fund,

the world's largest, should not invest in companies that breach

international law, Krogstad said.

"This question is more on the agenda now ... because of

Israel's policy, attacks and war in Gaza and in the West Bank,"

he said, speaking on the margins of the union's congress, where

the Palestinian flag flew alongside those of the United Nations

and Norway.

The Israeli embassy in Oslo did not immediately reply to a

request for comment.

The U.N.'s highest court last year said Israel's occupation

of Palestinian territories and settlements there were illegal

and should be withdrawn as soon as possible, in a ruling that

Tel Aviv rejected as "fundamentally wrong" and one-sided.

LO and 47 other civil society organisations sent Finance

Minister Jens Stoltenberg a letter, dated April 10 and seen by

Reuters, to push for such a move.

The letter asks Stoltenberg - an LO member - to instruct the

central bank, which operates the fund, to divest from companies

"where there is an unacceptable risk of complicity in violating

international law in the occupied Palestinian territories".

It also asks Stoltenberg take the initiative to give more

precise guidelines for the observation and exclusion of

companies from the oil fund "in such a way that they are in

accordance with international law".

Daily VG first reported on the letter.

Krogstad said LO would also request a meeting with

Stoltenberg to discuss the issue. No date had yet been set, he

said.

The finance ministry said the fund operates under ethical

guidelines agreed by parliament, with recommendations for

divestments made by an ethical watchdog that is "professionally

independent".

"We have a framework that works well and has broad support

in parliament," Deputy Finance Minister Ellen Reitan told

Reuters.

The fund has faced pressure to divest from companies active

in the West Bank and the Gaza Strip since the start of the war

in October 2023.

Since then, it has divested from telecoms company Bezeq

, and another unnamed company is under consideration

for exclusion by the central bank's board.

Most other companies active in the occupied Palestinian

territories have been cleared in a review by the fund's ethical

watchdog.

The fund held stocks worth 22 billion crowns ($2.12 billion)

across 65 companies listed on the Tel Aviv stock exchange as of

the end of 2024, according to fund data. They represent 0.1% of

the fund's overall investments.

($1 = 10.3668 Norwegian crowns)