Reference no: EM132223388
Signe Andresen, now in her early 60s and close to retirement, is a fourth generation Norwegian-American. Her great grandparents emigrated from Norway to eastern North Dakota, during the second half of the 19th century to escape the grinding poverty of rural Norway and seek a new life. The 1862 Homestead Act provided them with free land that they developed and lived on. Signe and her parents would occasionally go back to the family farm in North Dakota for visits and reunions from their home in suburban Minneapolis in neighboring Minnesota. This family background of toil leading to survival in Norway and then success in rural eastern North Dakota resulted in a pronounced conservative political orientation, which Signe also embraced, unlike many of her more liberally minded friends in Minneapolis.
Signe’s favourite author was Ayn Rand (Stanford.edu, 2016), who championed how individuals prospered if committed to self-interest and laissez-faire capitalism. Her socio-economic views aligned with Rand’s. Signe had observed how regulated grain production had become in the U.S., often driving out small farmers. After a few bad years of weather-related problems, they were too often forced to sell to large corporate conglomerates in many cases. She found the fracking and coal industries in North Dakota more exciting and saw first-hand how communities could prosper providing energy to a voracious world. She saw energy as the resource that had made modern life possible. She also viewed energy as vital in helping the U.S. become self-sufficient and free from compromising entanglements in the Middle East. Although she noted all of those benefits, Signe worried about the environmental impact of such energy generation. She definitely advocated for renewable energy sources, both in her work, and her personal life to mitigate the environmental effects of coal and fossil fuel energy, including natural gas, due to methane emissions.
Signe had twice attended family reunions in Norway and was struck by how different the values of contemporary Norway were to those espoused by her family in North Dakota, which reflected the Puritanical and work-oriented Norway of the pre-oil boom years. The oil boom in Norway began in 1972 and the government oil company, Equinor (2018), was able to funnel excess revenues to the government (Government.no., 2013). The oil boom continues today. It and other successful industries had made the country wealthy, so rich that people were able to work only 33 hours per week, the lowest average in the world (CNN Money, 2018). The Oil Fund capital was greater than $US1 trillion as of May 1, 2018. The Oil Fund endows the social welfare system for future beneficiaries.
The name change from Statoil to Equinorwas to reflect the change in mission from oil exploration to providing the energy the world needs and effectively fighting climate change (Equinor, 15 March 2018).Equinor is actively pursuing projects focused on renewable energy such as wind (Power Hedge, 2018, March 12) and solar (Remju, 2018, June 21; Equinor, 2018).Oil and gas production is shifting to the Arctic; Norway’s parliament voted 91-10 to drill for more Arctic oil (Reuters, 2018, June 18).
Social benefits are generous and contemporary Norwegians live without fear of unemployment forcing them into homelessness or poverty; many stopped work entirely to live off the social welfare system. Signe was struck by how many of her Norwegian relatives were “disabled.” They appeared fine to her and were 10-15 years younger than the normal retirement age of 67. Whenever her relatives tired of the long dark winters in Norway, they always seemed to have money for international travel to sunny beaches. She was also struck by the fact that Tesla vehicles, a high-end car in the U.S., sold well in Norway because electric cars are popular and the government provided many incentives to encourage their purchase (Ballaban, 2014, October 27).
Marit had a legal background in the public sector and enjoyed her work on the Council on Ethics. She saw the Council on Ethics’s responsibility as aligning the Oil Fund with Norwegian values.The Council on Ethics was to reflect the consensus of the Norwegian people to avoid actions regarded as unethical; it was not to change companies. If companies chose to do something the Oil Fund found objectionable it would simply exclude them. In her visits to Norway, Signe learned about the functions and purposes of the Oil Fund from Marit.
Based on the Norway Oil Fund Case, How can the Oil Fund make ethical decisions that best balance Norwegian values and interests?
Who are the stakeholders that should be considered in the decision-making process for Norway’s Oil Fund and its investment strategy? Is it purely internal to Norway’s government?