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Compendium on Arms Trade Corruption: Highlights

Oil-powered Genocide: Norway’s Ethical Investments Hypocrisy

Author
Jack Cinamon
Published on
March 5, 2025
Image
Ekofisk Field ; image credit: Telemuseet CC BY-SA 4.0
Ekofisk Field ; image credit: Telemuseet CC BY-SA 4.0

Summary: 

  • Norway’s oil wealth, generated initially from the Ekofisk oil field, led to the creation of the Government Pension Fund Global (GPFG), now worth $1.8 trillion.
  • Despite its ethical investment claims, the fund Invests in Half of the World’s Top 100 Arms Companies, Including Many Supplying Israel’s Genocide in Gaza, as well as companies linked to conflicts, corruption, and human rights violations.
  • Norway’s investments contradict its stated commitment to peace and human rights, raising urgent calls for divestment from arms companies.

In 1969, Norway made a huge discovery in the North Sea – the Ekofisk oil field, courtesy of Italian geologist Max Melli, marking the start of Norway’s transformation into an oil and gas powerhouse.  Decades later, Ekofisk is still producing, and following further discoveries, Norway has become one of the world’s top oil and gas extractors and suppliers. This newfound wealth from the petroleum sector eventually grew into a significant surplus, and so a solution was needed for investing these funds. 

Norway’s Government Pension Fund Global (GPFG), also known as the Oil Fund, is a sovereign wealth fund owned by the Norwegian government and managed by the country’s central bank, Norges Bank. The funds are tapped to cover the non-oil budget deficit, keeping the economy steady and giving future generations a safety net. Established in 1990 receiving its first transfer in 1996, it has grown into one of the largest funds in the world, now worth $1.8 trillion – nearly four times Norway’s annual GDP. To put it in perspective, that’s about $325,000 for every Norwegian citizen.

The Oil Fund has a significant global presence, holding an average of 1.5% of shares in all publicly listed companies, making it the largest single sovereign wealth fund by assets. Despite its enormity, the fund is supposed to adhere to ethical guidelines by excluding certain companies from its portfolio. So, the big question is: how well do its goals for “sustainable investment” align with its ethical practices?

Enter the Norwegian Council of Ethics.

According to their website, “The task of the Council of Ethics is to submit recommendations on the observation or exclusion of companies in accordance with the Fund’s Ethical Guidelines”, which includes: 

  • Serious or systematic violations of Human Rights
  • Severe Environmental Damage
  • Serious violations of individuals’ rights in situations of war or conflict
  • Gross corruption
  • Other particular serious violation of fundamental ethical norms
  • Unacceptable Climate Gas Emissions
  • Production of Cluster Munitions
  • Production of Nuclear Weapons
  • Anti Personnel Landmines
  • Tobacco Production
  • Cannabis Production
  • Sale of Military Equipment to Certain States

Calling a wealth fund built on oil ethical or environmentally sustainable is a stretch, yet the issue here is not the oily foundation, but how the surplus cash is invested.

The GPFG invests billions in arms companies. In fact, it owns stakes in exactly half of the world’s top 100 arms companies,  accumulating over $17 billion. That means Norwegian citizens’ money is tied up in companies responsible for creating some of the planet’s deadliest weapons, while many of the companies manufacturing these weapons are also heavily complicit in corruption through the arms trade, and environmental degradation through war. 

Despite these significant holdings, the fund has occasionally acted on its ethical guidelines at least when the violations are glaringly obvious. In 2024, it excluded Larsen & Toubro Ltd and General Dynamics Corp for making nuclear weapon components, and in May, excluded US arms company, L3 Harris, for the same reasons. Divesting from nuclear weapons is a no-brainer to the non-shareholder class, but what about companies tied to genocide?

Norway recognised the state of Palestine as recently as May 2024, underlining that Palestinians have a fundamental, independent right to self-determination; a move which comes 30 years after it hosted the Oslo Accords, the early-1990s peace agreements between Israel and Palestine that ultimately failed. Following Israel’s recent destruction of Gaza and its people, Norway has aligned closer to those who vocally support Palestinian rights; and while some civil society groups in Norway support the BDS movement, the Norwegian government does not endorse it. Instead, it focuses on targeted measures, such as excluding companies involved in activities violating international law from its Oil Fund.

However, despite its claimed commitment to ethical investing, the fund holds shares in arms companies all over the world – from Canada to China, France, Germany, India, Italy, Japan, South Korea, Sweden, Türkyie, the UK, and the USA. These companies form a global network supplying weapons to Israel. It’s a stark contradiction, a ‘United Nations’ of arms companies fuelling destruction under the guise of responsible investment.

Israel

The Council of Ethics has occasionally acknowledged the ethical dilemma behind investing in Israeli companies linked to international law violations.

Take 2009, when the fund divested from Elbit Systems, Israel’s largest arms company, following a recommendation from the Council of Ethics, due to the company supplying surveillance systems as part of the separation barrier being built by the Israeli government in the West Bank. As quoted: ‘The Council on Ethics considers the Fund’s investment in Elbit to constitute an unacceptable risk of complicity in serious violations of fundamental ethical norms’. Fast forward to December 2024, and Bezeq The Israeli Telecommunications Corp was also excluded from the fund, ‘due to an unacceptable risk that the company is contributing to serious violations of the rights of individuals in situations of war or conflict.’ Bezeq supplies telecommunications services to businesses and private individuals in Israel and the Israeli settlements in the West Bank. 

Commendable on paper – these divestments barely scratch the surface and are highly inconsistent. It credits itself for divesting from a few select companies but turns a blind eye to the profits it rakes from many other companies, or the “quieter” armament, fuelling violence in the Occupied Palestinian Territories (OPTs).  A sweeping ban is urgently needed on investments in arms companies supplying Israel and the Israeli Occupation Forces (IOF) with weapons, components, tech, and more. 

Below is a list of complicit companies currently in its portfolio.

India

Firstly, it must be mentioned that Norway continues to invest in nuclear weapons, although indirectly,  through its holdings in Honeywell Automation India Ltd, a subsidiary of US conglomerate Honeywell International Inc, based in Charlotte, North Carolina. Honeywell’s slogan, “The Future is What We Make It”, feels disturbingly ironic when you consider its role in producing 85% of the non-nuclear components for US nuclear weapons, making the company a key player in sustaining the global nuclear threat. Many of Honeywell’s subsidiaries supply the broader organization with the parts and components required for its core operations, including the US nuclear program.

Norway’s billion-dollar investment in Hindustan Aeronautics adds another layer of controversy. This Indian aerospace giant is not just building planes but is actually in a joint venture with Israel’s state-owned Israel Aerospace Industries (IAI) to transform aircrafts from civilian to military use, with Norway’s money driving the project. This partnership ties Norway’s financial interests to weaponising the skies and helps further reinforce the arms trade relationship between India and Israel.

Canada

As of December 2024, the Norwegian Oil Fund held over $98 million in shares of CAE Inc, a high-tech Canadian company based in Montreal. Originally known as Canadian Aviation Electronics, CAE now specialises in advanced simulation and training technologies. CAE is in business with Elbit Systems and IAI to provide training systems for the Israeli Air Force, keeping them combat-ready. The same pilots often involved in the bombardment of civilians, not only in Gaza, but across the Middle East.  

France

Norway’s fund also directs significant investments into French arms manufacturers Thales and Dassault Aviation, both of which have deep ties to Israel’s military operations. Both have supplied Israel with critical components for weaponry, including transponders for Israeli-made drones. Notably, Dassault Systems SE even operates an office in Raanana, Israel, underscoring its embedded role in Israel’s defence network. All while French President Emmanuel Macron’s recent declaration that France will cease supplying weapons to Israel.

Despite calls for Norway to divest from these companies due to their role in fuelling violence in Gaza, the Council of Ethics has yet to respond. But the fund might want to reconsider for another reason: both Thales and Dassault have some seriously shady pasts. These companies were deeply involved in the notorious Taiwan Lafayette Frigate and Mirage Scandal, one of the largest arms corruption cases ever, with investigations still ongoing and eight mysterious deaths tied to the case. And if that were not enough, Thales has recently faced a scandal in Australia over overpriced contracts for frigate maintenance, and is currently under a separate investigation by UK and French authorities for suspected bribery and corruption.

Germany

The Oil Fund has capitalised on the opportunity by investing over half a billion dollars in Germany’s rapidly growing arms industry. Germany is amidst a period of hyper-militarisation and has hugely increased its annual defence budget following Russia’s invasion of Ukraine and Israel’s devastating attacks on Gaza. Following the words of German Foreign Minister Annalena Baerbock that “we are all Israelis”, Germany’s stance is in ‘unconditionally’ supporting Israel, raising troubling questions about the nation finding itself on the wrong side of history once again.

By far the fund’s largest German investment is in Rheinmetall, with over $643 million in shares as of December 2024. Rheinmetall has thrived in recent years, embodying war profiteering at its peak, taking the sizable advantage of arms flows to Ukraine and Israel. They have been supplying tens of thousands of tank shells to Israel, enabling ground invasions in Gaza and South Lebanon. Yet, it also manufactures M109 self-propelled howitzers in collaboration with the UK’s BAE Systems – a weapon widely used by the IOF, including as the artillery of choice for deploying white phosphorus in Gaza and South Lebanon, which can burn skin down to the bone. Norway’s fund also has stakes in thyssenkrupp, the German shipbuilder behind Israel’s Sa’ar 6 corvettes. These warships, deployed by Israel shortly before the latest bombardment and siege on Gaza, play a key role in enforcing blockades and shelling targets from the Mediterranean Sea. Additionally, Hensoldt, a German tech firm, supplies radar systems to the Israeli Air Force (IAF), playing a critical role in enhancing its operational capabilities.

All three of these companies are mired in corruption allegations. Take the $3.4 billion Dolphin-2 submarine deal from 2022 – suspected bribery at the highest levels of government, with Israeli Prime Minister Netanyahu under investigation. Designed, developed and manufactured by thyssenkrupp, the submarines are one-third funded by German military aid to Israel. Through Norway’s extensive portfolio, they are very clearly backing a network of military deals that feed further conflict, genocide and corruption.

Italy

Few investments in Norway’s portfolio illustrate its ethical blind spots as starkly as its stake in Anglo-Italian arms manufacturer Leonardo. With around $206 million invested, the company has become a focal point for divestment campaigns – and for good reason. 

Leonardo supplies the Oto Melara 76/62 Super Rapid 76mm naval guns, a key component of Israel’s Sa’ar 6 warships. These warships have been deployed in operations targeting Gaza, underscoring the company’s role in civilian violence. Headquartered in Rome, Leonardo is also a significant player in the F-35 program. Through its subsidiaries, the company provides sensors, integrated mission systems, tactical workstations, displays, avionics, and other military tech.

Leonardo also has a history of shady corruption. In 2017, Norges Bank decided to place Leonardo under observation, based on a recommendation from the Council on Ethics to exclude the company due to unacceptable risk that the company contributes to or is responsible for gross corruption. However, the observation was discontinued in 2022 as ‘the Council considers that the risk of gross corruption in the company’s operations no longer is unacceptable’. The first time a recommendation refusal like this has occurred. 

Yet, Leonardo still continues its corrupt business practice. The company was recently embroiled in a scandal involving the Indonesian Air Force’s purchase of an AW101 helicopter, where millions of dollars were funnelled to middlemen as bribes, with one of the facilitators receiving a 10 year prison sentence as recently as 2023. The Indian VVIP Helicopter Deal is another recent example of corruption implicating Leonardo, with evidence presented in Italian courts indicating that they paid up to €51 million in bribes to Indian Air Force officers, bureaucrats, and politicians to facilitate the procurement of defective helicopters. The company has also been accused of providing the military junta in Myanmar with weapons in violation of a UN arms embargo. 

Leonardo is also complicit in the production of nuclear weapons for the French program through MBDA, a joint venture with BAE Systems and Airbus. The production of nuclear weapons has historically been a key reason for the GPFG to exclude certain arms companies. This, in turn, makes Norway just as complicit as the very companies it has divested from due to their involvement in nuclear weapons production. If the Council of Ethics fails to scrutinise Leonardo for its role in arming Israeli forces in their genocidal campaign, perhaps its numerous corruption scandals and nuclear weapons production will intensify the call for re-observation.

Japan

Billions of dollars seem to also make a detour from Norway into Japan’s defence and aerospace sector. The fund holds stakes in Mitsubishi, Kawasaki Heavy Industries, and Fujitsu – each one with some seriously questionable ties to Israel. Mitsubishi: its vehicles are used by the Israeli military and Border Police, essential for operations in the OPTs; Kawasaki Heavy Industries: a customer of drones supplied by Israel Aerospace Industries (IAI), directly supporting Israel’s advanced surveillance and combat capabilities; and Fujitsu: which provides digital defence tech used by the Israeli military, has set up an R&D centre in Tel Aviv, further embedding itself in Israel’s military-industrial complex – an investment unlikely promoting global peace.

South Korea

Norwegian funds also extend to South Korean weapons manufacturers with direct ties to Israel’s military operations. For example, Hyundai Rotem Co Ltd, supplied unmanned ground vehicles (UGVs) to Israel, bolstering its military capabilities; Hanwha Systems Co Ltd, collaborates with Israeli defence firms Elbit and Elta, providing advanced radar systems and cooperating on aviation technologies; And in 2023, Korea Aerospace Industries Ltd (KAI) took things to the next level with Israel Aerospace Industries (IAI), integrating the Adaptive Defence Array (ADA) system into their platforms. These are ‘battle-tested’ on Palestinians, before being exported worldwide – a grim sales pitch. 

The United Kingdom

Of course, Norwegian money also finds its way into the UK’s defence sector – the UK government being a strong supporter of Israel. Among these investments is QinetiQ. The British defence tech firm has collaborated with the Israeli military to develop the Watchkeeper drone system, a joint project with Israel’s Elbit Systems, to repeat, a company previously dropped from the fund. The drone which has racked up 100,000 hours of service in Iraq and Afghanistan. Following sustained direct action from Palestine Action, Elbit Systems UK lost its largest-ever British arms contract, worth over £2.1bn, after the UK Ministry of Defence scrapped its Watchkeeper drone programme. However, QinetiQ subsidiaries, such as QinetiQ Australia, are also involved in the F-35 fighter jet program, Israel’s go-to for air superiority.

Then there is Babcock International, another UK company in Norway’s portfolio. It claims it does not provide weapons to Israel, but with partnerships involving Israeli defence firms IAI, Elbit, and Rafael Systems, the line between ‘not involved’ and ‘indirectly arming’ becomes quite blurry. Babcock also  sustains the entirety of the UK’s submarine fleet, including by delivering through-life support and life extension of the UK nuclear armed Vanguard class submarine.

Norway’s largest UK arms investment, however, is in British engineering giant Rolls-Royce, where the fund holds more than a billion dollars in shares, representing over 2% of the company. Rolls-Royce is not just about luxury cars, it is a critical supplier on the F-35 program, powering Israeli military operations. Case in point: Rolls-Royce’s German subsidiary, MTU, produces the engines for Israel’s Merkava tanks and most of the Israeli Navy’s vessels.

Divesting from the UK defence sector is far from unlikely, as the Oil Fund previously decided to exclude BAE Systems, the UK’s largest arms company, from its portfolio in 2018. This decision was made following a recommendation from the Council of Ethics due to BAE Systems’ involvement in nuclear weapons production.

The United States of America

Unsurprisingly, Norway’s largest arms company investments are in the United States, with the Oil Fund investing almost $11 billion in stock. Of these US companies, all but one is linked to arms cooperation with Israel. The only exception, CACI International, having been found liable for torture at Abu Ghraib prison.

The largest investments – each exceeding $1 billion – are in General Electric Co, Parker-Hannifin Corp, Eaton Corp PLC, and Amphenol Corp. These may not be household names like Lockheed Martin or Boeing, but they are among the top 100 arms companies globally and deeply entangled in equipping Israel’s military. 

  • General Electric: Supplies engines for Israel’s primary military platforms, including F-16 fighter jets, Apache helicopters, CH-53K helicopters, and Sa’ar-class naval vessels.
  • Parker-Hannifin Corp which supplies fuel systems and gas systems for the F-35.
  • Eaton Corp: With multiple sites in Israel, Eaton produces components for F-16s and F-35s.
  • Amphenol Corp: Operates facilities in Israel, producing electrical and electronic connectors for military use.

But wait, there’s more:

The extent of these investments paints a clear picture: Norway is heavily complicit in arming Israel through its US stock holdings. While these companies lack the public notoriety of other arms companies, their relative anonymity provides a veil of plausible deniability, shielding Norway’s actions from greater scrutiny.

The Real Question

The evidence is clear: the fund channels billions of dollars into corporations that fuel violence, sustain occupations, and profit from human suffering. These aren’t just financial decisions; they’re moral failings, directly contradicting the fund’s stated ethical guidelines. These investments, from which all Norwegian citizens profit, are complicit in violations stretching far beyond Gaza, with arms being shipped worldwide, inevitably and uncontrollably ending up in conflict zones

How does Norway square these investments with its loud-and-proud commitment to peace and human rights? Is this ignorance or hypocrisy? And shouldn’t these ‘quiet contributors’ to global conflict get their fair share of public scrutiny – or better…shame? 

The solution is clear: Norway must divest entirely from arms companies. If done now – Norway can restore a level of credibility to its claims of ethical leadership.

As one of the world’s wealthiest nations, Norway has the privilege, and the responsibility, to lead by example. Divesting from arms companies will send a powerful message: that peace and human rights are not negotiable, and profit should never come at the expense of lives. This vast wealth presents a significant opportunity – to redirect investments toward peaceful initiatives and the development of renewable energy. It is time for Norway to reconcile its values with its investments and show the world what ethical governance truly means.

 

 

Note: Some of the investment data in this piece has been updated to reflect most recent publications on March 5th, 2025.