New Delhi: The ethics body overseeing Sweden’s four national multi-biillon dollar pension funds has recommended excluding public sector defence major, Bharat Electronics Limited (BEL), from its portfolio due to the company’s sales to Myanmar. However, it did not exclude private firm Adani Ports, observing that the company had exited Myanmar “responsibly”.Even as New Delhi had called for a democratic transition, the Indian government has maintained close ties with the Junta in Myanmar after the 2021 coup, with an eye on Nyay Pyi Daw’s ties with China.In its 2024 annual report released earlier this week, the Council on Ethics of the AP-fonden (Allmänna Pensionsfonden) proposed BEL’s exclusion, stating that “the company’s sale of weapons to the Myanmar military is deemed to contribute to human rights violations”.The decision, it added, was in line with the UN Global Compact and Chapter IV on Human Rights in the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.According to its website, the Council on Ethics – formed by Sweden’s First, Second, Third, and Fourth National Pension Funds – works to “make improvements in sustainability and to support the AP Funds in complex sustainability areas.”The annual report noted that BEL had involved in the sale of weapon systems, including radar, air defence systems, radio systems and equipment for naval vessels, to Myanmar military, “both before and after the military coup in February 2021”.“The company’s export of weapons to the Myanmar military is deemed to have contributed to its ability to carry out violence against the civilian population, in violation of international humanitarian law,” the report observed.It noted that exclusion is the Ethics Council’s last resort when dialogue with a company fails to produce results. BEL was the only firm recommended for exclusion among the 3,307 global companies screened by the Council.The report also stated that “despite repeated attempts at contact, the company has not been willing to engage in dialogue with the Ethics Council.” Nor, it added, has BEL “engaged in any substantive dialogue with other stakeholders on this matter.”Last month, an industry media outlet reported that Sweden’s First Pension Fund (AP1) had exited BEL following the Ethics Council’s recommendation. AP2 had reportedly held equity worth $33.8 million in BEL but has since divested.However, AP7, a Swedish pension fund not affiliated with the Ethics Council, continued to hold shares in BEL, valued at $28.7 million.The advocacy group, Justice for Myanmar, which has published reports of BEL’s sales to the South-east Asian nation, welcomed the announcement of exclusion of the Indian public sector firm.“This sends a strong message to BEL that business with the Myanmar military not only flouts international law. It’s also a bad investment,” said JFM spokesperson Yadanar Maung in a statement. “This should be a wake-up call to the Indian government to finally end its transfers of arms and military equipment to the Myanmar military and abide by its obligations under international law.”Another Indian company, Adani Ports, which had been under the Ethics Council’s scrutiny for its links to Myanmar’s junta, was not excluded.The report noted that a dialogue with Adani Ports began in 2021 as the company was found to have “indirectly financed human rights violations” through its business relationship with Myanmar Economic Corporation (MEC), a company linked to the Myanmar military junta. Adani Ports had signed an agreement with MEC to operate a container terminal in Yangon.The Council observed that Adani Ports announced its intent to withdraw from Myanmar in 2021. “The exit was completed in 2023 and verified by a third party, confirming that it was carried out responsibly,” the report stated.It further noted that Adani committed to ongoing reporting and to engaging third-party consultants with human rights expertise for broader impact assessments in all new operations in high-risk areas.“Given APSEZ’s responsible exit from Myanmar and its commitment to future human rights assessments, the Ethics Council considers the dialogue’s objectives to have been met,” it concluded.“The dialogue is now closed, but a separate discussion on environmental impacts from projects in India and Australia remains ongoing,” the report added.
