The Council on Ethics recommends that Power Construction Corp of China Ltd (PowerChina) be excluded from investment by the Norwegian Government Pension Fund Global due to an unacceptable risk that the company is contributing to, or is itself responsible for, serious environmental damage.

PowerChina is a Chinese multinational company that engages in the construction of hydropower schemes and operation of power stations. Its subsidiary Sinohydro Corp Ltd, is responsible for the construction and operation of the Batang Toru hydropower project, which lies in North Sumatra,  Indonesia. The project is located in a Key Biodiversity Area, which is also home to the critically endangered Tapanuli orangutan. The Tapanuli orangutan is the most endangered of all the great apes. There are fewer than 800 of these animals left in the Batang Toru forest, which is the species’ only remaining habitat worldwide.  This habitat is estimated to cover less than 5 per cent of the Tapanuli orangutan’s original range. The hydropower project lies in the area with the highest concentration of orangutans and is also home to a number of other critically endangered species. PowerChina has not replied to the Council’s queries.

The Council concludes that the construction of the hydropower project in Batang Toru will have a destructive and permanent impact on the environment, which will pose a serious threat to the survival of this orangutan species as well as other critically endangered species.

The Council on Ethics submitted its recommendation on 14 February 2023. Norges Bank published its decision to exclude the company on 6 July 2023.

Please find the Council’s recommendation here.