New Delhi: Citing alleged violations of or a high risk of violating their responsibilities pertaining to human rights, labour conditions and the environment, a Swedish pension fund this week excluded four Indian firms from its investment portfolio.

The firms are Bharat Electronics Limited (BEL), which was excluded for alleged human or labour rights-related issues; Hindustan Aeronautics Limited (HAL), excluded for the same reason; Tata Power, excluded for alleged environment or climate-related issues; and Vedanta, excluded for the same reason.

State-run premium pension fund AP7's move on Monday (December 8) came months after an ethics council working with four Swedish income pension funds recommended BEL's exclusion because its sale of weapons to the Myanmar military was assessed to have contributed to the latter's ability to perpetrate violence against civilians.

Justice for Myanmar, a group of covert activists working to trace and expose the Myanmar junta's sources of funding and which has pointed to BEL and HAL's dealings with Naypyidaw, welcomed AP7's exclusion of the two public sector units.

In announcing the companies it has excluded from its portfolio, AP7 said it divests from companies that it deems to have violated or to be at a high risk of violating the UN Global Compact's principles for corporate responsibility with regards to human and labour rights, the environment and corruption.

It also said it had decided to exclude companies at “high risk of failing in the climate transition” as well as firms at risk of human rights violations in conflict areas, something it seeks to expand to cover other norms-based grounds.

BEL, HAL, Tata Power and mining giant Vedanta were among a total of 35 global companies excluded on Monday, among which are the energy firms BP, Chevron, Petrobras and TotalEnergies, all of which were flagged for alleged environment or climate-related issues.

Other Indian firms the fund has previously excluded include Adani Power, Adani Enterprises, Bharat Heavy Electronics Limited, Coal India, JSW, L&T, the National Thermal Power Corporation and the Oil and Natural Gas Corporation.

AP7 did not specify the violations or risks it identified relating to the individual groups excluded on Monday.

Reacting to AP7's decision, Justice For Myanmar endorsed the move, saying “Swedish pension money should not be invested in companies that sell weapons to or fund the Myanmar military junta”, which took over the reins in a 2021 coup and has been criticised for its atrocities against Burmese civilians.

Earlier the collective had flagged BEL's shipments of military-use equipment to Myanmar after the coup as well as HAL's past dealings with the junta. It had also pointed to the air force and other Indian public sector units' business with the Burmese military.

The council of ethics working with Swedish income pension funds AP1, AP2, AP3 and AP4 had said in its most recent annual report that BEL was involved in the sale of weapons systems – including radar, air defence systems, radio systems and equipment for naval vessels – to the 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,” it had said.

Justice For Myanmar also supported AP7's decision to exclude the PTT Exploration and Production Thai oil company as well as the Tokyo-based Sumitomo Corporation.

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