Pension funds: guarantors of international legality in Western Sahara? Evidence from Norway and Sweden

Abstract

Natural resources have been defined by the Sahrawi Arab Democratic Republic, Polisario Front, and a number of non-governmental organisations not only as an essential part of the Western Sahara conflict, but also as a battlefield that has attracted the interest of the international community. This article explores how the ethical trade guidelines of two large institutional investors–the Norwegian and Swedish pension funds–have affected the behaviour of companies that export and exploit the natural resources of Western Sahara. The results of applying a triad-network model suggest that as pension funds have more instruments of influence, their strategy becomes more effective. Moreover, investments that follow ethical trade guidelines play a key role in pressuring companies to modify objectionable behaviours.