Norway oil fund slams firms on ethics, governance

* PetroChina not excluded after review

* Asks 6 top U.S. firms to make board nomination easier

By Balazs Koranyi and Gwladys Fouche

OSLO, Dec 6 (Reuters) - Norway's oil fund, one of the biggest equity investors in the world, will exclude several companies from its investment list due to ethical concerns and called on six large U.S. firms to make it easier for shareholders to nominate board members.

The $558 billion fund will no longer invest in chemical and engineering conglomerate FMC Corporation and fertiliser-maker Potash Corporation because it says they buy phosphate from Western Sahara, which it deemed a "particularly serious violations of fundamental ethical norms".

Contacted by Reuters on Tuesday, FMC had no immediate comment. Potash could not be reached for comment.

The fund said Potash and FMC purchased phosphate from the Moroccan company Office Cherifien des Phosphates (OCP), which extracts phosphate in Western Sahara, a disputed territory in North Africa that is not self-governed but under Moroccan control.

In April Potash confirmed in a statement on its website that it bought phosphate rock from OCP and added it was "mindful of the dispute between the Kingdom of Morocco and parties who claim to represent the interests of the inhabitants of Western Sahara."

"Like many interested parties to the dispute we are looking forward to a peaceful United Nations sponsored solution," it said.

In addition to the exclusions, French firm Alstom was put under review for four years due to what the Norwegian finance ministry said was "the risk of gross corruption in the company's operations".

Swiss authorities fined Alstom last month for corporate negligence as part of a corruption probe at the French power and engineering group.

"We are extremely surprised. We refer to the decision taken by a Swiss court on Nov. 22," said an Alstom spokeswoman, referring to the fine which involved corporate negligence but not bribery.

However, PetroChina has been kept on the fund's investment list after a review.

Managed by a unit of the Norwegian central bank, Norway's wealth fund, commonly known as the "oil fund", invests abroad the Nordic state's tax revenues from oil activities to save for future generations.

It is one of the world's largest funds and is Europe's biggest equity investor.

Recommendations on exclusions are made by an ethics council that reports back to the Norwegian finance ministry, which has ultimate responsibility for the fund.

WANTS MORE ACCOUNTABILITY

Separately, the fund said it has filed proposals with Wells Fargo, Charles Schwab, Western Union, Staples, Pioneer Natural Resources and CME Group to make it easier for shareholders to nominate board members.

"We have looked at a range of issues and selected these companies where we felt that boards we entrusted with the stewardship of our investment were not sufficiently accountable," Anne Kvam, Director of Corporate Governance at the fund told Reuters.

"We looked at traditional corporate governance issues but also took into account their unsatisfactory financial performance," Kvam said.

She added that all six companies have in the past ignored some majority-approved shareholder proposals and the current regulations make it difficult to hold boards accountable.

The U.S. Securities and Exchange Commission earlier proposed a rule broadly in line with the oil fund's proposal but a U.S. court struck it down, saying such rules could be set on a case-by-case basis.

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