Danske Bank still has large customers in the banking business that are drilling and exploring for oil fields in the North Sea, among other places.

Although the bank launched a climate plan in 2023 and has just updated its investment policy targeting fossil fuel companies, the bank continues to help Norway’s second largest oil group, Aker ASA, with new bond issues. Danske Bank confirms the agreements, which have a total value of more than DKK 2 billion.

“The agreements with the Aker Group clearly show that fossil expansion still plays a major role in Danske Bank’s banking business. The bank’s climate plan has not put an end to this,” says Carsten Tanggaard, Professor of Finance at Aarhus University.

The Norwegian oil group escapes the bank’s climate plan because the rights to the oil are placed with the subsidiary Aker BP – and not with the parent company Aker ASA or its sister company Aker Solutions, with whom the bank has formally entered into the agreements.

THE FACTS

Aker Group’s rights to oil & gas fields on the Norwegian Continental Shelf

The map shows both rights to fields that can be developed and fields that are currently producing. The rights to the oil & gas fields are owned by Aker BP, which is controlled by Aker ASA.

Source: The Norwegian Soil Directorate, Ministry of Energy in Norway.

“A free ride with no effect”

According to a response from Danske Bank’s Global Head of Sustainable Finance Samu Slotte, the bank’s climate plan only targets fossil customers who own license rights for fossil extraction and exploration for new oil fields.

And the bank has virtually none of them, and that has always been the case.

Only three of the bank’s 62 oil and gas customers since 2016 until the launch of the climate plan in 2023 own oil extraction rights. This is according to data collected by Danwatch and Finanswatch.

The remaining 59 companies do not own oil licenses but perform tasks such as oil drilling, oil production, fossil exploration and rig maintenance for licensees. They are therefore not excluded from the restrictions of the bank’s climate plan, even though they are in practice participating in fossil fuel expansion.

The climate plan is therefore a free ride, according to Carsten Tanggaard, after Danwatch presented him with documentation showing that the bank’s climate plan has limited impact on the bank’s business and continues to service fossil fuel activities.

“It looks like a very deliberate and convenient choice on the part of the bank to let the formal right to oil fields determine whether a company is considered climate-friendly or not. To me, it seems far-fetched and a completely free ride with no effect,” says Carsten Tanggaard.

Climate plan ignores fossil activities

Before the launch of its climate plan in 2023, Danske Bank had Aker BP on its customer list, but because Aker BP owns the rights to the group’s oil fields, they can no longer be a customer of the bank.

On the other hand, both parent company Aker ASA, which controls Aker BP, and sister company Aker Solutions, which supplies equipment for drilling platforms and fossil fuel production facilities, are now on the customer list.

The agreements are thus fully in line with the bank’s climate plan, because the rights to the oil extraction are placed with Aker BP – and not with either the parent company or its sister company, both of which are now customers in Danske Bank’s corporate customer department.

“I find it strange that a climate plan ignores the actual fossil fuel activity and instead focuses on licenses and corporate structure. You may be able to bluff your stakeholders, but not the climate, which deteriorates regardless of who produces and extracts the oil,” says Carsten Tanggaard.

Danwatch has previously revealed that the bank also continues its customer agreements with oil companies BW Offshore and Odfjell Drilling, among others.

Odfjell Drilling does not own oil licenses itself, but carries out oil drilling for both Aker BP and Norway’s largest oil company Equinor. BW Offshore also slips through the climate plan, as their license rights to the group’s own oil fields are formally owned by the sister company BW Energy.

BW Offshore produces oil for BW Energy from floating oil platforms, so-called FPSOs (Floating Production, Storage and Offloading). Both companies are owned by BW Group.

At Merkur Andelskasse, which is considered one of the most climate-focused banks in the country, CEO Charlotte Skovgaard believes that climate considerations are a management responsibility.

“If large financial players want to be green, I would recommend that they anchor it in their strategy so that it is clear how they prioritize combating the climate crisis compared to creating financial results. Because there is something wrong with the governance structure if it is possible to get around climate promises with technical explanations,” says Charlotte Skovgaard.

Investors demand reassessment of climate plan

The loopholes in the climate plan that allow the bank to continue to make big money from services that support oil extraction and fossil fuel expansion should be closed.

This is according to Jasper Riis, Investment Director at P+, which has invested 280 million in Danske Bank.

As part of our dialog with Danske Bank, we will focus on the fact that the bank should generally raise the level of ambition and that the climate policy should also include those activities that are currently not sufficiently addressed,” says Jasper Riis.

AP Pension, which has excluded Aker and 172 other oil and gas companies for climate reasons, also reacts to Danske Bank’s agreements with the oil companies. AP Pension will now include Danske Bank’s climate plan in the pension fund’s active ownership of the bank.

We are discussing with our external partner whether their dialog with the company includes this topic, and we will also take note of our voting at the upcoming annual general meeting,” says Anna Maria Fibla Møller, Head of Sustainable Investments.

THE FACTS

Danske Bank’s fossil fuel customers

Overview of Danske Bank’s fossil customers (oil & gas) within loan financing and financial services in the period 2016 and up to 2022, just before the bank’s climate plan was launched.

Only four companies own fossil extraction rights, two of which have merged (Aker BP and Lundin Energy). Danske Bank’s climate plan excludes just three of the bank’s 62 fossil fuel customers.

Danske Bank has not wished to comment on the list.

Source: www.bankingonclimatechaos.org

According to Charlotte Skovgaard, financial institutions should clearly communicate the dilemmas they face when it comes to how the climate crisis can affect their business.

“There are dilemmas between climate concerns and profit, and it should be clear to consumers that you will lose revenue in the short term by not making money from the fossil fuel industry, but we will not solve the climate crisis if we continue to send money to fossil fuel companies,” says Charlotte Skovgaard.

New financial data from LSEG Data & Analytics shows that since the launch of its climate plan in January 2023, Danske Bank has participated in financing agreements with companies that own, apply for and are awarded new licenses for oil extraction in the North Sea, Barents Sea and Arctic. Here are the latest deals that Danwatch can reveal.

Aker ASA – Bond issue of DKK 820 million.
In the beginning of 2024, Danske Bank participated in Aker ASA’s bond issue worth EUR 1.25 billion. NOK. Aker ASA is the majority owner of Norway’s second largest oil company, Aker BP. The money was raised just one week after the Aker Group was awarded 27 new licenses to explore for new oil and gas deposits on the Norwegian continental shelf. The money is not earmarked and can be used for any purpose (General Corporate Purpose). The Aker Group holds 179 licenses with rights to fossil exploration and production.

Aker Solutions ASA – Credit agreement of DKK 1.95 billion.
On January 31, 2023, Danske Bank is co-arranger on the renewal of a USD 285 million (approx. DKK 1.95 billion) credit agreement with Aker Solutions. Aker Solutiones is part of the Aker Group and delivers installations for oil & gas extraction and equipment for floating production storage and offloading (FPSO). Aker Solutions has, among other things, supplied equipment and technology for Equinor’s oil extraction in the Johan Castberg field, one of the largest in the Barents Sea.

Sval Energi AS – Credit facility of DKK 9 billion
On February 20, 2023, Danske Bank participates in a credit facility of USD 1,325 million (approx. DKK 9 billion) to Sval Energi. The credit agreement is concluded on d. 20.2.2023 and runs until 2028. Sval Energi currently produces from 15 oil and gas fields on the Norwegian Continental Shelf and owns a total of 58 licenses, of which four new fields are under development. According to Danwatch’s information, the credit will be used as investments (CapEx). These are typically funds that a company uses to maintain production facilities or to implement new projects.

KNOT Offshore Partners LP – Loan agreement of DKK 300 million.
On June 2, 2023, Danske Bank enters into a loan agreement with other banks and commits to deliver USD 44,500,000, just over DKK 300 million. KNOT owns and operates shuffle tankers that transport oil between oil drilling platforms and oil tankers that send the oil out into the world. KNOT works for customers such as Shell and Equinor.

No impact on earnings

Danske Bank confirms in an email that the bank’s climate targets also do not capture financial services, a business area where Danske Bank has many fossil fuel customers. Financial services are, for example, financial advice, which earns Danske Bank DKK 5.7 billion annually.

“Danske Bank’s climate action plan does not yet include information or targets for emissions related to fees from servicing customers’ fundraising via the bond and equity markets,” the bank’s press department writes in an email to Danwatch.

Although the bank’s climate plan formally excludes both lending and financial services to oil and gas companies, in practice it does not seem to have had any particular impact on the number of Danske Bank’s fossil fuel customers.

A review of Danske Bank’s financial statements for 2023 shows that earnings from financial services to large customers are at the same level as the previous year.

Nor has the volume of credit and lending changed since the bank launched its climate plan. Danske Bank confirms this to Danwatch.

THE FACTS

Bank lending to fossil fuel companies

Danske Bank states that since the climate plan in 2023, its lending to fossil fuel companies has fallen from DKK 2.7 billion to DKK 2.6 billion, a drop of just 3.7 percent. The statement does not include financial services, such as the agreement with Aker ASA.

Source: Danske Bank investor presentation

“Our exposure (to oil and gas, ed.) already decreased significantly before we announced the end of lending to E&P (companies that explore, extract and produce oil and gas, ed.),” Danske Bank’s press department writes in an email.

“This shows that we already acted on this before updating our policy and that we have not “speculated” on issuing a lot of loans before the announcement that we could profit from,” the bank writes.

In addition, as already mentioned, the bank’s total number of fossil customer relationships in 2023 is largely unchanged compared to 2022, the year before the climate plan.

“A financial institution can channel money out in many ways, and Danske Bank can apparently continue with pretty much the same fossil fuel customers they had before they announced the climate plan in 2023,” says Carsten Tanggaard.

Climate targets do not apply to a third of large customer business

The bank’s CO2 reduction targets are measured in so-called financed emissions. However, the metric does not include greenhouse gases associated with financial services, where the bank serves many of its large fossil fuel customers.

Emissions from financial services, on the other hand, are included in another metric called facilitated emissions. A ratio that the bank does not use.

Facilitated issues cover all the issues associated with services such as advisory, issuance and underwriting. While funded issues are accounted for as assets from loans and investments. Financial services account for 36 percent of the bank’s key account business, corresponding to the aforementioned DKK 5.7 billion.

Andreas Rasche, Professor of Sustainable Finance at Copenhagen Business School, believes that the bank should include financial services in its climate goal and thus take responsibility for emissions from the oil production that the bank helps finance.

“I expect Danske Bank to streamline its exclusions based on funded issuances with a policy that also applies to facilitated issuances. It is crucial that financial institutions adopt relevant policies to avoid inconsistencies,” says Andreas Rasche.

Very few banks include emissions from services, and there’s a reason for that, according to Jeanne Martin, Head of Banking Campaigns at ShareAction, which promotes responsible investing.

“In theory, any sector with emissions should calculate facilitated emissions, because they do exist. Progressive investors should push for more transparency and accountability in the handling of facilitated issuance in the banking sector,” she says.

However, it may be difficult to get banks to take responsibility for the service part of their business, according to Jeanne Martin.

“Banks generally believe that their role as service providers in capital market transactions absolves them of full liability,” she says.

An analysis by the NGO Rainforest Action Network (RAN) shows the participation of the world’s 60 largest banks, including Danske Bank, in the period 2016 to 2022 in loan financing and financial services to the fossil fuel sector. The analysis is based on data from Bloomberg Finance, IJGlobal database and Urgewald’s Oil & Gas Exit List.

The analysis reveals that during the period, Danske Bank has had 62 fossil fuel companies on its customer list when it comes to loan financing and financial services. Danwatch has compared the 62 companies with active license owners of oil & gas rights on the Norwegian Continental Shelf, which covers the Norwegian part of the North Sea, the Norwegian Sea and the Barents Sea. Data on license owners is sourced from Norsk Petroleum.

The result of the comparison shows that before the launch of the climate plan, Danske Bank has only three customers who own licenses.

In the Indian port of Vadinar, a long fuel terminal is sandwiched between a colourful coral reef and a multitude of oil vessels.

From here, around 200 large vessels been shipping fuel to Europe and elsewhere since the sanctions against Russia’s energy exports came into force.

But the cargo on the tankers comes from a Russian-owned refinery called Nayara Energy, which allows Russia to sell oil regardless of the sanctions, and is dubbed the “European nightmare scenario”.

Now Danwatch and Ekstra Bladet have revealed that the Danish tanker company Hafnia has transported Russian oil products with an estimated value of up to DKK 2 billion from the Russian refinery with Kremlin connections.

Rosneft is sanctioned, so one might ask why the import of oil from the refinery in Vadinar is not sanctioned. In practice, Rosneft has significant influence
Craig Kennedy
Researcher at Harvard University’s Davis Center

Hafnia, which calls itself the world’s largest tanker company, had the following tankers pass the oil quay in Vadinar between July and August: Hafnia Africa, Hafnia Australia, Hafnia Excellence, Hafnia Seine and Hafnia Shenzhen.

They have transported the products to countries such as Denmark, the UK, Tanzania and the Emirates, and in this way, the company has helped Russia get their oil products to Europe, despite the sanctions.

The vessels have carried more than 2.5 million barrels of Russian aviation fuel and diesel, according to data from the Centre for Research on Energy and Clean Air (CREA) and MarineTraffic.

OVERVIEW

Hafnia’s routes from India

The map shows the routes of Hafnia’s five vessels

Source: MarineTraffic

OVERVIEW

Hafnia’s routes from India

The map shows the routes of Hafnia’s five vessels

Source: MarineTraffic

Since the oil products are refined in India, it is not illegal to import them to Europe, but the trade still helps to counteract the intent of the sanctions, according to researcher and sanctions expert Kim B. Olsen from the German Council on Foreign Relations. Olsen from the German Council on Foreign Relations.

He is an expert in Europe’s use of sanctions and has a career background as a foreign affairs analyst at the Danish Institute for International Studies with a focus on sanctions.

“It’s a bad scenario that the Russian state can establish a company in India to buy cheap Russian oil and sell it to Europe as Indian fuel and still reap some of the profits,” he says, adding:

“It exposes the limitations of sanctions. The EU and the US have gone to great lengths to try to get third countries like India to join our side and ensure that sanctions are not circumvented. But very few non-Western countries have been willing to contribute to that. So it’s a nightmare scenario, but also a nightmare that was foreseen,” he says.

Hafnia silent about Indian business

One of the five Hafnia vessels that made the journey from the Russian refinery in India ended up in Copenhagen on 2 October.

It was Hafnia Africa that delivered almost 30 million litres of Russian aviation fuel to Prøvestenen near Amager, as Danwatch has previously revealed.

Apart from a brief telephone conversation in mid-December, Hafnia has not been contactable. Both Danwatch and Ekstra Bladet have tried to contact them by phone, text message and email several times, but no one returns their calls.

When we contacted Hafnia’s reception in January to get in touch with the company’s press officer, we were transferred, but the call once again went to voicemail. Since then, it hasn’t been possible to get reception to connect us.

Despite the fact that Hafnia on their own website describes how transparency is particularly important to them, it is not possible to get a comment on their business with Nayara Energy.

You have to ask yourself: What do we as a company want to be a part of when our home country is in open conflict with Russia?
Kim B. Olsen
German Council on Foreign Relations

Danwatch and Ekstra Bladet also wanted to know to whom Hafnia has supplied Russian aviation fuel in Copenhagen.

On their website, Hafnia also writes that they recognise the UN Universal Declaration of Human Rights and that they have a special interest in working against corruption

Therefore, Hafnia will also not “facilitate payments intended to expedite or secure the performance of routine official acts by governments”.

However, the refinery in Vadinar was specifically established so that Russia can continue their routine oil exports to Europe, Kim B. Olsen assesses. Among other things, he refers to a statement from the state-owned Russian bank VTB Bank, where they themselves emphasise that Nayara Energy’s ownership structure is designed to evade sanctions.

“Russia has stated this itself. It is part of their preparation to mitigate the negative effects of the sanctions. A structure is being created where oil can still be sold, where the revenue and the profits still flow back to Russia,” he says.

  • Why is Hafnia continuing the do business with Nayara Energy, and do you have any concerns about the fact that some of the profits from the oil products end up in the hands of the Russian state?
  • What is Hafnia’s position on the fact that you are shipping products from a Russian-owned company in India, which is deemed to be counterproductive to the purpose of the sanctions?
  • Will Hafnia continue to do business with Nayara Energy?
  • To whom did you deliver 30 million litres of aviation fuel at Prøvestenen on 2 October?
  • How much has Hafnia transported in total from the refinery in Vadinar to Denmark since the sanctions came into force?

At the same time, he believes that transparency is important among companies that do business with companies like Nayara Energy.

“The conflict between Europe and Russia has resulted in costs for consumers. Increased inflation and high energy prices have affected the everyday lives of ordinary Europeans. It is only fair that consumers can question companies’ business practices, even if they are legal,” he says.

The Indian loophole

Although it is legal to buy aviation fuel from Nayara Energy, this is only possible because the Russians are exploiting a loophole in the sanctions that Europe cannot simply close.

Because almost half of Nayara Energy is owned by the Russian state through the oil company Rosneft and about 25 per cent by a private equity fund founded by a Russian billionaire and oligarch connected to Rosneft.

Since neither of them owns the majority stake in the company, it is technically not Russian.

American researcher Craig Kennedy, an expert on Russian oil and sanctions at Havard University’s Davis Center, says that the Vadinar refinery could become a problem for the West if action is not taken.

“Rosneft itself is sanctioned, so one might ask why the import of oil from the Vadinar refinery is not sanctioned. In practice, Rosneft has significant influence over the refinery, but on paper they only own 49 per cent. And according to EU regulations, this may allow the refinery to avoid being sanctioned like Rosneft”, he says and adds:

“It’s a challenge for the authorities. It’s a loophole that needs to be addressed. And while Vadinar’s European sales are currently small in overall Russian exports, this is a leak that could turn into a flood, and then it becomes a real problem.”

Hafnia has, among other things, delivered Russian aviation fuel to Prøvestenen on Amager, as seen in the picture here.

According to Kim B. Olsen, companies trading in such products therefore have a great responsibility to conduct a thorough risk assessment of those they trade with.

“While there is nothing legally wrong with the trade, it is an example of how companies become pawns in the geopolitical game. Sanctions and EU states have limited reach, and this is where the choices made by the companies become relevant,” he says.

When Russia invaded Ukraine, many companies withdrew from the Russian market, not because of sanctions, but for moral reasons.

This is precisely where companies become actors in the conflict when they choose to either continue or stop their trade with Russia, Kim B. Olsen points out.

“Even if it’s within the framework of what you can legally do, it doesn’t mean you’re exempt from criticism. You have to ask yourself: What do we as a company want to be a part of when our home country is in open conflict with Russia?”, he says.

Danwatch and Ekstra Bladet are still trying to get a comment from Hafnia. The first contact with the tanker company was in mid-December and the latest attempt to get a response was made on 10 January.

In addition, there is still no answer as to who bought 30 million litres of Russian aviation fuel, which was delivered by Hafnia Africa in Copenhagen on 2 October.

A 220-metre-long tanker entered the port of Copenhagen on 2 October.

At 18:22, the vessel docked at the oil port at Prøvestenen near Amager and emptied its cargo of around 184,000 barrels of jet fuel, corresponding to almost 30 million litres.

The tanker docked at the large silos of the Danish company Oiltanking Copenhagen on Amager.

This is according to data extracted for Danwatch by the international research institute Centre for Research on Energy and Clean Air (CREA).

The cargo comes from Vadinar in India and has an estimated value of DKK 150 million based on the price of jet fuel at the time.

On the surface, the jet fuel is Indian, but in reality it is purchased by a Russian-owned company that refines Russian oil and whose ownership structure is designed to just barely evade EU and US sanctions.

The Russian-owned company is Nayara Energy, which controls India’s second largest oil refinery and the associated oil port in the Indian city of Vadinar. Three quarters of the refinery is in Russian hands – the majority directly under the Russian state.

By importing Russian crude oil into India and turning it into jet fuel, they can sell it back to Europe as an Indian product that is not sanctioned.

There are always loopholes in sanctions (…) but when they are exploited like this, it undermines the purpose of sanctions.
Kim B. Olsen
Researcher at the German Council on Foreign Relations

Going out and home again

Going out and home again

Click the numbers to read more

According to researcher and sanctions expert Kim B. Olsen from the German Council on Foreign Relations, the companies that still buy jet fuel from refineries such as Nayara Energy are undermining the intention of the sanctions aimed at not financing Russia's war in Ukraine.

He is an expert in Europe's use of sanctions and has a career behind him as a foreign affairs analyst at the Danish Institute for International Studies on sanctions.

"It's the European nightmare scenario that you can set up a company in India, buy cheap Russian oil and sell it as jet fuel to Europe, especially when the Russian state is involved," he says.

Although it is legal to buy jet fuel from Nayara Energy, this is only possible because the Russians are exploiting a loophole in the sanctions to continue selling their oil products to Europe. And that's why those who buy these types of products have a great responsibility to carry out a thorough risk assessment of those they do business with, says Kim B. Olsen.

"If a company deals in goods where Russia has traditionally had a large market, such as oil, you should investigate the ownership. Both because of the sanctions, but also to know where the money ends up," he says.

It is easy to see how the 30 million litres of Russian-origin jet fuel ended up in Copenhagen in October. But who ordered and paid for the fuel is still shrouded in mystery.

Danwatch has tried to find an answer.

Companies are clamming up

When the sanctions against Russia were adopted by the EU and the G7 countries, the intention was to stop the invasion of Ukraine by weakening the Russian economy, which is highly dependent on oil exports.

As a result, oil prices were capped and the purchase of a wide range of oil and fuel products from Russia was banned. Consequently, according to Kim B. Olsen, it is contrary to the objectives of the sanctions if Danish companies have found another way to buy the products legally.

"The EU has repeatedly pointed out that it is a problem that Russian oil is shipped to India, refined and sold to Europe. That is not the intention of the sanctions," says Kim B. Olsen.

Danwatch has asked 11 companies at Prøvestenen that either sell, store or use jet fuel whether they have ordered DKK 150 million worth of fuel from the Russian-owned company.

Eight of them flatly deny doing business with Nayara Energy - some even state that they do not import petroleum products from India at all, while one company has not responded to our inquiry.

That leaves SAS and BP, who will neither confirm nor deny whether they have anything to do with the jet fuel.

Oiltanking Copenhagen, which according to CREA received the cargo in Copenhagen, does not want to disclose the identity of the buyer of the jet fuel. CEO Karl Henrik Dahl declines to comment on customer relations, but emphasises that Oiltanking Copenhagen does not import or own fuel itself. They simply own silos at Prøvestenen and offer the storage space to other companies.

However, their customers count some of the largest Danish and international companies, including SAS and BP.

SAS writes in a comment that they have no knowledge of the import of the many litres of jet fuel. SAS does not import fuel to Prøvestenen itself, it says, but has it delivered by BP. However, they will not say whether they have been supplied with jet fuel from Vadinar by BP or whether they have pumped the fuel into their aircraft.

"We cannot comment on who BP has delivered to. That is for BP to do. Unfortunately, we have no further comments beyond the one we have already sent," writes press officer Alexandra Lindgren Kaokji.

According to information collected by Danwatch, it is possible to trace the country of origin of the fuel in Oiltanking Copenhagen's silos. Therefore, in principle, it should be possible for the companies at Prøvestenen to find out whether their jet fuel has come from India or not, regardless of who the supplier may be.

The British BP press office will not comment on the 30 million litres of jet fuel, but confirms that they deal with refineries like the one Russia controls in Vadinar. However, BP will neither confirm nor deny whether they are behind the shipment in question.

"BP purchases refined products worldwide, including from such refineries, in compliance with all applicable laws and regulations," the company writes in an email.

It is therefore not possible for Danwatch to get a concrete answer to this essential question:

Who will own up to buying Russian jet fuel for DKK 150 million?

Who did Danwatch ask?

  • SAS - denies importing, but says BP supplies them with fuel. They will not answer whether they have had it delivered by a company in Denmark and have used the fuel
  • BP - will not comment on the specific shipment, but confirms dealing with refineries like the one in Vadinar
  • Shell - rejects
  • Total - rejects
  • Danske Olieberedskaber - rejects
  • The Danish Ministry of Defence's Acquisition and Logistics Organisation - rejects
  • Dan-Bunkering - rejects
  • Velvet tank - does not import
  • Brændstoflageret Københavns Lufthavn (The Copenhagen Airport Fuel Depot) - does not import
  • Oiltanking Copenhagen - does not import
  • World Fuel Services - not responding

Lack of transparency

It's a great example of how quickly you can end up funding the Russian war machine.
Kim B. Olsen
German Council on Foreign Relations

The sanctions on Russia's oil exports were imposed to minimise the country's profits from their production of oil and oil products. The intention was not to stop the export, but to make sure Russia couldn't make too much profit from it.

That's why they put a price cap on the products. But Russia has earned over DKK 75 billion more than what the sanctions allow, according to an analysis by Bloomberg.

According to Kim B. Olsen, this possibility leads to several questions about the effect of the sanctions.

"It's a really good example of how quickly you can end up financing the Russian war machine. People keep buying Russian products, even though that may not be what they were expecting," he says.

About half of Nayara Energy is owned by the Russian state through the oil company Rosneft and about 25 per cent by a private equity fund founded by a Russian billionaire and oligarch connected to Rosneft.

There is a lack of "light in the room", says Kim B. Olsen, whose European companies on the one hand take a stand in favour of Ukraine, but on the other hand help finance the war by buying fuel from a Russian-owned refinery.

"There is no transparency. Even if it's legal, the question is whether it's morally right. It's ultimately up to the consumer. Therefore transparency is important," says Kim B. Olsen.

Among other things, SAS has previously condemned the Russian war in Ukraine and even removed products from Mondelez and PepsiCo from its aircraft because they are accused by Ukraine of sponsoring Russia's invasion.

Importing oil from the dark fleet

Data from CREA shows that approximately half of all oil imported by Nayara Energy comes from Russia.

On MarineTraffic, Danwatch has followed several vessels sailing to and from the oil port in Vadinar. We have compared them with data from Lloyd's List Intelligence, an international maritime data company, on the Russian dark fleet, which is used to circumvent the sanctions.

What is the dark fleet?

  • The so-called dark fleet are oil vessels used to circumvent sanctions against Russia. Several international organisations have revealed how the dark fleet has grown enormously since the war in Ukraine began.
  • Lloyd's List Intelligence defines dark fleet vessels as being more than 15 years old, not within the 12 major maritime insurance organisations (P&I Clubs) and often completely uninsured.
  • They bypass European ports for fear of being inspected, and their owners often hide behind complicated structures and networks of companies that make them difficult to trace.
  • The World Bank believes that the dark fleet is the reason why the EU price cap on Russian oil cannot be met.
Source: Lloyd's List Intelligence

This shows that the dark fleet is a major supplier of oil to Nayara Energy's port facility in Vadinar.

Experts from Lloyd's List Intelligence and the World Bank believe that the dark fleet is one of the main reasons why Russia is able to circumvent Western sanctions on Russian oil exports. Among other things, the World Bank has called the price cap almost impossible to enforce.

Large portions of the refinery's crude oil for the production of jet fuel are most likely overpriced and are therefore banned under US and EU sanctions.

The consequence is that Russia can sell its oil at a much higher price. The sanctions have capped the price of Russian crude oil at $60 per barrel, yet the average price of Russian crude oil is often much higher because the price cap is not respected.

In this way, Russia earns more money for the treasury and thus for the financing of the very war in Ukraine that caused the sanctions to be adopted in the first place.

There are also examples of supplies to Vadinar from companies that, according to US authorities, are in violation of the sanctions.

For example, the tanker NS Consul, which passed Skagen on Monday 27 November on its way to India and Vadinar. It is owned by the shipping company Oil Tankers SCF Management in Dubai. SCF in this context stands for Sovcomflot, Russia's state-owned shipping company.

Several vessels from Oil Tankers SCF were in November accused by US authorities of trading in sanctioned oil, according to Reuters.

It only makes the case more serious that Nayara Energy's suppliers are accused of sanctions violations, says Kim B. Olsen.

"It certainly challenges the intent of the sanctions significantly. There are always loopholes in sanctions due to complex markets and difficult legal issues, but when they are exploited like this, you undermine the purpose of the sanctions," he says.

We are still left without an answer to the question of who bought around DKK 150 million worth of jet fuel from a company controlled by Russia. A purchase for which no one has been willing to take responsibility.

Kremlin's threads to Nayara Energy

The refinery in Vadinar is one of the largest in the world. Photo: Nayara Energy (PR)

In 2016, India's Nayara Energy was sold to a group of foreign investors. According to Reuters, the deal was the largest foreign acquisition in India to date and the largest investment Russia had ever made abroad.

Both Vladimir Putin and Indian Prime Minister Narendra Modi were present when the agreement was finally signed in October 2016.

The sale was carefully structured so that Rosneft's ownership of Nayara would not exceed the 50 per cent that would otherwise subject Nayara to Western sanctions.

The remaining shares were instead acquired by a consortium of Russian and European investors under the Cyprus-based holding company Kesani Enterprises Company Limited.

This ownership structure makes sense given Russia's strategy of not being cowed by Western sanctions. A strategy that began after the Russian annexation of the Ukrainian Crimean peninsula almost a decade ago.

"Since 2014, Russia has done a lot of preparation to be able to circumvent and counteract Western sanctions. The fact that it's in the statutes just emphasises the reason why they do it," says Kim B. Olsen.

The Russian state was also deeply involved in the acquisition of the holding company.

Because according to a 2021 notification to the Indian stock exchange authorities, the money for the share of the Kesani consortium came from a huge loan from the Russian state-owned VTB Bank, which, like Rosneft, is subject to sanctions in both the EU and the US.

As collateral for the loan of up to DKK 25 billion, the consortium has pledged all its shares in Nayara Energy.

Here you can see the ownership structure of Nayara Energy. The remaining small percentages, which are missing in the graphic here, are owned by small private investors. Graphics: Mathias Glistrup

One of the main investors in Kesani is Russian oligarch and billionaire Ilya Sherbovich, who through his investment company United Capital Partners owns approximately 25 per cent of Nayara.

With a background as a board member of several of Russia's largest banks and oil companies - including Rosneft - Sherbovich has long been close to the Russian political elite.

While he himself is not sanctioned by either the US or the EU, he is identified by the Ukrainian authorities as a close friend of the Kremlin, personally coordinating all major transactions with a member of Putin's inner circle, Igor Sechin, who is currently the head of Rosneft.

Sherbovich himself has previously said that he is in regular contact with Sechin - albeit not as often as before - in connection with their joint projects. He also personally holds shares in Rosneft.

According to the ownership agreement, Rosneft, and thus the Russian state, has the right of first refusal to bid for the supply of crude oil to Nayara's refinery at Vadinar. And should Nayara receive a better offer, Rosneft has the right to match the price, after which Nayara is obliged to enter into a contract with Rosneft.

While it is still legal to do business with Nayara Energy despite the ownership structure, companies should realise that this is also because it may be too complicated to do so illegally.

Countries such as India have a completely different perspective on the war in Ukraine, and therefore Russia can hide behind the fact that the Indians are a Western partner that does not follow Western sanctions, says Kim B. Olsen.

"This is a political dilemma. It could just as easily be an attempt to put pressure on the Indians. But the pressure is limited when sanctions are circumvented in economically powerful countries with which the West would like to have a good relationship," he says.

In the creation of this article, we have made use of the Pension Machine. Developed by Danwatch.

Since October last year, Denmark’s third largest pension fund has made a remarkable decision.

The pension fund, which is jointly owned by the trade union 3F and the Confederation of Danish Industry, has welcomed new fossil fuel investments worth almost one billion Danish kroner.

One third is invested in 17 global coal companies, which together own 132 coal-fired power plants, 12 operating coal mines and 9 new ones under construction.

This is revealed in an investigation of PensionDanmark’s latest equity and bond investments, carried out by Danwatch in collaboration with Finans.dk.

The investments are controversial. In addition to the annual CO2 emissions from coal power plants, which are many times higher than Denmark’s annual emissions, the investments also undermine PensionDanmark’s climate commitments to exclude coal mines and phase out coal power plants.

THE FACTS

New coal mines and power plants

The map shows coal mines and coal power plants that PensionDanmark is connected to via new equity and bond investments made in the period from October 2022 to November 2023.

Sources: Global Energy Monitor, Urgewald and PensionDanmark’s holding lists. See all of PensionDanmark’s investments in the Pension Machine

High-level greenwashing

In 2019, PensionDanmark was a co-founder of the UN investor alliance Net-Zero Asset Owner Alliance (NZAOA). Membership commits to investing towards the goal of carbon neutrality by 2050. According to the International Energy Agency (IEA), in addition to stopping new investments in coal, it requires the phasing out of existing coal-fired power plants by 2040.

“No further coal-fired power plants should be financed, insured, built, developed or planned,” the alliance writes in a position paper.

Danwatch has presented the investments to Therese Strand, Associate Professor of Corporate Governance and researcher in institutional investors at Copenhagen Business School. She now criticises PensionDanmark for greenwashing.

In my opinion, this is high-level greenwashing.
Therese Strand
Copenhagen Business School

“PensionDanmark has promised its customers to support carbon neutrality by 2050, which means phasing out coal. They must deliver on this. In addition, they are a member of the Net-Zero Asset Owner Alliance, which under UN auspices obligates them in relation to other investors. In my opinion, it is high-level greenwashing to continue with new investments in energy companies that expand production from burning coal,” says Therese Strand.

PensionDanmark’s Head of Sustainability and ESG, Jan Kæraa Rasmussen, rejects the criticism. He does not believe that the new investments of over DKK 300 million in coal are problematic because the companies also make money on other things.

“I cannot see how this is greenwashing. When we calculate the coal share of revenue in the companies on the list (the list of new coal companies, Ed), our exposure is around DKK 100 million. We can vouch for that. I cannot take responsibility for more than what we have financed,” says Jan Kæraa Rasmussen.

I cannot take responsibility for more than what we have financed.
Jan Kæraa Rasmussen
Head of ESG, PensionDanmark

PensionDanmark excludes coal giant

Among PensionDanmark’s new investments is, for example, the Indian energy giant National Thermal Power Corporation (NTPC). According to data from Global Energy Monitor and Urgewald, NTPC is building new coal mines and increasing coal production from existing mines.

NTPC is therefore also one of the most excluded companies among Danish institutional investors, with Danske Bank and most recently Nykredit blacklisting the company.

NTPC states that they will keep their coal mines and power plants running beyond 2040 – partly due to the Indian government’s policy to increase the country’s coal production. The NTPC share has increased by 40 percent since the beginning of the year and has already been a good investment for PensionDanmark.

Nevertheless, PensionDanmark states that based on Danwatch’s investigation, they now exclude NTPC because the company is building new coal mines. The reason is that it is in direct conflict with the pension fund’s exclusion policy of “divesting from mining companies that start new thermal coal extraction”.

“In relation to NTPC, they supply power, including green power. We screen for new coal mines annually in December based on the IEA’s inventory, but based on your inquiry, we have already taken a closer look at NTPC and can see that they have applied for a new coal mine. Therefore, we are initiating an exclusion process, and NTPC is already out of our portfolio,” says Jan Kæraa Rasmussen.

Immediate divestment is one thing. Another question is why it only happens when Danwatch makes enquiries and why the investment was made in the first place?

“The exclusion decision is based on it being a new coal mine, and we did not have that information before or when we made the investment,” says Jan Kæraa Rasmussen.

With the upcoming exclusion of NTPC, five of a total of 21 new coal mines that can be linked to companies in the investment portfolio of PensionDanmark will disappear. Coal mine expansions continue to take place, among them the expansion of the Caval Ridge coal mine in Queensland Australia. The mine is owned by BHP and Mitsubishi Corporation, both of which are on PensionDanmark’s holding list.

If the parent companies of the mine owners are included, more can be added. For example, the expansion of the Carmichael Coal Project, also in Australia. The mine is owned by the Adani Group. PensionDanmark has invested in two Adani Group-controlled companies, Adani Ports & Special Economic Zone and Adani Electricity.

Investing in new coal power plants

PensionDanmark has added many new coal power plants through new investments in one of China’s largest energy producers, China Resources Power Holdings, the Czech Republic’s largest company, CEZ, the US energy company Dominion Energy and many more.

They are additional to other coal investments, including Korea Electric Power Corporation (KEPCO), which co-owns a huge coal power plant in Suralaya in the Banten province of Indonesia. KEPCO is expanding the plant, but the expansion does not cause PensionDanmark to exclude the company.

“We have a green partnership with KEPCO and they are very aware that they are being criticised for their energy mix. We need to keep the dialogue with them, and KEPCO is not where they need to be. We are invested in CIP, which has signed agreements for the supply of green power from 900 MW offshore wind connected to KEPCO’s grid, and we can easily justify investing in the company, even though there is a clear potential for improvement,” says Jan Kæraa Rasmussen.

NTPC and KEPCO are far from the only coal companies in the investment portfolio. According to PensionDanmark’s own calculations, a total of DKK 905 million has been invested in coal companies.

More than half of the new coal companies on the investment list do not have a phase-out date for their coal power plants, which is a prerequisite for achieving carbon neutrality by 2050.

According to Jan Kæraa Rasmussen, phasing out coal must be understood in relation to the specific situation. The UN alliance’s recommendation for a phase-out by 2040 is not an ultimate requirement to fulfil, says Jan Kæraa Rasmussen.

“The recommendation to phase out coal is not open to interpretation, but how you work with the recommendations may differ. I can guarantee that we are continuously tightening our requirements in relation to what is realistic,” says Jan Kæraa Rasmussen in response to the criticism.

Several coal companies seem to be working with the same logic. For example, Japanese companies Sumitomo and Mitsubishi have adopted climate plans but are still involved in coal.

Alliance partner demands explanation

NZAOA is endorsed by the World Wide Fund for Nature (WWF), which both provides the logo for the communication and puts credibility at stake as an official strategic advisor and alliance partner. Secretary General of WWF in Denmark, Bo Øksnebjerg, demands an explanation from the pension fund after Danwatch has reviewed the investments with him.

The world doesn’t need new investments in coal.
Bo Øksnebjerg
Secretary General, World Wide Fund for Nature WWF

“We want to make sure that the alliance members keep their agreements, which is why we have also contacted PensionDanmark to get an explanation of the investments. The world does not need new investments in coal, and our recommendation is not to invest in coal companies,” says Bo Øksnebjerg.

Bo Øksnebjerg also refers to the spirit of the alliance, which he believes PensionDanmark discredits.

“The agreement in the alliance is that coal companies will be phased out and these new investments do not support that. We are very disappointed. We do not believe that new coal investments are the way forward to fulfil the responsibility of reaching the goal of carbon neutrality. Nor do we believe that it reflects the spirit of the alliance’s rules of the game,” says Bo Øksnebjerg.

Green principles for sale

As we all know, the devil is in the detail. PensionDanmark’s CSR report states that coal should “as far as possible” be phased out by 2040. In the excruciatingly clear light of hindsight, this formulation looks like the perfect hedge against a change of mood in the financial markets. For example, when green investments are in decline and black investments are soaring, as is currently the case.

However, a change of CEO and a new dawn in the financial markets does not absolve a pension fund of responsibility, according to Therese Strand.

“Even if the financial markets turn and it becomes expensive to be climate-friendly, you cannot run away from your sustainability promises or green goals. Perhaps PensionDanmark has promised too much on the climate front, and now they cannot live up to it. The timing of the investments makes it clear that it is money and returns that speak. The principles were something they had as long as they could make money on it,” says Therese Strand.

In October 2023, PensionDanmark’s total fossil fuel investments in oil, gas and coal companies are estimated at DKK 4.7 billion.

See all of PensionDanmark’s investments in the Pension Machine.

THE FACTS

Coal power plants and phasing-out plans

The map shows the coal power plants that can be connected to PensionDanmark’s investments. More than half of them do not have a phase-out plan.

According to the UN’s Net-Zero Asset Owner Alliance, existing coal power plants must be phased out by 2040 if the alliance’s climate goal of carbon neutrality is to be realised. PensionDanmark is a co-founder and member of the alliance.

Source: Net-Zero Asset Owner Alliance, position paper on coal investments.

Since October, at least ten large oil tankers from Russia’s so-called dark fleet have been allowed to anchor in Danish waters off the port of Skagen.

According to international maritime data company Lloyd’s List Intelligence, they are part of a network that helps Russia make billions from the oil trade, bypassing EU sanctions.

Danwatch can reveal this based on data from MarineTraffic and Lloyd’s List Intelligence.

It may be both illegal and a circumvention of the sanctions against Russia that the vessels have docked in Denmark. And the ten vessels are just a random sample. Data from MarineTraffic and Lloyd’s List Intelligence shows that vessels from the dark fleet have docked at Skagen almost weekly since the sanctions came into force around the turn of the year.

My cat could get insurance papers from those countries.
Michelle Bockmann
Chief Analyst at Lloyd’s List Intelligence

Lloyd’s List Intelligence has analysed the ten vessels in Skagen and assesses that they are sailing without insurance, with hidden owners and with oil that has been traded far more expensive than what EU sanctions allow.

According to the World Bank, it is precisely these dark vessels that undermine the EU’s sanctions against Russia and have led to the current price of Russian crude oil averaging USD 80 per barrel, rather than the USD 60 price cap targeted by the sanctions.

The consequence of this is that Russia is making far more money for the treasury and thus the war in Ukraine, which was the reason the sanctions were imposed in the first place.

What is the dark fleet?

  • The so-called dark fleet are oil vessels used to circumvent sanctions against Russia. Several international organisations have revealed how the dark fleet has grown enormously since the war in Ukraine began.
  • Lloyd’s List Intelligence defines dark fleet vessels as being more than 15 years old, not within the 12 major maritime insurance organisations (P&I Clubs) and often completely uninsured.
  • They bypass European ports for fear of being inspected, and their owners often hide behind complicated structures and networks of companies that make them difficult to trace.
  • The World Bank believes that the dark fleet is the reason why the EU price cap on Russian oil cannot be met.
Source: Lloyd’s List Intelligence

An example of this is the vessel Vela Rain, which sailed from the Russian oil port of Primorsk in the Baltic Sea on 16 October and arrived in Skagen on October. According to MarineTraffic, the huge oil vessel was loaded with up to 800,000 barrels of Russian oil, which has a value of almost half a billion Danish kroner.

Danwatch has attempted to contact the owner of Vela Rain, but they have not returned our request.

Michelle Bockmann, Chief Analyst at Lloyd’s List Intelligence, says that Denmark has a unique opportunity to control and detain oil vessels coming from Russia because they dock in Ålbæk Bay. The vessels do not dock in other European countries, she states.

“In ten minutes, I can make a list of oil vessels with no known insurance. So can the Danish authorities,” she says.

There is a strong suspicion that these vessels do not comply with their obligations and do not have the documentation in place.
Philip Max Cossen
Associate Professor of Maritime Law at SIMAC

Many of the oil vessels sail with some form of insurance papers, but they are often “worth less than the paper they are written on”, says Michelle Bockmann.

“Many of the vessels fly the flags of countries like Gabon and Cook Islands. My cat could get insurance papers from those countries if it just presented some kind of insurance company to the maritime authorities in those countries. They don’t check anything,” she says.

Often, the insurance companies don’t even exist. And even though it is illegal, the vessels are still allowed to enter Denmark.

But in the future, Denmark may end up having to inspect these vessels – and on a much larger scale.

The Financial Times reports, based on anonymous sources in the EU, that Denmark has been selected to monitor oil vessels arriving from Russia. This is despite the fact that Denmark has so far not inspected the vessels at all, even though they have repeatedly been in Danish territorial waters.

Did not inspect vessels in Skagen

When the oil tanker Canis Power suffered engine failure off the coast of Langeland in May, it quickly became clear that the vessel was part of Russia’s so-called dark fleet.

When the Danish Maritime Authority became aware of the Canis Power incident, they issued a request to have it inspected at the first opportunity by the countries in the Paris MoU, which is an international agreement on port controls in Europe, among other places.

But there is no difference between Canis Power and the other ten vessels that have docked at Skagen, says Michelle Bockmann.

“If they believe that Canis Power is suspicious due to safety risks, they should make the same assumption for the other ten vessels,” she says.

When the dark vessels dock in Ålbæk Bay, they are not inspected by Danish authorities. It is not customary to do this at anchorages unless there is a concrete suspicion against a vessel.

The vessel Canis Power suffered an engine failure off the coast of Langeland back in May. This photo was taken while the vessel was stationary in Danish waters. Photo: Private

However, in the ten cases where Lloyd’s List Intelligence assesses that the vessels at Skagen have sailed without insurance and with sanctioned cargo, Denmark should have inspected them anyway. This is according to Philip Max Cossen, associate professor of Maritime Law at Svendborg International Maritime Academy.

“It’s within the realm of port state control. It’s clear grounds. There is a strong suspicion that these vessels do not comply with their obligations and do not have the documentation in place,” he says.

The vessels’ route to Skagen

The oil vessels sail from the western Russian oil ports – mainly Primorsk – to Ålbæk Bay near Skagen, before continuing on to countries such as India with the oil.

Source: MarineTraffic

Philip Max Cossen points out that, by law, the Danish authorities should react to the vessels if they do not have the convention-bound and internationally recognised CLC insurance.

“It’s a clear ground for detention if they don’t have a CLC certificate,” he says.

And if the oil cargo is found to be sanctioned, the oil must be confiscated, he says.

Danwatch is working to get a comment from the Danish Maritime Authority. This was not possible before publication.

Several dark vessel accidents

According to Lloyd’s List Intelligence, many of the shady oil vessels sail for shipping companies with only that one vessel affiliated, and if you take a closer look at the owners of the vessels, the address is often somewhere in India or the Middle East, where there is no shipping company present at all, says Michelle Bockmann.

“They only exist on paper. Often they don’t even have an email address associated with their company. Therefore, it’s hard to hold them accountable if an accident happens,” she says.

There have already been several accidents with dark vessels. Most recently, it was the vessel Pablo, a large oil tanker that exploded off the coast of Malaysia in May.

No company will clean up after the accident because there is no one to pay for the cleanup.
Michelle Bockmann

There was no cargo on board and therefore no oil spillage, but several crew members died during the accident on the old vessel.

It later turned out that the vessel’s insurance company didn’t exist either, which is why Pablo still remains in the same place where the explosion took place.

“The Pablo was sailing under the flag of Gabon, like many of the vessels in Denmark. No company will clean up after the accident because there is no one to pay for the cleanup,” says Michelle Bockmann.

However, it’s easy to get to the bottom of whether insurance companies even exist, says Michelle Bockmann.

When he vessels present their insurance documents – the so-called blue cards – in some cases it can be as simple as Googling the name of the insurance company to reveal that they don’t exist, she says.

According to the Financial Times, it has not yet been confirmed that Denmark will inspect all oil vessels arriving from Russia. However, Kremlin spokesman Dmitry Peskov has stated that it would be against international law if the vessels were stopped in international waters on their way through Denmark.

He was also asked whether Russia will use warships to escort oil exports through Denmark. Dmitri Peskov did not want to comment on this.

The Ukrainian authorities have today added the Danish Rockwool Group to the list of “International Sponsors of War” as a result of the company’s business activities in Russia.

The justification states, among other things:

“Rockwool sees no contradiction between ‘standing side by side with the Ukrainian people’ and supplying the aggressor state’s war machine.”

International sponsors of war

The list of “International Sponsors of War” is maintained by Ukraine’s National Agency on Corruption Prevention (NACP).

In addition to Rockwool and its key people, 45 companies and 247 individuals are currently on the list – including well-known companies such as Nestlé, Unilever, PepsiCo, Philip Morris International, Alibaba Group and Mondelēz International.

Almost a third of all companies on the list come from China, while 23 companies originate from countries in Europe. Rockwool is the first Scandinavian company to make the list.

Source: NACP

The Ukrainian National Agency on Corruption Prevention (NACP) is behind the list of “International Sponsors of War”. Rockwool is the first Scandinavian company to be given the label, bringing the total number of companies on the list to 46, of which 24 are European.

Oleksandr Novikov, head of the NACP, explains that the list includes companies that supply Russia’s public and private sectors with essential goods and services, and that at the same time contribute to Russia’s budget and funding of the war.

“After Russia’s full-scale invasion of Ukraine, Rockwool made a conscious decision to remain in the Russian market. Through intermediaries, the company continues to supply their construction materials to the Russia state, including the Russian Ministry of Defense.”

“In total, Rockwool, through its Russian representative offices, paid more than 16 million US dollars in profit tax to the Russian budget in 2022. Every amount contributes to the aggressor state that continues to wage its unprovoked war against Ukrainian civilians and infrastructure,” he says.

While there are no direct legal consequences for being on the list, the NACP states that the goal is to hit companies on their reputation and thus their wallets.

Condemns Rockwool

NACP also directly justifies the addition of Rockwool with revelations from Danwatch and Ekstra Bladet that since 2014, Rockwool has sold products used in at least 31 warships and submarines in the Russian Navy through official suppliers.

“This is terrible. We are now seeing how this very same Russian fleet is being used by the aggressor to shell peaceful Ukrainian cities. Rockwool should understand that they have contributed to this situation,” says Oleksandr Novikov.

Oleksandr Novikov has a long career as a prosecutor specialising in anti-corruption. Since 2020, he has been the head of Ukraine’s National Agency on Corruption Prevention, NACP. Photo: NACP (PR photo)

“Russia started a war against Ukraine back in 2014, annexing Crimea and launching an invasion in the east of our country. In 2022, after Russia launched a full-scale invasion against Ukraine, Rockwool did not stop from cooperating with war criminals.”

The head of the anti-corruption agency does not mince his words when describing Rockwool’s responsibility today.

“Our military is doing incredible things in the Black Sea, eliminating the Russian Black Sea Fleet, but what if Rockwool didn’t help the Russian Navy with its critical materials then? Most likely now it would have less capacity because Russia cannot produce such specialized materials internally.”

“The blood of peaceful Ukrainians killed by Russian missiles fired from the Russian fleet is on the hands of Rockwool, among others,” says Oleksandr Novikov.

NACP states that the companies on the war sponsor list are also automatically included in World-Check, one of the world’s largest financial risk assessment databases. It is used by companies, banks and insurance companies around the world to assess the risk of other companies or individuals.

“for global companies, the consequences of being on the list are worse than continuing to do business with the aggressor country,” the NACP writes in the reasoning for Rockwool’s inclusion on the list.

Danwatch and Ekstra Bladet have submitted a number of questions to Rockwool, but we have not yet received a response.

To Danwatch and Ekstra Bladet, Rockwool has previously maintained that it is the “least bad choice” for the group to stay in Russia, where it operates four factories reportedly worth billions of Danish kroner.

“If we choose to leave Russia, we know that the factories will be taken over by a local player and will continue to operate as if nothing had happened – only in Russian hands (…) Instead, we choose to do what we believe is least helpful to the Russian regime, which is to maintain passive ownership,” Rockwool said earlier this year.

Rockwool has also admitted to the Danish Business Authority that it has been aware that intermediaries have supplied the company’s products to Russian naval vessels. However, the group denies having a direct customer relationship with the Russian military, as all products are sold through intermediaries.

According to Palestinian authorities, more than 8,000 people, including at least 3,000 children, have lost their lives in aerial bombardments in the Gaza Strip in recent weeks.

Israeli F-35 fighter jets with Danish military equipment participate in the bombings.

This is the conclusion of a review of the Israeli military’s social media, local news media and press releases from the Israeli government, conducted by Danwatch and Information.

The Israeli Defence Forces (IDF) confirms the participation of fighter jets in the war:

“We can confirm that the F-35s have been operating in the Gaza Strip throughout this operation, i.e. the war against Hamas that started on 7 October,” an IDF spokesperson told Danwatch.

Among other things, the Israeli F-35 fighter jets are equipped with so-called pylons, produced by the Danish defence company Terma. The pylons are positioned underneath the aircraft wings and are used to hold and launch bombs and missiles.

The Israeli air strikes in Gaza were launched after the militant Hamas movement carried out a terrorist attack in Israel on Saturday 7 October, killing more than 1,400 people and taking more than 200 hostages.

Israel then began a bombing campaign against alleged Hamas targets in Gaza, which has so far claimed the lives of more than 8,000 people.

The Israeli military spokesperson does not want to elaborate on exactly what role the Danish-equipped fighter jets play in the war against Hamas, but he tells Danwatch that the Israeli Defence Forces (IDF) is doing “everything they can” to avoid civilian casualties.

According to Save the Children, more children have been killed in Gaza in recent weeks than were killed in armed conflicts worldwide in the whole of 2022.

On 11 October, four days into the bombings, the Israeli Air Force posted a video on social media site X of a Danish-equipped F-35 “protecting Israel until late at night.”

International law experts: Denmark risks breaking the law

Denmark has signed both EU rules and a UN treaty on arms exports. This means that Denmark must reject the export if there is a “clear risk” that the military equipment exported from Denmark will be used for war crimes or other violations of international law.

Marc Schack, Associate Professor of International Law at the University of Copenhagen, warns that Denmark risks breaking the rules by exporting parts for the Israeli fighter jets.

“There are now very serious allegations that Israel is committing war crimes, and the gravity of the situation emphasises that Denmark is taking a legal risk by allowing the export of weapons parts to a country where it is well known that there are challenges in complying with the laws of war,” says Marc Schack.

Zeray Yihdego, Professor of International Law at the University of Aberdeen in Scotland, agrees. He is one of Europe’s leading experts on arms control legislation.

“Although the current war has been instigated by Hamas and includes serious violations of international law, any response to such a criminal act must be within the framework of the law,” emphasises Zeray Yihdego.

He believes that the ongoing bombardment of Gaza is very worrying.

“While we don’t have concrete facts about every single Israeli military action, what we see in media reports and on TV screens raises serious questions about proportionality and compliance with the duty to protect civilians in armed conflict,” he says.

According to the Scottish expert, the apparent lack of protection of civilian lives means that Denmark risks violating the international laws and regulations on military exports, to which it has committed itself.

“Modern international law prohibits complicity in international wrongdoing. More specifically, both the UN Arms Treaty and EU rules prohibit the supply of conventional arms, ammunition, parts and components to a recipient if there is a risk that they will be used in violation of international humanitarian law and international human rights norms,” says the professor.

“These are incredible aircraft and the technicians are working around the clock to make us succeed in this war,” an Israeli Air Force F-35 technician told the Jerusalem Post newspaper last week. Illustration / screenshot: Johan Seidenfaden

Amnesty: Compelling evidence of war crimes

Both international human rights organisations and UN experts believe that clear war crimes have been committed during the Israeli bombardment of the Gaza Strip.

One of them is Human Rights Watch, which emphasises that both Hamas and Israel have committed possible war crimes.

Several of Israel’s aerial bombardments, which have destroyed entire residential blocks and also hit hospitals, risk violating the laws of war, and thus the planes with Danish equipment may risk being complicit in war crimes, says Omar Shakir, Israel and Palestine director at Human Rights Watch.

“If the F-35 fighter jets have been operating in the Gaza Strip since 7 October 2023, there is certainly a risk that they will be used in connection with possible war crimes,” Omar Shakir told Danwatch and Information.

Amnesty International has investigated several of the specific Israeli air strikes carried out in the first days of the war. Days that included the participation of Danish-equipped F-35 fighter jets.

Amnesty also emphasises that the killing of civilians by both Hamas and the Israeli military during the current war is a violation of the rules of war.

In a report released on 20 October, Amnesty International presents what it describes as “compelling evidence” that the Israeli Air Force’s bombing of residential buildings, a refugee camp, a family home and a market between 7 and 12 October violated the laws of war and its obligation to protect civilians.

The investigated air strikes include the bombing of a three-floor residential building that killed fifteen members of a family – including seven children. According to witnesses, the bomb hit without any prior warning and without Amnesty International being able to find any indications of military targets.

Another attack destroyed a six-floor building and killed at least 40 civilians. According to Amnesty International’s investigation, a Hamas member was living on one of the floors, but he was not at home when the building was destroyed. And even if he had been at home, that alone would not make the building a legitimate target, Amnesty emphasises in the report.

“Our investigation points to compelling evidence of war crimes in Israel’s bombing operations that should be investigated immediately,” Amnesty writes.

The Israeli Defence Forces (IDF) rejects the report’s conclusions.

“The Amnesty International report is flawed, biased and premature, and based on unfounded assumptions about IDF operations,” an IDF spokesperson wrote in a written comment to Danwatch and Information.

The IDF writes that the Israeli military is taking “all possible precautions under the circumstances” to minimise harm to civilians, including warnings to civilians “whenever possible”. The IDF also emphasises that the Israeli military has repeatedly used social media and leaflets to call on civilians to evacuate to the southern part of the Gaza Strip.

“The IDF regrets any harm to civilians caused by our operations, and we examine all our operations to learn, improve and ensure that all activities were conducted in accordance with operational procedures and the law,” the IDF spokesperson writes.

“Every single missile has an address, we will reach every single member of Hamas,” said Israeli Defence Minister Yoav Gallant as he gave a pep talk to Israeli F-35 pilots on 17 October at the Nevatim base in the Israeli desert, about 60 kilometres west of the Gaza Strip. The photo is from a press release from the Israeli government. Photo: Ariel Hermoni (IMoD)

Terma: We are proud to deliver to the F-35s

Terma, Denmark’s largest defence company, has 700 employees involved in the production of parts for the American-made F-35 fighter jets, of which Israel has 36. There are six essential parts from Terma on every F-35 aircraft.

In addition to the pylons that hold and release the aircraft’s external bombs and missiles, Terma also supplies radar components, machine parts and parts for the aircraft’s tail. All parts are essential for the functioning of the aircraft

Danwatch has asked Terma how the company’s management responds to the fact that the aircraft are now being used in the bombardment of Gaza, where human rights organisations believe that serious war crimes are being committed.

In an email response, Kasper Hyllested, Head of Communications at Terma, writes that the company has all necessary export licenses and complies with all relevant legislation.

“Terma produces and supplies parts for the F-35 programme. All these parts are covered by the thorough Danish export controlsThis means that the Danish authorities – the Danish National Police, the Ministry of Foreign Affairs and others – have thoroughly assessed our exports and granted us a license,” he writes.

“At Terma, we are pleased and proud to be part of the F-35 programme – and thereby make a significant contribution to Denmark’s important alliance with the United States and other countries. Danish industry’s participation in the F-35 programme , which is the world’s largest industrial project, creates growth and many good Danish jobs”, writes the Head of Communications in the email to Danwatch.

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New Danish-equipped aircraft on their way to Israel

As Danwatch and Information have previously described, Danish authorities have for decades deliberately failed to assess the risk of Danish fighter jet exports being used for human rights violations when the aircraft end up in controversial countries such as Israel.

It has been known since 2010 that Israel is the recipient of the F-35 aircraft, which Israel has been involved in developing since 2003.

The Danish practice is in direct conflict with both the UN Arms Treaty and EU rules on arms exports, several legal experts have previously told Danwatch and Information.

Both sets of rules require Denmark to always assess the risk of human rights violations and war crimes at the end user when Danish defence companies export military equipment to controversial countries.

Even though the Danish aircraft parts are formally exported to the aircraft factory in the US, Denmark must assess the risk with the final buyer, i.e. Israel, experts say.

Danwatch has asked Foreign Minister Lars Løkke Rasmussen (M) about the risk of Danish aircraft exports being used for war crimes in Gaza.

The Minister of Foreign Affairs has not answered this question, but in an email, the Ministry of Foreign Affairs confirms that Danish licences for the export of parts for the F-35 aircraft usually only involve an assessment of the risk of misuse in the United States:

“In relation to the F-35, the export controls in Denmark usually only take place with the United States as the recipient, as it is usually not known at the time of application whether and, if so, to where the finished product with the relevant subcomponents may be resold,” says the Ministry of Foreign Affairs.

“Any subsequent export of the finished product will be subject to U.S. export controls, which include considerations of human rights, international humanitarian law and regional stability,” the ministry writes.

The Israeli Air Force currently has a total of 36 F-35 aircraft with Danish parts, with another 14 aircraft on the way. In addition, in July this year, US aircraft manufacturer Lockheed Martin, which produces the F-35 fighter jets, received an order for a further 25 F-35 aircraft for Israel.

These aircraft will also contain Danish parts and components.

Officially, the Russian ship Evgeny Gorigledzhan is a research vessel.

In reality, it is a state-of-the-art military intelligence ship belonging to one of Russia’s most secretive and offensive military underwater units. A ship with heavy capabilities to map, survey and, in extreme cases, sabotage critical seabed infrastructure.

For this very reason, it has caused a stir that the spy ship on its maiden voyage appears to have sailed directly from its shipyard in Kaliningrad to the Danish-German waters of the Fehmarn Belt.

Publicly available AIS data – i.e. position signals transmitted from the ship itself – reveals that Evgeny Gorigledzhan has made a number of unusual manoeuvres over a small piece of seabed near the future Fehmarn Belt fixed link. Seemingly unnoticed for many hours before a small German coastguard vessel shows up to keep an eye out.

Here you can see the two offshore wind farms Rødsand I and II and a rough sketch of the four internet cables that run through the area between Denmark and Germany. The route of the ship is marked in orange. The white dotted lines represent ferry routes. Sources: HiFleet, OpenInfrastructureMap and SubmarineCableMap. Illustration: MG

What exactly Evgeny Gorigledzhan did near Fehmarn is still unknown. But the voyage certainly seems suspicious, says Jens Wenzel Kristoffersen, lieutenant commander and military analyst at the Centre for Military Studies at the University of Copenhagen.

“I can only say that the ship has not just been in transit. Nor is it normal for a ship of this category to sail back and forth on more or less the same opposite course for a long period of time, unless it is a diversionary manoeuvre and to attract the attention of the authorities.”

“One may wonder why their AIS transmitter is on while they’re down there rummaging around. But perhaps it is a matter of seeing how we react to something like that. Just as the Russians do in the air, where their fighters jets enter Danish airspace to test our preparedness,” he says.

The spy ship stopped not far from where the Fehmarn fixed link is being built. There are also several undersea data and power cables nearby. According to publicly available records, the area includes four internet cables between Denmark and Germany and two offshore wind farms near the Danish coast.

However, according to AIS records, the vessel was not directly over any of these cables as it sailed back and forth over the same small area for over 24 hours.

A nautical chart of the waters where the Russian spy ship Evgeny Gorigledzhan made a series of passes over the same spot in a 24-hour period (orange). On the left side is the Fehmarn peninsula, from where the motorway to Denmark is being built. The yellow circles at the top centre are the offshore wind farms, and the yellow peninsula at the top right is Gedser, from where underwater cables run to Rostock on the German side. Photo and data: HiFleet

Armed soldiers on board

Having left the Fehmarn Belt in the early hours of 16 October, Evgeny Gorigledzhan passed the Great Belt Bridge later in the morning. Here, a number of amateur marine photographers captured the vessel as it passed.

Danwatch and Ekstra Bladet have also come into possession of a number of photographs by another photographer, who wishes to remain anonymous.

The photos were also taken near the Great Belt Bridge, and you can clearly see that there are armed soldiers in full uniform among the ship’s crew.

It is not unusual for Russian military vessels to sail through Danish waters with armed guards. In the documentary series ‘The Shadow War’, Danmarks Radio documented that this was also the case on the research vessel Admiral Vladimirsky.

Yet the photos emphasise that the Evgeny Gorigledzhan is no ordinary civilian vessel.

Unattended for 8 hours

According to AIS data analysed and shared by user @auonsson on X, the “Neustadt”, a German coastguard vessel, can be seen sailing quietly towards Evgeny Gorigledzhan in the waters around Fehmarn.

But the Germans arrive only after the Russian research vessel has been carrying out its mysterious manoeuvres for eight hours.

The fact that the Danes apparently are nowhere to be seen for such a long time – at least according to the publicly available position data – is very puzzling to military analyst Jens Wenzel Kristoffersen.

“It seems very, very strange that we don’t seem to be paying more attention to what’s going on,” he says.

“Based on the AIS data, it seems to take up to eight hours for a small German coastguard vessel to arrive. Eight hours in the middle of the night, with this vessel going back and forth, doing something. And you have to remember that this isn’t just anyone. GUGI is well-known. These are highly professional people,” he says.

“Anyone who sits in a command centre and follows ship traffic should be wondering about this. It’s not a civilian ferry, it’s a special unit! It should have immediately set off the loudest alarm bells.”

Only 18 hours after the Russian spy ship began its manoeuvres off Fehmarn, and some time after the ship had passed through the Great Belt, a small Danish patrol ship left Frederikshavn and followed the Russians for three hours before the patrol returned home. For all three hours, Evgeny Gorigledzhan had switched off its AIS transmitter – the only period of time during the more than 62 hours the vessel was in Danish waters.

As soon as Evgeny Gorigledzhan exited the Skagerrak and entered the North Sea, the AIS transmitter was switched off again. The last ping sent by the ship indicated that it was heading south along the west coast of Denmark.

Subsequently, the Dutch media Pointer has made it probable that the Dutch navy may have sent a patrol vessel after an unknown vessel with its AIS transmitter switched off near the Netherlands. Apparently, the blacked-out vessel was in the vicinity of the East Anglia 1 wind farm and the Interconnector gas pipeline that connects the UK to the European mainland.

A spokesperson for the Dutch Ministry of Defense confirms to Danwatch and Ekstra Bladet that they have spotted Evgeny Gorigledzhan near the Netherlands:

“We have been aware of this Russian vessel in the North Sea and the waters between the Netherlands and the UK. We have been monitoring the case closely, but due to operational considerations we will not give more details for now.”

The UK is also said to have sent a Boeing P-8 patrol aircraft to the same area, where it flew in a zigzag pattern over a small area. Several larger British warships have since been spotted in the same area. A Royal Navy spokesman declines to comment on specific operations, but tells Danwatch:

“We routinely monitor activity in UK waters and its Exclusive Economic Zone (EEZ) and maintain a presence to counter and deter potential threats.”

Danwatch has asked the Defense Command in Denmark why the Russian spy ship was apparently able to make its unusual voyage unattended for such a long time, but the Defense Command says it cannot provide an answer this week.

We have also contacted the Danish Defense Vessel Traffic Service (VTS) at the Fehmarn Belt, the German coastguard at Schleswig-Holstein, the German navy and the Russian embassy in Denmark, but none of them has responded to our inquiries by the deadline.

In October this year, a brand new Russian spy ship from GUGI, Putin’s top-secret military programme, left a shipyard in Kaliningrad and headed for Denmark.

The ship arrived in Danish waters on the evening of 14 October, and at 2 a.m. it stayed in the waters around Fehmarn for more than 24 hours, sailing in zigzag movements over a small piece of seabed.

Danwatch and Ekstra Bladet can reveal this today based on publicly available position data shared by the ship’s own AIS transmitter and described by several OSINT analysts on the social media X.

According to the data, it also took more than eight hours for the small German coastguard vessel “Neustadt” to arrive in the Fehmarn Belt and get close to the Evgeny Gorigledzhan, which is designed to map communication cables and pipelines on the seabed using two manned mini-submarines.

The spy ship is also capable of sabotaging critical infrastructure, and photos obtained by Danwatch and Ekstra Bladet show that soldiers on board were armed with machine guns.

The fact that a modern Russian spy ship has apparently been able to sail completely undisturbed in Danish waters puzzles Jens Wenzel Kristoffersen, lieutenant commander and military analyst at the Centre for Military Studies at the University of Copenhagen.

“Anyone sitting in a command centre and following ship traffic should be wondering about this. It’s not a civilian ferry, it’s a special unit! It should have immediately set off the loudest alarm bells.”

“It seems very, very strange that we don’t seem to be paying more attention to what’s going on. Based on the AIS data, it seems to take up to eight hours for a small German coastguard vessel to arrive. Eight hours in the middle of the night, with this vessel going back and forth, doing something. And you have to remember that this isn’t just anyone. GUGI is well-known. These are highly professional people,” he says.

This shows the Russian spy ship’s sailing route through Denmark from 14-17 October 2023. Along the way, the ship stopped in the waters south of Gedser, where it made a number of strange manoeuvres. Photo and data: HiFleet. Illustration: MG

Russian naval ships have the legal right to pass through Denmark, but it is unusual for them to make longer stops.

Danwatch and Ekstra Bladet have therefore asked a number of questions to the Defense Command (FKO) about Evgeny Gorigledzhan’s sailing in Danish waters, but the FKO states that it will not be able to answer until next week at the earliest.

Packed with Rockwool

GUGI’s naval base is located in Olenya Bay, a small bay on Russia’s north-western Kola Peninsula bordering the Barents Sea. This is where the service’s intelligence ships and submarines are berthed, just 100 kilometres east of the Norwegian border.

This is why the spy service is also on the radar of the Norwegian intelligence service, which in its annual threat assessment from 2021 includes, among other things, a reference to GUGI:

“Russia’s development of subsea capabilities is becoming a serious threat to submarine cables and underwater systems.”

Danwatch and Ekstra Bladet have previously asked the Norwegian Intelligence Service if they have any knowledge of the ship “Evgeny Gorigledzhan.” In a written response, the service writes:

“We don’t wish to comment on any one vessel.”

The Norwegian Intelligence Service also refers to comments made by Nils Andreas Stensønes, Head of the Norwegian Intelligence Service, in connection with the DR,NRK, SVT and Yles’ documentary series “Skyggekrigen” from earlier this year, which focuses on Russian spy ships preparing for possible sabotage against critical infrastructure on the seabed in Denmark and the Nordic region.

“GUGI is a military organisation and a military programme in Russia that intends to map Western seabed infrastructure, and they have surface vessels, submarines and submersibles to carry out these operations,” Nils Andreas Stensønes said in connection with the programmes.

“This is a strategic capability for Russia that is considered very important and is controlled directly from Moscow,” he says.

GUGI came into the spotlight when another of the service’s spy ships, the Yantar, was spotted in Guantánamo Bay, Cuba, in 2015 – and since then, the Arctic Command has confirmed that the ship was anchored off Nuuk, Greenland, in the summer of 2016.

In November 2016, NATO published a “HANDBOOK OF RUSSIAN INFORMATION WARFARE.” About Russia and the GUGI it says:

“Current activities provide a pointer to possible forms of future Russian operations”

“A good example is the investigation of underwater communication cables. This is believed to be one of the tasks of the Main Directorate of Deep Sea Research (GUGI), a formerly highly secretive organisation that is now gaining public attention due to the greatly increased pace and prominence of its operations.”

Since then, the then head of NATO’s submarine forces, rear admiral Andrew Lennon, issued a warning in the Washington Post in December 2017:

“We are now seeing Russian underwater activity in the vicinity of undersea cables that I don’t think we’ve ever seen before. Russia is clearly interested in NATO and the NATO countries’ undersea infrastructure.”

In 2021, the warnings were followed up in a report from the NATO Energy Security Centre of Excellence (ENSEC COE), which states:

“Despite Russia’s best efforts to keep it hidden, there is ample evidence of the presence of a formidable military fleet of specialised vessels located in Olenya Guba on the coast of the Barents Sea. Operating under Russia’s Main Directorate of Deep Sea Research (known as GUGI in Russian), it includes traditional submarines, intelligence vessels and auxiliary ships, some of which are capable of disrupting undersea cable infrastructure.”

Officially, the Evgeny Gorigledzhan is an oceanographic research vessel, but it belongs to the so-called Main Directorate of Deep Sea Research, also known as GUGI, which is a top-secret spy programme under Russia’s military, reporting directly to Putin and the general staff in Moscow.

Evgeny Gorigledzhan was officially launched in August this year at the Yantar shipyard in Kaliningrad, using – among other things – Danish materials. Through an official partner, the stone wool giant Rockwool has in 2018 and 2020 supplied ship insulation for approximately DKK 730,000 at the exchange rate of the time, which was to be used in Evgeny Gorigledzhan.

This is evident from documents from Russia’s official tender database, which Danwatch and Ekstra Bladet are in possession of.

At the time, the shipyard had issued several press releases stating that the ship would be part of GUGI’s fleet, which, in addition to intelligence vessels, also consists of several submarines and auxiliary ships.

Danwatch and Ekstra Bladet have asked Rockwool a number of questions about the deliveries, but Rockwool does not want to answer them and instead refers to the company’s website.

Suspicious shipping route

The first traces of Evgeny Gorigledzhan appeared on Saturday 14 October at 20:15, when the intelligence ship turned on its AIS transmitter as it approached Denmark’s internal waters.

A few hours later, at around 2 a.m., the ship began sailing back and forth across a small stretch of water in the Fehmarn Belt, where the future tunnel between Denmark and Germany will be located. Not until just before five in the morning on 16 October – more than 24 hours later – the Evgeny Gorigledzhan continues towards the Great Belt.

At around 11:30 a.m., the ship passes under the Great Belt Bridge, where several amateur photographers take pictures of it. And only after passing Anholt at around 8 p.m., the Danish patrol ship Diana comes alongside. According to the AIS data, Evgeny Gorigledzhan switches off its transmitter while the Danes spend the next three hours escorting the ship north of Læsø before it goes back to Frederikshavn.

Jens Wenzel Kristoffersen does not want to speculate on what the Russians have been doing at the Fehmarn Belt, but it seems “definitely suspicious,” he says.

“I can only say that the ship has not just been in transit. Nor is it normal for a ship of this category to sail back and forth on more or less the same opposite course for a long period of time, unless it is a diversionary manoeuvre and to attract the attention of the authorities.”

As Evgeny Gorigledzhan leaves the Skagerrak and sails into the North Sea, the AIS signal disappears again. The last known location of the ship was at 11:46 a.m. on Tuesday 17 October. But all indications are that the intelligence ship has continued towards the waters between the Netherlands and the UK. A spokesperson for the Dutch Ministry of Defense told Danwatch and Ekstra Bladet:

“We have been aware of this Russian vessel in the North Sea and the waters between the Netherlands and the UK. We have monitored the case thoroughly, but due to operational considerations we will not give more details for now.”

A spokesperson for the British Navy declined to comment on specific operations, but told Danwatch and Ekstra Bladet:

“We routinely monitor activity in UK waters and its Exclusive Economic Zone (EEZ) and maintain a presence to counter and deter potential threats.”

Ekstra Bladet and Danwatch have also tried to get a comment on Evgeny Gorigledzhan’s mission in Denmark through the Russian Embassy and Russia’s Ministry of Defense, but have not received a response at the time of publication.

Louise Lönborg is a mother. She has two young children, and like other parents, Louise is concerned about her children’s future. It has to be good, green and full of possibilities. That’s why Louise has set up child savings to ensure both children have some financial freedom when they turn 21.

She hopes that the children will use the savings both wisely and sensibly, based on their own wishes. Preferably in a world that by then has gone green and averted the worst climate disasters from global warming.

But Louise Lönborg’s bank, Nordea, invests part of her children’s savings in the world’s most CO2 emitting oil companies that continue to spend billions of dollars on developing new oil fields all over the world. These are new oil fields that will emit large amounts of CO2 in the future, contributing to further global warming.

This is according to a study conducted by Danwatch, which Politiken also mentions.

“It really provokes me. I wanted to invest the money and approved the investment fund, which had 6 out of 7 “stars” on sustainability. That’s why I’m pretty shocked that my bank is using my children’s savings to invest in big oil companies,” is Louise Lönborg’s reaction when Danwatch calls her to tell her about the investigation.

“After all, their huge CO2 emissions are the root cause of global warming. Of course I want my children to have good savings. But it’s pointless if I support an industry that will exacerbate the climate crisis well into my children’s future,” says Louise Lönborg.

THE FACTS

These fossil fuel companies get money from children’s savings

The lists below – broken down by bank – are not exhaustive, but are the result of an extensive search of known fossil fuel companies. If a company appears multiple times, it is because it is part of several different funds. This means that a bank can have, for example, four investments in the same company.

Through sources and from the banks’ websites, Danwatch has collected inventory lists of products under the rules for pooled investments, which include the payments to the children’s savings. Danwatch has identified the pools’ direct equity investments as well as holdings in selected funds and mutual funds in which the pools invest.

Drawing on our experience from working with Pensionsmaskinen, among other things, we have screened investments against the German NGO Urgewald’s lists of oil, gas and coal companies.

Danwatch’s screening is not comprehensive and does not cover all investments from the pool schemes. The total volume of fossil fuel investments is not quantified, as much of the money is invested in funds that channel the money further into the financial system, where it is ultimately tied up in shares in the fossil sector. This makes it difficult to calculate the market value accurately, and the lack of transparency in several funds goes beyond the scope of this journalistic investigation.

Source: Bank websites + Urgewald’s Global Coal Exit List and Global Oil & Gas Exit List

Nordea is far from the only bank investing children’s savings in black energy.

Danwatch’s investigation shows that also Danske Bank, Nykredit, Jyske Bank, Sydbank and Lokal Puljeinvest, an association of 42 local banks, invest money from children’s savings in large fossil fuel companies that plan to expand fossil fuel extraction.

According to their own figures, the banks in the study represent 9 out of 10 parents with children’s savings in terms of total market share. Louise Lönborg is thus far from being the only parent whose children’s savings are invested either directly or via funds in large expansive oil and coal companies.

Warns against expansion

Danish banks’ investments in coal, oil and gas companies that are working to expand production in the coming years are controversial because they de facto lead to higher CO2 emissions in the future. And CO2 emissions, as we know, are the main cause of global warming.

The warnings against investing in more coal mines and new oil and gas wells come from the International Energy Agency (IEA), among others. In a main report from 2021, the agency writes that all investment in new fossil fuel expansion should cease as of 2022 if the goal of a CO2-neutral society is to be achieved.

In an update from September this year, the IEA reiterates the message that investment in fossil fuel expansion is not compatible with the Paris Agreement. If the average global temperature is to rise by a maximum of 1.5 degrees, the IEA assesses that the fossil fuel industry will have to be phased out to a lower level.

“A few days ago I was talking to my children about what we can do to stop climate change. They are aware of this, for example by eating less meat and cycling instead of driving. But it is my responsibility as a parent to do what I can to ensure that their lives and the lives of future generations are not ruined by massive CO2 emissions. This applies to everything from what we eat for dinner to how we invest our children’s savings,” says Louise Lönborg.

Louise Lönborg’s bank invests part of her children’s savings in the world’s most CO2 emitting oil companies. Photo: Sarah Hartvigsen Juncker

Nordea’s Head of Investment Products, Kerstin Lysholm, explains that the bank is merely an advisor when it comes to investing children’s savings:

“We want to contribute to a more sustainable society, which is why we also inform and guide parents about their investment options and actively ask about their sustainability preferences. At the same time, we believe that it is the individual parents who can best make choices on behalf of their children, which is why it is ultimately up to the parents to decide how they want to invest,” says Kerstin Lysholm.

How does Nordea take into account that children’s savings belong to children who in the future will be harder hit by the climate crisis than their parents?

“Nordea assesses and considers children’s rights and the efforts to combat the climate crisis in its investments. This is done, among other things, through screening processes, ESG scoring, climate targets, analysis of companies’ transition plans and active engagement,” says Nordea.

Nordea does not wish to disclose its ESG ratings of the fossil fuel companies on the list. Nordea invests in oil giants Chevron, Devon, ExxonMobil and Occidental Petroleum, as well as China’s largest oil producer PetroChina and the Brazilian oil and gas company Petroleo Brasileiro.

“We are working to advance the ESG agenda. This also includes active co-ownership, where we invest in selected companies to drive sustainable change from within. In relation to these companies, we have a very effective dialog about reducing their emissions of methane, which is about 80 times as powerful a greenhouse gas as CO2,” says Kerstin Lysholm.

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Lack of transparency

Danwatch has spoken to several other parents and reviewed their children’s savings to see how the money is invested. One of them is Henrik Ulander. He is the father of two children aged 11 and 15 and, like Louise Lönborg, is very surprised at how the family’s children’s savings in Nordea are invested.

Henrik Ulander’s agreement also includes investments in a number of large oil giants. Henrik Ulander is annoyed by the lack of transparency in the way the investments are presented to him when, at Danwatch’s request, he logs on to his online bank and finds the list of holdings.

“I can find the investment list. But it contains so many funds and mutual funds of which I cannot see the contents. It’s thought-provoking that oil companies are hidden in the funds. This makes it very difficult to figure out,” says Henrik Ulander.

Danwatch has shown Henrik Ulander the answer from Nordea that the bank is pushing for a sustainable transition through dialogues with fossil fuel companies. He’s not impressed.

“I find it very difficult to understand how a dialog with a company about methane gas promotes the green transition. I don’t think many parents can figure that out. It’s about children’s future, not about methane gas,” says Henrik Ulander.

THE FACTS

How children’s savings end up in fossil fuel companies

Most Danish banks make their children’s savings grow by buying shares and bonds issued by fossil fuel companies. Either the bank buys these shares and bonds itself, but more often the purchase is made indirectly through investments in so-called “funds”.

Oil giants ExxonMobil, Chevron and Shell

Danwatch’s investigation shows that equity investments in fossil fuel companies of all kinds are included in Danish banks. The banks invest in the largest and most well-known oil companies, including ExxonMobil, Chevron, Shell and many more.

These are oil companies, which according to the Financial Exclusions Tracker are among the world’s most unethical companies. The list shows the companies that have been publicly excluded by most financial institutions in the world. In other words, these are fossil fuel companies where responsible investors believe that the minimum criteria for averting the climate crisis and transitioning to green energy are not met.

ExxonMobil is also notorious for lying for decades about the impact of CO2 emissions from burning fossil fuels. Danwatch’s investigation shows that ExxonMobil is on the investment lists of Jyske Bank, Nordea, Sydbank and Lokal Puljeinvest. However, Lokal Puljeinvest removed ExxonMobil from the list two days after Danwatch contacted them.

Jens Theil, Head of Sustainability at Nykredit, which through its ownership of SparInvest manages the funds for Lokal Puljeinvest, informs that the divestment of ExxonMobil is due to a new policy for investing in fossil fuels, which also means divestment of Chevron and ConocoPhillips. However, there are still fossil fuel companies on the list.

“We have decided to keep 14 companies, including Shell and Inpex. They therefore remain the investment universe of the pools. These companies are not where they should be, but they are exempt because we still see an opportunity for them to change,” says Jens Theil.

Good savings without fossil fuel investments

Both children’s and pension savings typically have a long-term investment perspective, so the risk is spread across multiple sectors. The risk diversification means that the expected return can be realised with reasonable certainty in practice when, for example, the child turns 21.

However, in light of the climate crisis and the accompanying political objectives, more investors are being pressured to divest from fossil fuel companies. In Denmark, among others, AkademikerPension, AP Pension and Velliv have excluded a large number of fossil fuel companies because they oppose the green transition and continue to invest in new oil fields that will lead to increasing CO2 emissions far into the future.

According to Nikolaj Holdt Mikkelsen, a self-employed and independent investment expert with over 20 years of experience advising both private and professional clients, the fossil fuel sector is still important to many investors offering pooled schemes. But the fossil fuel sector is no longer essential to ensure a balanced risk/return ratio.

“As an investor, it’s nice to have as large an investment universe as possible to choose from. Fossil fuels have proven to be a good hedge in the inflationary environment in which we find ourselves. But you can still get a good spread even if you exclude the energy source. You can easily put together a portfolio without fossil fuels and have the same risk-return ratio as one with fossil fuels,” says Nikolaj Holdt Mikkelsen.

Danske Bank recognises that some of the funds in Puljeinvest are invested in fossil fuel companies via funds.

“It’s absolutely correct that with our children’s savings, you can choose to have Puljeinvest invest for you if you don’t have the time or ability to take care of the ongoing management yourself. This gives you a balanced investment solution in a very wide range of shares and bonds. You also have the option of opening a children’s savings account, where you can select and combine your investments yourself. You can, for example, choose funds with a sustainable focus,” Danske Bank’s press department tells Danwatch when asked how children’s savings and investments in fossil fuel companies are connected.

Louise Lönborg is pleased to hear this information. Although she, like most parents, doesn’t know much about investments, she now intends to approach her bank based on Danwatch’s investigation.

“I will ask the bank to remove the investments in black energy from the children’s savings, and I will find out if it is even possible to invest in green energy with the money I have saved for my children,” says Louise Lönborg.

Correction 18/10: A previous version of this article stated that Nykredit had implemented a new investment strategy. Instead, it’s a new policy for investing in fossil fuels.

The expert in medical studies was shocked when he heard the rumour. During the more than fifteen years that Anders Fuglsang has been conducting inspections for the WHO, EU and pharmaceutical companies at clinics around the world, he has not experienced a similar scandal.

“It’s unprecedented”, says Anders Fuglsang, “and the consequences for patients can be very serious”.

Data for more than 2,000 medicines are currently being reviewed by the European Medicines Agency, EMA, and the pharmaceutical companies that have brought the medicines to market. The fraud potentially affects 61 medicines for Danish patients. 23 of these medicines are approved in Denmark, but only fifteen of them can be found in various strengths and forms on the shelves of Danish pharmacies, according to the Danish Medicines Agency.

THE FACTS

Suspected medicines in the Danish market

The issue involves generic medicines, i.e. counterfeit medicines that must be as safe and effective as the expensive original medicines. Or at least that’s how it should be, but that’s now being questioned.

The EMA suspects that an Indian clinic has falsified data to such an extent that the authorities have raised serious doubts about the quality, safety and efficacy of the medicines. These include medicines for patients with lung cancer, HIV and diabetes, several of which are in the Danish market.

Eva Aggerholm Sædder, senior consultant at the Department of Biomedicine at Aarhus University, has seen the list of suspected fraudulent medicines.

“It’s very serious, both for patients and for confidence in medicines, there’s no doubt about that,” she says.

Switched blood samples

The scandal was already lurking in November 2020.

Two inspectors from the Spanish Medicines Agency arrived in the Indian city of Pune. Corona had locked everything down and Indian pharmaceutical companies were producing medicines at full speed for the rest of the world.

In a grey concrete building called Majestic Plaza, the Synapse Lab clinic is housed on a few floors. Since 2007, employees have behind these walls been producing data that has approved thousands of medicines in the EU. Synapse Lab is a clinical research organisation or CRO, and this is roughly how they work:

A pharmaceutical company comes up with a copy of a painkiller that they want to launch in a country. The patent for the original drug has expired and the cheaper copy may be approved if the company can provide data showing that the new copy is as effective and safe as the original painkiller.

The CRO, in this case Synapse Lab, tests the generic drug among subjects in two groups. One group takes the original pill and the other group takes the new and hopefully accurate copy. Both groups have blood samples taken during a given period of time.

And this is where the Spanish inspectors encountered problems, explains Anders Fuglsang.

The inspectors returned from India with findings that led to the following in the inspection report: “The severity and scope of the inspection raises serious concerns (…) and the overall reliability of the data generated by this CRO”.

The Spanish inspectors returned exactly two years later, in November 2022, and this time they no longer had any doubts. The essence of their criticism was summarised in five points, of which one sentence in particular has caught Anders Fuglsang’s attention. Overlapping plasma time concentrating profiles.

In practical terms, this means that the EMA suspects the clinic of reusing data from test subjects in medical studies, explains Anders Fuglsang.

“This means that the EMA is concerned about quality, safety and efficacy. The data is unreliable. Maybe these medicines don’t have the pharmacological properties they should have,” he says.

In July this year, the Spanish inspectors alerted the European Medicines Agency, EMA, and the industry in Europe. Pharmaceutical companies have now been given a deadline by the European Medicines Agency. By 15 September, they must submit new data to the EMA showing that their medicine is safe and effective.

“All medicines are in acute potential danger of being withdrawn from the market because pharmaceutical companies have to prove that the data behind their medicines is valid”, says Anders Fuglsang.

In short, the fraud means that neither the pharmaceutical companies nor the patients can rely on their counterfeit medicine being as safe and effective as the original medicine, experts tell Danwatch.

Fraud harms patients and trust in medicines

Data fraud on this scale may have consequences for both healthcare finances and patient safety, says Eva Aggerholm Sædder.

“It’s terrible. If a patient’s treatment fails or potentially very serious adverse effects are identified, it has huge consequences. This is something that needs to be analysed in depth,” she says.

Anders Fuglsang agrees that the fraud should cast doubt on patients’ safety.

“Very much in doubt”, says Anders Fuglsang, “we should fear that the medicine does not have sufficient effect or that it has too many adverse effects. The evidence for bioequivalence, i.e. that the medicine has the same effect and safety as the original medicine, has been manipulated,” he says.

The EMA has asked pharmaceutical companies to submit different or new data showing that their medicine is as effective and safe as the original medicines. If not, experts suspect they will be asked to withdraw the products from the market. Eva Aggerholm Sædder explains that this fraud can also have societal consequences.

At a time when shortages of many types of medicines are pushing up prices, we rely on cheap generic copies. If the fraud means that thousands of generic medicines are withdrawn from the market, there will be an even greater shortage of medicines and confidence in cheaper medicines will suffer, explains Eva Aggerholm Sædder.

“In Denmark, we have a unique system where generic medicines have a huge impact on how much money we spend on medicines, which are constantly increasing in price. The new medicines reach consumers quite quickly, but it costs money, so we need to be able to trust a product when we use it. A scandal like this has a major impact on that trust,” says Eva Aggerholm Sædder.

The Spanish Medicines Agency has known about the problems with Synapse Lab since 2020, and although that seems like a long time, it doesn’t mean the authorities could have intervened earlier, she says.

“We don’t know what type of irregularities the inspectors saw three years ago. It may be that the fraud has increased in scale, which is why they have not intervened until now,” says Eva Aggerholm Sædder.

Pharmaceutical company: “Utmost seriousness”

One of the pharmaceutical companies, Sandoz, which has used Synapse Lab and is currently facing doubts about the data that has had several hundred of its drugs approved, is awaiting the authorities’ assessment. The CEO of Sandoz, Carsten Glerup, does not wish to be interviewed, but writes in an email to Danwatch:

“We have with the utmost seriousness noted the alleged concerns about the data quality at Synapse Labs. Together with the European trade association for pharmaceutical manufacturers, Medicines for Europe, Sandoz and other affected companies are working closely with the European Medicines Agency, EMA, to investigate the situation and ensure the necessary measures are taken to maintain patient safety. As soon as the conclusions from these investigations are available, we will be able to share further information.”

Another pharmaceutical company that markets some of the medicines on the list, Accord, has not responded to our inquiry.

Danish Medicines Agency: “Patients are not at risk”

The experts believe that there is a risk to Danish patients, but the Danish Medicines Agency rejects this. The Danish Medicines Agency does not wish to be interviewed, but writes in an email that it does not believe that the fraud at the Indian clinic poses a risk to Danish patients.

“A suspicion has been raised (in the EMA ed.) and a process is underway. However, as the quality of the manufacturing has not been questioned, it has been assessed that there is currently no patient safety risk associated with the affected medicines and therefore there is no need to withdraw the medicine while the case is being investigated”.

“In situations where the formulation of the medicine is more complex, for example if it had a slow-release effect, we would consider that there could potentially be some impact on patients if the two products are not absorbed into the bloodstream in the same way. This is not the case for any of the medicines involved in this case. This includes the medicines for the treatment of lung cancer and HIV”.

The Danish Medicines Agency is now awaiting the EU process.

THE FACTS

All suspected medicines in the European market

Use the table’s search function to search the 2,147 products.

Spy ships, nuclear submarines, landing ships and frigates. Danish Rockwool has systematically and deliberately supplied the Russian navy with hundreds of thousands of square meters of ship insulation used in some of the most advanced vessels in the Russian navy.

This is revealed by a comprehensive review of Russia’s official tender database, which Danwatch and Ekstra Bladet have conducted over several months.

In total, there is evidence that since Russia’s illegal annexation of Crimea in 2014, Rockwool ship insulation has been sold at least 52 times to a total of 31 different vessels in Putin’s fleet. These include two destroyers, two submarines that can be equipped with nuclear weapons, two landing ships, three frigates, six minesweepers and five reconnaissance vessels – in other words, warships and spy ships at the very heavy end of the Russian naval arsenal.

Together, the list represents a sizable portion of Russia’s active fleet, which in July 2023 is estimated to consist of 297 warships, submarines and other military vessels.

In 29 of the cases, sales were made through Rockwool’s official partner and distributor, Marine Complex Systems LLC (MKS), a company that specialises in servicing the Russian military.

To better understand the type of vessels Rockwool has supplied insulation to, we asked Commander and Military Analyst at the Centre for Military Studies at the University of Copenhagen, Jens Wenzel Kristoffersen, to comment on their role in the Russian navy:

Destroyer, project 11551
“Admiral Chabanenko” (650) of the Northern Fleet

Destroyer, project 1155
“Marshall Shaposhnikov” (543) of the Pacific Fleet

Both are older destroyers, but still in active service. Also seen in the Baltic Sea. Used primarily as an anti-submarine vessel and is specially designed for this purpose.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

Several of the ships have since played a role in the current war in Ukraine. This applies to the six ships belonging to the Black Sea Fleet, but for example, the landing ship “Pyotr Morgunov” from the Northern Fleet, to which MKS supplied Rockwool products worth 48 million rubles (approx. DKK 4.5 million at the time) in 2018, has also been directly involved in the war.

An EU regulation from March 2022 states that the 135-metre-long ship is equipped with an AK-630 cannon and heavy machine gun, among other things:

“The large landing ship “Pyotr Morgunov” project 11711, built by United Shipbuilding Corporation, participated in the illegal Russian invasion of Ukraine in 2022.”

Ukrainian military analyst Alexander Kovalenko also confirms to Danwatch and Ekstra Bladet that “Pyotr Morgunov” has played an important role during the war:

“It has been in the Black Sea since the beginning of the invasion of Ukraine. ‘Pyotr Morgunov’ has provided transportation of ammunition, personnel and equipment and has also participated in the mining of the Black Sea,” he says.

Landing ship, project 11711
“Ivan Gren” (010) of the Northern Fleet
“Pyotr Morgunov” (017) of the Northern Fleet

Capable Russian landing craft, the latest addition to the fleet. Kind of a hybrid between an amphibious and landing craft and an actual warship. Also seen in the Baltic Sea.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

Denies customer relationship with Russia’s military

The market for selling insulation to warships is something of which the renowned Danish company has been fully aware. In an official promotional booklet from 2015, which Rockwool translated and distributed in Russia, highlights warships as one of the most common applications for Rockwool’s marine insulation.

Rockwool’s Head of Communications, Michael Zarin, writes in a response to Danwatch and Ekstra Bladet that they are aware that insulation products in “certain cases have been used in Russian naval vessels” and that they have been sold through the Russian subsidiaries’ external distributors.

“Neither ROCKWOOL A/S nor our Russian subsidiaries sell directly to Russian end users and nor do they have a customer relationship with the Russian military,” Michael Zarin writes, among other things.

Rockwool does not want to comment on why the company in Russia continues to work with MKS, which as a company is specialised in servicing the Russian navy. Neither do they want to answer questions about whether the group makes special demands on their distributors in Russia in relation to the end use of their products.

“ROCKWOOL A/S is aware that general insulation products – as well as insulation products for use in civil marine applications sold through the Russian Subsidiaries’ external distributors – have in some cases been used in Russian naval vessels similar to how these products are used on all types of ships worldwide – including commercial and industrial vessels, as well as cruise ships and yachts. ROCKWOOL products can neither be weaponised nor used for military purposes in general. No stone wool products are classified as dual-use.

All in all, these are harmless products whose main use is to insulate houses and buildings to improve energy efficiency. Neither ROCKWOOL A/S nor our Russian subsidiaries sell directly to Russian end users or have a customer relationship with the Russian military. For the record, as we’ve previously stated, production of marine insulation products in Russia will cease in March 2022.

At ROCKWOOL, we don’t usually comment on the details you ask about that relate to specific project or customer relationships – even those that happened almost 10 years ago. But as we’ve said before, ROCKWOOL has extensive guidelines when it comes to risk assessments and due diligence. ROCKWOOL has complied with all Russia-related sanctions, which the Danish Business Authority has also concluded.”

 

Nuclear-powered ballistic missile submarine, project 955A
“K-549 Prince Vladimir” (825) of the Northern Fleet

Largest, most dangerous and newest nuclear-powered submarine capable of carrying the latest “Baluva” ballistic missiles.

Dangerous in the North Atlantic if it escapes through the GIUK gap (the waters between Greenland, Iceland and the UK) undetected. Can launch its missiles from all areas of the globe and hit all Western targets.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

Can pose a military threat

According to Jens Wenzel Kristoffersen, a naval captain and military analyst at the Centre for Military Studies at the University of Copenhagen, the number of Russian naval ships with Rockwool is collectively capable of posing “a threat to allied forces at sea, on land and in the air.”

“The collection of ships is assessed to pose a military threat to allied naval vessels, including in relation to special operations, retrieval missions, monitoring, mapping of critical infrastructure and finally in crisis and war situations,” he says.

He particularly highlights the large ships such as the battlecruiser “Admiral Nakhimov” and the two destroyers “Marshal Shaposhnikov” and “Admiral Chabanenko”, all of which, despite being many years old, can still play a major role in future missions.

“Especially the larger units, regardless of age or whether they have undergone midlife updates, as well as the latest nuclear units, pose a particular threat in the Atlantic and to NATO allies,” says Jens Wenzel Kristoffersen.

Special-purpose nuclear-powered submarine, project 09852
“Belgorod” (BS-329) of GUGI, Northern Fleet

This unit forms the backbone of the Russians’ ability to conduct deep-sea operations (3000 – 6000 metres) with GUGI and specially equipped submarines. Its size indicates that it is best suited for special operations in the Atlantic and Pacific, but it cannot be ruled out that it has also been in the Baltic Sea.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

Professor Michael Petersen, head of the Russia Maritime Studies Institute at the US Naval War College and a former member of both US military intelligence and the National Security Council, also believes that the many concrete warships are of great importance to Russia’s military.

He emphasises that Russia’s navy has undergone a large-scale modernisation in the years before and after the illegal annexation of Crimea in 2014, and according to him, Danwatch and Ekstra Bladet’s list of naval vessels insulated with Rockwool reflects exactly that development.

“The complete list provides an interesting and concrete insight into the Russian navy’s priorities for the construction and modernisation of surface ships. They reflect an emphasis on power projection, intelligence gathering and coastal defense,” he says.

“In particular, the construction of Project 22350 Gorshkov-class missile frigates is the primary focus in restoring the Russian surface fleet’s global presence and military power. They have carried out Russia’s highest-profile peacetime naval missions, including the first circumnavigation of the globe by a Russian warship since the nineteenth century in 2019.”

Frigate, project 22350
“Admiral Gorshkov” (417) of the Northern Fleet
“Admiral Kasatonov” (461) of the Northern Fleet
“Admiral Golovko” (456) of the Northern Fleet

Latest new line of frigates for the Russian navy. Extremely powerful unit designed for air defense, but also for launching various types of cruise missiles.

Heavily inspired by Western frigate design as a multirole frigate for use in all domains such as surface, air and anti-submarine warfare.

Whether it is equally good for all roles is questionable, but the air defense role seems strongest with its long range strike capability with cruise missiles as well as the latest hypersonic Tsirkon missiles.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

Systematic practices

Back in February this year, the Danish Business Authority initiated an investigation when Danwatch and Ekstra Bladet first revealed Rockwool’s connections to the Russian military.

At the time, it specifically concerned 5 ships equipped with Rockwool insulation, and the Danish Business Authority did not believe there was reason to assume that Rockwool had violated the EU sanctions introduced in connection with the annexation of Crimea.

Tara Van Ho, one of the world’s leading experts on human rights and business at Essex Law School in the UK, emphasises that even if companies are found not to have breached sanctions, they are still obliged to comply with the UN Guiding Principles on Business and Human Rights (UNGPs), which are designed to ensure that companies do not contribute to human rights abuses at any stage of their value chain.

“Rockwool has been behind a kind of systematic practice that is really worrying from a UNGP perspective. It suggests that there is a bigger problem with Rockwool’s screening processes,” she says.

Attack submarine, project 677
“Velikie Luki” (B-587) of the Northern Fleet

A dangerous little guy that is considered suitable for coastal operations.

The successor to the Kilo-class submarines, it is the latest diesel-electric type of submarine to be launched by the Russians. It can operate air-independently for up to 45 days, making it a particularly dangerous threat in the Baltic Sea, should it operate there.

Equipped with the latest versions of Kalibr cruise missiles, which we have seen used in the war in Ukraine.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

“Many or all of these sales may be technically compliant with EU sanctions, but Rockwool was still supplying the Russian military through their official distributors with products necessary for the military’s activities.”

“As soon as Russia invaded Crimea, those sales should have been investigated more thoroughly – what we call enhanced human rights due diligence. That Rockwool continued to allow these sales raises the question of what they have done, and what they are doing now, to ensure that they are not complicit in Russia’s war crimes or crimes against humanity,” says Tara van Ho.

Have a responsibility

Fernanda Hopenhaym Cabrera, a member of the UN Working Group on Business and Human Rights, which helps implement and advise on the UNGPs, also emphasises that Rockwool is obliged to investigate its sales in Russia.

“Any company that supplies the arms sector with products or operates in areas of armed conflict should conduct enhanced due diligence”.

Frigate, project 11540
“Neustrashimy” (772) of the Baltic Fleet

An old lady in the arsenal. Once considered one of the biggest threats to submarines in the Baltic Sea. Today, it poses no major threat to modern submarines.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

“Rockwool now has a responsibility to prevent, mitigate and address the potential or actual human rights violations caused by their business or commercial relationships,” says Fernanda Hopenhaym Cabrera and continues:

“This means that Rockwool has a responsibility to decide whether to implement direct preventive measures, withdraw from the region, abandon commercial relationships, or use its influence in the supply chain to prevent and address adverse human rights impacts, based on the results of its extended due diligence, of course.

Battlecruiser, project 11442M
“Admiral Nakhimov” (080) of the Northern Fleet

The old Kirov-class in a new disguise. Will be equipped with the latest types of modern missiles, including the Tsirkon, which is a hypersonic missile, allowing it to pose a threat to even larger carrier groups in a Western context.

However, its age, despite the midlife update, means that as a unit it is not considered to be the most advanced but still the largest nuclear-powered surface unit the Russian navy has to offer. A presence in the North Atlantic will, nonetheless, mean that resources will need to be allocated to keep an eye on it in the event of a serious conflict.
Jens Wenzel Kristoffersen
Commander and Military Analyst, Centre for Military Studies, University of Copenhagen

Danwatch and Ekstra Bladet have asked Rockwool whether conditions have been imposed on the company’s Russian distributors – and whether the company itself believes that sales to the Russian military comply with the UNGP guidelines.

Michael Zarin, Head of Communications at Rockwool, declines to answer this question, but writes in an email:

“(…) As we have also previously stated, ROCKWOOL has extensive guidelines when it comes to risk assessments and due diligence.”

Despite repeated requests, Rockwool has not been willing to disclose the results of the risk assessments that the company has allegedly carried out in connection with their business in Russia.

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