Norwegian pension fund KLP has divested its stake of close to $70m in US industrial group Caterpillar due to the risk that its equipment is being used to violate human rights in occupied Palestine.

Norway’s largest private pension manager announced the decision citing concerns that Caterpillar's machinery may be contributing to human rights abuses and violations of international law in the West Bank and Gaza.

Israel has historically repurposed Caterpillar D9 bulldozers, equipped with armor and weapons, for operations such as demolishing structures in the occupied territories and military activities.

KLP, which previously held shares in Caterpillar worth 728 million Norwegian crowns ($69m), expressed dissatisfaction with the reassurances received from the US company regarding the mitigation of human rights violation risks.

The fund states that Caterpillar has provided equipment allegedly used in demolishing Palestinian properties for Israeli settlements and by the Israeli Defence Force in military operations, particularly following specific incidents like the Hamas attack on October 7.

KLP, managing around $90bn, completed the divestment of its Caterpillar stake on June 17, following earlier exclusions of companies associated with illegal Israeli settlements, including Motorola, in 2021.

Norway, aligned with other nations, considers the settlements in the West Bank as violating international law and has taken steps towards recognizing Palestinian statehood based on pre-1967 borders for regional peace.

Noting the importance of acknowledging Palestinian statehood for Middle East peace, Norway's Prime Minister Jonas Gahr Store emphasized the necessity of such recognition.

Despite attempts at dialogue with Caterpillar, KLP remains concerned about the company's efforts to avoid complicity in human rights violations during conflict situations and international law breaches.