Response to interpellation 2023/24:715 on the follow-up of state-owned companies' risk-taking

Finansministern Elisabeth Svantesson (M)

Madam Speaker! Tobias Andersson has asked me what measures I and the government intend to take to control what risk-taking occurs in state-owned companies. He has further asked whether I and the government intend to review to what extent the state-owned companies ensure healthy competition without abuse of their own means of power.

LKAB, Vattenfall AB and other companies with state ownership are subject to the same laws as privately owned companies. It is the company's board and management that are responsible for the ongoing management of the company's operational activities. This includes ensuring purposeful internal control, risk management, and regulatory compliance for the company's projects. I expect the companies in question to meet the requirements placed on the boards and management.

The Government has high expectations of companies with state ownership. The State's ownership policy states that companies with state ownership shall promote long-term sustainable value creation and act in such a way that they enjoy public trust.

The state-owned companies shall ensure that abuse does not occur of the special position that it can entail to be a company with state ownership, and the companies shall comply with both the competition legislation and the EU's rules on state aid.

In the state's ownership policy, it also appears, among other things, the so-called coordination responsibility, which means that the board, through the chairman of the board, shall coordinate its view with representatives for the owner when the company faces particularly important decisions.

As an owner, the state conducts continuous follow-ups with all companies with state ownership through so-called owner dialogues. The owner dialogue is an important tool for monitoring that the company acts in a long-term and responsible manner and for discussing current issues of a significant nature for the company's operations. As an owner, the state has during owner dialogues with LKAB and Vattenfall AB emphasized the importance of the companies' boards considering appropriate times for owner coordinations ahead of future major investments.

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Tobias Andersson (SD)

Madam Speaker! Thank you for the Minister's answer!

Some of the largest and most risky industrial projects in Swedish history are taking place today under state direction. The clearest example is the green steel that the wholly or partially state-owned companies LKAB, Vattenfall, and SSAB are engaged in. In other words, it is not private actors who choose to take this risk.

Furthermore, the high-risk projects have received additional state support through extensive grants. In addition to the early support, the Hybrit initiative recently received support from Industriklivet through the Swedish Energy Agency amounting to a total of 3.1 billion kronor, which is likely one of the largest individual industrial supports ever paid out in Swedish history.

When it is required that public actors step in driven by ideological convictions and with grants or credits from the public, as if it were not enough that the companies were already public, one should hold one's ears, in my opinion.

It would not be the first time that so-called green bubbles burst with billions in losses as a result. In this case, it would be multi-billion losses for Sverige AB and for all Swedes.

That the project in question was also commenced without formal ownership coordination with the government, despite the major societal consequences associated with the project, is a further warning sign.

Now we fortunately have a new government in place that I know has dared to raise issues in discussions with the companies concerned and which has a different view on the ownership management of the same. But in the external rhetoric, I still think I hear the same fascination with these risk projects that the previous government suffered from.

Against this background, I chose to first submit a written question to the Minister in February. I received an answer that highlights her confidence in the companies' managements and boards, as well as the fact that continuous reconciliations and follow-ups are carried out with them.

This is naturally good. But since then, several reports have been published and criticism has also been highlighted from other sides. As recently as this week, the anthology *De norrländska stålsatsningarna - frälsare eller gökunge?* was released with Magnus Henrekson as editor. There, they have succeeded in collecting several sets of reports from distinguished researchers.

Madam Speaker! Given this widespread criticism, not least concerning the lack of scrutiny of the projects from both the media and politics, I also submitted this interpellation in which I asked the Minister whether the government will take any measures linked to the risk-taking that occurs in state-owned companies and whether it is considered that the state-owned companies are using the means of power they do possess in a reasonable manner.

Elisabeth Svantesson pointed out in her response that recurring ownership dialogues take place and that the companies follow the current legislation and that the government has high requirements and expectations of the companies. I think that is positive.

What I perhaps lack in the Minister's answer is precisely the reasoning regarding the risks associated with the projects. Yesterday, the National Audit Office communicated that it will audit LKAB's transition. In light of that, I would like to ask the Minister if she is certain that the company has acted correctly and carried out appropriate assessments linked to the risk it is now taking.

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Finansministern Elisabeth Svantesson (M)

Madam Speaker! Thank you, Tobias Andersson, for the question!

It is a question that sparks great discussion, just as the member is pointing out. It is good that all the very large investment plans that exist now should also be scrutinized. But there are a few things that I want to emphasize and perhaps add for those who do not deal with these issues on a daily basis.

I will say something briefly about LKAB. LKAB is not just any company. It is a company that is important for Sweden and for the Swedes. It is a company that generates very large values. Just last year, it turned over 43 billion. It distributed over 7 billion to the Swedish people, that is to say, the state.

It is a company that is stable and doing well, and it has done so for several years. It is also a company that is important for the EU and for companies within the union. Of all the ore that is mined, 80 percent is mined via LKAB.

It is a company that has long and extensive experience with good results. It is very important for the industry in Sweden and for many others. Furthermore, discoveries have now been made. It is also important to point out.

What we know is that it concerns Europe's largest known deposit of rare earth metals and, for example, phosphorus, something that is very important for future transition so that our countries in the EU become more self-sufficient.

All this is nevertheless important to have said. In the debate, it sometimes sounds like it is companies playing on a market. This is, as I see it, a company that is very clear with a focus on transition and which in this takes step by step.

There are two questions that Tobias Andersson has directed to me, and I appreciate them. They concern risk-taking but also ownership coordination.

All companies must, naturally, take certain risks. It is fundamentally up to the companies' boards of directors to assess and take responsibility for those risks. Of course, one must take risks. Then, one can always discuss what type of risk.

That in itself is not an issue for me as Minister for Ownership. But what is then an issue for me? Let me say it in this first post. The new government and I are responsible for the companies. We are very careful with clear governance and frequent dialogues to follow every step in the development.

We also, of course, have many non-political civil servants who are constantly working with the companies to ensure compliance with exactly this. It is important. It is precisely the Swedes, the taxpayers, we together, who own this.

This is not a quarterly economy either. It is long-term values that are to continue to generate both money and also other values for both Sweden and for other countries in, for example, the green transition.

Swedish steel is important. Of course, one must take risks. The future will show if one takes too large risks. The question of ownership coordination is also part of the question in the interpellation. Under the previous government, it was not an ownership coordination. I can imagine that it certainly would have been needed.

We are now following this step by step and have a very, very close dialogue with the board regarding when it considers it appropriate and the right time to have a new ownership coordination. It shall be initiated precisely from the board.

Tobias Andersson can feel reassured that the company we see is important both for Sweden and also for other countries because the steel and the ore that are in the mine will continue to generate value moving forward.

We have a long-term goal regarding exactly return. I trust fundamentally that the boards, which we also appoint, live up to this.

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Tobias Andersson (SD)

Madam Speaker! Thank you again for the answer I received from the Minister!

I will try to break it down somewhat. I fundamentally share the Minister's view on how important a company LKAB is, has been, and will remain. This is especially given the challenges that the Minister mentioned.

We need to become increasingly self-sufficient in not least rare earth metals but also other types of minerals and metals. It is extremely important, not least from a total defense perspective. There we agree.

I, however, have a somewhat more skeptical approach to the new projects that one is engaged in and the 70 terawatt-hours that LKAB itself intends to consume, which is approximately half of Sweden's current electricity consumption, for a single project. They intend to use electricity to proceed to the next step in the processing chain with the ore that they have mined, if one simplifies it somewhat. It is there that I have some criticism.

I, however, share the challenges one has with mining rare earth metals and, not least, extracting phosphorus and ore. But the question there is how it will go if one also invests billions in the significantly more risky projects.

There is a risk that too much focus is placed on side projects and that the regular operations, which the Minister highlights as so important, are thus left for later. This applies in particular if it were to turn out that we do not achieve the 70 terawatt-hours, that the infrastructure does not solve it, that the supply of competence is not resolved, or that something else fails.

Thus, both the company and, by extension, the state face enormous losses in the billions, which could significantly affect the ordinary operations that both the minister and I consider to be central for both the company as well as Sweden and Europe. I feel that the minister and I have the same starting point but perhaps slightly different nuances.

Regarding whether it is a matter for the minister which risks the company takes, I do not share the view that it is not a matter for the minister and that this would only be up to the board. In his first answer, the minister says that "the so-called coordination responsibility is also set out in the state's ownership policy, which means that the board, through the chairman of the board, shall coordinate its view with representatives of the owner when the company faces particularly important decisions." This did not happen, which both I and the minister have pointed out in this case. It is also one of the reasons why the Swedish National Audit Office is now to audit this. It is a deficiency in current ownership governance that it must come from the company's board.

Madam Speaker! When it concerns such enormous society-transforming transitions and risks from state-owned companies, I think that even the state, the minister himself, could call for an ownership coordination with the company concerned. It is strange that it can only occur from the board, which for natural reasons perhaps primarily looks at the company's interests, while the minister and the politics need to look at society's interests.

I want to ask a direct question. Is the Minister open to expanding the possibility also for the state, for example through a responsible minister, to call for ownership coordination with the state-owned companies when it is required for the same reasons that the board should call for it but where it has fallen short?

One must be honest, Madam Speaker, and say that there has been a politicized management of the company and it risks remaining so. Then perhaps one has not only looked at the engineering part, but one has been colored by ideological convictions, which has likely caused that one has not called for ownership coordination despite that it should have occurred.

Is the Minister open to expanding the state's possibility to call for ownership coordination with state-owned companies?

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Finansministern Elisabeth Svantesson (M)

Madam Speaker! Thank you again, Tobias Andersson, for an important question that affects very many and which concerns large sums of money!

I want to be clear about a few things. Of course, as Minister for State-Owned Enterprises, I care about whether companies are taking too large risks or not. Fundamentally, we are clear with every company we meet with, which we do regularly in and through our ownership dialogues, that they have return requirements and that it is these they must live up to.

There is also, to some extent, a risk in this. Every company must, of course, think long-term at every step. Where does this company lead in the long term? Does it create long-term sustainable values? That is what I mean by risk. In every individual minor decision, it is of course the board that makes the decisions.

I think it is good to remind oneself of a few things. Tobias Andersson is not just anyone; he is the chairman of the Committee on Industry here in the Riksdag. There is a tone in what he says about not trusting the decisions being made right now. It is not I who make these decisions. The company takes one step at a time, and one tests every step. Is there demand for this, and so on? It is not that the companies throw themselves into a black hole, but they take one step at a time to see if there is demand and if there is money to be made. If there is, it is an enormous opportunity, because here it is about both money and about reducing emissions in a dramatic way.

The companies that are now mentioned, but also many other private companies in Sweden, are increasingly going hand in hand. Even though they are competitors, they cooperate to reduce emissions in Sweden but also to help in other countries, which I think is very good.

With that said, I just want to come back to the fact that we, of course, are in constant dialogue with the companies, and also with this large company. Only ownership coordination, which is something special that should be called for or a question that should be raised by the board, occurs when the companies face particularly important decisions. I envision that the board needs to call for such a coordination when one decides for oneself which direction to go. For now, we are not there, and the companies are not there. It is important to point that out.

Finally: Tobias Andersson spoke in his first contribution about Industriklivet and that these state-owned companies have indeed received money. But Tobias Andersson, who is chairman of the Committee on Industry, knows that we have negotiated Industriklivet, Klimatklivet and others. He knows that the companies only get to take part in these resources and money if they meet high standards. This applies to private or state-owned companies. Precisely in this case, these companies have been allowed to take part in this to favor the green transition. One can have different opinions about this, but that is the case. Furthermore, we have negotiated it.

Fundamentally, we follow this very closely. LKAB is, as I said, an important company for Sweden but also for significantly more countries and for more industries than the Swedish ones. Furthermore, there is now an ambition to reduce emissions, and that is fundamentally very good. But that will not be possible, and it should not be done, by sacrificing the return. That is the big question: return, profitability, and long-term perspective. This is about long-term projects - not just for one or two years, but far into the future.

I would like to hear from Tobias Andersson what it is exactly in LKAB's board, where we have now also reinforced, for example, the mining competence, that makes him feel hesitant. I think that one should always be hesitant, or rather, ask critical questions. That is my basic personality in all these types of investments.

I see that something has been started that has gone well so far, and we will have to see how it continues step by step. LKAB has until now achieved enormous results and given large dividends to the state and to the Swedes. What is it that makes Tobias Andersson hesitant precisely in this?

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Tobias Andersson (SD)

Madam Speaker! What I am skeptical about is that one is to do something completely new. One is to take a completely untested technology on an industrial scale that has not happened anywhere in the world. One is to take risks that have never before been taken to this extent. One is to claim half of Sweden's electricity production for a single project that is not commercially viable. It is only viable thanks to ETS, the emissions trading system, plus an ambition that carbon tariffs are to be introduced into Europe.

I know that the minister is a friend of the market economy. But it is only after one has disrupted the entire market that the product might become commercially viable, provided no one makes it cheaper and better somewhere else with one of the other technologies being developed. It is only then that the product would work - on a market that no longer exists.

It is this that I am hesitant about. I am hesitant about whether the company will be able to have the type of return to the state that has been had historically if it chooses to engage in this.

With that said, I think it is positive that the Minister is clear that this needs to happen in stages. It is a somewhat new rhetoric, because in all contexts, one has spoken about 70 terawatts. That is what has laid the foundation for the planning goal. Now, fortunately, we have control stations, so it can be revised if one does not succeed. But from the company and the politics, it has been 70 terawatts and complete transition that have been discussed.

Now I think I hear that from both the Minister and the State Secretary, and to some extent also from the company itself, one is somewhat more cautious in their rhetoric and says that one constantly needs to conduct a review of whether one can sell this product given these conditions. It is very much awaited, Madam Speaker, and I would like to thank the Minister for that.

With that said: These are enormous risks that have not been taken previously. I understand that the Minister does not want to comment directly on that, but I return to the question: Does the Minister think it is reasonable that it is only the company that can call for ownership coordination?

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Finansministern Elisabeth Svantesson (M)

Madam Speaker! I perceive that we are in agreement on a great deal, namely that LKAB is an important company that over the years has delivered strong results and created great value. The company wants to continue to do so, and we, the Riksdag and the government, want the company to continue to do so.

When one sets out on new journeys with innovation, it sometimes involves risks. It does so in private companies, and it does so in state-owned companies. In Norrland, people are now talking about new industrialization, but of course, there are also many other risks there in total. It is about electricity supply, about housing, about competence issues and about much else that the companies also have a responsibility for. It is not just about this discussion but also applies in a broader sense. But also we in the public sector, both municipalities and regions and the state, have a responsibility.

At the core, it is good that the companies are investing in the green transition and that these fantastic deposits have now been found, which can make a big difference and extend LKAB's operations. You extend the entire mining activity for a long time forward.

I mean that it will be time for an ownership coordination ahead, when the major decisions are to be made. I do not perceive it, as Tobias Andersson and some other assessors do, that a single decision has been made that lies there in the future. It is a target image, and so one works slowly but surely to see if there is demand, if the technology is in place, and if one can move forward.

I can promise Tobias Andersson and everyone else in this chamber that we will follow the matter very closely. The state-owned companies shall generate value, but as I usually remind, those who sit on such a board truly have the Swedish people on their shoulders. It is not just any owner just because it is a state owner, on the contrary. It is very many who own them together.

This is important from a yield perspective, and it is important for the transition. This is also an important discussion. Having a debate about this obviously affects decisions in different phases. It is also welcome that the Swedish National Audit Office examines it.

The interpellation debate was hereby concluded.

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