JAKARTA (Reuters) -Norway's&nbsp;wealth&nbsp;fund&nbsp;has placed an&nbsp;Indonesian&nbsp;state-controlled cement maker, in which it has a stake,&nbsp;under&nbsp;observation&nbsp;for three years for what it calls "risk&nbsp;of damage" from the firm's activities to&nbsp;prehistoric&nbsp;cave paintings on Sulawesi island.
A Semen Indonesia subsidiary operates a mine near 18 caves in South Sulawesi which house some of the world's oldest paintings, said Norges Bank, which manages the world's biggest sovereign&nbsp;wealth&nbsp;fund&nbsp;Norges Bank Investment Management (NBIM).
"The background for the decision is unacceptable&nbsp;risk&nbsp;of damage on&nbsp;prehistoric&nbsp;and irreplaceable culture heritage," Norges Bank said on Thursday, citing recommendations by an ethics council.
Vibrations from drilling activities and dust from trucks carrying raw material pose a&nbsp;risk&nbsp;of erosion to the cave&nbsp;art, it said.
Semen Indonesia said in a statement on Monday that it had made efforts such as restricting access to entry and minimising vibration or dust, adding the&nbsp;fund's decision to place it&nbsp;under&nbsp;observation&nbsp;was to ensure these measures are executed.
"We are fully committed in environmental preservation, including the pre-historical cultural heritage found&nbsp;under&nbsp;our areas," the company said.
NBIM is Semen Indonesia's third-largest shareholder, with 1.6% of outstanding shares as of end-2022 worth around $45 million, according to Refinitiv data.
Caves in South Sulawesi are home to paintings that are believed to be about 44,000 years old and the earliest known pictorial record of story-telling. Archaeologists have said some are rapidly decaying due to factors like salt erosion driven by climate change.
Earlier this week, UNESCO designated the area a 'global geopark', meaning it is a landscape with geological significance that should be developed sustainably.
Semen Tonasa "has no systematic monitoring of rock&nbsp;art&nbsp;sites", Norges Bank said, adding that "a lack of oversight over the impact of the company's operations constitutes a significant&nbsp;risk, given the outstanding cultural heritage which the rock&nbsp;art&nbsp;represents."
(Reporting by Stanley Widianto, Fransiska Nangoy; Editing by Kanupriya Kapoor)

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Norway's wealth fund puts Indonesian SOE under observation on risk to prehistoric art