

Dutch civil service pension giant ABP has announced it will divest its €300,000 stake in South Korea’s POSCO DAEWOO over palm oil deforestation in Indonesian Papua.
The €408bn, 2.9m-member fund said that the Korea Exchange-listed company, via a subsidiary, was involved in logging to make palm oil plantations. The Heerlen-based investor said it was holding companies to a “strict yardstick” (“strenge meetlat”).
“POSCO DAEWOO does not meet our requirements and therefore we decided not to include it in our investment portfolio,” it said in a statement.
It follows engagement but ABP said the company had not acted fast enough and that it no longer had confidence that the company would improve.
ABP says it actively tries to stimulate sustainable and responsible palm oil production. In January this year ABP said it would exclude €3.3bn stake in the tobacco and nuclear weapons sectors.
In 2015 peer investor Norges Bank Investment Management said it would divest South Korean steel giant POSCO and subsidiary Daewoo International over a similar issue.
The announcement by ABP follows a series of media reports in the Netherlands about forest destruction by PT Bio Inti Agrindo, an oil palm plantation company majority owned by POSCO DAEWOO.PT. Bio Inti Agrindo arm last year issued its first ever sustainability report, written in accordance with the GRI G4 Standard, and referred to RSPO (Roundtable on Sustainable Palm Oil) Principle & Criteria. It also said it signed an agreement with PwC Korea to develop enhancement plans for environmental and social management and established an Environmental & Social Committee for the first time.
In a separate development, Singapore-based palm oil processor Wilmar Group has reportedly ceased sourcing from suppliers linked with deforestation. A Reuters report cited a Wilmar statement saying it had stopped sourcing from suppliers flagged up by environmental group Greenpeace.
- Steel firm POSCO will be familiar to RI readers for its involvement with various disputes conducted under the OECD’s Guidelines for Multinationals National Contact Point system. In 2013, ABP-owned asset manager APG reached agreement in a case brought by a group of NGOs under the system relating to investor responsibility at the companies where they have shareholdings. The case related to APG’s stake in POSCO and its controversial plans to build a combined steel and power plant in Odisha, India.