AP funds and Goldcorp: anatomy of a constructive engagement

The dialogue between the four Swedish national AP funds and Canadian mining giant Goldcorp reveals how productive engagement between investors and corporates can be.

The funds and other investors have been in discussions with the Toronto-listed company for years over the controversial Marlin gold mine in Guatemala. In 2008, they teamed up with Canadian investors in tabling a shareholder resolution calling for an independent human rights assessment. In the event, the resolution never reached a vote, as Goldcorp committed to the assessment in return for the withdrawal of the resolution.

Four years later, the annual report of the AP funds’ Ethical Council reveals the outcome of a “constructive” engagement.
Unusually, the report even includes an interview with a senior Goldcorp executive describing the positive impact of the engagement. Goldcorp executives visited the Ethical Council twice late last year, the report reveals, where it emerged that many of recommendations of the human rights assessment are now “part of the day-to-day work of the company”.

“The Ethical Council has maintained a constructive dialogue on a regular basis with the company for several years,” the report says, adding it believes the conditions at the mine and Goldcorp’s work on sustainable development issues are “considerably better today than they were when the Council began its dialogue”.
The council is encouraged that other mining companies have contacted Goldcorp to learn from its experiences.

“The dialogue with the Ethical Council has not only led to decisive changes in the way we regard our operations in the mine itself”, says Brent Bergeron, Goldcorp’s Vice President of Corporate Affairs in the report.“The dialogue has also had an important impact on our work in CSR [Corporate Social Responsibility] generally, and has even affected how the mining industry as a whole addresses issues relating to the impact that mining operations have on human rights.

“The effects of our dialogue with investors have rippled out further than what we could have foreseen.”

Some of Goldcorp’s shareholders have remained sceptical though – earlier this year Danish pension scheme SamPension sold its stake, citing continued pollution at the mine.

The 28-page report of the Ethical Council also includes details of the funds’ other constructive dialogues. These include that with US-based Duke Energy which introduced modern purification technology at coal-fired power stations. And Japanese tyre giant Bridgestone adopted a global policy distancing the company from child and forced labour.

“Dialogue with investors has rippled out further than we could have foreseen”

“The progress we have seen for companies like Duke Energy and Bridgestone, as well as Goldcorp, where the Ethical Council has been pushing for a change since 2008, is a clear example of how we can exert an influence through active ownership,” says Council Chair Ulrika Danielson.
There are ongoing dialogues with AES, Alstom, Freeport McMoRan, Incitec Pivot, Motorola Solutions, Rio Tinto, Toyota, Veolia and WalMart. The engagement with oil major Chevron over destruction of the Amazon rainforest is the subject of ongoing legal proceedings.