AP2 engages with Posco over alleged links to Myanmar military

The pension fund has now put two firms on notice regarding links

Sweden’s €39bn pension fund Andra AP-fonden (AP2) has told RI it has “initiated a dialogue” with South Korean steelmaker Posco over accusations it has a “direct and long-term relationship with the Myanmar military or military-controlled businesses”.

In February, Myanmar was subject to a military coup resulting in democratic institutions and processes being shut down, media outlets closed, elected leaders arrested and more than 500 civilians killed.

Last week, RI reported that Dutch pension funds ABP and PFZW had come under fire from campaign group Justice For Myanmar for investing in nine companies, including Posco, Adani Ports, Bharat Electronics and Hilton Worldwide Holdings, which allegedly have relationships with the military or companies under its control.

AP2 said that it has already engaged with beverage firm Kirin regarding Myanmar, through the Swedish Council of Ethics. Following discussions in 2020, Kirin said in February that it was terminating its partnership with Myanmar Economic Holdings Public Company Limited – although Kirin still appears among the nine companies listed by Justice for Myanmar.  AP2 said it “will now continue in 2021 with Posco”, in which it has a 0.22% stake.

Yadanar Maung, a spokesperson for Justice For Myanmar, said: “Posco has been put on notice time and again by Myanmar and Korean activists, by the UN Fact-Finding Mission and by Amnesty International. Yet they continue to do business with the Myanmar military, which is now terrorising the people.” 

“We call on Posco’s partners and shareholders to take immediate action and cut ties with Posco. Don’t risk complicity in the Myanmar military’s crimes. Stand with the people of Myanmar and help restore democracy”.

Posco had not responded for comment at the time of publication.

RI also reached out to BlackRock, Vanguard, State Street Global Advisors, Franklin Templeton Asset Management, Norges Bank Investment Management, SBI Fund Management, and Sumitomo Mitsui Trust Asset Management – all of whom have holdings in companies accused of being linked to the regime, according to the latest available data on Market Screener. 

BlackRock, Vanguard and State Street all declined to comment. Franklin Templeton, SBI and Sumitomo Mitsui did not respond. 

A spokesperson for Norges Bank told RI it did not comment on specific investments, but provided the following statement: 

"We have clear expectations to the companies in our portfolio when it comes to how they should address global challenges in their corporate governance, including human rights. We have issued an expectation document which outlines our expectations to companies when it comes to human rights: We expect companies to integrate human rights into their policies, corporate strategy, risk management and reporting. 

We are also in regular dialogue with companies, and we raise governance and sustainability topics relevant to our long-term return. Furthermore, we exercise our rights as an owner through our voting."