Big funds keep up pressure on Freeport-McMoRan

Shareholder proposal targets Papua mine

Dutch pension giant ABP, the Swedish AP funds and the New York City Pension Funds are keeping up the pressure on Freeport-McMoRan Copper & Gold’s over its controversial Grasberg operation in Papua New Guinea.
The group has again filed a shareholder proposal calling on the Arizona-based company to appoint a board member with environmental expertise, arguing that the criticism over the impact of riverine tailings disposal at Grasberg is damaging shareholder value. They want Freeport to respond to its environmental challenges in an “effective, strategic and transparent manner”.
A similar proposal at last year’s shareholder meeting received almost 33% of votes in support, an unusually high level – which AP2 has said “inspired” the group. The level of support meant that the group could automatically lodge the same resolution at the following AGM.
The proposal is tabled for Freeport’s 2010 shareholdermeeting to be held in Delaware on June 9. The company has advised shareholders to vote against the proposal, saying it believes its director election process is effective and that it is not in shareholders’ best interests to require a particular type of specialist board member.
But the investors counter that such a board role “would strengthen the company’s ability to demonstrate the seriousness with which it is addressing environmental issues”.
The Kansas City Firefighters’ Pension System has also tabled a proposal. It wants senior executives to retain a “significant percentage” of pay-related shares for two years after they leaves their jobs – in a bid to get them to focus them on long-term success and align their interests with the company’s. Freeport opposes this proposal, saying it is “unnecessary and not in the best interests of our stockholders”.
The proxy is available here