Campaign groups target infrastructure giant Ferrovial over refugee camps (Update)

Scrutiny of A$769m acquisition of Broadspectrum (aka Transfield)

Major investors in Spanish infrastructure firm Ferrovial are facing calls from campaign groups to discuss concerns over the firm’s A$769m (€515m) planned takeover of Broadspectrum, the outsourcing firm formerly known as Transfield Services which operates controversial Australian refugee detention camps.

ASX-listed Broadspectrum has been dogged with criticisms since it won an A$1.2bn tender to run the Australian federal government’s asylum seeker detention centres on Manus Island and Nauru.

Australian super fund HESTA divested it, in its former guise, last year for breaching international human rights law. A number of Australian super funds have been engaging with it on human rights concerns.

Significantly, this month, the Papua New Guinea Supreme Court ruled that the detention of asylum seekers on Manus Island was unconstitutional and deprived its 850 male detainees of their human rights. In reaction, the country’s Prime Minister Peter O’Neill has said it will close the centre.

Ferrovial announced today (April 29) that it has 59% acceptance from shareholders, more than the 50% required. It said it was extending the offer until May 13 as it aimed to reach at least 90% acceptance and de-list Broadspectrum.

The Broadspectrum board had previously urged shareholders to reject the bid, but changed its mind yesterday, saying that the Manus Island closure could hit earnings.Speculation is mounting that Australia could move Manus Island detainees to Nauru, run by Broadspectrum, and Christmas Island, run by UK-listed company Serco. But the situation remains unclear.

Australian NGO No Business in Abuse has told RI it is holding meetings with Ferrovial investors in Europe, including the likes of BNP Paribas and Intesa Sanpaolo, to assess the ESG risks arising from the deal.

Speaking to RI, Shen Narayanasamy, Executive Director of No Business in Abuse, said it had already met investors, banks and analysts in London and Norway and planned to meet more in Paris, Madrid, Milan and Berlin over the coming days.

Ferrovial, which is 38% owned by the family of founder Rafael del Pino, holds its AGM next Wednesday at which No Business in Abuse others will raise their concerns. Ferrovial did not respond to enquiries.

The top external investors in Ferrovial include Norges Bank Investment Management, Threadneedle Asset Management, Deutsche Asset Management Investment and BlackRock Fund Advisors, according to No Business in Abuse.

Madrid-listed Ferrovial, which part owns Heathrow Airport, describes itself as a leader of sustainability on its website. It sits on the Dow Jones Sustainability Index and FTSE4Good. It is also signed up to the Global Compact and the CDP.

Narayanasamy said its listing on these indexes could be at risk if the takeover of Broadspectrum goes ahead as expected.

Update: Since this story was filed, Ferrovial has said Broadspectrum’s current operations in Nauru and Manus Island are not a strategic activity and that they would not “not form part of its services offering in the future”.