KPA liquidates tyre and mining stocks over alleged abuses.

Tyre manufacturer Bridgestone and mining group Freeport-McMoRan sold in protest.

KPA Pension, the €5bn ($6.8bn) Swedish pensions manager, has sold its entire shareholding in Bridgestone, the tyre manufacturer, in protest at allegations of child labour at the company’s manufacturing plants in Liberia. KPA’s 48,000 stake in Bridgestone was worth in the region of €750,000. The pensions manager, which runs the retirement assets of more than one million Swedish civil servants, has also shed 27,000 shares, worth about €2.4m, in Freeport-McMoRan, the US-based copper and gold company, over concerns about the company’s environmental record in Indonesia.
KPA is the second major Scandinavian investor in the last two years to divest from Freeport-McMoRan. In February 2006, the €250bn Norwegian Government Petroleum Fund sold its shares over allegations that the company was dumping mining residue in rivers in Papua New Guinea. The divestment of approximately €14m shaved one percent off Freeport’s share price at the time. The Norwegian fund’s ethical council said it had also been concerned about alleged human rights abuses and corruption at the company. Freeport recently sent an investor relations party to Scandinavia to meet withthe ethical advisory panel of the Norwegian Petroleum Fund in Oslo as well as investor research houses GES Investment Services and Ethix SRI Advisors in Stockholm.
William Collier, vice president-communications at Freeport-McMoRan said that the company was open to enquiries about its environmental policy from shareholders. He said: “We think we have a good story to tell and our environmental reports are all on our website and we try to explain the work we are doing.”
He said Freeport had no record of any contact from KPA Pension: “We would be happy to share our information with them if they are still interested.” A spokeswoman for KPA could not confirm if it had contacted Freeport-McMoRan, but said that preliminary contact with companies prior to divestment was standard practice at the pensions company. The spokeswoman said KPA had written to Bridgestone in June to explain its concerns: “There have been very strong allegations of the involvement of child labour at Bridgestone’s Liberia operations, so we wrote to the company asking what it was doing to ensure that this was not the case and
to prevent children from working alongside their parents in these factories. We did not receive a response from the company and we have now sold our shares as a result.”
In an official statement, Bridgestone said: “We are disappointed to learn of KPA’s decision, as we believe that decision has been taken without knowing all thefacts. Nor does it take into account Firestone’s efforts, investments and commitment to Liberia and its people. To date, none of the departments which would typically receive and respond to the type of inquiry mentioned by KPA have a record of any contact with the group.”