The NZ$19bn (€12.1bn) New Zealand Superannuation Fund has excluded mining firm Freeport-McMoRan Copper & Gold over its controversial Grasberg mine and Japan’s Tokyo Electric Power Company (TEPCO) following the Fukushima nuclear disaster.
The fund said Freeport was excluded for breaches of human rights standards by security forces around the mine in West Papua, Indonesia, and over concerns over requirements for direct payments to government security forces by the company in at least two countries in which it operates.
It said: “Despite improvements in Freeport McMoRan’s own human rights policies, breaches of standards by government security forces are beyond the company’s control.
“This limits the effectiveness of further engagement with the company.” The fund had a NZ$1.3m holding in the company.
The decision reflects a shift at the fund, which last year was forced to respond to media criticism over its investments in the controversial facility. The fund said in November that engagement by it and other investors and NGOs had improved practices and disclosure at the mine.“For us, walking away might be simpler and quicker than staying engaged, it might avoid critical coverage, but it changes nothing,” said Adam Orr, Chief Executive of the Guardians which oversees the fund, at the time.
Freeport has been excluded from the Norwegian Government Pension Fund since 2006 for severe environmental damage.
New Zealand Super, a founding signatory to the UN-backed Principles for Responsible Investment, also said it has excluded TEPCO (holding: NZ$199,447) due to its “long history of breaches of environmental and safety standards prior to and including the Fukushima nuclear plant crisis”.
Also excluded from investments were KBR (holding: NZ$125,341), the US construction and engineering firm spun out of Halliburton in 2007, for “severe breaches of anti-bribery and corruption standards over a long period”.
China’s state-owned Zijin Mining Group (holding: NZ$371,391) was excluded for severe breaches of environmental and safety standards.
The fund said that in all cases engagement was unlikely to be effective due to the context of the company’s operations or to a lack of responsiveness from the companies. The exclusions follow a review of engagement priorities. Link