The NZ$22bn (€14bn) New Zealand Superannuation Fund, one of the world’s leading responsible institutional investors, has axed Barrick Gold Corporation and its subsidiary African Barrick Gold from its investment portfolio on responsible investment grounds.
NZ Super, which has faced pressure from New Zealand’s Green Party over the holdings, joins other leading investors such as Norway’s Government Pension Fund, in excluding the Toronto-based mining firm.
The fund has sold its NZ$1.84m stake in Barrick Gold and its NZ$78,824 holding of African Barrick Gold from its global equity portfolio, saying its activities are “inconsistent with human rights and environmental standards contained in the UN Global Compact”. This is the key standard against which the fund measures corporate behaviour.
Barrick’s mines in Papua New Guinea and Tanzania have experienced a series of security-related, environmental and community problems over a lengthy period.
Of particular concern to the fund is Barrick’s use of riverine tailings (disposing mining waste into rivers) – a breach of international norms with the World Bank and the International Finance Corporation no longer financing projects that make use of this practice.
According to the fund, while Barrick has made recentsteps to improve its policies and practices, there was no practical remedy for the environmental impact of riverine tailings. Also, the fund’s view was that progress on resolving community grievances and security issues had been slow.
“In reaching our decision we took account of the security and environmental context in which the companies operate, and the length of time over which problems have occurred,” said the fund’s Responsible Investment Manager, Anne-Maree O’Connor.
“Given the circumstances, we believe engagement with Barrick would be unlikely to be successful, and until it is evident that significant improvements can be made on the ground we will be excluding both companies from our portfolio.”
It was important to focus its efforts “on situations where we believe a difference can be made”.
Last month, Barrick came under fire from eight of its institutional investors (stewarding a collective US$916bn in assets) following its decision to award a $11.9m bonus on top of a $17m pay packet to Co-Chairman John Thornton who started in June 2012.
Barrick is one of the companies that is most excluded from investor portfolios, according to analysis by Novethic, the sustainability research company.