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PGGM pulls €37m from PetroChina and adds to weapons blacklist

Four new companies placed on exclusion over links to nuclear weapons and cluster bombs.

PGGM, the €88bn ($127bn) Dutch pensions giant, has pulled investments worth €37m in PetroChina over the company’s involvement in human rights violations in Sudan. It is the first time the fund has divested from a company following what it called “intensive dialogue” over PetroChina’s relationship with the Sudanese government.
The fund has also added four companies to its investment exclusions list over involvement in the production of controversial weapons. It has divested €25,000 from US-based EDO for involvement in nuclear weapon production and €204,000 from US-based Goodrich Corporation for links to the manufacture of nuclear weapons and cluster bombs. The fund also withdrew €87,000 from Hanwha, the South Korean chemicals company, over its links to the making of anti-personnel landmines and cluster bombs. Hanwha was earlier this month was placed on a similar blacklist by the €250bn Norwegian Government Pension Fund. US-based company McDermott International was also put on PGGM’s blacklist for links to nuclear weapon production although the fund is not invested with the company. A spokesman for PGGM said the fund’s exclusion list also pre-empted companies in which it should not invest. Since the beginning of the year, PGGM has taken onthe legal status of administrator and asset manager to Pensioenfonds Zorg en Welzijn, the pension fund formerly known as PGGM. In a statement, the manager said: “The pressure exerted on PetroChina on behalf of Pensioenfonds Zorg en Welzijn to improve the practices of this company has failed to have the desired result. In such situations, PGGM excludes companies from investment. Companies are excluded immediately if they are involved in trading or production of weapons of mass destruction or weapons that continue to cause civilian injury or death after a military conflict has ended. The fund said that CNPC, PetroChina’s parent company was a major financer of the Sudanese government: “CNPC has not taken adequate steps to avoid involvement in these human rights violations or to contribute to resolving human rights issues in that country.” PGGM has one of the comprehensive environmental, social and governance policies amongst European pension schemes.
Last year, Dutch pension giants ABP and PGGM announced they would stop investing in companies making landmines and cluster bombs after coming under fire in a Dutch current affairs programme that prompted thousands of complaints from pension scheme members.