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Norway's government pension fund announces risk-based divestments; companies invited to respond

Norway's Government Pension Fund Global recently divested its investment from some companies on the basis that they "impose substantial costs on other companies and society as a whole and so are not long-term sustainable."

Four plantation companies were mentioned in a report on the divestment -- the report is linked below. Business & Human Rights Resource invited these companies to respond: Olam International, Halcyon Agri Corp, Sime Darby Plantation, and Sipef. 

Sipef and Olam International responded. Halcyon Agri Corp and Sime Darby Plantation did not.

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All components of this story

Company non-response
17 March 2019

Halcyon Agri Corp did not respond

We invited Halcyon Agri Corp to respond to Norway's Government Pension Fund Global recent divestment of its investment from the company.

Halcyon Agri Corp did not respond.

Company response
17 March 2019

Response by Olam

Protecting our forests and areas of high conservation value and eliminating unacceptable land use is a priority for Olam across our agricultural supply chains worldwide under our Living Landscapes Policy.

We are supporting progress towards a traceable cocoa supply chain and we have implemented a strict "no sourcing' policy from protected lands in our cocoa supply chains in Cote d'Ivoire and Ghana. All the cooperatives we buy from must sign our Supplier Code and adhere to not sourcing from classified forests, national parks and reserves...We are implementing an action plan to work with farmers and communities to protect and restore restore forests, which includes partnering with Rainforest Alliance to conserve forest reserves and native habitas, and planting over one million native and shade trees/

Download the full document here

Company non-response
17 March 2019

Sime Darby did not respond

We invited Sime Darby to respond to Norway's Government Pension Fund Global recent divestment of its investment from the company.

Sime Darby did not respond.

Company response
10 March 2019

Response by Sipef

Author: Sipef

We realise with great concern that, during 2019, NBIM has left the shareholding of SIPEF.

Our company is fully committed to the Roundtable on Sustainable Palm Oil (RSPO)...Our current development projects have all complied with the RSPO New Planting Procedure, and will be certified as soon as they become eligible. SIPEF has since 2014 issued and updated its Responsible Plantation Policy as a sign of our long term commitment to sustainable, deforestation-free agriculture.

Looking into your 2018 holdings, we have the impression that NBIM has turned back on all palm oil producers, regardless of their commitment and performance. 

This is difficult to understand from NBIM, a long-term investor, representing Norway, a country with high environmental standards and expectations, and a deep knowledge of our sector as well as of the challenges of developing countries. It sends a very negative message about our entire sector, vital to the economies of Indonesia, Malaysia, Papua New Guinea, and the African continent and to millions of smallholders who depend on palm oil for their livelihoods.

 

Download the full document here

Article
6 March 2019

Norway: Government pension fund divests from companies linked to deforestation

Author: Morgan Erickson-Davis, Mongabay

"Norway divests from plantation companies linked to deforestation," 01 March 2019

...Norway released the 2018 investment holdings of its massive government pension fund. Notably absent were four plantation companies previously listed in the portfolio: Olam International, Halcyon Agri Corp, Sime Darby Plantation and Sipef.

Olam International and Halcyon Agri Corp are both Singapore-based agribusiness companies, with Olam linked to deforestation for oil palm plantations in Gabon and cocoa in Ghana and the Ivory Coast, and Halcyon Agri’s subsidiary Sudcam razing rainforest for a vast rubber plantation near a UNESCO site in Cameroon. Belgium-based Sipef runs oil palm, rubber, banana and tea plantations in Indonesia, Papua New Guinea and the Solomon Islands, while Sime Darby Plantations produces palm oil in several countries in Southeast Asia, West Africa and Oceania.

With around $1 trillion in assets, Norway’s Government Pension Fund Global (GPFG) is the world’s largest sovereign wealth fund...

However, it doesn’t invest in just any company – certain ethical guidelines must be met. Coal mining, human rights violations, production of nuclear weapons, and “severe environmental damage” are a few criteria that prohibit the fund from investing in a company.

“The Ministry of Finance has established ethically motivated guidelines for observation and exclusion of companies from the fund,” said Marthe Skaar of Norges Bank Investment Management, which manages the fund. “The guidelines contain criteria for exclusion based either on the companies’ products or on their conduct.

While Olam, Sime Darby Plantations, Halcyon Agri, and Sipef aren’t included by name in the GPFG 2018 Responsible Investment report (“We do not disclose the names of our risk-based divestments,” Skaar told Mongabay), the report states 30 companies were divested from following “assessments of governance and sustainability risks.” These four companies are also no longer included in the GPFG 2018 holdings report while they were included in it in 2017.

Read the full post here