Norway's Govt. pension fund excludes Chinese co due to "unacceptable risk" of human rights abuses in garment factories in Vietnam

Get RSS feed of these results

All components of this story

Article
17 January 2019

Council on Ethics' recommendation to exclude Texwinca Holdings Co

Author: Council on Ethics

[T]he Council on Ethics recommended to exclude the company Texwinca Holdings Ltd from the Government Pension Fund due to an unacceptable risk of the company being responsible for systematic human rights violations.

Texwinca is a Chinese company that produces yarn, knitted fabrics and garments. Texwinca owns 50 per cent of the shares in Megawell Industrial Ltd, making it that company’s largest shareholder... Texwinca states that it does not have a controlling influence over Megawell, and that it has no responsibility for the working conditions at the factories in Vietnam.

The recommendation is based on investigations into working conditions which uncovered systematic norm violations at Megawell’s factories in Vietnam, including discrimination against women, numerous occupational health and safety hazards and restrictions on freedom of association. Texwinca’s dominant shareholding [...] leads the Council to presume that Texwinca has significant influence over Megawell. The Council attaches importance to the fact that Texwinca has not helped to clarify this case and concludes that neither Texwinca nor Megawell are taking any responsibility for the prevention of human rights violations at the factories in Vietnam. The Council on Ethics considers that when a company in this way disclaims responsibility for preventing norm violation [...], the risk of systematic labour rights violations becomes unacceptably high.

Read the full post here

Article
17 January 2019

Decisions to exclude companies from the Government Pension Fund Global

Author: Norges Bank

Norges Bank has decided to exclude Texwinca Holdings Co due to unacceptable risk that the company is responsible for serious or systematic human rights violations...

The Executive Board has not conducted an independent assessment of all aspects of the recommendations but is satisfied that the exclusion criteria have been fulfilled...

The Executive Board's decision on exclusion were made based on a recommendation from the Council on Ethics.

The Executive Board has also decided to exclude Evergy Inc and Washington H. Soul Pattinson & Co Ltd. based on an assessment of the product-based coal criterion... The Executive Board's decision on exclusion were made based on a recommendation from Norges Bank Investment Management.

Before deciding to exclude a company, Norges Bank shall consider whether the use of other measures, including the exercise of ownership rights, may be better suited. The Executive Board concludes that it is not appropriate to use other measures in these cases.

Read the full post here

Article
5 June 2018

Recommendation to exclude Texwinca Holdings Ltd from the Government Pension Fund Global

Author: Council on Ethics

The Council on Ethics recommends that Texwinca Holdings Ltd be excluded from investment by the Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is responsible for systematic human rights violations...

The Council contacted Texwinca for the first time in June 2015 to request information about working conditions at the company’s factories in Vietnam. Texwinca replied by referring the Council to the company’s annual report and its Environmental, Social and Governance (ESG) Report...

In October 2016, the company was sent a draft recommendation to exclude it from the GPFG that had been prepared on the basis of the Council’s investigations. Texwinca replied that the company did not wish to comment on the recommendation.

To obtain a broader basis for assessing the company, Kollan was investigated in May–July 2017. Texwinca was sent a new draft recommendation to exclude the company in February 2018. Once again, the company said it did not wish to comment on working conditions at the factories.

In its communications with the Council on Ethics, Texwinca has commented solely on its corporate structure, but has otherwise provided no information about the matter at hand. According to Texwinca:

“We have no comment on the enclosed draft recommendation. As explained in our previous communication, it is the Group’s strategy to remain as a passive investor in the Megawell business. To allow maximum appropriate authority to the managers of Megawell Group to operate and expand the business, it was agreed that we would impose the minimum intervention in the business of Megawell. Though we hold 50% equity interest in Megawell Group, the other two active investors, acting in concert and collectively own the remaining equity interest, also maintain 50% controlling interest in Megawell Group. Thus, we have no legal right to exercise full control on Megawell.”

Read the full post here