Delta Lloyd excludes 38 companies for violating Global Compact Principles

Almost half of excluded companies are Global Compact members

Dutch investment company Delta Lloyd has published a list with companies it has excluded from its investment portfolio. Delta Lloyd excludes companies for their involvement in controversial business practices. Delta Lloyd’s exclusion criteria are based on the Global Compact principles. A company that violates these principles repeatedly or seriously is excluded from Delta Lloyd’s investment portfolio.
The recently published list features 38 companies. Almost half of these companies are Global Compact members, including BP (excluded for severe environmental pollution), Goldcorp (excluded for violation of human rights) PetroChina and Total (both excluded for violation of human rights in Birma & Sudan).

World’s third largest pension fund divests from PetroChina

The Netherlands’ largest pension fund ABP has divested its interests in PetroChina and blacklisted the company for non-compliance with the United Nations Global Compact Principles. PetroChina is a participant in the Global Compact. CNPC, its parent company, has been criticized for its presence in war-torn Sudan.

ABP had urged CNPC, repeatedly to improve its behavior to prevent complicity in human rights violations in Sudan. CNPC however failed to adequately address the concerns.

ABP’s investment policy is based on the ten principles of the Global Compact. ABP concludes that PetroChina / CNPC, lacks solid policies to prevent involvement in human rights violations in Sudan. Hence, PetroChina does not comply with the second principle of the UNGC, which states that businesses should make sure that they are not complicit in human rights abuses.

According to Thijs Steger, spokesman for ABP Investments, the pension fund has engaged with the local management of CNPC in Sudan and requested that the company would fulfill several demands. These included that the management should:

• execute an assessment of the impact of CNPC’s activities on the local community;
• be transparent on the working methods of their security staff;
• initiate a dialogue with their stakeholders and be accountable towards their stakeholders;
• publish a statement on their role in the democratic development processes in Sudan.

CNPC has responded that they do not comment on political situations. Mr. Steger stated that ABP repeatedly urged CNPC to meet the requirements, but that the company did not progress enough. ABP therefore decided to blacklist PetroChina.

In January 2009, over 80 civil society organizations including human rights, corporate accountability, and religious groups from 25 countries, as well as government officials submitted an open letter to the United Nations Global Compact (UNGC) in support of a formal complaint against PetroChina. PetroChina, the publicly traded arm of CNPC, is the leading oil company operating in Sudan, with extensive financial links to the regime. According to the complainants, the company was uniquely positioned to influence the government of Sudan, but failed to act and denying involvement in the humanitarian crisis in Darfur.

In July 2009 the Global Compact Board announced that they maintained PetroChina as a participant in the Compact. The Vice Chair of the Board, Sir Mark Moody-Stuart, said that CNPC had been “active in supporting sustainable development in the country [Sudan] […]." The Board also took note that CNPC "had engaged in Global Compact learning and dialogue activities on conflict sensitive business practices."

ABP is not the first pension fund that has decided to divest from PetroChina. In 2008 PGGM, another Dutch pension investment giant sold its PetroChina shares after their own engagement strategy failed to produce results. At the time, PGGM said: "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." Moreover, in January 2009 the US pension group TIAA-CREF also sold its PetroChina shares in protest of PetroChina’s business links to the Sudanese government presiding over genocide in Darfur.

As opposed to findings of the Global Compact Board in 2009, ABP and other major pension funds, have evidence that PetroChina is in breach of principle two of the Global Compact. Therefore, one can conclude that the Board would have to reconsider its position on PetroChina's participation in the Global Compact.

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Roquette lockout ends after agreement reached with union members

By Colleen Freeman.

Ten months after Roquette Frères’ subsidiary, Roquette America, locked out 240 members of the Bakery, Confectionary, Tobacco Workers and Grain Millers (BCTGM) Local 48G at its corn milling facility in Keokuk, Iowa, a contract agreement has finally been reached. According to BCTGM Local 48G’s press release, while the contract is less than what they hoped for, one important achievement is the company’s recognition of their union.

Readers of Global Compact Critics will recall from a December 2010 post, “Union federations: Roquette's actions undermine the legitimacy of the Global Compact,” that Manfred Warda, Global Compact Board member and General Secretary of the International Federation of Chemical, Energy, Mine and General Workers (ICEM), wrote to the Global Compact Office about the company’s brazen violation of labor rights.

Mr. Warda, along with his counterparts at the AFL-CIO and the International Union of Foodworkers (IUF), urged the Global Compact Office to immediately contact Roquette Frères and discuss the company’s failure to uphold the Compact’s Principle 3 at its subsidiary in Iowa. Failing a positive outcome, the union leaders stated their letter should be considered a formal complaint under the Compact’s Integrity Measures. 

In June, Sharan Burrow, General Secretary of the International Trade Union Confederation (ITUC) also wrote to the Global Compact Office, echoing earlier calls from ICEM, AFL-CIO and IUF to address Roquette Frères and its U.S. subsidiary’s failure to uphold the Global Compact’s labor principles (letter available here). 

An OECD Guidelines for Multinational Enterprises’ complaint was also filed by ICEM, AFL-CIO and IUF with the U.S. National Contact Point.

Unions file complaint against Deutsche Post DHL

By Colleen Freeman.

On June 24, the International Transport Workers Federation (ITF) and UNI Global Union filed a complaint against communications and logistics giant Deutsche Post DHL for breaches to the UN Global Compact’s Principles 1 and 2 relating to human rights, Principle 3 regarding freedom of association and the right to collective bargaining, and Principle 6 concerning the elimination of discrimination.

In their complaint, ITF and UNI detail how DHL discriminated against employees and actively discouraged workers from joining the American Postal Workers’ Union at its now closed Allentown, Pennsylvania facility. The complaint also describes how DHL has subjected workers to emotional and psychological abuse by requiring lie detector tests in Panama, Costa Rica, Columbia, South Africa and allegedly in El Salvador. In India, DHL has refused to engage in good faith bargaining, and has discriminated against and dismissed trade union members. According to the unions, DHL has also violated Indian Labor Law by paying temporary workers who are performing core functions below the prevailing wage. In addition, the complaint notes that a well-known Norwegian trade union activist was recently dismissed for supposed infractions of company rules. The unions also assert that Deutsche Post DHL’s 2010 Communication on Progress “is vague, incomplete and misleading” on human and labor rights issues and indeed failed to mention any of the issues ITF and UNI have been raising with the company for some time.

ITF and UNI have called on Deutsche Post DHL, a Global Compact member since 2006, to enter into a global framework agreement to ensure their employees’ human and labor rights are respected worldwide. Failing appropriate action by the company, the unions have requested that Deutsche Post DHL be expelled from the Global Compact.

On July 14, the Global Compact Office asked Deutsche Post DHL to provide written comments responding to the allegations of ITF and UNI.

The complaint is available here.

Indians believe Global Compact is used to mask human rights abuses

The UN's flagship business initiative is being used as a tool to mask human rights abuses, according to Ayoreo Indians in Paraguay.

Leaders of the tribe, some of whose members are still uncontacted, have written to the UN Global Compact saying they are "concerned and frustrated" by the inclusion in it of a controversial Brazilian ranching company.

The company, Yaguarete Porá, was charged and fined for illegally clearing the Ayoreo's forests, and concealing evidence of uncontacted Ayoreo living there. The Ayoreo have asked that it be expelled from the Global Compact.

The UN Global Compact was designed for companies "committed to aligning their operations with ten universally accepted principles," including respect for human and environmental rights.

In its reply, the Global Compact has admitted that it has "neither the resources nor the mandate to conduct investigations into any of our participants".

Yaguarete Porá won Survival International's "Greenwashing Award" in 2010 for "dressing up the wholesale destruction of a huge area of the Indians’ forest as a noble gesture for conservation".

While some Ayoreo have been contacted by missionaries, a number remain hidden in the forest. But their land is being quickly destroyed to make way for cattle farming.

Yaguarete has angered the Ayoreo by promoting its membership of the UN Global Compact on its website, which the Indians believe promotes a false image of corporate responsibility.

Survival’s Director Stephen Corry said today, "This makes an utter mockery of the UN Global Compact. If the UN doesn't make sure companies displaying its logos abide by the rules, such initiatives become entirely meaningless. Yaguarete should be forced to leave the Compact immediately."

Source: Survival International (5/7/2011).