|Human rights breaches related to manufacturing of iron in India|
|Supporting NCP(s)||Korea, Republic of (South), Netherlands|
|Description||Specific instance notified by a consortium of NGOs regarding the activities of POSCO India operating in India, and two of its investors, the Dutch Pension Fund ABP and its pension administrator APG, and the Norwegian Bank Investment Management (NBIM).|
|Theme(s)||Disclosure, General policies, Human rights|
|Date||9 Oct 2012|
|Industry sector||Financial and insurance activities|
Read the final statement issued by the Norwegian NCP concluding their specific instance process - 27 May 2013
Read the initial assessment issued by the Norwegian NCP - 27 November 2012
In October 2012 the Norwegian, Netherlands, and Korean NCPs received a request for review from a consortium of NGOs (Lok Shakti Abhiyan (India), Korean Trans National Corporation Watch (South Korea), Fair Green Global Alliance (Netherlands), and ForUM (Norway), alleging that Pohang Iron and Steel Enterprise (POSCO), and its joint venture POSCO India Private Limited had breached the human rights provisions of the Guidelines. The allegations also concerned two of POSCO's investors, the Dutch Pension Fund ABP, and its pension administrator APG, and the Norwegian Bank Investment Management (NBIM) of the government pension fund Global.
More specifically, the NGOs alleged that POSCO failed to:
The notifying parties allege that the financial institutions did not take all the appropriate steps to prevent or mitigate POSCO’s negative impacts on human rights and environmental rights which are directly linked to them through their financial relationship with POSCO.
The NCPs agreed that each NCP should handle the notification against the enterprise registered in their respective country. Consequently the Norwegian NCP assessed the alleged breach by NBIM, the Dutch NCP assessed the alleged breach by ABP and APG, and the Korean NCP assessed the alleged breach by POSCO.
On 27 November 2012, the Norwegian NCP accepted the specific instance for consideration and published its initial assessment.
On 29 November 2012, the NCP met with NBIM and followed up the meeting with a list of 32 questions to be used as a basis for further dialogue. On 31 January 2013, NBIM formally responded outlining NBIM’s commitment to good governance and environmental and social considerations in their approach to long-term asset management, but did not provide any response to the questions raised by the NCP. NBIM stated that it was of the opinion that the complaint against NBIM should be rejected by the NCP on the ground that the Guidelines are not intended to regulate the relationship between a minority shareholder and the enterprise issuing the shares.
During subsequent meetings and correspondance, dialogue with NBIM proved difficult. They maintained that the Guidelines do not apply to minority shareholding nor in this specific instance. The NCP, in consultation with the supporting NCPs and the OECD Investment Committee, did not share this view. The Guidelines apply to the financial sector, as they do to all sectors. They do not make any exception for sub-groups of investors, nor do they exempt minority shareholders.
In closing the specific instance the NCP concluded that NBIM had violated the Guidelines chiefly on two accounts: