|Human rights breaches related to manufacturing of iron in India|
|Supporting NCP(s)||Korea, Republic of (South), Norway|
|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)||General policies, Human rights|
|Date||9 Oct 2012|
|Industry sector||Financial and insurance activities|
Read the final statement issued by the Dutch NCP concluding their specific instance process - 18 November 2013
Read the initial assessment issued by the Dutch NCP - 18 January 2013
In October 2012 the Netherlands, Korean, and Norwegian 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 Netherlands NCP assessed the alleged breach by ABP and APG, the Korean NCP assessed the alleged breach by POSCO, and the Norwegian NCP assessed the alleged breach by NBIM.
The Netherlands NCP held separate meetings with SOMO and Both ENDS, representatives of Fair Green Global Alliance, on 26 November 2012 and with APG on 27 November 2012.
APG informed the NCP that it would act on behalf of its clients including ABP. SOMO and Both ENDS informed the NCP that they would represent the Fair Green and Global Alliance, Lok Shakti Abhiyan, KTNC Watch and ForUM with regard to the allegations against ABP and APG.
On 18 January 2013 the NCP published its initial assessment of the specific instance, concluding that the issues raised against ABP and APG merited further consideration. The NCP hence offered its good offices to the parties. The dialogue was conducted between SOMO, Both ENDS and APG. Meetings where held on 17 January, 12 February and 27 February 2013 in which parties the jointly set the agenda and terms of reference
On 6 March 2013 the parties reached a joint agreement on the issues raised in the notification. The parties agreed upon the appropriate steps to be taken by APG in order to prevent or mitigate any potential negative impacts related to their minority shareholding in POSCO and to further effectuate APG’s ongoing efforts in order to influence POSCO. Furthermore the parties agreed upon a draft Terms of Reference for an independent Review and Assessment of contentious issues in Odisha, India.
In light of the agreement reached through the mediation process, the NCP concluded the specific instance, issuing a public statement on 18 November 2013. In this statement the NCP concludes that investors have a responsibility under the Guidelines, even when they are only minority shareholders in a company, to exert influence where possible on companies they invest in to help prevent or mitigate possible adverse impacts of these companies’ operations. The NCP concluded that APG, which manages the investments of ABP and other pension funds, has taken its responsibility as a minority shareholder and acted in accordance with the Guidelines. However, constructive dialogue between POSCO and all stakeholders will be key to improve the situation on the ground. An independent review and assessment mission could help launch such a dialogue. The Netherlands NCP has expressed it's willingness to collaborate actively with the South Korean and Norwegian NCP to this end.
Further supporting documentation can be found on the NCP website.