GLOBAL - The €240bn civil service pension scheme ABP has conceded that a €47m investment in a Mozambique forestry project has failed to meet its environmental, social and governance (ESG) standards.
ABP's announcement came after the publication of a news story in Dutch daily De Volkskrant, which claimed that the forestry project had been involved in land-grabs and contributed to food insecurity for locals.
De Volkskrant cited studies by non-governmental organisations, agricultural groups and the Mozambican government that allegedly found that farmers had been threatened, crops destroyed and farms burned down.
The news daily said a government survey had concluded that more than twice the area allocated for the project in Niassa Province had been taken illegally, without compensation for the affected population, and that arable land had been used for forestry.
Since 2007, ABP has been a stakeholder in the Global Solidarity Forest Fund (GSFF), aimed at forestry in Mozambique and managed by the Global Solidarity Fund International (GSFI), an asset manager for churches in Sweden and Norway.
Although ABP is a majority stakeholder, it does not have a majority say in the forestry fund, the pension fund indicated.
ABP said it was taking the allegations "very seriously", adding that it had already raised concerns about the project's management following an independent assessment on the implementation of the Forest Steward Council standard.
The pension scheme said it understood that chief executives at the GSFF and its four subsidiary companies - as well as the chairman of GSFF's board - had been replaced, and that it was confident the investment was well on its way to complying with its ESG criteria.
It added: "We are convinced we can exert more influence on this process as a shareholder than by withdrawing from the investment."
ABP said Niassa bishop Mark van Koevering, who has been an outspoken critic of the GSFF, was satisfied with how the fund was now dealing with planting and the local population.
Van Koevering also believes the GSFF's relationship with the government, local businesses and the church has been greatly improved, according to ABP.
An ABP spokesman said reports from GSFF management did not indicate that the fund had failed to comply with the UN Global Compact directive on ESG, but he added that ABP would pay extra attention to the issue.
In a statement on its website, the GSFF said it is taking the issue of land tenure very seriously and that it is cooperating with Mozambican authorities and local communities closely on the issue of land rights.