Norway’s KLP announced its has banned the US private prisons companies Core Civic and GEO Group from its investment portfolio because of documented human and labour rights violations at refugee reception centres in the US – despite denials from the companies.

KLP, which manages local authority pensions up and down the country, said it had been contacted by many human rights organisations about the allegations.

“Both Core Civic and GEO Group have the lowest human rights rating from MSCI Controversies, and have been given the rating ‘Fail’ by the UN Global Compact,” the NOK918bn (€88.7bn) pension fund said.

In 2020, two Danish pension funds divested the two US companies following a Danish investigative report focusing on ethical concerns about such investments because of conditions in some of the jail facilities run by GEO Group and CoreCivic.

KLP said today that along with its KLP Funds subsidiary, it had owned shares worth around NOK4m in GEO Group and CoreCivic, which had now been sold.

Kiran Aziz, head of responsible investment at KLP Kapitalforvaltning (asset management), said: “The two companies operate refugee receptions centres in several US states and are among the largest providers of security services.

“Refugees at some of the reception centres are detained against their will and without legal cause. Such arbitrary detention is a violation of international law,” she said.

According to KLP, the allegations levelled against the companies include poor living conditions at the centres, multiple cases of fatally inadequate healthcare for chronically-ill residents, “slave-like” working conditions and – in the case of GEO Group only – the separation of families and restrictions on meeting family members.

Aziz said KLP had engaged the companies in dialogue with the aim of influencing them, but this had not worked, and KLP considered the companies to have shown little understanding of the allegations.

The pension provider said that in its assessment, there was a considerable risk that the human rights abuses would continue.

Though the two companies had responded to KLP’s queries and could document that policies relating to working conditions, discrimination, healthcare and staff training were in place, the Norwegian institutional investor said the firms could show scant evidence that policies were enforced.

At the same time, KLP said, the companies rejected the existence of any censurable conditions, instead attacking those making the allegations.

“If the allegations against the companies had come solely from civil litigation, this attitude could have sown doubt about the actual state of affairs. However, when censurable conditions are also uncovered by UN working groups and state authorities, claims that every single allegation has been fabricated or incorrectly presented have little credibility,” the pension provider said in its assessment.

A spokesman for CoreCivic responded to the news saying: “KLP’s decision is about politics, not about the company we are, and their statements are deliberately false and misleading.”

He told IPE that KLP had only sent the company one email, to which it had responded in detail.

“This was clearly not a fair, transparent and genuine exchange about the valued but limited role we’ve played for our government partners dating back nearly 40 years,” the spokesman said.

He went on to say, in a lengthy response including specific rebuttals of certain statements made by KLP, that CoreCivic did not operate any “refugee reception centres.”

“The vast majority of those in our civil immigration facilities are not refugees, and many are formerly convicted felons subject to deportation after completing their criminal sentences,” he said.

“These facilities are run on behalf of US Immigration and Customs Enforcement (ICE) and in accordance with their policies and oversight. ICE determines who is classified as a refugee,” the spokesman said.

Meanwhile, a GEO Group spokesperson said to IPE: “KLP’s public statements represent a wilful misrepresentation of these facts, and our company will continue to defend itself against these libellous claims.

“We welcome an opportunity to engage with investors and other stakeholders, who unlike KLP, are willing to conduct a fact-based review of our company’s long-standing quality services and operations.”

The spokesman said: “KLP is well aware that as a long-standing service provider to the federal government, under both Democratic and Republican administrations, our company has never played a role in decisions related to the detention or release of individuals at US Immigration and Customs Enforcement (ICE) Processing Centers, nor have we ever played any role in the adjudication of immigration cases.”

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