SWEDEN - Three companies on the dialogue list of the Ethical Council for the first to fourth AP funds have now achieved the goals set by the council in relation to corruption and environmental issues.

The last annual report from the Ethical Council - a joint collaboration between AP1, AP2, AP3 and AP4 - revealed 13 companies invested in by the AP-funds were involved in ongoing active dialogues with the Council over breaches of international conventions signed by Sweden. (See earlier IPE article: AP Ethical Council targets 13 investments)

However, the Council has confirmed three of these companies - Grupo Ferrovial S.A. of Spain, PetroChina Company Ltd of China and Thales SA of France - have met the goals set by the council at the start of the dialogue process "and thus have taken satisfactory action".

In each of the three successful dialogues - which involved infringement of the UK Convention on Biological Diversity; the Basel Convention on Hazardous Waste and the UN Convention against Corruption - a representative from the Ethical Council met with corporate management at the head offices of the firms in Beijing, Madrid and Paris, to demonstrate "the seriousness with which the Ethical Council regards these problems".

The success of the active dialogues follows suggestions in the 2008 annual report that the three companies had already made a "positive development" towards the Council's objectives last year.

However, the Council said "face-to-face talks with the managements in question have pushed the dialogues in a positive direction, and the fact that the companies have subsequently taken measures is proof that investors can exert a real influence through dialogue".

Of the three firms, Grupo Ferrovial was added to the 'focus list' because its subsidiary Budimex was building a road through a nature reserve in Poland. Hhowever following "constructive talks" the construction has stopped and the firm has developed a sustainability policy and risk analyses for assessing environmental risks connected with infrastructure projects.

In the case of PetroChina Company, the Ethical Council had demanded the firm strengthen its safety and environmental routines and provide an account of environmental and social issues in its sustainability reporting, following an accident which caused a chemical spill in the Songhua River, in China. 

The Council, together with another investor, meanwhile engaged with Thales over accusations the company had bribed officials in several countries, but the Council confirmed Thales has now centralised its sales organisation, developed a "robust anti-corruption program" and produced a manual to help employees handle the issue, while also taking a "leading role in the European defence industry's joint initiative against bribery and corruption".

Christina Kusoffsky Hillesöy, chairman of the Ethical Council, said: "This is enormously satisfying and a source of encouragement for our work in the Ethical Council, where we can see that our talks with the companies are truly effective."

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