TALKING POINT - Anglo American, the mining giant, issued a statement today on the back of widespread criticism of its plan to invest around £200m ($400m) in a platinum mine in Zimbabwe.
The statement confirms Anglo American has been investing in Zimbabwe for 60 years, yet it is only the new media-driven revelation which has now prompted people to speak and question the impact this could have on the ethical policy of many pension funds.
There are many questions to be posed as a result, but the pertinent question should perhaps be whether pension funds should do anything about this new investment, in light of increasing concerns about the violence and alleged human rights violations generated by the current government.
There has been no apparent public condemnation or indication from pension funds, up to now, of concern about investing in a company making profits in Zimbabwe - where it is reported people have been beaten and killed for supporting opposition politicians.
Yet being such a huge organisation, it is inevitable a huge number of small and large pension funds are invested in Anglo American, whether directly or indirectly through fund holdings. The £30bn (€38bn) Universities Superannuation Scheme (USS), for example, the UK's second-largest pension fund, has an active ESG policy but states on its website the firm held an equity stake in Anglo worth £248.6m to March 31, 2008. USS is merely an example investor of firms like Anglo American who until now have not been on the wider public radar regarding human rights issues, but this is likely to pose serious ethical dilemmas which many funds may not have felt compelled to consider until now.
Anglo American says it has yet to start production at the Unki platinum mine and will not generate revenues for many years, adding it condemns the violence and violations and feels it has a clear responsibility to protect the wellbeing of its staff and contractors, as well as their families, noting their livelihoods would be jeopardised should the company withdraw from Zimbabwe.
Similarly, officials say "it has been made clear to Anglo American that if it ceases to develop this project, the Government of Zimbabwe will assume control".
So what is the answer for European pension funds currently invested in the company and those like it? Can and should they do anything to try and alter human rights violations by targeting firms like Anglo American, and would it make a difference? Should they target such firms, or have they already been doing so? And does this revelation make pension funds complicit to the possible investment in regimes with human rights abuses, as due diligence would have required funds to know what they were investing in?
Or should this be considered ‘political interference' as has been intimated about the role of sovereign pension funds, such as the Norway Pension Fund - Global, in ESG engagement regarding human rights and other such practices.
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