November 10, 2009
GES Investment Services has, together with its clients Ilmarinen, KLP and Folksam, made important progress in its engagement with Australian retailer Wesfarmers. The company’s subsidiary CSBP recently responded to investor concerns by announcing a decision to invest in new technology, which will enable the company to successively reduce its reliance on phosphate rock from occupied Western Sahara, a trade that is considered to be in violation of international norms on human rights.
In July 2009, Ilmarinen, on behalf of Nordic Engagement Cooperation (NEC), and GES Investment Services arranged an investor group meeting with Wesfarmers and its subsidiary CSBP to discuss the sourcing of phosphate from occupied Western Sahara. This trade is in violation of e.g. the UN Global Compact Principle 1 on human rights, since it funds Morocco’s occupation of the territory and currently takes place in disregard of the wishes and needs of the people of Western Sahara. The meeting was coordinated together with the UN PRI Clearinghouse.
Recently, Wesfarmers announced a decision to invest in new technology, which will enable the company to use phosphate rock from sources other than the occupied area. The company estimates that the development of the new technology will take approximately two years, starting before the end of 2009.
Hanna Roberts, Research Manager and responsible for GES’ Engagement Services, says:
“The two year long dialogue with Wesfarmers has been constructive and we appreciate the company’s transparency on these issues. Wesfarmers’ recent declaration shows that the company is taking an important step towards ceasing its import of phosphate from Western Sahara. GES Investment Services will, on behalf of its clients, continue its engagement with Wesfarmers regarding the implementation plan for the phasing out of the company’s import from Western Sahara and the adoption of a sourcing policy that ensures the respect of human rights among all its suppliers.”
GES’ client Anna Hyrske, Senior Advisor at Ilmarinen Mutual Pension Insurance Company, says:
“This engagement case is pleasing as it demonstrates that we can cooperate when it comes to engaging with companies in other parts of the world. All three members of the Nordic Engagement Cooperation are satisfied about this development.”
NEC consists of three Nordic investors: Folksam from Sweden, Ilmarinen from Finland and KLP from Norway. The three organisations have made the strategic decision to coordinate their engagement activities with companies on environmental, social and governance issues.
For more information, please contact:
Hanna Roberts, Engagement Director