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| An aerial view of a giant mine run by US firm Freeport-McMoran Cooper & Gold, at the Grassberg mining operation, in Indonesia's Papua province in this July 2005 file photo. (Reuters Photo/Stringer) |
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New
Zealand’s public pension fund pulled more than $1 million in investment from
Freeport-McMoRan Copper & Gold over allegations of human rights offenses
committed by security forces around the company’s controversial Grasberg mine
in Papua.
The $15.7
billion New Zealand Superannuation Fund announced on Wednesday that it would
cease investment in four companies that violate international ethics standards.
The fund
raised concerns over “breaches of human rights standards by security forces
around the Grasberg mine, and concerns over requirements for direct payments to
government security forces by the company in at least two countries in which it
operates.”
Indonesian
security forces have a heavy presence in the restive province, where police and
the Indonesian Military (TNI) are ostensibly suppressing a decades-long
insurgency waged by members of the Free Papua Movement (OPM).
But Human
Rights Watch, citing leaked military documents, has alleged that security
forces have targeted everyone from tribal leaders to political activists in
Papua. Security forces routinely suppress pro-independence groups in the
province, jailing those caught flying the “Morning Star” flag for treason and
killing local leaders suspected of being separatists, like Reverend Kinderman
Gire and Mako Tabuni, of the West Papua National Committee (KNPB).
Security
forces hired by Freeport’s local subsidiary also engage in regular firefights
with unknown gunmen along a road leading to the mine in Timika, Mimika
district. The OPM operates from a base in Puncak Jaya, near the Grasberg mine.
The fund
concluded that while Freeport’s human rights policies have improved in recent
years, the activities of the government forces it employs are beyond the
company’s control.
“This
limits the effectiveness of further engagement with the company,” the fund said
in a statement.
Human
Rights Watch applauded the move, calling it “a sound decision indeed.”
“Businesses
are getting more and more conscious about human rights abuses,” said Andreas
Harsono, a researcher with HRW. “Sound businesses do care about human rights.”
The
Ministry of Defense declined to comment on the move. Papua Police, local
representatives of the TNI and Freeport Indonesia were unavailable for comment
by deadline.
The fund
had $1,062,061 in holdings in Freeport as of June 30.
Japan’s
Tokyo Electric Power Company, China’s Zijin Mining Group and construction and
defense firm KBR were also dropped from the fund’s portfolio.
All four
were dropped after the fund decided that they were unlikely to affect any
change in their policies.
“In making
a decision to exclude a company from our portfolio, one of the tests we apply
is whether engagement with the company might realistically lead to sufficient
improvements,” the fund said. “We have come to the conclusion that further
engagement by the Fund with these companies is not likely to be effective.
“We would
rather focus our efforts on companies where we believe we can make a
difference.”
The fund’s
equity portfolio includes shares in more than 6,500 companies. It manages the
government pension fund available for all New Zealand residents 65 and older.
Freeport,
which runs the largest copper mine in the world at Grasberg, has a market
capitalization of $37.29 billion and pulled in $3.17 billion in net income last
year.
Seventy-three
percent of its shares are held by institutions and mutual funds.
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