Policies and Statements Aren’t Enough
Last week the Government Pension Fund of Norway sold its shares in G4S, a British security company, because of the risk of human rights violations against the UK-based security company’s workforce.
Norway’s Council of Ethics, which monitors investments in the country’s Government Pension Fund Global, said there was an “unacceptable risk of the company contributing to systematic human rights violations.” The Council said it not only reviewed G4S’s operations in Qatar and the UAE but also its extensive use of approximately 18,000 migrant workers from countries such as India, Pakistan and Nepal.
Concerns included the fact that workers were taking out loans to be able to pay recruitment fees and then having to spend a significant portion of their salary to pay off the debt. Forced labor wasn’t the only concern. Unfair wages and long working hours were also identified.
Human rights advocates have criticized the London Exchange Group for including G4S on ethical investment indices. This is significant because this fund is the world’s largest sovereign wealth fund. The fund held a 2.33% stake in G4S at the end of 2018, valued at the time at about $91MM. It’s also significant because G4S has a Supplier Code of Conduct and has published a modern slavery statement. This is obviously not enough. It is the actions, programs, training, and commitment of resources behind these statements and policies that are important.
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