'Posco case' closed by Dutch NCP
Last week the NCP, the Dutch National Contact Point for the OECD Guidelines (on corporate social responsibility) issued a press release titled "Parties come to understanding in the POSCO case”. What is the issue, what agreement is reached and between whom? We ask our colleague Wiert Wiertsema, who has been involved in this case from the beginning.
What is going on?
"Since 2005, Korean steel company POSCO has wanted to invest a huge amount of U.S. $ 12 billion in a large steel plant and port in the Indian state of Orissa. This is causing enormous damage to the environment and the livelihood of the local population. A large part of the local population is opposing the expropriation of land and the loss of their livelihoods. There have been structural violations of human rights, and unfortunately even lives have been lost.”
"Because of these strong indications of violations of the OECD Guidelines for Multinational Enterprises, we filed complaints with the NCPs of South Korea, Norway and the Netherlands together with our partners in India. In South Korea, the complaint mainly concerned POSCO while in Norway and the Netherlands pension funds are being held accountable for their role as investors in POSCO. In the Netherlands, the complaint is specifically directed against the pension fund ABP and its executive APG. These investors have been asked to do more to help to improve the behavior of POSCO."
What did you want to achieve with the complaint to the NCP?
"By filing a complaint with the NCP we hoped to start a process to pinpoint the potential solutions to the problems in Orissa. We wanted an independent institute to establish what issues seem to block a more sustainable development in the region. We hoped to help put an end to human rights violations in the project area."
The NCP now states that 'APG has taken its responsibility as a minority shareholder’. What does this mean in practice?
"ABP / APG holds only a very limited number of shares of POSCO. Nevertheless ABP / APG acknowledges having a business relationship with POSCO. In this context, ABP / APG maintains a regular dialogue with POSCO in which its social responsibility for the impact of its investments in India is being discussed. Although ABP / APG has not actively consulted the representatives of the local communities threatened by POSCO, it has urged POSCO to actively do so. Unfortunately at this moment, in Orissa there is such a lack of confidence between the parties involved, that it is difficult to start a constructive dialogue."
What is the next step in your opinion?
"What we need now is an independent and international mission to the conflict area, to see what the obstacles to a constructive dialogue are. In response to the complaint to the NCP, POSCO has now announced to feel for such a mission. The Dutch NCP is trying to involve its sister institutions in Norway and South Korea to realise such a mission.”
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