financial institutions warn against Burma linksJanuary 2002
Eight institutional investors have issued a joint statement expressing their ‘grave concerns’ about foreign companies working in Burma.
The statement’s signatories – Co-operative Insurance Society, Ethos Investment Foundation, Friends Ivory & Sime, Henderson Global Investors, Jupiter Asset Management, Morley Fund Management, PGGM and the Universities Superannuation Scheme – who have a combined total of almost £400billion ($580bn) under management, say they are worried about the role such companies may play in indirectly sustaining a repressive military regime with a bad record on human rights.
While not threatening disinvestment, the institutions demand that businesses with operations in Burma (also known as Myanmar), should ‘justify their involvement in the light of the risks that such activity imposes on shareholders.’
This means, the investors say, that they should:
carry out and publish independently verified social impact assessments of their activities in the country
promote human rights and ‘combat corruption within company operations and the wider local and national community’
seek to ‘maximize the positive impact of their actions’ through collaboration with other companies and ‘respected organizations’.
Companies operating in countries such as Burma expose themselves to ‘extraordinary business risks’, the statement says.
These include ‘widespread public condemnation and attendant reputational damage’, hostile shareholder resolutions, sanctions and boycotts.
There is also the danger of asset expropriation, ‘pervasive corruption’ and ‘other political risks inherent in operating in a highly volatile environment.
‘Given the above, we wish to inform the companies in which we invest, and those in which we may wish to invest in the future, that we have grave concerns about companies with ... business relationships in Burma’.
The statement acknowledges that several companies have made efforts to create ‘a positive impact through constructive engagement’ with the Burmese regime, but adds that the signatories are ‘concerned that many of the risks … still remain’.
Jupiter said: ‘Although the statement does not call for disinvestment, it calls upon those companies choosing to continue their business involvement in Burma to adopt responsible business practices so as not to contribute to, or perpetuate, human rights abuses committed in the country’.
UK company Premier Oil, which operates in Burma, claimed the statement was a sign that ‘the attitude of the international community towards Burma is changing towards constructive engagement’.
The University of Virginia has sold 50,000 shares in Unocal after protests from students and staff members over the US-based oil company’s operations in Burma.
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