Advocacy Groups to Dow Jones: South Korean Company’s Transgressions Merit Removal from Sustainability Index
Advocacy Groups Appeal to Dow Jones Sustainability Index to Drop POSCO
New York - Prominent human rights, labor rights and advocacy groups appealed to the Dow Jones recently to remove POSCO (NYSE: PKX) from the Dow Jones Sustainability Indices.
United Against Nuclear Iran (UANI), the Cotton Campaign, and the International Network for Economic, Social & Cultural Rights (ESCR-Net) have all separately written to Dow Jones’ Chief Executive Officer, Lex Fenwick, and Chief Executive Officer of Dow Jones’ sustainability indices partner, RobecoSAM, Michael Baldinger, to initiate a Media & Stakeholder Review Process in response to POSCO’s refusal to address a range of appalling practices that violate Dow Jones’ sustainability standards.
POSCO, a diversified multinational steel-making company headquartered in Pohang, South Korea, has come under increasing criticism recently from a range of groups over human rights violations and illegal forced evictions connected to their operations in India, links to forced labor of children and adults in Uzbekistan’s cotton sector, and the company’s potential business ties to the Iranian regime and Iran’s nuclear program.
"Each of our groups has different goals,” said Matt Fischer-Daly, Cotton Campaign Coordinator, regarding the appeal. “But we are all seriously concerned about POSCO’s blatant refusal to take responsibility for its appalling practices around the world.”
Said UANI CEO, Ambassador Mark D. Wallace: “We continue to call for POSCO to fully end its business in Iran. Given the nature of the business, the only way for POSCO to eliminate its exposure to the Iranian regime and IRGC-controlled entities is to completely pull out of the country.”
In ESCR-Net’s letter to Mr Fenwick and Mr Baldinger they expressed that POSCO’s conduct in India “casts strong doubts on POSCO management’s commitment to corporate sustainability and the company’s ability to address critical economic and social issues.”
In the 2005 Memorandum of Understanding (MoU) between POSCO and the Government of Orissa (before becoming the Government of Odisha in 2011) the Government agreed to acquire and transfer over 4,000 acres of land “free from all encumbrances” to the company for the construction of the steel plant and port. The required land acquisitions would facilitate the illegal forced eviction and displacement of approximately 22,000 people from their land and destroy the livelihoods of many thousands more. Since first learning of the project from the media in 2005, villagers have attempted to utilize recognized political and legal processes to raise their concerns. However, these domestic legal procedures have been disregarded by the Government of India and POSCO, and the determined efforts of villagers to resist eviction and land confiscation have been met with excessive use of force, arbitrary arrests and detentions, extended blockades of villages, and police occupations of schools.
Every year the government of Uzbekistan forcibly mobilizes over a million children, teachers, public servants and private sector employees for the manual planting and harvesting of cotton. The use of forced labor to prepare fields and harvest cotton violates the labor laws of Uzbekistan and international laws ratified by the Uzbek government, in particular International Labor Organization Conventions No. 105 on the Abolition of Forced Labour and No. 182 on the Elimination of the Worst Forms of Child Labour. Unfortunately, POSCO subsidiary Daewoo International is the largest cotton manufacturer in Uzbekistan and operates three cotton companies in the country. Both POSCO and Daewoo have publicly acknowledged their connection to forced labor cotton in Uzbekistan, and neither company has taken appropriate actions to fulfill their obligations under the UN Global Compact and the Guidelines for Multinational Enterprises of the Organization for Economic Cooperation and Development.
UANI is very concerned by certain continuing business activities carried out by POSCO subsidiaries in Iran. In correspondence between POSCO and UANI, POSCO has asserted that all its transactions in Iran “involve only the civil market,” and are carried out with entities “not owned or controlled by the Iranian government.” However, a series of extensive privatization policies carried out in Iran have enabled regime entities such as the Iranian Revolutionary Guard Corps (“IRGC”) to effectively permeate large swaths of the Iranian economy. The increased control exercised by the regime and IRGC over the Iranian economy includes ostensibly civilian sectors of the economy including, significantly, the manufacturing and construction sectors - areas where POSCO subsidiaries continue to operate. In addition, such regime control is exercised through complex systems of private ownership that make it extremely difficult, if not impossible, for foreign corporations like POSCO to ensure that their Iran business activities are distinctly civilian and free of connections to regime-controlled entities.
View the full text of the Cotton Campaign letter here.
View the full text of the United Against a Nuclear Iran letter here.
View the full text of the letter sent by International Network for Economic, Social & Cultural Rights to Mr Fenwick and Mr Baldinger here, and the full text of their report on human rights violations linked to POSCO-India’s operations here.
CONTACT: Cotton Campaign Coordinator - c/o International Labor Rights Forum, 1634 I Street NW, Suite 1000, Washington, DC 20006. +1 202-347-4100, cottoncampaigncoordinator [at] gmail.com