BHP Billiton on blacklist of ethics firm

Investment specialist urges its clients, with £40bn in their pockets, to drop the mining giant and 16 others from their portfolios
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The Independent Online

A leading investment body is calling on its members to boycott BHP Billiton over accusations of poor labour practices.

A leading investment body is calling on its members to boycott BHP Billiton over accusations of poor labour practices.

The FTSE 100-listed mining giant has been targeted by GES Investment Services, an ethical investment specialist based in Stockholm. It is concerned that BHP does not recognise collective bargaining for new employees at some Australian operations. GES says this contravenes best practice set by the International Labour Organisation, an arm of the UN.

It is recommending that its clients, which manage €60bn (£40bn), exclude BHP from their portfolios. Other companies that have been added to the 17-strong exclusion list include Canadian oil group EnCana and Spain's Repsol, the two largest stakeholders in the consortium behind the OCP oil pipeline in Ecuador.

Also on the list is ChevronTexaco, which has been criticised over legal action in Ecuador, where it is accused of dumping toxic waste. It was already listed over accusations of human rights violations in Nigeria.

GES is also investigating BP, which has a 30 per cent stake in a $3.6bn (£2bn) pipeline in Central Asia. The BTC project has been targeted by campaigners concerned that it will hurt the environment and under- mine human rights in conflict-prone regions. GES said BP could be included in an upcoming observation report, which contains cases that could be put on the exclusion list in future.

GES's managing director, Magnus Furugard, said: "There are a lot of problems with pipelines. We have had accusations of forced labour, endless discussions about the environment and how local people are affected. They are, in their very nature, controversial."

The latest update to GES's exclusion list coincides with a report by the HBOS-owned Insight Investment, which has nearly £72bn of assets under management. It has warned that British oil and mining companies face having their profits and reputations damaged if they fail to "green" their operations.

It surveyed 22 companies including Shell, BP and Anglo American. Four were singled out: Antofagasta, Aquarius Platinum, Soco and Tullow Oil. Insight claims they have done little formal work to assess their exposure to environmental risks.

Kerry ten Kate, an Insight analyst, said: "We need these businesses to be profitable and successful for the coming decades. But there's a large flashing red light over the fact that unless these companies get on top of biodiversity issues - and demonstrate best practice - they run a risk that they won't get access to the land."

GES said it had held talks with BHP and had been unable to agree a course of action. BHP claims it is not contravening Australian laws.

Two companies, however, have been removed from the list: Nomura and Nestlé. The Swiss food giant, long criticised for selling formula baby milk in developing countries, has demonstrated "a well-developed training system and extensive guidelines in order to follow the directions of the World Health Organisation code", GES said.