- Norges Bank Investment Management (NBIM) withdrew more than $12 million from Alicorp SAA on March 5, 2020.
- In 2019, the Shipibo-Konibo indigenous group said a palm oil company in Alicorp’s supply chain had destroyed 70 square kilometers (27 square miles) of community forest.
- NBIM said it expects the companies it invests in to have strategies in place to mitigate deforestation but that reasons for divestment are usually financial.
A major sovereign wealth fund has pulled its entire $12.3-million investment from a Peruvian company that was accused in 2019 of failing to sever ties to a palm oil plantation accused of violating the rights of an indigenous group.
According to the most recent “responsible investment” report (PDF) from Norges Bank Investment Management (NBIM), one of the world’s largest sovereign wealth funds and sometimes called the Norwegian Oil Fund, part of its 2019 overview included a follow-up “on how Alicorp SAA managed deforestation and human rights risk in supply chains.”
Alicorp is one of 42 companies that NBIM divested from in 2019 and is no longer among the five Peruvian companies that the fund lists in its Peruvian investment portfolio online. The report says that when the fund decides to divest, it does so “to avoid investing in companies that produce certain types of products or are responsible for violations of ethical principles.”
According to a statement released on March 5 by the U.K.-based nonprofit Forest Peoples Programme (FPP), a complaint was filed with the fund in June 2019 on behalf of the Shipibo-Konibo indigenous group. The complaint alleged that Alicorp was continuing to do business with Ocho Sur, a palm oil company that destroyed 70 square kilometers (27 square miles) of the community’s ancestral forests.
“[T]he Shipibo-Konibo community and allies pointed out how Alicorp’s operations failed to comply with NBIM’s standards for companies, including its ‘expectation documents’ on human rights and climate change,” the FPP statement said.
“The complainants also urged NBIM to adopt stringent procedures to prevent any further sourcing of commodities linked to human rights violations and deforestation in the Peruvian Amazon,” the statement said.
In an email to Mongabay, Marthe Skaar, NBIM’s acting head of communications, said there are usually “a number of reasons why we sell out from a company, mostly financial.”
“We have had a focus on deforestation for several years. We expect that the companies have a strategy for reducing deforestation from their own activities and supply chains,” Skaar wrote. “We expect them to monitor whether suppliers that deliver forest-linked commodities adopt best practices to avoid deforestation and adhere to international standards and certification systems for the sustainable management of forests and disclose how they monitor their impact on tropical forests over time.”
Asked if deforestation was one of the factors considered when the fund withdrew its investment, Skaar said she could only “confirm that this was not a risk-based divestment.”
The FPP statement included a response from Shipibo-Konibo community leader Ivan Flores, who said the group welcomed the divestment, “which shows that even huge companies such as this should think twice before buying palm oil from a plantation like the one Ocho Sur operates on our dispossessed lands.”
Alicorp did not respond to a request for comment.
Banner image: An oil palm fruitlet. Image by Rhett A. Butler/Mongabay.