Human Rights Criteria in Investment
2010 – Power Corporation
WHEREAS: Power Corporation of Canada (“Power”) adopted a Corporate Social Responsibility (CSR) Statement in 2006 asserting: in making and overseeing investments, consistent with its objective of providing superior long-term returns to its shareholders, it will strive to conduct itself in a manner consistent with the Universal Declaration of Human Rights.
Power has investments in countries where human rights violations are of international concern, including Burma and Sudan. Power fails to disclose to shareholders procedures for determining how these investments comply with its CSR statement.
Specifically, Power, through its positions in Parjointco, Pargesa Holding S.A. and ultimately Groupe Bruxelles Lambert (“GBL”), has significant holdings in Total S.A., a French oil and gas company. Power and its Parjointco partner have direct control of GBL’s investment, as they hold majority voting rights throughout the chain of holding companies. GBL’s 3.9% holding makes it the single largest shareholder of Total. Further, Power’s Chairman and co-CEO Paul Desmarais Jr. has served on the board of directors of Total since 2002.
Burma
Total has significant operations in Burma, which has been ruled by a military regime since the overthrow of Burma’s democratically elected government in 1962. The regime is criticized for severe human rights violations, including the violent suppression of anti-government protests, the denial of religious freedom and the extensive use of forced labour. According to the Economist Intelligence Unit, energy sales from projects, including Total’s, accounted for 37% of Burma’s export revenues in 2005, which directly finance the military regime.
Sudan
On April 25, 2006, the United Nations Security Council supplemented Resolution 1591 with Resolution 1672, condemning the ongoing violations of international humanitarian law in Sudan’s Darfur region and, in particular, the violence against civilians and sexual violence against women and girls.
Total has owned rights to Sudan’s Block B since November 1980. Marathon Oil withdrew from the project in order to comply with the US Sudan Accountability and Divestment Act. Total has expressed the intent to resume operations. The company’s website states that it is resuming operations in “total agreement with the Sudanese government”.
A similar proposal received 50% support from non-controlling shareholders last year. In response to this proposal, Power Corporation stated it “has informed itself as to the nature of Total’s activities in Myanmar (Burma) and Sudan and has concluded that its indirect minority holding in Total is consistent with Power’s Corporate Social Responsibility Statement”. Power then references Total’s CSR policies. This broad assurance statement is not sufficient and is not equivalent to systematic implementation of Power’s CSR policy.
Continuing investment in high risk countries highlights the need for additional disclosure and assurance that measures are in place to manage the risks associated with Power’s investments and implement the company’s CSR statement.
BE IT RESOLVED THAT: the Board of Directors issue a report to shareholders by October 2009, at reasonable cost and omitting proprietary information describing how it evaluates investments according to its CSR Statement and commitment to the Universal Declaration of Human Rights.