The Netherlands’ biggest pension fund is to divest a stake in South Korean firm Posco Daewoo, as a subsidiary is involved in chopping down rainforests for palm oil plantations in the Indonesian province of Papua.

ABP, the €408bn Dutch civil service scheme, said in a statement that the company was too slow in responding to communications from its asset manager APG about tackling issues.

“As a result, we have lost faith in the company’s willingness to improve,” the pension fund said.

However, Dutch environmental group Milieudefensie claimed that ABP had divested its €300,000 stake as a result of pressure from ABP’s members as well as the pressure group itself.

Milieudefensie said that the palm oil firm had destroyed 27,000 hectares of rainforest during the past few years, displacing the local population and depriving them of their livelihood.

The pressure group said it also wanted ABP to divest a €157m stake in Posco, the parent company of Posco Daewoo.

“If ABP were to really invest sustainably as it claims, it should divest from the entire industrial palm oil sector,” the group argued.

TV show criticism

Milieudefensie highlighted that ABP had recently received a ‘Scaredy-Cat’ trophy from Dutch consumer programme Kassa, after it declined to account for the now-divested holding on camera.

At the time, ABP said nobody was available to comment because of the school holidays.

José Meijer, vice chair of the scheme, said she regretted “that the viewers have missed us, as we are keen to account, and never shy away from issues”.

ABP’s investments in palm oil firms total €17m. It said it was actively encouraging sustainable and responsible production of palm oil.

In 2016, the pension scheme introduced a new investment policy that not only took into account return, risks and costs, but also assessed how sustainable and responsible its investments were.

ABP said this policy must guarantee that it invested in equity and bonds of companies that are ahead on sustainability and responsibility factors by 2020.

It would only invest in other firms if it had faith in their ability and willingness to improve, it said.

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