Korean steel producer stops in Myanmar after pressure from APG

Korean steel producer stops in Myanmar after pressure from APG

Published on: 16 April 2021

South Korean steel producer Posco C&C today announced it will terminate its cooperation with a company controlled by the military in Myanmar. APG is invested on behalf of the pension fund clients - including ABP, bpfBOUW and SPW - in the parent company of Posco C&C. The announcement follows strong pressure from APG and other investors to cut ties with the junta.

In the Financial Times, Yoo-Kyung (YK) Park, sustainability specialist at APG, says this is ‘fantastic news’. In contacts with management and in a public appeal in a major newspaper, we have urged that the company end its cooperation in Myanmar.

“We are pleased to see that Posco has listened to the concerns we have raised on behalf our pension fund clients and together with other investors,” says YK. “In the past six months in particular, the company has implemented corporate responsibility improvements. Today's announcement is another step in the right direction.”

Pulling the plug

Posco C&C is pulling the plug on its joint venture with a military-controlled company, Myanmar Economic Holdings Limited (MEHL). Earlier, Posco C&C announced that it would stop paying dividends that financially benefit the military.

Since mid-February this year, Myanmar is controlled by a military junta after the army overthrew Aung San Suu Kyi's government. The military has violently suppressed protests against the coup. APG and its pension fund clients find this situation extremely worrying.

APG invests in some global companies that operate in Myanmar and may have business or financial ties with the military. We have been engaging with our investee companies on this issue for some time – also already prior to the military takeover.

In February, Japanese brewing company Kirin announced that it was ending two joint ventures with companies that may have ties to the military in Myanmar. Here too, APG had been urging the company to terminate this cooperation before the military coup.

Importance of human rights

In addition to financial criteria, we consider ESG-criteria – including human rights – in all our investment decisions. We have conveyed our great concerns to all investee companies that operate in Myanmar. We also ask them to reconsider their position in the country.

APG does not invest in government bonds of countries, such as Myanmar, that are subject to a binding weapons embargo imposed by the UN Security Council or the European Union.