The New Zealand Superannuation Fund has divested from a global mining corporation because of concerns over human rights violations and environmental damage, which it says are incompatible with UN Global Compact principles.
The fund, a pension scheme that invests money on behalf of the government, has decided to dismiss the Barrick Gold Corporation and its subsidiary African Barrick Gold from its $22 billion (£11.8 billion) investment portfolio because of these ethical concerns.
Explaining its reasoning, the fund said it had become clear that the company’s activities contrasted with the standards imposed by the UN Global Compact – the benchmark principles that the fund adheres to – about the environment and human rights.
It said that Barrick’s mines in Papua New Guinea and Tanzania had experienced problems concerning security and the effects on the local communities and the environment.
The fund’s manager for responsible investment, Anne-Maree O’Connor, said “We took account of the security and environmental context in which the companies operate, and the length of time over which problems have occurred.
“Given the circumstances, we believe engagement with Barrick would be unlikely to be successful, and until it is evident that significant improvements can be made on the ground we will be excluding both companies from our portfolio.”
Gold mining presents a number of ethical issues, especially concerning indigenous communities, in terms of health effects and land disputes.
It also severely affects the environment as it disfigures the landscape and releases toxic substances such as mercury and cyanide.
Meanwhile, the practices themselves to extract gold are often considered harmful. Heap leaching for instance, which requires the metal to be crushed and treated with chemical substances like cyanide, inevitably contaminates the surrounding environment.