FF Dirtyprofits PDF

Dirty
Profits
Report on Companies and Financial Institutions

Benefiting from Violations of Human Rights
Content
Summary 4
Methodology 6
Company Profiles and Harmful Projects:

Alliant Techsystems Inc. 9
Alpha Natural Resources Inc. 10
Anadarko Petroleum Corp. 12
Anglo American plc 13
Barrick Gold Corp. 14
BHP Billiton Ltd. 15
Coca-Cola Co. 16
Drummond Co. 18
EADS N.V. 20
ENI S.p.A. 21
Flextronics International Ltd. 22
General Dynamics Corp. 23
Glencore International plc 24
H&M AB 26
Hanwha Corp. 27
Heckler & Koch GmbH 28
Hon Hai Precision Industry Co. Ltd. (Foxconn) 29
L-3 Communications Holdings Inc. 31
Lockheed Martin Corp. 32
Paladin Energy Ltd. 33
Rheinmetall AG 34
Rio Tinto plc 35
Royal Dutch Shell plc 36
Samsung Electronics Co. Ltd. 37
Textron Inc. 38
Vale S.A. 39
Vedanta Resources plc 40
Wilmar International Ltd. 42
Excursus:
Bittersweet – Child Labour and Cacao Farming 43
Banks and Evil Acts:

Deutsche Bank AG 44
Goldman Sachs Group Inc. 46
Harmful Investments:
Analysis of Financial Institutions and their
Harmful Investments 48
Recommendations and Demands 57
Attachments:
Shares and bonds managed by selected
financial institutions 60
Underwritings of shares and bonds per selected
financial institution 62
Participation of selected financial institutions in loans 63
Norms and standards 64
Imprint 75
2 | FACING FINANCE | Dirty Profits | 2012

“Economic growth and business
development must be pursued in
ways that are sustainable in the
broadest sense – economic, social,
and environmental. Investment
and business activity must include
commitments to corporate
sustainability and responsibility
and the highest standards of busi-
ness ethics.”
United Nations Secretary-General Ban Ki-moon,
Istanbul, Turkey, 9 May 2011 – Secretary-General’s Remarks
at High-Level Meeting on Investment and Partnerships
FACING FINANCE | Dirty Profits | 2012 | 3

Summary
T his report addresses proven and postulated violations

of human and environmental rights by multinational
corporations and discloses the financial institutions
(FIs) which benefit from these activities.
Dirty Profits summarizes cases of companies which are
However, there is still a lack of adequate and effective
investment policies which address vital sectors and critical
issues at FIs. Binding legislation to regulate financial flow
is also absent, mainly in the spheres of human and labour
rights, environmental standards, and anti-corruption. This gap
heavily criticised for their poor environmental, social, and/or results in unsustainable business practices and contributes to
governance performance by stakeholders such as courts, human rights violations and environmental destruction in
politicians, regulators, NGOs, local communities, and the under-developed and low-income countries.
media. Often these cases concern proven and postulated As a result of the recent financial market crisis, FIs are
breaches of national and international laws, conventions, and increasingly turning to the resource extracting and mining
regulations associated with environmental damage, climate industries for investment. Many private and institutional
change, human and labour rights, community rights, corrup- investors view commodity equity funds as an opportunity to
tion, and arms. reap high profits from this industry sector. Investments in
Companies accused of committing human rights abuses and commodities prosper because they form the basis of economic
environmental damages have been trying for decades to activity in western society. Industrialized countries especially
address social issues through CSR (Corporate Social Responsi- depend on the constant availability of a wide range of raw
bility) programmes. These – mostly selective and voluntary materials. Experts state that in most cases it is unlikely that the
approaches – ignore the fact that a serious approach requires local population benefits even marginally from the profits of
the collective consideration of all human rights issues, not just resource extraction. Furthermore, profits are often veiled
a select few that companies feel comfortable with. A compre- in tax havens and thus remain untaxed. Investors should look
hensive human rights approach must focus on the people’s for investment opportunities that focus on the sustainable
needs in relation to a company’s social and environmental extraction and efficient use of resources.
impact. The arms industry has become all the more attractive for
Every company in every industrial sector, particularly the investors over the years because of its significant increase in
resource extracting and arms producing industries, impacts turnovers and exports. According to data on international
human rights and therefore has responsibilities. This report arms transfers by Stockholm International Peace Research
demonstrates that companies often leave a negative impact on Institute (SIPRI), the volume of worldwide arms transfers was
a range of human rights issues, such as discrimination, health 24 percent higher from 2007–2011 than it was from 2002–
& safety, freedom of association, privacy, poverty, subsistence, 2006. Likewise, the total value of German weapons exports
education, and housing. Also, corruption is becoming a increased in 2011 by 13.9 percent to a total of around €5.41
considerable problem undermining the world’s social, eco- billion compared to the previous year.
nomic, and environmental development. Abuse of state power, Thus, this report focuses on both the resource extracting
exclusion, environmental pollution, and the (illegal) arms and the arms producing industries. The irresponsible export of
trade are widely recognised as leading causes of poverty. Thus, arms has and will lead to: (1) violations of human rights and
respecting human rights is crucial for the long-term sustain- international humanitarian law, (2) inter- and intranational
ability of development, especially in light of rapidly growing conflicts, and (3) political instability, insecurity and reduced
resource-based industries. economic growth. Additionally, they support unaccountable
In this network, investors along with public and private purchasing practices, corruption, and the diversion of public
banking sectors play an incremental role in every division of assets. The US Department of Commerce estimates that the
human and business activity. With their investment decisions, arms trade accounts for approximately 50 percent of all global
this syndicate fosters certain business choices and hampers corrupt transactions.
others. It is essential to strive to eradicate global poverty and In 2011, companies* documented in this report earned
secure human rights and use financial resources according combined revenues of at least €1.22 trillion and achieved net
to ethical and sustainable investment criteria – especially in profits of more than €106 billion. While a significant amount
Sub-Saharan countries. was involved, it is impossible to specifically relate these num-
bers to human rights violations and environmental damage.

“To end human rights abuse The financial institutions** which directly support and thus
benefit most from business activities resulting in proven and
and environmental damage, postulated violations of human rights and environmental

damage include the French BNP Paribas, the German Allianz
financial institutions and and Deutsche Bank, the Dutch ING, and UniCredit from Italy.
Since early 2010, the financial transactions between the 16
policy makers should commit financial institutions** and 28 companies* investigated in this
report amount to more than €44 billion including loans (more
themselves to binding regula- than €16 billion), underwritings of shares and bonds (more
than €10 billion) and managed shares and bonds (less than €18
tions that adequately address billion).

Unfortunately, the current world-wide financial crisis has
environmental and human made it impossible to judge harmful investments from the “old”
or “real” economic perspective. Through speculative invest-
rights issues. They should also ments and non-transparent financial products, financial
institutions and investors endanger MDGs, create poverty,
increase control, inspection violate rights, and put the world’s financial system at risk. This
report also documents the harmful business practices of the
criteria, and sanction mecha- investment banks Goldman Sachs (USA) and Deutsche Bank
(Germany) and their role in the formulation of a crisis-ridden
nisms for financial trans- financial sector.

This report highlights the need for binding regulation to
actions.” better address environmental and human rights issues. In

order to combat human rights and environmental violations,
regulators have to strengthen control, inspection criteria,
Barbara Happe, urgewald and sanctions for financial institutions.
In order to regain credibility, financial institutions must
develop and implement concrete and binding commitments
to sustainability, transparency, clearly defined minimum
standards, and exclusion criteria for their financial services.
TOP 10 Financial Institutions benefiting
from human rights violations and environmental
damages (€ Billion) * Alliant Techsystems Inc., Alpha Natural Resources Inc., Anadarko
BNP Paribas 13,323 Petroleum Corp., Anglo American plc, Barrick Gold Corp., BHP
Deutsche Bank 9,590 Billiton Ltd., Coca-Cola Co., Drummond Co., EADS N.V., ENI S.p.A.,
Flextronics International Ltd., General Dynamics Corp., Glencore
ING 6,528
International plc, H&M AB, Hanwha Corp., Heckler & Koch GmbH,
Allianz 5,105
Hon Hai Precision Industry Co. Ltd. (Foxconn), L-3 Communications
UniCredit 5,086 Holdings Inc., Lockheed Martin Corp., Paladin Energy Ltd., Rhein-
Commerzbank 1,996 metall AG, Rio Tinto plc, Royal Dutch Shell plc, Samsung Electronics
Co. Ltd., Textron Inc., Vale S.A., Vedanta Resources plc, Wilmar
DZ Bank 1,432
International Ltd.
DekaBank 780
** Allianz, Argenta, BayernLB, BNP Paribas, Commerzbank, DekaBank,
KBC 421 Deutsche Bank, DZ Bank, ING, KBC, KfW, LBBW, Munich Re,
Munich Re 230 UniCredit.

Methodology
◀
Copper Smelter at Glencore’s
Mopani Mine in Zambia
© BD, Photo Audrey Gallet
T he FACING FINANCE campaign calls on investors

not to invest in companies which profit from human
rights violations, environmental pollution, corrup-
tion or the production and export of weapons.
Human rights are a crucial factor for long-term develop-
Thus, they often breach global norms such as the Interna-
tional Bill of Human Rights, the ILO labour standards, the
OECD Guidelines for Multinational Enterprises, the Conven-
tion on Cluster Munitions, weapons embargoes and relevant
national (export) regulations and laws.
mental sustainability. Discrimination and environmental However, they do not lack the necessary funds to do busi-
pollution are widely recognised as structural causes of poverty. ness; they are financed by both public and private financial
Violations of labour rights and corruption have played a major institutions, nationally and internationally.
part in undermining the world’s social and economic develop- For this reason, the increasing importance of the inter-
ment as well as environmental preservation. relation between corporate activities and investments on the
Given this information, there is sufficient evidence that one hand and achieving the Millennium Development Goals
corporate activities by multinational companies are often (MDG) on the other hand require responsible investors who
responsible for: support strong human and labour rights, as well as environ-
mental and anti-corruption standards.
→→ serious and systematic human rights violations
This report covers controversial issues including proven
such as forced labour, deprivation of liberty,
and postulated breaches of national and international laws,
child labour and other child exploitation;
conventions, and regulations with regard to environmental
→→ serious violations of the rights of individuals in
damage, contribution to climate change, human and labour
situations of war or conflict;
rights, community rights, corruption, and weapons.
→→ severe environmental damage;
→→ gross corruption;
→→ production and export of weapons that violate
fundamental humanitarian principles.
6 | FACING FINANCE | Dirty profits | 2012

Does this report include all companies which Thousands of Americans became homeless in the aftermath
violate international norms and standards? of the housing bubble, European states are sliding towards
bankruptcy and rising food prices drive millions of poor people
No. There is still a lack of official information available on
to suffer from hunger. Many of these outright criminal acts are
the violation of international norms and standards by com-
made possible through governmental deregulation and legal
panies worldwide. However, there are reports on hundreds
loopholes. These financial schemes hinder worldwide develop-
of companies who profit from hundreds of harmful business
ment. In addition, the budget for development aid has declined
activities.
drastically since the start of the Euro crisis, seriously endanger-
Accordingly, the FACING FINANCE report documents
ing existing efforts.
examples of companies which are currently heavily criticised
This report documents the business activities of the invest-
for their poor environmental, social and/or governance per-
ment banks Goldman Sachs and Deutsche Bank concerning
formance by different stakeholders such as courts, politicians,
their involvement in the aforementioned practices. These
regulators, NGOs, local communities, and media.
two financial institutions were also chosen because they have
been heavily criticised by courts, scientists, politicians, NGOs
Are all financial institutions, investors and creditors
and media for their speculative investments and their non-
and their business relations with companies
transparent and high-risk financial products. Finally, these two
which violate international norms and standards
banks have an exposed economic importance and relevance
listed in this report?
and a significant impact on European bank clients and their
No. In accordance with the FACING FINANCE membership assets.
profile, the report particularly analyses the relevant financial
institutions active in Belgium (BNP or ING), Germany, and Po- Note: Internet sources were accessed between August and
land which profit from these harmful business activities or sup- November 2012. Financial data pertaining to financial
port the selected companies and their business operations by turnover 2011 and net profits 2011 were derived from com-
providing bonds and loans. Financial analysis were provided pany reports and the Thomson One Database.
by Profundo (The Netherlands). They examine financial rela-
tions between 28 selected companies and 16 selected financial → Thomas Küchenmeister & Leen Schmücker
institutions since early 2010.1
Does the report only focus on the industrial

sector?
No. The current world-wide financial crisis has shown that it
is no longer possible to focus on harmful investments from the
perspective of the “old”, real economy. Financial institutions
and investors also endanger the MDGs, create poverty, violate
rights, and put the world’s financial system at risk through
speculative investments. This especially results from their
non- transparent and high-risk financial products which have
nothing to do with the projects of the real economy. Specula-
tion, tax evasion, and revolving doors are just as threatening to
the MDGs as weapons, mining, or oil spills.
1 PROFUNDO: Dirty Profits, Report on companies and financial institutions benefiting from
violations of human rights. A research paper prepared for FACING FINANCE, 10 November
2012.

Company Profiles and
Harmful Projects
▲
Protest against Barrick Gold at their Annual
Meeting in Toronto 2012
© flickr/drawstring Alan Pike Photo

◀
ATK booth at Eurosatory 2004 offering
SPIDER “alternative anti-personnel mines”.
© FACING FINANCE
Alliant
Techsystems Inc.
A
lliant Techsystems (ATK) is described as the Convention on Cluster Munitions.5 To make the
Management of shares and bonds:
largest ammunition manufacturer in the current DPICM ammunition, (cluster munitions),
Allianz 75.58
world. Their ammunition plant operates in ATK has teamed up with IMI from Israel to produce Deutsche Bank 20.69
Independence, Missouri.1 Currently, SIPRI has the XM242 fuses to replace the old M223 fuses in BNP Paribas 0.62
rated ATK 26th out of the Top 100 largest arms- the existing M42/M46 renades.6
Loans:
producing companies in the world.2 ATK is involved ATK is also involved in the production of BNP Paribas 21.62
in many weapon projects. They are a supplier of Depleted Uranium (DU) ammunition. This includes
special components and a main contractor for the M829A1 Kinetic Energy round, the M829A3 Turnover: 3,739.17
whole cluster munitions. They are also associated (120mm) Kinetic Energy tank cartridge, and the Net profit: 241.83
with the provision of key products and services for PGU-14 API (30mm) high-density penetrator.7
ISIN: US0188041042
nuclear weapons. ATK is updating their propulsion Transparency International UK has accused ATK
systems for the US nuclear deterrent programme. of not providing enough public evidence of how ( Top Financial Transactions in € Milllion )
Specifically, ATK produces rocket propulsion they fight corruption.8 The Norwegian Ministry of
systems for Trident II and Trident D5 submarine- Finance, Delta Lloyd Asset Management, Danske
launched ballistic nuclear missiles as well as Bank, Triodos and the Dutch Pensioenfonds Zorg
Minuteman III intercontinental nuclear ballistic en Welzijn are among those which have excluded
missiles.3 ATK from their investments due to their involve-
Conventional weapons are also part of the ment in the production of nuclear arms, cluster
company’s product range. ATK produces the rocket munitions, anti-personnel mines, and/or depleted-
engine for the “Sensor Fuzed Weapon” (SFW) and is uranium munitions.9
a contractor for the CBU-87B and CBU-97/B cluster → Thomas Küchenmeister
bomb programme. All of these are prohibited by
the Convention on Cluster Munitions.4
ATK also produces the 120 mm M971 DPICM
5 120 mm M970 and M971 DPICM cargo bombs’, Jane’s Ammunition
mortar bombs carrying 24 dual-purpose Handbook Online Edition.
M87 Bantam submunitions, which fall under the 6 http://dev.defense-update.com/20070505_xm242.html
category of weapons prohibited under the 7 http://www.bandepleteduranium.org/en/a/72.html#2, http://
www.atk.com/capabilities_defense/cs_ms_w_tgs_120ammo.asp
“ATK’s commitment to ethical
8 http://companies.defenceindex.org/report
behaviour at every level is
9 http://www.regjeringen.no/en/dep/fin/Selected-topics/ implausible and not
the-government-pension-fund/responsible-investments/ comprehensible as they produce
companies-excluded-from-the-investment-u.html?id=447122, a wide range of weapons which
1 http://www.atk.com/Capabilities/c_defense_default.asp http://www.pfzw.nl/about-us/investments/responsible-invest- violate fundamental
ments/activities/Paginas/exclusions-of-companies.aspx, http:// humanitarian principles with
2 http://www.sipri.org/research/armaments/production/Top100
www.deltalloydassetmanagement.nl/media/179531/exclusions_ respect to humanitarian law.”
3 http://www.dontbankonthebomb.com/2012/02/28/alliant- controversial_weapons_q1_2012.pdf, http://www.danskebank.
techsystems/, http://www.globalsecurity.org/wmd/systems/ Barbara Happe,
com/en-uk/CSR/business/SRI/Pages/exclusionlist.aspx,
slirbm.htm urgewald
https://www.klp.no/polopoly_fs/1.11860.1322724271!/menu/
4 IHS Jane’s Weapons Air Launched 2012-2013, p. 303 and 361. standard/file/SRI_Report_2_2011_english.pdf
“The ATK Business Ethics Code of Conduct outlines and

reinforces our commitment to ethical behaviour at every level.”
ATK CSR Report 2012 FACING FINANCE | Dirty Profi ts | 2012 | 9
Alpha ▲
Mountaintop removal coal mine in the Appalachian Mountains (USA)
Natural Resources Inc.

Photo: Kent Kessinger
A
lpha Natural Resources is the world’s third are referred to as ‘valley fills.’4 The mining process
largest metallurgical coal supplier with adds toxins to the soil which then make their way
UniCredit 81.02
Deutsche Bank 76.01 an annual output of nearly 126 million tons into the area’s water supply. The blasting process
Allianz 28.14 of metallurgical coal. The company operates 150 also pollutes the air with toxic particles. Health
active coal mines and 40 coal preparation plants problems such as cancer, liver and kidney diseases,
Underwriting of shares and bonds:
accross Virginia, West Virginia, Kentucky, Pennsyl- and skin rashes result for people in these regions.
Deutsche Bank 8.84
vania, and Wyoming.1 Recent studies prove that the cancer rate has
Loans: After taking over the coal producer Massey doubled in people who live close to a mine.5 Bob
Deutsche Bank 17.10
Energy in 2011, Alpha Natural Resources shot to Kincaid from West Virginia reports: “Children in my
Turnover: 5,391.54 the top of the list of controversial mining compa- region are routinely having organs removed from
nies. Massey Energy has been accused of having their bodies, victims of the toxins.”
Net profit: - 523.07
poor working conditions, safety problems, issues According to an SNL Energy analysis of annual
ISIN: US02076X1028 with fraud, and mountaintop removal mining.2 As safety and health data In 2011, coal mines
( Top Financial Transactions in € Milllion ) a result of the purchase, Alpha Natural Resources operated by Alpha Natural Resources were subject
became the single largest company in the United to more proposed fines for federal safety and
States to practise the highly controversial mining health violations than all other major public coal
technique, mountaintop removal (MTR)mining.3 companies combined. Alpha Natural Resources
With 22 percent of coal production derived was in jeopardy of nearly $33 million in proposed
from MTR mines, Alpha Natural Resources utilizes fines.6
the largest mount of MTR mining in the United According to the Rainforest Action Network,
States. MTR is a surface mining thechnique with an “property owners in West Virginia sued the
enormous environmental impact. This method is company for subsidence damage and ruined
used in the Appalachian region. Thin seams of coal groundwater due to ‘reprehensible, intentional,
inside the mountain are reached by blasting and grossly negligent’ conduct in mining
mountaintops. The blasted soil from the moun- operations.”7 In July 2012, a coalition of citizen
taintop is often dumped into nearby valleys; these and environmental organisations filed a lawsuit
against Alpha Natural Resources due to selenium
4 Environmental Protection Agency: What is mountaintop mining?:

1 Alpha Natural Resources website: http://www.alphanr.com/about/
http://www.epa.gov/region03/mtntop/index.htm
Pages/default.aspx
5 “Mountaintop Removal Mining: Digging into Community Health
2 RepRisk Report, March 2011: Most Controversial Mining Companies
Concerns.”, David Holzman, Environmental Health Perspectives,
2011: http://www.reprisk.com/downloads/mccrep-
2011
orts/23/150312%20Top%2010%20Most%20Controversial%20
Mining%20Companies_RepRisk.pdf 6 Ken Ward Jr. 2012: Report: Alpha tops coal industry in MSHA fines,
in: Coal Tattoo, March 21, 2012
3 Rainforest Action Network, April 2011: Policy and practice. 2011
Report Card on Banks and Mountaintop Removal: http://ran.org/ 7 Rainforest Action Network 2011: Report Card on Banks and
sites/default/files/mtr_reportcard_2011.pdf Mountaintop Removal

▲
Mountaintop removal coal mine in the Appalachian Mountains (USA)
Photo: Kent Kessinger
pollution at nine different Alpha Natural Resourc- top Massey executives arranged the sale to avoid
es coal mining operations. In December 2011, personal liability for the deaths of the 29 miners
Alpha Natural Resources settled a lawsuit killed in the Upper Big Branch explosion. Docu-
regarding selenium pollution at three other ments show that the former Alpha Natural
facilities with the same groups.8 Resources CEO entered into a pact with the Massey
With the acquisition of Massey Energy, Alpha Energy officers who were directing the internal
Natural Resources became the most controversial investigation, promising high-ranking positions
mining company in 2011.9 Massey Energy had a within the post-merger company.11 Nevertheless,
long history of social and environmental irrespon- in June 2011 shareholders approved Alpha Natural
sibility. With the purchase, Alpha Natural Resourc- Resources' purchase of Massey Energy.
es also took on these problems. Massey Energy is In its 2010 annual report, Alpha Natural
infamous for contaminating aquifers and wells Resources stated that “approximately 87% of our
with coal slurry, pumped into underground mines 2010 coal production came from mines operated
between 1978 and 1987. More and more details by union-free employees. As of 31st December
about the safety policy of Massey Energy were 2010, approximately 79% of our workforce is
revealed in April 2010, following an infamous union-free.” Alpha Natural Resources notes that
explosion at a coal mine resulting in 29 deaths. under the National Labor Relations Act, employees
Since that incident, Massey Energy has have the right to form or affiliate with a union but
received over 1000 citations from the US Mining cautions investors that “any further unionisation
Safety and Health Administration.10 of our employees, or the employees of third-party
In 2011, people filed suit to stop the transac- contractors who mine coal for us, could adversely
tion that would make Massey Energy part of Alpha affect the stability of our production and reduce
“The oldest, and some of the
Natural Resources. Lawyers argued that our profitability.”12 most beautiful mountains on
→→ Barbara Happe & Kathrin Petz earth, are assaulted daily by 3
million kilograms of high
explosives used by the coal
industry to blow apart our
mountains, rain poison down
upon our communities, sicken
8 Sierra Club Press Release, July 16, 2012: Coalition Acts to Protect and kill our friends, our
Waterways from Pollution at 9 Alpha Natural Resources Facilities 11 Source Watch 2012: http://www.sourcewath.org/index. neighbors and our families.”
http://action.sierraclub.org/site/MessageViewer?em_id=245343.0 php?title=Alpha_Natural -Resources Bob Kincaid,
9 RepRisk Report, March 2011 Coal River Mountain Watch
12 Alpha Natural Resources 2011: Form 10-K Annual Report, U.S.
10 RepRisk Report, March 2011 Securities and Exchange Commission, February 25, 2011, page 41
“Powering the future …

And running right.”
Alpha Natural Resources Website FACING FINANCE | Dirty Profits | 2012 | 11
▶
Spilled oil from Deepwater Horizon
Photo: US Coast Guard [Public domain],
via Wikimedia Commons
Anadarko
Petroleum
Corp.
H
eadquartered in The Woodlands, Texas, been known to cause earthquakes. Fracking has
Anadarko Petroleum Corporation, is one of already been banned in Bulgaria, France and in
Allianz 339.01
Deutsche Bank 256.60 the world’s largest, publicly-traded oil and the Canadian province of Quebec. 3
ING 148.36 gas exploration and production companies. In the deep-water Rovuma Basin of the north
The company’s major areas of operation are in Mozambican province of Cabo Delgado, Anadarko
the United States, off the shores of the Gulf of exploration wells discovered two major natural
Deutsche Bank 321.98
BNP Paribas 19.16 Mexico, and in Algeria. Anadarko also operates in gas reserves. Having concluded the exploration
West Africa, Mozambique, Kenya, South Africa, phase, many issues have already been reported
Loans:
New Zealand, and China. such as the massive deaths of shallow-water
Anadarko’s activities lead to multiple human bottom-feeding sea-grass fish, shellfish, and
BNP Paribas 421.52
ING 210.60 rights violations and environmental damages. turtles. As a result of the seismic program, three
They are involved in several controversies, different species of mollusk were found dead on
Turnover: 10,710.30
including the 2010 explosion and subsequent spill the beaches of one community. As for the
Net profit: -2,045.54 of an oil rig, Deepwater Horizon, which spewed communities within the seismic program area,
around 4.9 million barrels of crude oil into the Gulf several harpoon fishermen suffered hearing
ISIN: US0325111070
of Mexico. Until 2010, none of Anadarko’s 4,300 injuries from the seismic guns while fishing. Many
( Top Financial Transactions in € Milllion ) workers were represented by labour unions. fishermen were forced to suspend their fishing
Anadarko uses a controversial method of activities for extended periods of time. This
hydraulic fracturing in order to drill for shale gas negatively impacted the communities’ means of
across the USA. This method, also known as subsistence and, according to the local fishermen,
“fracking”, is widely criticized for causing numer- they were not given any compensation.4
ous environmental problems.1 Fracking involves →→ Samuel Mondlane & Jan Schulz
“… fracking has resulted in over injecting millions of gallons of highly pressurized
1,000 documented cases of
groundwater contamination water, sand, and proprietary chemicals into a well.
across the country, either This often contaminates groundwater. There are
through the leaking of fracking over 1,000 documented cases of contamination
fluids and methane into
groundwater, or by above by courts, states, and local governments across
ground spills of contaminated the US.2 Furthermore, this drilling method has
and often radioactive
wastewater from fracking
operations.” 1 http://www.greenpeace.org/usa/en/news-and-blogs/
Letter from 68 groups to campaign-blog/halt-fracking-68-groups-say-to-obama/
US-President Obama blog/36272/ 3 http://eenews.net/public/energywire/2012/05/04/1
www.thehill.com
2 http://www.propublica.org/article/buried-secrets-is-natural-gas- 4 http://www.foei.org/en/resources/publications/pdfs/2011/
drilling-endangering-us-water-supplies-1113 oil-or-development/view?searchterm=oil%20or%20development
“Leaving the world a better place for generations to come and giving back to the
communities where we operate is our responsibility and our commitment.”
12 | FACING FINANCE | Dirty Profits | 2012 Anadarko Website
◀
Anglo American advertising poster welcoming
the attendees of the COP17 climate summit in
Durban, South Africa.
Photo: FACING FINANCE
Anglo
American plc
A
nglo American plc (Anglo American) focuses Chilean local politicians, Anglo American has
on the extraction of iron, coal, copper, illegally begun excavation activities at the Paloma
nickel, minerals, (including platinum and Glacier. Located in a protected area, the Yerba Loca Allianz 309.75
diamonds), andmore.The company operates in Sanctuary, the glacier has already been pierced by DZ Bank 118.60
Africa, North and South America (Chile and Brazil), a gold extraction tunnel built by Anglo American.
Australia, China, India, Japan and other parts of The glacier is the main water source for the city of
Commerzbank 281.26
Asia and Europe. Anglo American faced criticism Santiago and mining activities could threaten it. BNP Paribas 267.97
across the globe in 2011 for both their existing and There are also risks for local food production and
Loans:
proposed mining ventures. While companies animal husbandry.3
BNP Paribas 166.67
promote their ethical behaviour through corporate On 5 October 2012, Anglo American Platinum Commerzbank 166.67
social responsibility programmes, they are (Amplats) fired 12,000 miners for staging an
responsible for destroying indigenous culture in unlawful strike in South Africa. At least 20,000 Turnover: 22,678.70
communities by forcing them to resettle. mineworkers at Amplats have been on strike since Net profit: 4,575.05
Anglo American’s joint venture with Xstrata and September 12th, demanding 12,500 rand (about
ISIN: GB00B1XZS820
Mitsui & Co at the Collahuasi mine in Chile proved $1,500) in take-home pay. South African miners
very controversial. Over twenty labour unions accuse the company of being responsible for their ( Top Financial Transactions in € Milllion )
accused the companies of serious acts of retalia- work-related diseases. They accuse the company
tion against union leaders following a series of of knowingly exposing them to silica dust, which
strikes.1 leads to respiratory illnesses including silicosis and
The Cerrejón coal mine in Colombia is operated tuberculosis.4 Anglo American will face a hearing in
by BHP, Anglo American and Xstrata. Its activity 2013 to determine if it is liable for miners who
has led to contamination of rivers and environ- contracted the lung disease silicosis while working
mental damage. People have been forced to in its gold mines.5
resettle and some who have protested against the →→ Thomas Küchenmeister
mine have been threatened or murdered. The
Wayuu indigenous community fears that their
cultural identity will be rendered extinct. Moreover,
“I was a mine worker from
this syndicate has recently made plans to expand 1964 until I was retrenched in
the mine towards a protected forest and a major 1991. I am suffering from both
water source.2 In Peru, the Quellaveco copper mine silicosis and tuberculosis. The
tuberculosis is so bad that I am
project was criticised due to concerns over the unemployable. I gave the best
heavy usage of scarce water supplies. Likewise, years of my life to that company,
Anglo American's proposed Michiquillay mine they make billions each year
and I can't even provide a plate
experienced protests from residents who feared it of food for a day for my wife and
would damage the local environment and sought four children.“
more asequate compensation. According to Daniel Seabata Thakamakau,
3 noalamina.org
65, worked for Anglo American
4 The Independent, UK owned mines
1 RepRisk: Most Controversial Mining Companies of 2011 www.bbc.co.uk
5 http://uk.reuters.com/article/2012/10/01/us-safrica-silicosis-
2 noalamina.org anglo-idUKBRE8900E620121001
“Real Mining. Real People.

Real Difference.”
Anglo American Slogan FACING FINANCE | Dirty Profits | 2012 | 13
◀ ▲
A 10-year-old boy and Vincent
Charles-a-Nyabigena Harmlet, living near
Nyabigena, a village in the Nyamongo
area (Mara region), where the Barrick
mine spilled toxic waste into the public
river. They suffered major skin mutations
from using the water in their daily lives.
© Haki Madini 2012
Barrick Gold Corp.

A
frican Barrick Gold(ABG), a 73% subsidiary health and safety standards in the mine area are
of Barrick Gold, is a Canadian mining very low. Birth defects, food shortages and
Allianz 497.81
ING 229.24 company and, with 27 mines in operation, drownings in the tailing dams have been reported.6
Deutsche Bank 112.45 is the largest producer of gold in the world. African Local NGOs filed an OECD complaint against
Barrick Gold (ABG) is also a publicly listed company. Barrick in 2011, saying the mining agreement was
Communities of small scale miners have been based on much lower quantities of extraction but
Deutsche Bank 31.33
BNP Paribas 31.33 displaced and disenfracnchised by ABG’s North was never renegotiated.7
Mara gold mines in Tanzania. Since the mine The Pascua Lama project explores gold and
Loans:
opened, there have been multiple confrontations other mineral reserves in glaciers on the Chilean-
BNP Paribas 231.34
with the security staff. Again and again, people Argentine border. Although the production phase
ING 106.52 were shot.1 Protests against the mine in 2011 has not begun at Pascua Lama, an OECD com-
ended in violence with police forces killing seven plaint was filed against Barrick in Argentina in 2011
Turnover: 10,683.10
people.2 Police and security forces were also for polluting water, air, and soil.8 Glaciers, an
Net profit: 3,347.06 accused of arbitrary detention and sexual abuse of important water source, were destroyed. Commu-
women. nities also protest against the high amount of
ISIN: CA0679011084
A study from 2009 revealed a concentration water the mine is expected to use.
( Top Financial Transactions in € Milllion ) of arsenic 40 times higher than the WHO limit. The In 2009, the Norwegian Government Pension
drinking water was poisoned.3 Additionally, ABG Fund excluded Barrick because of extensive and
was suspected of tax evasion. irreversible damage to the environment, especially
Porgera Joint Venture (PJV), a 95% subisidiary because of its riverine disposal practice in Papua
of Barrick’s, extracts and processes gold from low New Guinea.9
quality ore in Papua New Guinea. Its security staff →→Julia Dubslaff
“Barrick Gold Corporation is is alleged of severe human rights abuses such as
causing severe environmental
damages as a direct result of its killings, beatings,4 and gang rapes5. Furthermore,
operations … the company’s
assertions that its operations do
not cause long-term and
irreversible environmental
damage carry little credibility.
6 http://www.porgeraalliance.net/wp-content/uploads/2011/10/
This is reinforced by the lack 1 http://www.bloomberg.com/news/2010-12-23/shooting-gold- Urgent-Resettlement-Porgera-web.pdf
of openness and transparency diggers-at-african-mine-seen-amid-record-prices.html
in the company’s environmental 7 http://oecdwatch.org/cases/Case_210
2 http://www.dominionpaper.ca/articles/3993
reporting.” 8 http://oecdwatch.org/cases/Case_221
3 http://www.miningwatch.ca/es/node/6356
Norwegian Government 9 http://www.regjeringen.no/en/dep/fin/press-center/Press-
Pension Fund 4 http://www.amnesty.org.nz/files/PNGasa340012010.pdf releases/2009/mining-company-excluded-from-the-governm.
5 http://www.hrw.org/reports/2011/02/01/gold-s-costly-dividend html?id=543107
“Barrick Gold Corporation is dedicated to recognizing and

respecting human rights wherever we do business.”
14 | FACING FINANCE | Dirty Profits | 2012 Barrick Gold Website
BHP Billiton
Ltd.
▲
Cerrejón coal mine in Colombia
Photo: © Sebastian Rötters/FIAN
H
eadquartered in Melbourne, Australia, BHP deforestation, forced removals of local communi-
Billiton is an Anglo–Australian mining and ties, and an unsafe living environment are some of
Allianz 440.94
petroleum company that has a major the problems that have arisen as a result of the Deutsche Bank 332.81
management office in London, United Kingdom. project.2 ING 178.77
They operate in 25 countries worldwide and are In Colombia, BHP Billiton is accused of poor
one of the most controversial mining companies in work and safety conditions at the Cerrejón Coal
BNP Paribas 721.48
the world. BHP Billiton has been criticized because Mine which is a joint venture project of BHP ING 488.62
of the social and environmental impact of their Billiton, Xstrata (35% Glencore), and Anglo UniCredit 481.10
activities in the various countries where they American. The conditions here led to serious
Loans:
operate. Reprisk ranks them 4th amongst the most health problems and even fatalities of workers (26
BNP Paribas 2,892.73
controversial mining companies, saying that they deaths from 2009 to 2011). Furthermore, the ING 2,114.16
are “responsible for environmental destruction extraction process led to forceful resettlement or UniCredit 1,996.00
[…], forced relocation of communities, destruction loss of land for many communities.3
Turnover: 56,930.20
of traditional livelihoods, human rights abuses and In Pakistan, BHP Billiton is accused of causing
the violation of indigenous peoples’ rights.”1 serious health problems. Villagers living near the Net profit: 18,766.40
In Mozambique, BHP Billiton operates the Zamzama Gas Plant suffer daily with the toxic ISIN: AU000000BHP4
Mozal Aluminum smelter. It started its operations fumes from the plant.4
( Top Financial Transactions in € Milllion )
in August 2000, before approval of the company’s Furthermore, BHP Billiton is criticised for using
Environmental Impact Assessment Report (EIAR) a particularly carbon intensive process during their
and Environmental Management Plan was given. deep sea oil production and for using a highly
Since its operations began, it has violated several controversial fracturing technique to develop
Mozambican and International laws and regula- shale gas in the U.S.5
tions, mainly regarding labour, environment, and →→ Samuel Mondlane & Jan Schulz
human rights. 1,200 families were displaced from
their farming or residential land without prior
consultation from the Government or Mozal. Mozal
does not respect labour rights and prevents the
formation of unions. Workers were forced to work
for 12 hours per day, breaking the Laws of the
Ministry of Labour which appropriates 8 hours. The
environmental impact audit reported a lack of
compliance with environmental responsibilities “BHP Billiton/Mozal lacks
2 Research undertaken by Samuel Mondlane - Justica Ambiental
and standards set by the company's environmen- Mozambique, 2011 to 2012 transparency in their emissions
tal management plan and the country’s legislation. and environmental assessments,
3 Reprisk and http://bhpbillitonwatch.files.wordpress.
and endangers the health of the
Soil and water contamination, air pollution, com/2011/11/bhpb_report_sml.pdf
people living near its projects.”
4 http://www.reprisk.com/downloads/mccreports/23/150312%20
Anabela Lemos,
Top%2010%20Most%20Controversial%20Mining%20Companies_
Justiça Ambiental
RepRisk.pdf
1 http://www.reprisk.com/downloads/mccreports/23/150312%20
Top%2010%20Most%20Controversial%20Mining%20Companies_ 5 http://bhpbillitonwatch.files.wordpress.com/2011/11/
RepRisk.pdf bhpb_report_sml.pdf
“At BHP Billiton, we value sustainability; it is about putting health and safety first,
being environmentally responsible and supporting our communities.”
BHP Sustainability Report 2012 FACING FINANCE | Dirty Profits | 2012 | 15
Coca-Cola Co.
C
oca-Cola is the leading soft drink producer In eleven years, from 1999 to 2010, groundwater
in the world. There are just two countries in levels in Mehdiganj have dropped 7.9 meters.2
Allianz 280.06 the world without Coca-Cola: North Korea Three out of four wells in the area dried up. This
ING 157.05 and Cuba. cannot be linked solely to the persistent drought.
In India, Coca-Cola dominates 95 percent of the The Central Pollution Control Board CPCB has
soft drink market and generates double-digit also found high levels of lead, cadmium and
Deutsche Bank 1,158.37
BNP Paribas 464.92 growth figures. Coca-Cola has 56 bottling facilities chromium in the groundwater. Signs around wells
in India and more are planned. Often, these and hand pumps advise that the water is not
Turnover: 36,112.50
facilities destroy lives, livelihoods, and communi- suitable for human consumption. As a result,
Net profit: 6,619.25 ties. Coca-Cola is accused of causing water people have to buy bottled water – often filled by
shortages, pollution of groundwater and soil, and Coca-Cola. There have not been any studies into
ISIN: US1912161007
exposure to toxic waste and pesticides. Critics like the long-term effects of the toxins. However,
( Top Financial Transactions in € Milllion ) the India Resource Center state that this is simply people have already been complaining of skin
disastrous for a country where over 70 percent of diseases and rashes.
the population depends on agriculture to make a Coca-Cola has also been criticised for funding
living. According to Coca-Cola, the company uses water projects in India as part of marketing
approximately 2.6 litres of water for every one litre campaigns to improve its image. The company has
of soft drink it produces – and 75 percent of the allegedly spent over € 4.2 billion on marketing, but
fresh water Coca-Cola extracts in India becomes just € 38 million on school and water projects,
wastewater. The company has indiscriminately many of which are failing.3
discharged its wastewater into surrounding fields, Recently, Coca-Cola has said that together with
severely polluting the scarce remaining groundwa- its bottling partners it will invest $5 billion in India
ter and soil. Several of its largest production in a bid to increase its market share.4
facilities are located in areas plagued by scarce In Kenya, Coca-Cola has denied that its soft
water resources, where Coca-Cola’s consumption drink contains high levels of a carcinogens. The
of water has significantly hampered the ability of Center for Science in the Public Interest (CSPI) has
local residents to access safe drinking water. reported that a concentration of 4 microgram
According to the latest government data, ground- (mcg) of methyl imidazole can cause cancer.
water levels in the Kala Dera region fell 3.6 meters Compared with the 4 mcg concentration in the
between November 2009 and November 2010. In U.S., Coca-Cola drinks sold in China contain
the 10 years before Coca-Cola started operations 56 mcg, in the UK 135 mcg and 267 mcg in Brazil.5
in Kala Dera (1990–2000), groundwater levels fell Additionally, a Coca-Cola plant operated by
just 3.94 meters. In the 10 years since Coca-Cola Femsa in Argentina was closed after being accused
started operations (2000–2010), groundwater of dumping toxic and potentially carcinogenic
levels have plummeted 25.35 meters.1 waste. In Shanghai, Coca-Cola’s factory allegedly
Other community members face similar prob- contaminated a batch of the company’s products
lems. Most of the people of Mehndiganj, Nagepur, with chlorine.6
Benipur, and the surrounding villages in the State →→Jenni Roth & Thomas Küchenmeister
of Uttar Pradesh attribute the lack of water in
their neighbourhood to the presence of Hindustan
Coca-Cola Beverages Pvt Ltd, a subsidiary owned
by the U.S. based multinational Coca-Cola Inc.
2 http://www.indiaresource.org/news/2011/1005.html
3 Das Erste (online) 26.06.2012
4 http://www.bbc.co.uk/news/business-18605454
1 Source: http://www.indiaresource.org/news/2011/1008.html,
5 28.06.2012 Xinhuanet (xinhuanet.com; chinaview.cn)
http://www.indiaresource.org/campaigns/coke/2008/
cokeimplicatedteri.html 6 03.06.2012 Diario Responsable (diarioresponsable.com)

“But as well as its health,
economic and cultural impacts
the manufacturing of Coca-Cola
and Pepsi soft drinks are
unethical to the very core.“
Report from
Mehndiganj, Varanasi
www.countercurrents.org
▲
Photo: Cover of Coca-Cola India,
Sustainability Review 2010.
▲
Coca-Cola bottling facility in
Mehndiganj, India
Photo: Jenni Roth, 2012
“Coca-Cola brings the hope

for happiness”
Slogan from a Coca-Cola TV advert used in India FACING FINANCE | Dirty Profi ts | 2012 | 17
Drummond Co.
D
rummond Company Inc. is a privately coal 120 miles by freight from the mines to Puerto
Loans:
owned US mining company from Birming- Drummond. Drummond is one of the most
BNP Paribas 39.24
ham, Alabama with mining operations in important suppliers of coal to European coal
Turnover: 2,540.00 4 the U.S. (Alabama) and in Colombia. Drummond power plants.
( Top Financial Transactions in € Milllion ) has a 5% share of the global coal export trade, The Drummond Company has been the subject
making it the fourth largest coal exporter in the of numerous lawsuits due to alleged links with the
world. paramilitary group United Self Defense Forces of
Drummond’s expansion to Colombia began Columbia (AUC) between 1999 and 2005.
with the acquisition of significant mining rights to There is evidence that Drummond paid
coal reserves located in northern Colombia in the paramilitary forces to murder two important union
late 1980s. Since then, Drummond International leaders in 2002. A former paramilitary member
has become the second biggest extractor of testified before a US court in March 2012 that the
Colombian coal, with an annual output of 25 two union leaders had “to be killed because they
million tons1 from just two coal mines.2 In 2011 were organising a strike that would have gener-
ITOCHU Corporation from Japan became a partner ated losses for the company.”6 Although Drum-
in 20 percent of Drummond’s Colombian opera- mond was ordered to pay a $25,000 fine to the U.S.
tions.3 Drummond now controls reserves totalling Justice Department, the victims' families were
over 2 billion tons producing more coal in never compensated.7
Colombia per year than from all of the mines in It is assumed that Drummond is involved in
Alabama combined.5 In addition to the coal mines, many more cases of unexplained murders of union
Drummond’s Operation in Colombia includes a members. Until now, none of the company‘s
deep water ocean port (Puerto Drummond) and a directors have been convicted for the coal giant‘s
railway to transport the alleged dealings with death squads. Some of the
1 http://www.drummondco.com/our-products/coal/mines
(17.10.2012)
2 Coal mines Mina Pribbenow and El Descanso (both located in the

Cesar Coal Basin near La Loma)
3 http://www.drummondco.com/about/history/
4 Forbes. “#131 Drummond – Forbes.com.” Information for the

World’s Business Leaders – Forbes.com. N.p., n.d. Web. 31 6 http://colombiareports.com/colombia-news/news/22827-
Oct. 2012. <http://www.forbes.com/lists/2011/21/private- drummond-paid-to-kill-unionists-ex-paramilitary.html
companies-11_Drummond_SBL6.html>. 7 Suhner, Stefan 2010: Sicherheitsrisiken für Kohlekritiker und
5 Hubbard, Russell. “Birmingham-based Drummond Co. on track Gewerkschafter – ungelöste Menschenrechtsfragen in den
for 2010 revenue of $3 billion | al.com.” Alabama Blogs and Kohlenminen des Departement Cesar: http://www.askonline.ch/
Bloggers - al.com. Birmingham News, 28 Apr. 2010. Web. 31 Oct. themen/wirtschaft-und-menschenrechte/bergbau-und-
2012. <http://blog.al.com/businessnews/2010/04/birmingham- rohstoffkonzerne/glencore-in-kolumbien/sicherheitsrisiken-
based_drummond_co_o.html>. fuer-kohlekritiker-und-gewerkschafter/ (10.10.12)
“Drummond has always been respectful of all of the communities where

we operate and we continually strive to be a model corporate citizen.”
18 | FACING FINANCE | Dirty Profits | 2012 Drummond Sustainability Report 2010
▲
Drummond coal port in Colombia
© Sebastian Rötters/FIAN
accused persons remain in positions of power at atmosphere, many of the workers are afraid to join
Drummond. For example, Alfredo Araujo and the union or to protest against the poor working
Augusto Jimenez maintain positions as Commu- conditions.9 Even today, coal union members are
nity Relations Officer and Head of Drummond threatened; the Colombian advocate Alirio Uribe
Colombia respectively. reported that several union members received
Drummond is also accused of operating its coal invitations to their own funerals in April 2012.10
mines on land that was bought illegally. There are many more instances of Drummond’s
Drummond is actively engaged in a battle human rights violations in Colombia, including the
against Sintraminergetica, the union which forced displacement of peasants from the
represents its workers. In March 2009, 4000 Mechoacán and El Prado plots. Paramilitary
workers peacefully protested against the poor and groups took the land and sold it later on to
hazardous working conditions at Drummond’s Drummond. Drummond refused to comment on
mining sites. The strike was called because Fenoco, the case.11 12 In October 2012, the lawyer represent-
Drummond's coal transport contractor, refused to ing those who were displaced from Mechoacán
negotiate a labour proposal (CBA) despite its legal and El Prado received a death-threat which
obligation to bargain with the 600 union members explicitly referenced those communities.13
in addition to an on-the-job worker fatality. In →→ Barbara Happe & Kathrin Petz
response to the strike, Drummond suspended and/
or fired at least 9 workers. Similarly, Fenoco (which
is partially owned by Drummond) illegally fired 25
workers, 8 of which were union leaders.8 In such an
9 Suhner (see footnote 7)
“Colombian people have been
10 Eon Annual meeting, May 2012 http://www.kritischeaktionaere.de/ the victims of foreign
fileadmin/Dokumente/Reden_2012/Rede_E.on_HV_2012_Alirio_ companies, governments and
Uribe.pdf (15.10.2012) institutions that want to take
11 Suhner (see footnote 7) advantage of the country’s
12 Verdadabierta, 26.10.2010: Carbón y sangre en las tierras de
mineral and energy resources.”
‘Jorge 40’: http://www.verdadabierta.com/paraeconomia/2816- Aviva Chomsky:
carbon-y-sangre-en-las-tierras-de-jorge-40 (15.10.2012) “Profits of Extermination”, 2005
8 http://laborrightsblog.typepad.com/international_labor_ 13 http://m.elespectador.com/opinion/columna-382666-no-hay-
right/2009/11/another-drummond-worker-dies-on-the-job.html restitucion-de-tierras

▲
Mirage fighter aircraft with ASMPA
nuclear missiles.
© Armée de l’air
EADS N.V. ▲
EADS Combat Helicopter TIGER
© FACING FINANCE
T
he European Aeronautic Defence and Space strategic submarine forces. The contract will last
Company (EADS NV) is a Netherlands-based for ten years and valued at € 3 billion.4 MBDA also
Commerzbank 168.67
Deutsche Bank 141.08 company active in the aerospace and builds ASMPA nuclear missiles for the French Air
Allianz 74.12 defence sectors. The company manufactures Force.5
aircrafts, helicopters, drones, commercial space Since the arms embargo was lifted in 2004,
Loans:
launch vehicles, missiles, satellites, defence military jeeps, helicopters, and anti-tank missiles
BNP Paribas, Commerzbank,
Deutsche Bank, DZ Bank, systems, and defence electronics. EADS is a have been delivered to Libya. Gaddafi's regime
ING, KfW, UniCredit 93.75 participant of the UN Global Compact which asks transferred € 168 million to EADS for the MILAN
companies to support and respect the protection missiles.6 Armed helicopters built by EADS
Turnover: 49,128.00
of internationally proclaimed human rights. subsidiaries (mainly Eurocopter) or their predeces-
Net profit: 1,033.00 Despite this, EADS is ranked 7th among the world's sors are sold to almost every conflict area in the
ISIN: NL0000235190 Top 100 arms producing companies.1 EADS is also world.7
a part of MBDA which builds nuclear missiles for EADS has been accused of military and
the French Air Force, and produces and maintains non-military corruption in South Africa, Singapore,
submarine-launched nuclear missiles for the France and Finland.8 In October 2012, the Munich
French Navy. The Norwegian Ministry of Finance public prosecution office investigated EADS
and the Dutch Pensioenfonds Zorg en Welzijn have employees on suspicion of bribery. Preciding this
excluded EADS from their investments because of was the sale of Eurofighter aircraft to Austria with
their involvement in the production of nuclear a business value of about € 2 billion. Raids
arms.2 followed in Austria, Germany, and Switzerland.9
EADS has what is referred to a ‘contractual →→ Thomas Küchenmeister
partnership’ which keeps the majority of EADS
shares (50.39%) in the hands of the founding
companies: SOGEADE, SOGEPA, SEPI, DASA
4 http://www.astrium.eads.net/en/media-library/m51.html
(Daimler), and a consortium of private and http://www.eads.com/eads/int/en/news/press.en_20041223_
public-sector investors. In February 2011, Daimler m51.html
announced that they wanted to sell their remain- 5 http://www.dontbankonthebomb.com/2012/02/27/eads/
ing shares in EADS to the German Government. 6 Ian Black, Libyan rebels receiving anti-tank weapons from Qatar,
This should occur by the end of 2012. Additionally, Guardian, 14th April 2011; Howard Mustoe and Andrea Rothman,
Eurofighter’s combat debut in Libya may boost sales of $106
EADS holds a 37.5 % share in MBDA, a joint venture million plane, Bloomberg, 24 March 2011
with BAE Systems and Finmeccanica. MBDA 7 http://stopwapenhandel.org/sites/stopwapenhandel.org/files/
produced over 3,000 missiles in 2010,3 including EADS2011_0.pdf. This includes Angola, Burma, Chad, China,
the new M-51 nuclear missile for the French Colombia, Côte d’Ivoire, Israel, Morocco and Taiwan. Missiles
produced by MBDA (and predecessors) are sold to countries
including Algeria, Angola, Cameroon, Chad, China, Chile, Colombia,
“… nuclear weapons violate
1 http://www.sipri.org/research/armaments/production/Top100 Egypt, India, Iran, Israel, Kenya, Lebanon, Libya, Malaysia,
fundamental humanitarian
Morocco, Oman, Pakistan, Philippines, Saudi Arabia, Syria, Taiwan,
principles …” 2 http://www.regjeringen.no/en/dep/fin/Selected-topics/
the-government-pension-fund/responsible-investments/ Thailand, Turkey, the United Arab Emirates, Uruguay, Venezuela
Norwegian Ministry of Finance, and Yemen.
companies-excluded-from-the-investment-u.html?id=447122
5th January 2006
http://www.pfzw.nl/about-us/investments/responsible- 8 http://stopwapenhandel.org/sites/stopwapenhandel.org/files/
investments/activities/Paginas/exclusions-of-companies.aspx EADS2011_0.pdf
3 http://stopwapenhandel.org/sites/stopwapenhandel.org/files/ 9 http://www.ftd.de/unternehmen/industrie/:ermittlungen-in-
EADS2011_0.pdf deutschland-und-oesterreich-razzien-bei-eads/70114915.html
“Innovative, clean and

safe products”
20 | FACING FINANCE | Dirty Profits | 2012 Header of the “Responsibility” Section of the EADS website
▲
Agip gas flaring in Idu community,
Rivers State, Nigeria © ERA
▲
Leaking Agip gas pipe in Ebocha community,
Rivers State, Nigeria © ERA
ENI S.p.A.
E
NI S.p.A. is 30 percent state-owned Italian Communities such as the Kalaba3, the Gbaraun4,
multinational oil and gas company head- and the Sabatoru5 in Bayelsa State suffer from oil
quartered in Rome, Italy. They operate in 79 spills, leaking and burning pipelines, and constant Deutsche Bank 191.11
countries across Europe, Africa, America, Asia, and burning of natural gas emissions, similar problems DZ Bank 172.23
Oceania. ENI has been involved in several contro- to those caused by Royal Dutch Shell. According to
versies as a result of its operations. ERA, spills were linked to the company negligence
BNP Paribas 479.09
In Mozambique, ENI is is involved in oil and gas and poorly maintained facilities. Agip does not pro- UniCredit 409.09
prospecting and exploration in the Rovuma Basin vide information on incidents, compensation or
Loans:
of Cabo Delgado. They are accused of transporting clean ups.
BNP Paribas 490.91
and dumping large amounts of waste as well as ENI is on the brink of tar sands exploration in
UniCredit 490.91
threatening both the environment and the health the DR Congo.6 Oil extraction from tar sands
of the communities in the affected region. involves the resettlement of communities and puts Turnover: 109,147.00
The fact that gas flaring has been illegal in primary forests, and biodiversity in the Congo Net profit: 6,860.00
Nigeria since 20051 compiled with promises to Basin at risk.7
ISIN: IT0003132476
shareholders to discontinue gas flaring has not →→ Samuel Mondlane & Julia Dubslaff
deterred ENI's Nigerian subsidiary Nigeria Agip Oil ( Top Financial Transactions in € Milllion )
Company (NAOC) from still running gas flaring

sites, oilfields, and pipelines.2
3 http://www.eraction.org/component/content/article/429
4 http://www.eraction.org/component/content/article/5/423-field- “Agip operates massive gas

report-312-nine-months-after-spill-gbaraun-community-wants- flares in the midst of the
agip-to-clean-up-pay-for-damages- communities. Spills continue
5 http://www.eraction.org/component/content/article/418 without being cleaned and with
no compensations paid.”
1 http://news.bbc.co.uk/2/hi/africa/4438182.stm 6 http://www.reuters.com/article/2011/10/06/congo-eni-oilsands-
idUSL5E7L648220111006 Kentebe Ebiaridor, ERA
2 http://platformlondon.org/2011/11/15/eni-misled-shareholders-
over-gas-flaring-in-nigeria/ 7 http://www.banktrack.org/show/dodgydeals/congo_tar_
http://platformlondon.org/wp-content/uploads/2012/03/ sands#tab_dodgydeals_basics
energy-security-nigeria1.pdf http://www.boell.de/navigation/climate-energy-7110.html
“ENI is committed every day to respecting human rights in areas

of operations and in countries in which they work.”
ENI Website FACING FINANCE | Dirty Profits | 2012 | 21
Flextronics
▶
Workers strike at
Flextronics factory
© China Labour Watch
International
Ltd.
F
lextronics is a leader of the EMS (Electronic leave constitutes a pay deduction. Flextronics
Manufacturing Services) industry. Everx well- workers are placed in overcrowded dormitories
BNP Paribas 7.16
Deutsche Bank 6.19 known IT brand outsources production to a (up to 20 people per room), many often sleeping
KBC 3.09 small group of giant manufacturing companies on the floor. Their passports are withheld by the
that are capable of managing the entire produc- work agencies, which makes this a case of modern
Loans:
tion process: everything from getting a project slavery. They have no right to join trade unions.
BNP Paribas 124.84
ready, to the delivery of the final product. The Pregnant women are subject to immediate depor-
Turnover: 22,569.20 names of companies belonging to the EMS tation. Workers also suffer from various occupa-
Net profit: 469.18 industry are little-known, as the EMS business tional diseases, usually a result of sleep depriva-
model bars any connection to specific products. tion or dehydration due to restrictions on toilet
ISIN: SG9999000020
While Flextronics International Ltd. originated use.1
( Top Financial Transactions in € Milllion ) in Silicon Valley, it is now registered in Singapore. Labour rights abuses have been documented in
It is listed on NASDAQ, hiring 225,000 (mostly other production countries as well. Although the
low-cost) employees in 30 countries, and is the minimum-living-wage in India is estimated to be
second largest EMS corporation behind Foxconn. between € 127 and € 240 per month, short-term
The list of its clients includes Microsoft, Apple, contracted workers in Chennai, India earn just € 95
Lenovo, LG, Toshiba, Nokia, Motorola, and per month. Some unskilled workers earn as little
Hewlett-Packard, among others. Flextronics grew as € 66 per month. Unions have been replaced by
from revenues of $ one billion in 1998 to $ 30 “working committees” set up by the company.2
billion in 2011. 6,000 workers in Shanghai went on strike
Like other EMS companies, Flextronics hires recently, protesting for proper compensation over
a great number of workers at peak times and the swift relocation of a factory to another more
reduces employment when market demand falls. cost-effective region in China.3
The EMS industry requires flexibility and constant In Mexico, workers are required to work six
cost-cutting. As a result, many people work on days a week with shifts in excess of 12 hours.
low-wage, short-term contracts (often signed with Agencies only contract workers for 15 to 28 days
temp agencies), with little or no job security. This as any contract shorter than a month allows the
type of employment is called “precarious work”. company to deny paying social benefits. Illegal
In Malaysia, half of the workers at three and discriminatory recruitment procedures, such
production sites are immigrants originating from as psychometric, blood, and urine tests, are also
rural areas in Bangladesh, Nepal, Cambodia, administered.4
Myanmar, or Indonesia. They are employed Hazardous work is not limited to Asian or Latin
through work agencies to whom they must pay American divisions of Flextronics. The company
excessive, illegal recruitment fees for false also operates in Central and Eastern Europe, (e.g.
promises of direct contracts with Flextronics. Poland, Hungary and Romania) – usually paying
Contracts signed with agencies are often not even wages just above the legal minimum and using
translated to their native languages. They receive large-scale temp-work.5
“… all I know is that I have not very low wages, even lower than promised. They →→ Grzegorz Piskalski
been paid for four months
altogether. I am in a bind because receive on average only € 200 (which is at the
I am neither able to send money poverty level in Malaysia), for up to 26 working
to my impoverished family, nor days of 12-hour shifts. However, the contracts only 1 http://www2.weed-online.org/uploads/migration_in_a_
am I able to return home right digital_age.pdf
now because I don’t have the stipulate eight hours. Furthermore, the workers
2 http://makeitfair.org/en/the-facts/reports/phony-equality
money to pay for an air ticket.” often have to factor in an additional three hours of
3 http://evertiq.com/news/22899
Flextronics-worker, producing unpaid time for their commute. Salaries are often
displays for Apple iPhones, 4 http://goodelectronics.org/publications-en/Publication_2281
delayed for up to six months, overtime is not
Weed report “Migration in a 5 http://somo.nl/publications-en/Publication_3591,
Digital Age”
compensated, and breaks are unpaid. Medical http://www.dziennikbaltycki.pl/artykul/458482,tczew-
flextronics-zwalnia-pracownikow,id,t.html
“At Flextronics, we believe that a sustainable approach to business is essential and

therefore, it forms a core part of the way in which we do business.“
22 | FACING FINANCE | Dirty Profits | 2012 Flextronics Pledge
▶
BLU-97 dud found in Kosovo, 2006
© Jan Schulz
▲
M919 depleted uranium ammunition, offered
by General Dynamics at Eurosatory 2010
© FACING FINANCE
▶
M2001 cluster munition, displayed
by DENEL at IDEX 2007 in Abu Dhabi
© FACING FINANCE
General
Dynamics Corp.
G
eneral Dynamics Corporation (GD) is an Lastly, GDO&TS produces the 25MM PGU-20 API
aerospace and defence company that offers and M919 (APFSDS-T) depleted uranium ammuni-
ING 74.44
a wide range of weapons systems and tions.5 Deutsche Bank 59.54
munitions. SIPRI placed General Dynamics 5th Similarly, General Dynamics Electric Boat, Allianz 15.39
among the Top 100 largest arms-producing another subsidiary of General Dynamics, built the
Turnover: 25,233.00
companies in the world, ranked by arms sales.1 Ohio class nuclear submarines for the US Navy,
General Dynamics Ordnance and Tactical which are equipped with nuclear Trident missiles.6 Net profit: 1,950.56
Systems, a subsidiary of General Dynamics, General Dynamics’ Advanced Information ISIN: US3695501086
classifies itself as a world leader in munition Systems, a further GD subsidiary, has also been
dispensing which includes the dispensing systems involved in a project which stretches the life span
for the Sensor Fuzed Weapon cluster bomb.2 of the guidance systems for the Trident II D5
Furthermore, General Dynamics Ordnance and nuclear missiles owned by the US Navy.7
Tactical Systems (GDO&TS) is a subcontractor for →→ Thomas Küchenmeister
the CBU-87/B with the BLU-97 submunition.3 This
is a cluster bomb which is widely used in conflicts
including those in Iraq, Kosovo and Serbia.
According to IHS Jane’s, the company also markets
the M2001 155mm cluster munition produced by
Rheinmetall Denel Munition (RDM) in South Africa.4
“Cluster munitions such as
BLU-97 pose a significant
threat to civilians and result in
5 http://www.gd-ots.com/2011%20Brochures/25mm%20
victims even years after a
PGU-20%20API.pdf
conflict has ended, as proven in
http://www.globalsecurity.org/military/systems/munitions/
1 http://www.sipri.org/research/armaments/production/Top100 Kosovo.”
m919.htm
2 http://www.gd-ots.com/munitionsdispensing.html Jan Schulz, FACING FINANCE
6 http://www.gdeb.com/about/product/ohio/
3 IHS Jane’s Weapons Air Launched 2012-2013. 7 http://www.dontbankonthebomb.com/wp-content/
4 Jane’s Ammunition Handbook 2011-2012 uploads/2012/02/Chapter4.pdf
“… (Our) ethics program also helps sustain our reputation

by detecting and addressing unethical conduct early …”
General Dynamics Standards of Business Ethics and Conduct handbook 2012 FACING FINANCE | Dirty Profits | 2012 | 23
Glencore ▲
Prodeco’s coal mine Calenturitas, Colombia
International plc
© AG Schweiz Kolumbien
G
lencore is a Swiss-based commodity In Zambia, a 73% subsidiary of Glencore,
extracting, producing, and trading Mopani Copper Mines (MCM), uses harmful acids to
Deutsche Bank 49.83
DZ Bank 47.02 company active in 40 countries worldwide. extract copper at its Mufulira and Nkana Mines.4
ING 21.83 Its three pillars are metals, energy and crops. They Only one of three safety pumps was ever installed
control up to 60 percent of the commodities: zinc, in the extraction system. Consequently, a damage
copper (50 percent), and lead (45 percent) in the of this single pump led to severe contamination
ING 520.87 resource market. In October 2012, the merger with of drinking water in 2007.
Deutsche Bank 312.50 Xstrata was finalized. Sulphur emissions were 70 times higher than
Prodeco, a subsidiary of Glencore, runs two the healthy limit set by the WHO.5 Parts of the mine
Loans:
coal operations in Cesar, Colombia: Calenturitas were closed in 2012 due to heavy acid mist. In high
ING 1,051.38
BNP Paribas 756.11 and La Jagua.1 As a result, more than 50% of the concentrations, sulphur severely pollutes air,
Deutsche Bank 756.11 population in Cesar suffers from respiratory groundwater and soil, destroying families’ means
diseases and damage to their skin and eyes.2 of self-subsistence. People suffer from respiratory
Turnover: 138,054.00
Communities are supposed to be resettled due diseases and high rates of cancer. Miners are often
Net profit: 3,002.08 to these health impacts. However, they protest contract-workers without any health or social
ISIN JE00B4T3BW64 against the resettlement plans demanding benefits.
consultation concerning compensation, time-lines, A leaked audit report6 on Mopani showed that
infrastructure, and above all, the future locations MCMs tax evasion could cost the Zambian govern-
of their homes. Hardly any unspoiled land is left ment up to £76 million a year.7
in Cesar. Subsequently, authorities have refused Katanga Mining, a 75% subsidiary of Glencore,
to grant extension licenses to Glencore because of runs copper mines in the province of Katanga in the
their heavy air pollution.3 DR Congo. Workers, many of them on short term
contracts, are forced to operate under the poorest
of conditions. They are not provided with any
safety attire and therefore are exposed to the dust
4 http://www.mbendi.com/orgs/cnfn.htm
1 http://www.glencore.com/prodeco-group.php 5 http://www.thisismoney.co.uk/money/news/article-2064379/
CITY-FOCUS-The-face-Glencore-mining-investors-see.
2 http://www.woz.ch/127/glencore-in-kolumbien/mehr-als-die-
html?ito=feeds-newsxml
haelfte-ist-krank
6 http://de.scribd.com/doc/48560813/Mopani-Pilot-Audit-Report
3 http://www.solidar.ch/data/C870F8F6/Kohlebergbau%20im%20
Cesar.pdf 7 http://www.trust.org/alertnet/news/enough-empty-promises

▲
Copper Smelter at Glencore’s Mopani Mine in Zambia
in the mines which leads to severe health problems. the British Parliament's International Develop-
The BBC accused Glencore of indirectly ment Committee13 opened an inquiry over
receiving copper produced by child labour from taxation in developing countries14 in which
the Tilwezembe copper mine.8 They also accused Glencore's subsidiaries in Zambia15 and DRC were
Glencore of dumping heavily polluted waste into included.16
the Luilu river.9 In light of the OECD complaint on tax avoidance
Additionally, NGOs accused Glencore of tax eva- in Zambia, even the European Investment Bank
sion and involvement in corruption.10 “Publish froze all new loans to Glencore “due to serious
What You Pay” named Glencore the most opaque concerns about Glencore' s governance which
mining company in terms of tax transparency as have been brought to light recently and which go
they incorporated half of their 46 subsidiaries into far beyond the Mopani investment.”17 Allianz, a
tax havens.11 Several other NGOs filed a complaint German insurance company, also declared that
with the OECD in 2011, alleging that Mopani they would cut off investment to Glencore because
Copper Mines manipulated financial accounts to of their poor sustainability record.18
evade taxation in Zambia.12 In the spring of 2012, →→Julia Dubslaff & Jan Schulz
13 http://www.parliament.uk/business/committees/committees-a-z/
8 http://www.guardian.co.uk/business/2012/apr/14/glencore-
commons-select/international-development-committee/
child-labour-acid-dumping-row
inquiries/parliament-2010/tax-in-developing-countries/ “Glencore and its subsidiary
9 http://www.bbc.co.uk/news/17702487 KML don’t seem to care about the
14 http://taxpol.blogspot.de/2012/05/uk-hearings-on-tax-
10 http://www.brotfueralle.ch/fileadmin/english/Business_and_ economic, environmental and
transparency.html
Human_Rights/20120416_Glencore_in_the_DRC_report_2012. social impact of their mining
15 http://www.thisismoney.co.uk/money/markets/article-2108904/ activities. The criticism concerns
pdf, http://www.globalwitness.org/sites/default/files/Global%20
MPs-eager-grill-Glencore-boss-Ivan-Glasenberg-tax. in particular three areas:
Witness%20memo%20on%20Glencore%27s%20secretive%20
html#ixzz1oLCSEzAN contracts, compliance with human
dealings%20in%20the%20Democratic%20Republic%20of%20
Congo.pdf 16 http://www.guardian.co.uk/business/2012/may/08/mining- rights and the environment
firms-congo-deals?newsfeed=true standards and tax issues.”
11 http://www.publishwhatyoupay.org/resources/piping-profits-
secret-world-oil-gas-and-mining-giants 17 http://www.bbc.co.uk/news/business-13620185 Chantal Peyer, Brot für alle
12 http://oecdwatch.org/cases/Case_209 18 Monitor, 4 August, 2011
“Glencore’s global presence and economic strength has a positive impact

on the communities in which we operate.”
Glencore’s commitment to communities, Glencore website FACING FINANCE | Dirty Profits | 2012 | 25
▶
Garment workers rest after falling sick, the
latest mass fainting at the Hung Wah textiles
factory in Phnom Penh July 25, 2011. About a
hundred garment workers fainted. The exact
cause of the sudden illness which has overcome
workers at the factory is unclear.
© REUTERS/Samrang
H&M
Hennes & Mauritz AB
H
&M Hennes & Mauritz is a Swedish company report, young 12 year old children work up to 14
that is active in the clothing retail industry. hours a day in factories for miserably low wages to
Allianz 124.49
Deutsche Bank 42.36 The company has around 700 independent supply H&M, which offers its products with slogans
BNP Paribas 37.69 suppliers active in local production offices in Asia like “fashion and quality at the best prices.” It is
and Europe. As of 31st December 2011, the also worth mentioning that the allegedly authori-
Turnover: 12,317.60
company had over 50 subsidiaries, including H&M tarian Uzbekistan government makes huge profits
Net profit: 1,771.62 Hennes & Mauritz SA, Impuls GmbH and FaBric from cotton export.3
ISIN: SE0000106270 Sales A/S, among others. H&M is accused by locals, Along with several other major clothing makers,
NGOs, media and scientists of violating human H&M has been criticised for how they treat workers
and labour rights and of polluting the environment. in Cambodia, where hundreds of employees at a
Textile suppliers for Zara, H&M, Ann Taylor, plant run by a supplier of the Swedish fashion
Guess, Target, Disney and Uniqlo, among other big giant mysteriously passed out in August.4 On top of
brands, have violated China’s environmental laws this, H&M declared that they no longer use
by contaminating water supplies with chemicals sandblasting to fade their jeans products. However,
from dyes and printing, according to the report a new report reveals that regardless of whether a
“Cleaning up the Fashion Industry”, released by the brand has ‘banned’ sandblasting or not, both
“… It's painful to see how the Institute of Public and Environmental Affairs.1 manual and mechanical sandblasting is still
kids knock themselves out in the
cotton fields to earn this rotten A German TV program entitled “Your Cheap commonly used.5 Sandblasting has been proven to
money. Just think about it: in Fashion – Our Misery”2 has reportedly featured cause fatal lung diseases, including silicosis.
order to earn 50 sum (four US H&M’s links to child labour and labour exploitation →→ Thomas Küchenmeister
cents), a kid who is barely 14 has
to bend down to the cotton bush in Uzbekistan and Bangladesh. According to the
over 50 times. And his earnings
from a day of this work won't
even buy him a pair of ugly
socks.”
Boy, ninth grade (14 years old),
3 http://www.uznews.net/news_single.php?lng=en&cid=3&sub=hot
Kashkadaria province.
&nid=18865
Source: antislavery.org, Cotton
Crimes, Child slavery in the Uzbek 4 http://www.thelocal.se/39006/20120209/
cotton industry 1 http://www.ipe.org.cn/Upload/Report-Textiles-One-EN.pdf 5 http://www.cleanclothes.org/campaigns/killer-jeans-still-being-
2 http://www.wdr.de/tv/hartaberfair/ made
“Our vision is that all business operations shall be run in a way

that is economically, socially and environmentally sustainable.”
26 | FACING FINANCE | Dirty Profits | 2012 H&M Commitment
Hanwha’s booth displaying cluster munitions at
Hanwha’s booth at IDEX 2005,
IDEX 2005, Abu Dhabi, UAE
Abu Dhabi, UAE
© FACING FINANCE
© FACING FINANCE
▼
▼
▲
Hanwha’s booth displaying cluster munitions at
DEFEXPO March 2012, New Delhi, India
© FACING FINANCE
▲
Hanwha
Hanwha’s booth at IDEX 2005, Abu Dhabi, UAE
© FACING FINANCE
Corp.
H
anwha is a Korean based Corporation. In 2007, Hanwha confirmed to Norway's
They manufacture industrial explosives, Government Pension Fund that they manufacture
Deutsche Bank 0.08
defence products, and aircraft and are 2.75 in Multipurpose Submunitions (MPSMs) as
undeniably involved in the production of cluster well as the 130mm Multiple Launch Rocket Turnover: 8,112.26
munitions. Cluster munitions are prohibited System (MLRS).2 They also lead the new South Net profit: 88.92
under the Convention on Cluster Munitions which Korean MLRS programme and produces fuses for
ISIN: KR7000880005
became effective on 1 August 2010. Due to the various cluster munitions. 3 The company website
company's involvement in the production of lists the M577A1 mechanical fuse and the M732 ( Top Financial Transactions in € Milllion )
cluster munitions, the Ethical Council of the electronic proximity fuse, both of which are used
Norwegian Pension Fund has excluded Hanwha in cluster munitions. Additionally, Hanwha has
from their investment universe.1 offered Claymore anti-personnel mines at arms
fairs. “Every year we clear tens of
In 2008, Hanwha reportedly exported 2.75 in thousands of unexploded mines in
Multipurpose Submunition (MPSM) rockets with former battle zones in order to
eliminate the deadly threat they
cluster munition warheads to Pakistan.4 pose to civilians and especially to
→→ Thomas Küchenmeister children. Anyone who still
produces cluster munitions or
landmines does so illegally and as
such commits unjustifiable
human rights violations to the
2 www.regjeringen.no/pages/2041987/Rheinmetall%20and%20 highest extent.”
Hanwha,%20Unofficial%20English%20transla.pdf
Sylvia Werther,
1 http://www.regjeringen.no/en/dep/fin/Selected-topics/ 3 http://english.hanwhacorp.co.kr/BusinessArea/Explosives/ Solidarity Service International
the-government-pension-fund/responsible-investments/ Defense/Overview/Overview.jsp (SODI)
companies-excluded-from-the-investment-u.html?id=447122 4 http://lm.icbl.org/cm/2009/banning_cluster_munitions_2009.pdf
“Everyday we are creating

a greater beginning.”
Hanwha Corporation Annual Report 2012 FACING FINANCE | Dirty Profits | 2012 | 27
▶
G 36 rifle used by Mexican special forces,
© SWR Report Mainz, 2010
Heckler &
Koch GmbH
▲
Heckler & Koch booth at the Eurosatory 2012
exhibition in Paris
© FACING FINANCE
H
eckler & Koch (H&K) describes itself as a In 2010, a German prosecutor investigated
leading manufacturer of small arms witness accounts and travel documents which
UniCredit 9.11
including rifles, fully automatic weapons, suggested that weapons manufacturer H&K
Turnover 2010: 203.28 6 and grenade launchers in Europe. The media, knowingly and purposefully delivered G36 rifles to
Net profit 2010: 11.94 6 NGOs, Members of the German Parliament, and four Mexican provinces suffering from ongoing
German legal authorities all accuse H&K of bribery, human rights violations and political unrest:
weapon smuggling, and illegal arms sales to Chiapas, Chihuahua, Guerrero and Jalisco.4 A
countries and regions of unrest or ongoing human fierce drug war is raging in Mexico. Over 30,000
rights violations. The Small Arms Survey (2010) people have been killed in recent years.
estimates that 875 million rifles, submachine guns, H&K was also under investigation following the
and pistols are in circulation worldwide. According discovery of its assault rifles in Georgia and Libya.
to UNICEF, more people are killed by small arms Libyan rebels have undeniably used H&K G36
than all other weapons.1 assault rifles in their struggle against dictator
Since late 2011, H&K has been accused of Muammar Gaddafi. However, H&K denies that it
bribing officials in Mexico and Germany.2 In August sold weapons to anyone in the embargoed country.
2011, the German media reported that Modern H&K also said it can neither confirm nor deny
Industries Company (MIC), a Saudi government- German media reports alleging that former Libyan
owned arms company located in Al-Kharj, was leader Muammar Gaddafi's son visited the
exporting German G36 assault rifles, and thus company’s headquarters in 2003.
violating German export laws. Heckler & Koch has In 2008, the German TV program “Report Mainz”
licensed MIC to manufacture their G36 rifles. MIC reveiled that Georgian special forces used H&K
has been showcasing the weapons at exhibitions G36 rifles in their conflict with Russian troops.
like IDEX 2011. Santa Bárbara Sistemas in La H&K claimed it would not export weapons to the
Coruña, Spain, is also licensed to manufacture the Georgian conflict zone only after unsuccessfully
G36. However German arms export regulations seeking to obtain an export permit in 2005.5
“In view of the fact that just forbid companies from awarding licenses in order →→ Thomas Küchenmeister
over 1.5 million people have lost
to outsource production of weapons.3
their lives as a result of H&K
weapons, one can certainly 4 http://www.spiegel.de/wirtschaft/unternehmen/waffenexport-
speak of Germany’s deadliest 1 http://www.unicef.de/download/i_0068_kleinwaffen.pdf staatsanwalt-ermittelt-gegen-heckler-koch-a-711875.html
company.” http://www.swr.de/report/-/id=233454/nid=233454/did=7124626/
2 http://www.fr-online.de/politik/razzia-bei-waffen-hersteller-
Jürgen Grässlin, ge0x00/
verdacht-auf-bestechung-gegen-heckler---
arms opponent, in WIWO koch-,1472596,11129788.html 5 http://www.tagesspiegel.de/politik/international/georgien-
heckler-und-koch-bestreitet-waffenlieferung/1304520.html
3 http://www.gdels.com/products/others_2.asp?id=1
http://dipbt.bundestag.de/dip21/btd/17/079/1707926.pdf 6 https://www.bundesanzeiger.de/ebanzwww/wexsservlet
“Securing peace
in freedom”
28 | FACING FINANCE | Dirty Profits | 2012 Slogan from H&K press release
Hon Hai
Precision Industry Co. Ltd.
(Foxconn)
A
ccounting for around 40 percent of global taken steps to audit working conditions in
production, the Taiwan-based Hon Hai production plants. While raises on 25 percent to a
Deutsche Bank 90.31
Precision Industry Co., (also known by its daily wage of over $5 have been promised, reports ING 28.98
trading name, Foxconn), is the world’s largest have surfaced indicating that workers were Allianz 20.44
electronics manufacturer. They serve as the threatened and ordered only to share certain
Loans:
original design manufacturer for some of the information, as deemed acceptable by Foxconn.
ING 102.50
largest electronic and multimedia brands, The improvements themselves have also been
including Apple Inc., Amazon.com, Dell, Hewlett- questioned2 . It should be noted that the Fair Labor Turnover: 87,567.50
Packard, and Sony, among others. They have Association (FLA) only inspected three Foxconn Net profit: 2,069.33
massive production plants in Asia, Latin America, factories: two in Shenzhen and one in Chengdu,
ISIN: TW000231700
and Eastern Europe. Sichuan. They reported severe health and safety
Foxconn has been accused of violating labour risks, and excessive hours of overtime without ( Top Financial Transactions in € Milllion )
rights for many years. appropriate payments. 3

They keep their employees in overcrowded Foxconn has been moving its production
dormitories run by military-like security forces. further north to inland China. There is no
People work excessive hours, often with no indication that similar compensation or improve-
compensation for overtime, which the company ments to working conditions have taken place in
claims is done voluntarily. Management controls other factories.
every aspect of workers’ lives, interfering with Nevertheless, human rights organisations
their privacy. The concept of privacy is even an have gained insight into the gated Foxconn
illusion, as up to 24 people share a room in huge dormitories and highlighted some daily practices
blockhouses. including full control over people’s working
Foxconn employs about 1.2 million workers in schedules, as well as their free time. Workers are
China. In Shenzhen and Chengdu, a combined prohibited from using certain devices, their rooms
Foxconn workforce of 500,000 provides labour for are raided, and if they are found to have broken
Apple Inc. Violations against workers have already any of the strict rules, they have to confess their
been widely reported over the last decade. guilt publicly4 .
However, in recent years these issues have drawn Time off is usually only used for rest as people
more attention from international media and regularly work shifts of 11 to 13 hours. Working
human rights organisations as there have been a hours are so long that people sleep in the
number of suicides and frequent riots in Chinese factories when a new product is being released.
Foxconn factories1 . After mounting allegations,
Foxconn, pressured by their largest clients, has 2 http://sacom.hk/archives/960
3 http://www.fairlabor.org/report/foxconn-investigation-report
1 http://www.huffingtonpost.com/2010/05/21/foxconn-suffers- 4 http://somo.nl/news-en/somo-media-coverage/inside-foxconns-
ninth-sui_n_585325.html factory-report-exposes-conditions-at-apple-manufacturer

▲
Taken inside the Foxconn‘s factory in Chengdu. New workers had to undergo “military training“,
i.e. standing for all day long and disciplined by the supervisors.
© SACOM 2011
Additionally, if targets are not met, lunch breaks quently occurred in many locations 5. Although
are also cancelled. Days off are rare and trips local authorities are often attracted to the
home to visit family are only allowed once a year. prospect of opening a large factory providing
This is particularly concerning as most of the employment, control over the environmental
workers are immigrants from distant provinces. impact is usually very limited. Once established, it
They are usually young people who are not in a is very difficult to determine the effects on
strong position to find employment in their home people’s health. China’s Centre for Legal Assis-
regions. Some of them are attracted by Foxconn tance to Pollution Victims (CLAPV) set up safety
advertising campaigns. The largest group of zones for different types of production, however,
Foxconn employees is between 18 and 21 years the regulations have not yet been determined for
old although incidents of child labour have been certain categories. Consequences of such cases
observed. have been visible in Taiyuan where inhabitants of
As the largest private employer in China, villages and settlements around the Foxconn
Foxconn holds a position superior to that of local factory are unable to determine the damage the
communities and authorities. Although workers factory may be causing to their health. They do
are often exposed to harmful substances without know that there are rising numbers of respiratory
“The daily production target is
6,400 pieces. I am worn out every being informed, surrounding areas are also disorders which already amount to 70 percent of
day. I fall asleep immediately subjected to water and air pollution. This problem the illnesses among the villagers.6
after returning to the dormitory. is consistent among Foxconn factories worldwide. →→ Krzysztof Kutra
The demand from Apple
determines our lives.” Disturbing odours which cause immediate
Worker at Foxconn factory,
respiratory problems and gas leaks have fre-
5 http://goodelectronics.org/news-en/foxconn-plant-in-tamil-nadu-
Sacom Report
south-india-temporarily-shuts-down-due-to-occupational-health-
“New iPhone, Old Abuses”
incident
6 http://www.chinadialogue.net/article/show/single/en/4921
“Engaging employees with respect, establishing continuing improvement,

maintaining the vision of benefiting society, and enhancing sustainability.”
30 | FACING FINANCE | Dirty Profits | 2012 Foxconn CSER Report 2011
▲ ▲
L-3 fuzes displayed at Eurosatory 2008 L-3 fuzes displayed at Eurosatory 2008
© FACING FINANCE © FACING FINANCE
L-3 Communications
Holdings Inc.
L
-3 Communications is a leading provider of a component of the M30 Guided MLRS rocket, a
broad range of electronic systems used on programme which will last minimum until the end
Allianz 26.01
military and commercial platforms. The of 2013.4 Deutsche Bank 17.96
company’s L-3 Fuzing & Ordnance Systems (L-3 The ESAD is also described as a key component BNP Paribas 10.65
FOS) division is described as one of the most of the M30 cluster munition rocket, as it was
advanced manufacturers of fuzing and ordnance developed first and foremost for use in this
products in the world. This includes the develop- weapon. Marketing material from L-3 Communica-
ment and production of fuzes for missile and tions describes the device as used on the unitary Loans:
Deutsche Bank 50.67
rocket-driven devices and ordnance ammunition version of the GMLRS rocket as ‘a variant of the
deployed by infantry. SIPRI rated L-3 as the 9th DPICM Round ESAD’. 5 In 2009, the United Arab Turnover: 11,713.40
largest arms producing company in the world.1 Emirates ordered 780 M30 GMLRS rockets, each
Net profit: 736.67
L-3 is accused of being involved in the produc- equipped with 404 M101 DPICM submunitions.6
tion of cluster munitions banned by the 2008 Another example of L-3’s involvement in cluster ISIN: US5024241045
Convention on Cluster Munitions by media, NGOs, munitions is the marketing of the XM1162 ( Top Financial Transactions in € Milllion )
and specialist researchers. In July 2011, Danske self-destruct fuzes designed for cluster munitions.
Bank excluded L-3 from its investment domain L-3 describes the fuze for use with 155 artillery
based on the findings of research into L-3’s ammunition and GMLRS rockets in order to
involvement in cluster munitions carried out by “minimise battlefield duds by adding a self-de-
the independent advisor Ethix SRI Advisors.2 The struct capability to the current DPICM” cluster
Dutch PGGM Vermogensbeheer B.V. excluded L-3 munitions. The marketing material for the XM1162
for the same reason. 3 was removed from the company website in 2010,
L-3 Fuzing and Ordnance Systems produces an but L-3 Communications has to date not con-
electronic safety and arming device (ESAD) for firmed having withdrawn the fuze from sale.
use on cluster munitions. The ESAD is a key →→ Thomas Küchenmeister
“There is evidence that L-3 is still

4 http://www.dtic.mil/ndia/2007fuze/SessionIIIA/grilliot1400.pdf involved in the production and
http://comptroller.defense.gov/defbudget/fy2013/FY2013_ marketing of key components
Weapons.pdf used with cluster munitions.”
1 http://www.sipri.org/research/armaments/production/Top100 5 http://www.dtic.mil/ndia/2008gun_missile/6484KurtzWilliam.pdf Julia Dubslaff,
2 http://www.danskebank.com/en-uk/CSR/business/SRI/Pages/ FACING FINANCE
6 http://www.globalsecurity.org/military/systems/munitions/
exclusionlist.aspx mlrs-g.htm
3 http://www.pfzw.nl/about-us/investments/responsible- http://www.the-monitor.org/index.php/cp/display/region_
investments/activities/Paginas/exclusions-of-companies.aspx profiles/theme/2268
“Our values provide the foundation for our commitment to the highest level
of ethical conduct, a commitment we take very seriously.”
L3- Code of Ethics and Business Conduct FACING FINANCE | Dirty Profits | 2012 | 31
▲
Trident II D5 nuclear missile
© Lockheed Martin
Lockheed
ATACMS MLRS rocket with cluster munitions,
displayed at Eurosatory 2006 in Paris
© FACING FINANCE
Martin Corp.
S
IPRI placed Lockheed Martin 1st among the contractual obligations to provide cluster muni-
2010 Top 100 list of the world’s largest tion missiles for customers until 2013. These
Allianz 248.09
Deutsche Bank 68.16 arms-producing companies.1 include the 227mm M30 Guided MLRS (GMLRS)
MunichRe 22.08 Lockheed Martin's weapons systems currently rockets launched by M270 MLRS or HIMARS, which
operate aboard all U.S. Navy nuclear submarines are exported to the United Arab Emirates, Jordan,
Loans:
and aircraft carriers deployed worldwide.2 The and Singapore.5 Cluster munitions are banned
Deutsche Bank 71.92
company, based in Bethesda, Maryland (USA), under the Convention on Cluster Munitions.
Turnover: 35,906.30 produces a wide variety of nuclear weapons The Norwegian Ministry of Finance, Delta Lloyd
Net profit: 2,050.18 including the Trident II D5 nuclear missiles for the Asset Management, Danske Bank, Triodos, and
U.S. Ohio class submarines and the British the Dutch Pensioenfonds Zorg en Welzijn are
ISIN: US5398301094
Vanguard class submarines for both the United among those who have excluded Lockheed Martin
( Top Financial Transactions in € Milllion ) States and the United Kingdom.3 Lockheed Martin from their investments because of their involve-
is also contractor for the new guided B61-12 TSA ment in the production of nuclear arms and /or
tail kit to increase accuracy for deployed, ground- cluster munitions.6
penetrating bombs known as “mini-nuclear- →→ Thomas Küchenmeister
bombs”.4
Lockheed Martin is also involved in the
production of cluster munitions. This is confirmed
5 Sipri (2012) – Global transfers of major conventional weapons
“Lockheed Martin has never by government contracts and the ongoing sorted by supplier (exporter), 2011.
published, stated or confirmed
that it has stopped or will stop 6 http://www.regjeringen.no/en/dep/fin/Selected-topics/
the production of the GMLRS or the-government-pension-fund/responsible-investments/
other cluster munitions.” 1 http://www.sipri.org/research/armaments/production/Top100 companies-excluded-from-the-investment-u.html?id=447122,
http://www.pfzw.nl/about-us/investments/responsible-invest-
IKV Pax Christi, 2 http://www.lockheedmartin.com/us/products/nuclearsands.html
ments/activities/Paginas/exclusions-of-companies.aspx,
Worldwide investments in 3 http://www.dontbankonthebomb.com/wp-content/up- http://www.deltalloydassetmanagement.nl/media/179531/
Cluster Munitions, June 2012 loads/2012/02/DivestmentReport.pdf exclusions_controversial_weapons_q1_2012.pdf,
4 http://www.fas.org/blog/ssp/2011/06/b61-12.php, Jane’s Weapons http://www.danskebank.com/en-uk/CSR/business/SRI/Pages/
Handbook 2012/2013 – Air-launched Weapons, p. 417. exclusionlist.aspx.
“We are committed to the highest standards

of ethical conduct in all that we do.”
32 | FACING FINANCE | Dirty Profits | 2012 Lockheed Martin Code of Ethics 2012
◀
“Langer Heinrich” mine in Namibia
© Ministry of Mines and Energy 2010
Paladin
Energy Ltd.
P
aladin Energy Ltd. is a uranium production deterioration of health for workers and communi-
company with projects in Australia and two ties. Increasing uranium mining activities pose
Allianz 0.54
operating mines in Africa (Malawi and risks in Africa because they are not always strictly Deutsche Bank 0.23
Namibia). At Paladin Energy’s recent annual regulated and controlled.4 UniCredit 0.17
meeting, a series of questions were raised A 2010 Environmental Impact Assessment (EIA)
Turnover: 209.46
regarding alleged corruption, human rights abuses, report on water consumption at Paladin’s “Langer
and worker safety issues. Several NGOs accuse Heinrich” mine in Namibia contains disturbing Net profit: -64.61
Paladin Energy of operating the Kayelekera conclusions over the mine’s water use. It stated ISIN: AU000000PDN8
Uranium Mine in Malawi without concern for that the proposed water withdrawal is not
possible environmental damage or health sustainable and explained how the existence of a
hazards.1 Some claim that local communities are vulnerable tree species might be threatened if the
not aware of the negative impacts of the mining water table is further lowered. Paladin has not
activity.2 The Kayelekera mine is located near a explained how or if it will address these concerns.5
forest reserve and Lake Malawi which is essential In an earlier report released by the World
for drinking water and fishing. According to Information Service on Energy (WISE) entitled
activists, the Australian company bribed the “Environmental Impacts of Current Uranium Mine
Malawian government to obtain the mining licence Projects”, Paladin Energy was criticised for its
in 2007.3 operation in the Langer Heinrich open pit mine.
A current NGO report on the mitigation of The deposit is located in a National Park (the
uranium mining in Africa and its impact on society Namib-Naukluft) which has a large biodiversity
and the environment found that multinational adapted to Namibia’s extreme climate. Paladin
uranium mining companies are generally not held Energy is also criticised because of the water it
accountable for their social and environmental uses for processing which comes from one of
impacts in Africa. The report covers five companies Namibia’s scarce groundwater sources. The
and include Paladin, AngloGold Ashanti, Areva, current water extraction is damaging the land-
and Rio Tinto. Paladin did not respond when scape. However, the company plans to use more
contacted. The report concludes that uranium water to increase its production capacities.6
“Mining companies want to
mining operations have a high impact on the → Thomas Küchenmeister expand their mines in the coming
environment and society and can lead to the years (and more mines are
expected to open), and will need
much more water for that: about
4 Uranium from Africa – Mitigation of uranium mining impacts 50 million m 3 each year. Our
1 http://www.wise-uranium.org/umopafr.html, on society and environment by industry and governments by water sources already are very
http://www10.antenna.nl/wise/uranium.pdf, p.51 WISE & SOMO, Amsterdam, June 2011 scarce and may will be
2 http://www.nyasatimes.com/malawi/2011/08/25/karonga-locals- 5 http://www.theeis.com/data/literature/Langer%20Heinrich%
contaminated for generations.”
take-on-uranium-miners/ 20Water%20Supply%20Draft%20EIA%20Nov%202010.pdf Bertchen Kohrs,
Earthlife Namibia
3 Open Society Initiative for Southern Africa. 06.09.11, Inter Press 6 WISE Uranium Project 27.09.10, Inter Press Service News Agency,
Service News Agency. 22.08.09 and 17.07.07, Mine Web 19.09.07. 22.08.09 and 17.07.07
“Act with integrity, honesty

and cultural sensitivity …”
Paladin Energy Corporate Values FACING FINANCE | Dirty Profi ts | 2012 | 33
▶
Leopard 2 battle tank displayed
at EUROSATORY 2006
© FACING FINANCE
Rheinmetall
AG
R
heinmetall AG is a German defence sector In 2012, following corruption allegations that it
company which produces land systems, strongly denied, Rheinmetall Air Defence (part of
Deutsche Bank 43.05
DZ Bank 17.02 weapons, munitions, propellants, and air Rheinmetall AG) was blacklisted in India and
Allianz 13.96 defence. SIPRI ranked Rheinmetall 31st among banned from doing business there.4 This was
the 2010 Top 100 list of the world’s largest followed by Transparency International UK
arms-producing companies.1 The company accusing Rheinmetall of not providing enough
UniCredit 265.24 operates through subsidiaries which are located public evidence on how they fought corruption.5
Commerzbank 98.57 around the world. Delta Lloyd Asset Management currently
The widely used Leopard 2 battle tank is armed prohibits investing in Rheinmetall because of
Loans:
with Rheinmetall’s 120mm smoothbore gun. their production of white phosphorus weapons.6
Commerzbank 88.31
Deutsche Bank 88.31 Rheinmetall also makes a comprehensive range of White phosphorus burns fiercely and can set
UniCredit 88.31 ammunition for the Leopard 2, and supplies the cloth, fuel, ammunition, and other combustibles
tank’s fire control technology and C4I systems.2 on fire and can cause serious burns or death.
Turnover: 4,454.00
The Leopard 2 is deployed by more nations than According to an Amnesty International fact-find-
Net profit: 213.00 any other main battle tank. These include nations ing mission to southern Israel and Gaza, Israeli
ISIN: DE0007030009 like Saudi Arabia which ordered 200 2A7+ model forces used white phosphorus and other weapons
Leopard tanks. Opposition parties to the German supplied by the USA, committing out serious
Parliament criticise the deal with Saudi Arabia, violations of international humanitarian law, in-
emphasising that it not only violates the principles cluding war crimes.7
of the German foreign export policy on weapons In May 2007, the Norwegian Ministry of Finance
but that it could also exacerbate the crisis in the excluded Rheinmetall from the Government
Middle East. Critics referred to an incident in Pension Fund - Global (previously the Petroleum
February 2011 when the Arab democracy move- Fund) because of alleged involvement in the
ment reached the smaller neighbouring country production of cluster munitions. This was
Bahrain, prompting Saudi Arabia to immediately repealed in 2008. However, there are reports by
send armoured troops to violently quell the the German television broadcaster ZDF on
demonstrations. Rheinmetall’s ongoing involvement in the
In late 2012, the Indonesian foreign ministry production of cluster munitions by RDM (Rhein-
announced that the country’s armed forces would metall Denel Munitions) in South Africa. 8
purchase 103 Leopard and 50 Marder tanks from →→ Thomas Küchenmeister
Germany. The orders were placed with Rheinmetall
and the deal is thought to be worth some € 210
million. Human rights organizations expressed
strong concern over the human rights situation 4 http://www.reuters.com/article/2012/06/09/india-arms-
corruption-idUSL1E8H93CQ20120609
“RDM currently produces cluster in Indonesia – particularly in the region of West
5 http://companies.defenceindex.org/report
munitions of type M2001 as Papua fearing that the German tanks could be
stated in the August volume of the 6 http://www.deltalloydassetmanagement.nl/en-gb/about-us/
military handbook Jane’s. This used by the Indonesian State against its civilians.3 mvo/exclusions/
would clearly manifest a violation 7 http://news.bbc.co.uk/2/hi/middle_east/7904929.stm
of the Oslo Convention to ban
8 http://www.facing-finance.org/en/2012/07/frontal-21-geschaefte-
Cluster Munitions.” 1 http://www.sipri.org/research/armaments/production/Top100
mit-geaechteten-waffen-deutsche-ruestungskonzerne-unter-
Ove Dullum, 2 http://www.rheinmetall-defence.com/en/rheinmetall_defence/ verdacht/, http://www.regjeringen.no/en/dep/fin/Selected-topics/
military expert of the Norwegian systems_and_products/weapons_and_ammunition/index.php the-government-pension-fund/responsible-investments/
Defence Research Establishment, http://www.army-technology.com/projects/leopard/ Recommendations-and-Letters-from-the-Advisory-Council-
in ZDF-Frontal 21, 10th July 2012 3 http://www.dw.de/indonesia-tank-deal-raises-moral- on-Ethics/Recommendation---New-assessment-of-the-c.
questions/a-16357173 html?id=496490
“Our goal is to sustain solid growth

for the defence sector.”
34 | FACING FINANCE | Dirty Profits | 2012 Rheinmetall Newsline 2012
▶
Radioactive dust from the Roessing uranium mine
in Namibia. Roessing acknowledges that no monitoring is
done to determine how far the dust spreads.
© Kirstin Kraft, Allgemeine Zeitung
◀
Roessing Uranium Mine pit in Namibia
© Ministry of Mines and Energy, 2010
Rio Tinto plc

R
io Tinto is an Anglo-Australian metal and Rio Tinto Coal Australia is criticized for its
mining company headquartered in London. health and safety conditions and lack of transpar-
Allianz 545.24
It operates on six continents and is one of ency at the Mount Thorley, Hunter Valley, and Ben- ING 229.75
the four largest mining companies in the world. Its galla coal mines; for harassing union members at DZ Bank 208.30
principal product groups are aluminium, copper, its Bell Bay smelter; and for contamination of soil
diamonds, minerals, energy, and iron ore. and groundwater in Arnhem Land. Also, Rio
BNP Paribas 726.70
The company is criticized widely for violating Tinto’s uranium mining activities in Australia Deutsche Bank 665.20
human rights and causing damage to the environ- come under criticism because they damage the
Loans:
ment while carrying out its mining activities. environment and produce radioactive waste. In
BNP Paribas 187.17
The Government Pension Fund of Norway Western Australia, at the Ranger Uranium Mine,
excluded Rio Tinto from its investment portfolio large quantities of radioactive water threatens to
for contributing to severe environmental damage spill into an Aboriginal community and the Turnover: 45,150.50
through its cooperation with Freeport-McMoran wetlands belonging to the Kakadu. According to Net profit: 4,352.68
Copper & Gold Inc. in the Grasberg mine in Reprisk, 100,000 litres of contaminated water has
ISIN: GB0007188757
Indonesia.1 leaked continually from the tailing dams for 30
In Mongolia, Rio Tinto aims at exploiting the years.4 ( Top Financial Transactions in € Milllion )
largest, undeveloped gold and copper mine in the Uranium mining by Rio Tinto in Africa is also
world, “Oyu Tolgoi”, located in the South Gobi criticised. NGOs researched the environmental,
Region. Critics claim that the Environmental and labour, and human rights impacts of the largest
Social Impact Assessment for Oyu Tolgoi does not uranium mine, “Roessing”, in Namibia, where Rio
cover concerns over the destruction of the fragile Tinto is the biggest shareholder (69%). Workers
South Gobi ecosystem or the livelihoods of the and people from surrounding communities suffer
nomadic herders.2 NGOs complain that the mining from health problems arising from exposure to
projects in the South Gobi region are taking place radioactive waste and from inhalation of dust and
before sufficient scientific information is available radon gas. The health and safety measures
about the possible environmental impacts. provided by Roessing are insufficient. 5 Recent
Furthermore, conflicts over limited water and land measurements found elevated rates of uranium in
resources have already evolved between tradi- groundwater, soil, and sediments.6
“The management of the waste
tional herders and the mining sector.3 → Jan Schulz
rock dump of Roessing’s mine
urgently needs to be improved; it
is freely accessible and does
not provide any warning signs.
1 http://www.regjeringen.no/en/dep/fin/Press-Center/Press-
The tailings are contaminating
releases/2008/the-government-pension-fund-divests-its-.
the sediments of the Khan River
html?id=526030 4 Reprisk: Most Controversial Mining Companies of 2011. p. 7
and the surrounding area.”
2 http://www.minesandcommunities.org/article.php?a=11936 5 LaRRI: Uranium Mining in Namibia. 2009.
Bruno Chareyron, CRIIRAD France
3 http://bankwatch.org/sites/default/files/spirited-away-mongolia- 6 http://www.criirad.org/actualites/dossier2012/namibie/
mining.pdf CRIIRAD-namibia-press.pdf
“Our operations give us the opportunity to bring long-lasting positive change

to the communities, regions and countries where we work …”
Rio Tinto Annual Report 2010 FACING FINANCE | Dirty Profits | 2012 | 35
▶
A river in Goi community,
Rivers state (Nigeria), polluted
by a Shell oil spill
© ERA
Royal Dutch
Shell plc
R
oyal Dutch Shell is a global group of energy government admit that Shell contributes to the
and petrochemical companies that employs funding of the military in the Delta region. Under
Allianz 779.38
BNP Paribas 609.12 90,000 people in more than 80 countries the premise of “protecting” Shell from peaceful
ING 365.49 including Canada, Malaysia, Nigeria, and Brazil. demonstrators, the Nigerian police special forces
Shell is a supporter of the Extractive Industries destroyed houses and vital crops, and killed more
Transparency Initiative and a participant of the than 2,000 people. In autumn 2012, Nigerian
Net profit: 22,929.40 UN Global Compact. farmers took Shell to court in The Hague, hoping
ISIN: GB00B03MLX29 Almost 14 percent of Shell’s production – their the company would be forced to change their
and GB00B03MM408 biggest fields outside the U.S. – comes from methods, pay compensation, and clean up spills.
Nigeria. Since they started drilling there in 1958, According to the National Oil Spill Detection and
the Ogoni region, part of the Niger Delta, has Response Agency, NOSDRA, in July 2012 Shell
yielded about $ 30 billion in oil revenues. However, Nigeria (SNEPCO) was fined $5billion for a massive
the people who live there profit very little from oil spill that occurred at its Bonga oil field on
this money. With around 31 million inhabitants, December 20, 2011. 5
the Niger Delta is one of the world’s most The Anglo-Dutch oil group is planning to drill 5
substantial wetland and coastal marine ecosys- wells in the Arctic seas. This industrial activity in a
tems. It is an important source of food for the fragile polar ecosystem poses a major threat to
rural population. According to a study conducted animals and the survival of indigenous peoples.6
by a Nigerian university in 2011, a total of 2.4 Furthermore, an oil spill would be catastrophic
million barrels have leaked into the delta.1 Air and virtually impossible to clean up in a sea that
pollution from gas flaring results in acid rain and remains ice-covered for most of the year.
respiratory problems in the surrounding commu- Shell will also start exploring for Chinese shale
nities. People have been driven off their land and gas. These unconventional gas reserves can only
Shell pipelines pass through villages and over be reached by hydraulic fracturing, a process
what was once agricultural land.2 “In at least 10 which damages aquifers, may leak chemicals, or
Ogoni communities where drinking water is cause landslides or minor earthquakes.7
contaminated with high levels of hydrocarbons, In July 2012, the Russian Sakhalin Island
public health is seriously threatened,” the UN residents (Prigorodnoye Production Complex),
Environmental Programme (UNEP)concluded. living adjacent to a highly polluted liquefied
They went on to say that some areas which natural gas plant with oil and gas export termi-
appeared unaffected were actually “severely nals, filed a complaint against Royal Dutch Shell
“Shell’s … construction and opera- contaminated” underground. 3 and three of the UK’s largest banks: Royal Bank of
tion of the Prigorodnoye Countless peaceful marches and blockades for Scotland (“RBS”), Standard Chartered, and
Production Complex has severely
harmed the adjacent community, environmental and economic justice were met Barclays for their failure to adhere to OECD
endangering their health, with violence.4 Militant groups have occasionally Guidelines for Multinational Enterprises. 8
jeopardizing their food security, sabotaged Shell infrastructure in the area, hoping →→ Leen Schmücker & Thomas Küchenmeister
and polluting and destroying local
environmental resources. to economically damage the company and regain
Community members living only power over their livelihood. Both Shell and the
1.2 kilometers away have not been
resettled or justly compensated, in
5 http://www.vanguardngr.com/2012/07/bonga-oil-field-spill-
violation of Russian law and
1 Ekubo and Abowei, Aspects of Aquatic Pollution in Nigeria, fg-fines-shell-5bn/
international standards including
Research Journal of Environmental and Earth Sciences 3(6):
the OECD Guidelines.” 6 Indigenous Environmental Network and Athabasca Chipewyan
673-693, 2011. First Nation, Risking Ruin, May 2012.
Dmitry Lisitsyn,
2 Amnesty International; The true tragedy; delays and failures in
Chairman of Council of 7 http://www.guardian.co.uk/business/2012/aug/21/shell-invest-
tackling oil spills in the Niger delta, 2011.
Sakhalin Environment Watch, china-shale-gas-fracking on 23.08.12
a Sakhalin Island-based regional 3 http://www.unep.org/newscentre/Default.aspx?DocumentID=264 8 http://oecdwatch.org/news-en/complaint-seeks-resettlement-
environmental organization 9&ArticleID=8827&l=en and-just-compensation-from-royal-dutch-shell-and-uk-banks-
4 http://archive.greenpeace.org/comms/ken/, on 17.07.12. for-damage-caused-by-sakhalin-ii-oil-and-gas-project
“Building a sustainable
energy future”
36 | FACING FINANCE | Dirty Profits | 2012 Shell Sustainability Report 2011
◀
Workers at a Samsung supplier factory
© China Labour Watch
Samsung
Electronics
Co. Ltd.
T
he Samsung Group, founded in 1938, is a China Labour Watch (CLW) accuses the
South Korean conglomerate with more than enterprise of massive labour law violations. The
BNP Paribas 430.88
340,000 employees. The flagship of allegations are numerous: necessitating excessive Allianz 398.47
Samsung Group is Samsung Electronics, the overtime hours due to low wages, unpaid work, DZ Bank 234.62
world’s largest TV and mobile phone producer. The doing work while standing for up to 12 hours at a
enterprise began in the 1980s with the develop- time, systematic employment of underage
ment of electronic semiconductors. workers, discrimination, failure to issue pay checks, Net profit: 7,717.52
The company is accused of using highly poison- inadequate workplace safety standards, and ISIN: KR7005930003
ous substances for its semiconductor produc- prevention of unionized organization.5
tion without informing or offering protection to These allegations are referring to company-
their employees. Chinese Labour Watch reported owned factories and suppliers. For example,
violations of labour laws, such as child labour, in numerous cases of child labour have emerged at
Samsung’s affiliated companies in China.1 HEG Electronics. Underage workers work under
The South Korean organization SHARPS the same conditions as adult employees while only
accused Samsung of causing severe, life-threaten- receiving 70% of an adult's wage.6
ing illnesses, such as cancer, to 140 former China Labour Watch has discovered that it is
employees.2 In August 2012, the organization not unusual for Samsung to replace the names of
attested to 56 work-related fatalities during an former adult employees with the names of
interview with ZDF’s (German TV network) underage workers on company badges in order to
magazine “Frontal 21”.3 avoid legal ramification. Underage child labourers
According to an investigation by the Occupa- are usually hired directly from Samsung’s affiliated
tional Safety and Health Research Institute, companies and do not receive a labour contract.
cancer- and especially leukaemia causing Instead, the agreement is conducted by the
substances like benzene, formaldehyde, arsenic schools and labour is passed off to the pupils as a
and radioactive material have been found at the compulsory part of their education.7
production lines.4 Samsung maintains that these In November 2012, Samsung admitted to
substances are not used for production. Neverthe- have found illegal work practices at their Chinese
less, the company is accused of having a massive suppliers, following accusations by China Labour
imbalance between profits and responsibility, Watch. 8 Samsung has given its suppliers two more “Then they told me that I had
particularly in terms of workplace safety and years to eliminate these practices.9 cancer. A brain tumour.”
“Sometimes, lead residue was left
health issues. Samsung still denies any correlation →→ Nikoletta Pagiati on our hands. You couldn’t get
between the cases of cancer and their working the smell out of your nose. I wore
conditions. a simple mask made of paper.”
Han Hye-kyoung,
former Samsung employee
1 http://www.spiegel.de/netzwelt/netzpolitik/china-labor-watch-
5 http://www.chinalaborwatch.org/pro/proshow-177.html
clw-beschuldigt-samsung-der-kinderarbeit-a-853464.html “Cancer often occurs, even with-
6 http://www.chinalaborwatch.org/pro/proshow-175.html out any particular cause. That’s
2 http://stopsamsung.wordpress.com/what%E2%80%99s-wrong-
in-samsung-semiconductors/ 7 http://www.chinalaborwatch.org/pro/proshow-177.html why I think these cases of cancer
3 http://frontal21.zdf.de/ZDF/zdfportal/web/ZDF.de/ 8 http://chinalaborwatch.org/upfile/
were not preventable.”
Frontal-21/2942216/23872458/6a799d/Tod-nach-Arbeit- 2012_11_26/20121126121032989.pdf Kim Soo-Geun, Samsung
f%C3%BCr-Samsung.html Health Research Center
9 http://www.guardian.co.uk/technology/2012/nov/26/
4 http://dx.doi.org/10.1179/1077352512Z.00000000022 samsung-illegal-china-suppliers
“Designed for Humans”

Samsung Electronics Website
▲ ▲
CBU 97/CBU105 Sensor Fuzed Weapon, Textron lobbying UN
Cluster Bomb with BLU-108 submunitions © FACING FINANCE
© FACING FINANCE
Textron Inc.
▶
CBU105/BLU-108 submunitions duds,
found in Iraq 2003
T
extron Inc., headquartered in Wilmington, weighing less than 20 kilograms, and includes
Massachusetts, is a multi-industry company those explosive submunitions’.4
Allianz 22.92
Deutsche Bank 11.38 involved in the aircraft, defence, industrial The USA, who did not participate in the Oslo
ING 4.31 and finance businesses and has customers process prohibiting cluster munitions, now finds
worldwide. SIPRI ranked TEXTRON 30th among that almost all of their alternative cluster muni-
Loans:
the list of the Top 100 arms-producing companies tions (e.g. BLU 108) are illegal. This was heavily
in the world.1 Textron Systems, a fully-owned criticised by Textron, who strongly tried to
Turnover: 8,706.50 subsidiary of Textron Inc., produces the CBU-97/ influence the U.S. government to prevent this.
Net profit: 186.87 CBU-105 Sensor Fuzed Weapon cluster munition Textron even sent a company spokesperson to the
containing BLU-108 submunitions.2 The Norwe- Geneva-based UN Meetings (CCW) to persuade the
ISIN: US8832031012
gian Ministry of Finance, Delta Lloyd Asset delegates of the UN Convention on Conventional
( Top Financial Transactions in € Milllion ) Management, Danske Bank, and Triodos, among Weapons of the benefits of “alternative US-Ameri-
others, have excluded Textron from their invest- can cluster munitions” like the SFW. A unique
ments because of their involvement in the approach in the UN’s history.
production of cluster munitions.3 The Sensor Fuzed Weapon (SFW) was first used
The CBU-97/CBU-105 Sensor Fuzed Weapon by the U.S. during the war against Iraq in 2003.
(SFW) carries ten BLU-108 submunitions, each According to on scene experts, it leaves numerous
in turn carrying four ‘Skeet’ warheads – meaning unexploded duds behind, putting civilians highly
a total of 40 target seeking submunitions. The at risk. However, Textron claims a reliability rate of
SFW falls under the category of weapons prohibited over 99 percent. In 2010, Textron exported the
by the Convention on Cluster Munitions (Oslo Sensor Fuzed Weapon (SFW) to India; In 2011 to
Convention), which defines a ‘cluster munition’ as Saudi Arabia and to the United Arab Emirates.5
a ‘conventional munition that is designed to → Thomas Küchenmeister
disperse or release explosive submunitions each
1 http://www.sipri.org/research/armaments/production/Top100
2 http://www.textrondefense.com/products/smart-weapons-air/
“We felt very comfortable that
sfw/index.php
the CBU-105 having a zero dud
http://www.textrondefense.com/products/smart-weapons-air/
rate would be a factor in forces
blu-108.php
moving through that area. So, it
was an easy call for us to make 3 http://www.regjeringen.no/en/dep/fin/Selected-topics/
to drop CBU-105's …” the-government-pension-fund/responsible-investments/
companies-excluded-from-the-investment-u.html?id=447122,
SMSgt John Knipe, 4 http://www.clusterconvention.org/files/2010/12/CCM-Text1.pdf
http://www.deltalloydassetmanagement.nl/media/179531/
OIF on Textron’s Website
exclusions_controversial_weapons_q1_2012.pdf, 5 SIPRI (2012) - Global transfers of major conventional weapons
http://www.danskebank.com/en-uk/CSR/business/SRI/Pages/ sorted by supplier (exporter), 2011, http://www.textrondefense.
exclusionlist.aspx com/news/press_release_item.php?ReleaseID=1526733
“Clear victories.
Clean battlefields.”
38 | FACING FINANCE | Dirty Profi ts | 2012 Textron’s Advertising Slogan for SFW
◀
Protest of communities against the Vale/Thyssen steel mill
in Rio de Janeiro, February 2011
© Community Association, Rio de Janeiro
Vale S.A.
V
ale is the second largest mining company in Survival International, is the world’s most endan-
the world and one of the largest producers of gered tribe.3
Allianz 695.33
raw materials. It is headquartered in Rio de In Mozambique, Vale operates the Moatize Coal BNP Paribas 303.15
Janeiro, Brazil, and operates in 37 countries across Project in Moatize - Tete province. Between late 2009 Deutsche Bank 277.98
North and South America, Europe, Africa, Asia, and and early 2010, when setting up this project, Vale dis-
Underwriting of shares and bonds
Oceania. Vale is the world’s largest producer of iron placed and resettled more than 1,300 families in the
BNP Paribas 328.13
ore and pellets (a key raw material in the iron and communities of Chipanga, Mithete, and Malabwe Deutsche Bank 312.87
steel industries), and the world’s second largest in the Moatize province. Apart from the loss of their
Loans:
producer of nickel. land, these families also suffered health impacts as
BNP Paribas 78.88
Vale is criticised for having the most contempt a result of the dust produced by Vale’s mining activi-
Deutsche Bank 78.88
for the environment and human rights. In Janu- ties, changes in social relations, destruction of liveli- DZ Bank 17.30
ary 2012, Vale won the Public Eye People’s Award hoods, and radical changes in traditional cultures due
Turnover: 47,808.00
for being the world’s worst company in view of its to the resettlement. The resettlement process was
human rights and environment performance. The mishandled from the beginning. Vale provided poor- Net profit: 17,518.40
Public Eye awards, also known as the “Oscars of quality infrastructure and insufficient housing condi-
ISIN: BRVALEACNOR0
Shame”, are organised by Greenpeace and the Ber- tions with poor access to water. Furthermore, the land
ne Declaration.1 provided was inadequate for agricultural purpos- ( Top Financial Transactions in € Milllion )
Vale’s activities impact the territory and comes, putting the nutrition of the communities at risk.
munities, generating extremely high social costs Promises of compensation by Vale were not kept. The
and severe environmental damage. Deforestation, free movement of people and goods and the access
population displacement, destruction of traditional to resources was restricted in the resettlement area.
livelihood models, air pollution, and contamination Vale is also accused of violating workers’ rights
of water sourses are impacts that follow Vale’s path by keeping them in precarious and short-term con-
of mineral exploitation through processing and tractual relationships, and risking workers’ health
transportation of their products to the final markets. by exposing them to compounds that cause aller-
In Brazil, Vale has several large scale mining proj- gies and pain.4
ects which have a direct impact on communities Furthermore, Vale is accused of instigating
and the environment. Among them is the controver- violence and militarization in Cajamarca, Peru,
sial steel complex Companhia Siderurgica do Atlan- where Vale carries out a mining project called
tico (TKCSA), a joint project between ThyssenKrupp “La Morada”. Vale’s subsidiary Miski Mayo Min-
(Germany) and Vale at the Sepetiba Bay in Rio de ing Company S.A.C formed a paramilitary group
Janeiro. A study by Friends of the Earth showed that which guards the area and threatens and/or ha-
the project has negatively affected the livelihoods rasses people from the surrounding communities.
of 8,000 fishermen living in traditional communi- As a result of protests against the mining activi-
ties in the Sepetiba bay. According to the study, the ties, several leaders were found at fault and sen-
onset of industrial activity led to air pollution levels tenced with up to seven years in prison. 5
exceeding environmental limits and metal-like par- Vale’s activities in Canada led to disputes with
ticulate matter being spread over the Santa Cruz workers and violations of labour rights and com-
neighbourhood and surrounding areas.2 pensation rights. Here, Vale followed a strictly anti-
Vale plans to expand its rail line to transport iron union course, suing union members, their leaders
ore from the Carajás mine in Northern Brazil. This and dismissing strikers.6 “If I was allowed, I’d rather go
back to Mitete because here I do
poses a threat to the ecosystem and the traditional → Samuel Mondlane
not see anything better. My kids
lifestyles of the Awá tribe which, according to and family are hungry, I have no
3 http://www.survivalinternational.org/awa job and I am suffering.”
4 Research undertaken by Samuel Mondlane – Justica Ambiental Displaced member of
Mozambique, 2011 to 2012 Cateme Community, Moatize,
1 http://www.publiceye.ch/en/ranking/ 5 http://atingidospelavale.wordpress.com/2010/04/17/428/ Mozambique
2 http://www.foei.org/en/resources/publications/pdfs/2012/ 6 http://atingidospelavale.wordpress.com/2010/04/27/
how-corporations-rule-vale dossie-dos-impactos-e-violacoes-da-vale-no-mundo/
“Vale is working to create prosperity, with social responsibility

and respect for the environment.”
Vale Sustainability Report 2011 FACING FINANCE | Dirty Profits | 2012 | 39
Vedanta
Resources plc
V
edanta Resources, one of the world’s materials.3 Until now, Vedanta has obtained its
largest zinc and aluminium producers, is bauxite mostly from illegally-operated mines. The
Deutsche Bank 74.04
UniCredit 53.26 a British diversified metals and mining com- plan for the bauxite mine provoked international
DZ Bank 15.72 pany with operations in India, Zambia, Namibia, outrage due to Vedanta’s lack of consideration for
South Africa, Liberia, Ireland and Australia. The the Dongria Kondh, an indigenous tribal group
company was founded in 1976 and is headquar- regarding their holy sites and their settlements.
UniCredit 129.67
tered in London, UK. Vedanta is heavily criticized Vedanta neglected to consult the tribe to ask for
Turnover: 8,824.02 for its poor environmental, health and safety, their consent to use the land when planning to
Net profit: 1,570.49 indigenous, and human rights performance - par- build the mine. The Indian Ministry of Environment
ticularly in India where most of its operations are and Forests acknowledged that one of the holiest
ISIN: GB0033277061
based. In 2009, RepRisk, a consultant agency sites, an untouched summit area, would have
( Top Financial Transactions in € Milllion ) focusing on companies’ environmental, social, been destroyed. A successful complaint before the
and governance performance, ranked Vedanta the British OECD contact point finally led to the cancel-
second, “most environmentally lation of the mining project by India’s Ministry of
and socially controversial multinational mining Environment and Forests in 2010. Nevertheless,
company.“ Vedanta is appealing this decision and wants to
In 2010, Vedanta Resources was ranked third.1 tap the bauxite deposits.
A significant number of investment funds from Although the construction of the bauxite mine
Norway, the UK, Canada, USA, Sweden, and the has been cancelled, Vedanta’s refinery at Lanji-
Netherlands have excluded Vedanta from their garh is still operating and causing severe environ-
sovereign wealth fund portfolios having recog- mental damage due to the expenditure of
nized the reputational risks of doing business with so-called “red mud,” the waste product of
such a company.2 aluminium processing. There is already documen-
Since April 1997, Vedanta Resources has had tation of a “red mud” spillage from artificial
plans for a bauxite mine at the foot of the Niyam- storage ponds near a local river.4
giri Hills in Orissa, India, to more easily supply its
nearby aluminium refinery at Lanjigarh with raw 3 London Mining Network (2012): UK-listed Mining Companies and
the case for stricter oversight; Amnesty International (2012):
Vedanta’s perspective uncovered. Policies cannot mask practices
in Orissa.
1 RepRisk 2009, 2010, 2011: Most Controversial Mining Companies 4 http://www.amnesty.org/en/news-and-updates/india-toxic-
2 http://www.regjeringen.no/upload/FIN/Statens%20 sludge-leak-vedantas-red-mud-pond-threatens-rural-
pensjonsfond/RecommendationVedanta.pdf communities-2011-06-0

▲
Captive Power Plant (CPP) of Vedanta Aluminium Limited at Jharsuguda (Orissa)
© Jenni Roth 2012
Unfortunately, this does not only occur in Zambia. In November 2006, the company dis-
Orissa. Vedanta and its subsidiaries are heavily charged effluent into the Kafue River, polluting it
criticized the world over for their poor reputation. with heavy metals. The chemical concentrations
In 2001, Vedanta bought the state owned Balco were 1,000% higher than acceptable levels for
aluminium refinery, smelter, and bauxite mines in copper, 77,000% higher than those for manganese
Korba, India. Eight years later, the worst Indian and 10,000% higher than those for cobalt. The
industrial accident of recent times occurred in this domestic water supply for 75,000 residents in the
factory. On September 24th, 2009, a 245-meter nearby town of Chingola was contaminated. In
chimney toppled to the ground killing at least 41 November 2010, KCM yet again polluted the Kafue
workers. An investigation report carried out by the River – a court later found Konkola guilty of wilfully
National Institute of Technology concluded that failing to report the accident to authorities and
“careless, poor construction practices, […] poor fined the company $2 million. In 2012, Zambian
workmanship […] and insufficient cement content activists and Chingola villagers published a report
in the concrete mix were likely causal factors”. A which detailed the ongoing contamination of their
final judicial inquiry into the disaster has already water supply by KCM.6
postponed release of its findings three times. →→ Barbara Happe
According to J.N. Chandra, the deputy director of
prosecutions in Korba, “there are too many
powerful people who want nothing to be done”.5
Vedanta’s subsidiary in Zambia, Konkola “Continuing to invest in the …
company Vedanta would present
Copper Mines (KCM), has already been fined for an unacceptable risk of
ongoing pollution of the Kafue River in northern contributing to grossly unethical
activities.“
Norwegian Council on Ethics,
5 London Mining Network (2012): UK-listed Mining Companies and 2007
the case for stricter oversight; Amnesty International (2012):
Vedanta’s perspective uncovered. Policies cannot mask practices
in Orissa. 6 see above
“Upholding people’s fundamental rights

is core to our business.”
Vedanta Sustainability Website FACING FINANCE | Dirty Profits | 2012 | 41
◀
Demonstration against Wilmar, 2007
© Nordin, Rettet den Regenwald e.V.
▶
Wilmar clear cutting in Indonesia, 2010
© SOB, Rettet den Regenwald e.V.
Wilmar
International
W
ith a total planted area of 242,403 Sustainable Palm Oil (RSPO), this round table has
hectares in Malaysia and Indonesia, the not been able to ensure that producers break the
ING 7.19
Deutsche Bank 3.55 Singapore based, Wilmar, is one of the link between deforestation and palm oil. 5
DekaBank 1.93 largest palm oil plantation owners, and the In 2009, the World Bank’s investment banking
world’s largest palm oil and biodiesel producer. In arm issued a moratorium on all lending to palm
Loans:
Europe, companies like Unilever, Nestlé, and oil companies and in 2011, DWS, a fund manage-
BNP Paribas 169.51
ING 81.47 Procter and Gamble are its main customers.1 ment company run by Deutsche Bank, dropped all
KBC 57.08 Wilmar and its customers have been targeted Wilmar International Stock from its financial
by different environmental groups2 around the products over concerns that the palm oil giant
Turnover: 33,296.10
world for their part in the massive and often illegal failed to produce palm oil in a responsible manner.
Net profit: 1,192.16 clearing and burning of peat land and forests in Recent NGO reports from 2012 reveal that the
ISIN: SG1T56930848 Indonesia and Malaysia. Every year, Indonesia World Bank provided millions of dollars in funding
loses 1.2 % of it forests for products including for palm oil expansion in forested islands off the
palm oil, paper and timber. 3 Indonesia’s National coast of Lake Victoria in Kalangala, Uganda. The
Climate Change Council identified the palm oil project is a joint venture between Wilmar
sector as one of the key drivers of natural forest International and BIDICO, an African oilseeds
loss and peat land degradation in 2010.4 company. Within three months, the forest was
The enormous monoculture that Wilmar’s oil destroyed and the Kalangala community in
palm plantations create, not only destroys Uganda had lost its land.6
pristine forests, but also dries out peat swamps, Other NGO reports state that Wilmar forced
threatening already endangered species like Bidin natives from the Sumatra Islands to leave
tigers and orang-utans, intensifies climate change their land in order to make space for oil palm
“People’s rights to land are and disrupts the livelihoods of indigenous plantations. Wilmar is also accused of having
being demolished despite
protection for them under the communities. Whilst many major Indonesian destroyed the homes of the Bidin.7
Ugandan Constitution. Small producers are members of the Roundtable on → Leen Schmücker
scale farming and forestry that
protected the unique wildlife,
heritage and food of Uganda is
being converted to palm oil 1 FoE Netherlands, Buyers and financiers of the Wilmar Group, 2006.
wastelands that only profit Wilmar SUSTAINABILITY REPORT 2011.
agribusinesses.” 2 http://www.robinwood.de/Newsdetails.13+M55ead9b1d73.0.html 5 Greenpeace India, Frying the forest, How India’s use of palm oil is
David Kureeba, National on 16.09.12 having a devastating impact on Indonesia’s rainforests, tigers and
Association of Professional the global climate, 2012.
3 Greenpeace India, Frying the forest, How India’s use of palm oil is
Environmentalists (NAPE) / having a devastating impact on Indonesia’s rainforests, tigers and 6 http://www.foei.org/en/media/land-grab
Friends of the Earth Uganda the global climate, 2012. 7 http://www.regenwald.org/news/4027/gewalt-in-indonesien-
4 DNPI (2010). Op.cit. Section 1:16, 18, 19, 20 unilever-schert-sich-nicht-um-palmoel-opfer
“Setting the standards for

sustainable practices”
42 | FACING FINANCE | Dirty Profi ts | 2012 Wilmar Sustainability Report 2011
Excursus
Bittersweet – Child Labour
and Cacao Farming
A t the beginning of the millennium, child labour was
still persistent in cacao plantations. Recent studies
from Ghana and Côte d’Ivoire (Ivory Coast) show that
hazardous child labour and sometimes even cases of the worst
forms of child labour (as defined by the ILO), such as child traf-
Consequently, the idea was dismissed in 2007. Certifica-
tion was re-defined. Now, the protocol only provides progress
updates for the data pool on cases of exploitive child labour and
forced labour, and reports the effects of progress in the elimina-
tion of the aforementioned types of labour. It also reports on
ficking and forced labour, still occur. According to the Tulane independent verifications of the data pool. The development of
University, New Orleans, children from Burkina Faso and Mali a certification system which affects 50 percent of the cacao culti-
continue to be sold to cacao farms in Ghana and Ivory Coast- vating regions in Ghana and Ivory Coast is planned. Although it
the world’s two largest producers of cacao- where they are used is supposed to model itself on United Nations and ILO standards,
in sectors which massively damage their health. Nearly one the certification does not set exact standards with mandatory
million children were found working on cacao plantations in requirements as criteria. Furthermore, there is no all-embracing
Ghana, while in Ivory Coast more than 800,000 cases were iden- approach to improve the overall working situation.
tified. All the while, these children and their families hardly Despite its self-commitment to fight child labour,3 the
benefit from educational or vocational programs.1 chocolate industry still focuses on increasing productivity and
States, industry, consumers, and civil society all admitted the profit without developing all-embracing, country-specific, or
problem of child labour and agreed unanimously that the most long-term social projects. Thus far, it has only been possible to
severe forms had to be eliminated. As early as 2001, industry, reach a few Ivorian and Ghanaian communities. In addition to
governments and international NGOs signed the Harking- child trafficking and forced labour, this problem complicates
Engel Protocol2 which was supposed to improve the regulations the execution of fair production chains. Similarly, there hasn’t
against child labour and abolish forced labour by certifying been any prospect development for children who have been
cacao. saved from exploitative employment. There are no standards
The Harking-Engel Protocol should have been enforced by regarding voluntary certification for the cacao sector. Coop-
2005. It was soon clear to more than just the representatives eration with the ILO is set to be expanded with help from U.S.
of the industry that the aspired protocol was not feasible: In government funds and aid from the chocolate industry. Existing
Western Africa alone, cacao beans are cultivated on more than programmes will also be continued. However, as of yet, none of
600,000 farms. Furthermore, the value chain is too diversified them concerns the explicit certification of cacao.
and unclear to establish effective control systems.
→→ Nikoletta Pagiati
Further sources:
→ http://www.suedwind-institut.de/fileadmin/fuerSuedwind/
Publikationen/2010_Inhalt/2010-13_Inhalt_Menschenrechte_im_
Anbau_von_Kakao.pdf
→ http://www.laborrights.org/sites/default/files/publications-and-
resources/Cacao%20Protocol%20Success%20or%20Failure%20June
%202008.pdf
▲
Photo: “The Dark Side of Chocolate” → http://www.worldvision.com.au/issues/human_trafficking___slavery/
© Miki Mistrati, U. Roberto Romano
WhatIsThisAbout/ReportOurGuiltyPleasure.aspx
3 e.g. Hershey: http://laborrightsblog.typepad.com/international_labor_right/2012/10/

1 http://www.childlabor-payson.org/Tulane%20Final%20Report.pdf
no-more-child-labor-chocolate-can-hershey-be-trusted.html
2 http://www.cacaoinitiative.org/images/stories/pdf/harkin%20engel%20protocol.pdf

Banks and Evil Acts
Example 1: Deutsche Bank
H eadquartered in Frankfurt, Deutsche Bank AG is

the largest German global banking and financial
services company. They employ more than 100,000
people in over 70 countries.
Despite Josef Ackermann, former Deutsche Bank CEO, re-
peatedly stating that “no business is worth risking the reputa-
tion of Deutsche Bank,” Deutsche Bank has been involved in
a large number of irresponsible business transactions during
his time in office (2002-2012). Subsequent lawsuits against
Deutsche Bank have even led to convictions.
Deutsche Bank’s involvement in human rights violations
and environmental damages are documented further in this
report in the chapter entitled: “Harmful Investments – Analy-
sis of Financial Institutions and their Harmful Investments.”

Deutsche Bank and the Housing Credit Bubble This case is just one of around two dozen suits against
Deutsche Bank on this issue. Deutsche Bank has sold similar
Deutsche Bank was one of the major driving forces behind the
high-risk interest rate swaps to around 200 mid-sized compa-
housing credit bubble since 2004. A US Senate Report from
nies and local authorities. According to estimates, the actual
20111 on this issue analyzed that Deutsche Bank was one of
total loss amounts to more than one billion Euros. However,
the most important Collateralized Debt Obligation (CDO) trad-
many of these suits have been resolved through out-of-court-
ers. After renouncing from this market, Deutsche Bank started
agreements.
betting against mortgage bonds which contributed to the
The most famous case regarding interest rate swaps was
collapse of the market in 2007. Nonetheless, Deutsche Bank
submitted by the city of Milan. Italian prosecutors accused
continued selling CDO products to investors.
Deutsche Bank and three other large banks (UBS, JP Morgan
Carl Levin, the chair-person of the US Senate Permanent Se-
Chase, and Hypo Real Estate) of mis-selling derivatives. Milan’s
lect Committee, observed alarming practices within Deutsche
chief prosecutor Alfredo Robledo said that the banks had been
Bank, stating, “we have found a snake pit full of greed, interest
“plundering society.”6 As a result, Milan received a €500 mil-
conflicts and misconduct.”2
lion payout in an out-of-court settlement in April 2012.
In a lawsuit filed in May 2011, the Los Angeles city attor
ney called Deutsche Bank “one of the major slumlords in
Deutsche Bank and Food Speculation
the city.”3 The attorney’s office contends that the lenders
destroyed neighbourhoods by wrongly kicking people out of There is growing evidence that investments on commodity and
homes and left hundreds of properties to become trash-strewn food markets are causing food shortages and hunger. Financial
crime magnets. The Deutsche Bank suit involved about 2,000 institutions like Deutsche Bank and Goldman Sachs speculate
foreclosed homes. The claim against Deutsche Bank also noted with food at the expense of the impoverished. According to
that Deutsche Bank acquired hundreds of properties from a report titled “Die Hunger-Macher” (“The Hunger Makers”),
tenants who were illegally forced out. According to city of- there is a close correlation between speculation and rising food
ficials Deutsche Bank is “one of the worst and [least] accessible prices.7 According to the analysis of Olivier de Schutter, the UN
culprits.”4 special rapporteur of the Right to Food program, “a significant
portion of the increases in price and volatility of essential
Deutsche Bank: Violations of Advice Obligations food commodities during the food crisis of 2007/2008 can
only be explained by the emergence of a speculative bubble.”8
In March 2011, Deutsche Bank was commanded by the
He attributes this specifically to the role of large institutional
German Federal Supreme Court (Bundesgerichtshof) to pay
investors such as hedge funds, pension funds, and investment
compensation to a mid-sized paper company for selling
banks. Speculators who bet on rising prices and volatile prices
them interest rate swaps without adequately disclosing the
of agricultural raw materials can reap large returns. People liv-
risks of the products.5
ing in poverty are left without protection as they contend with
subsequent exploding food prices and extreme price volatility.
In reaction to these reports and analyses, several German
financial institutions, such as Commerzbank, discontinued
speculation on basic food commodity prices. For now, Deutsche
Bank only contends that it will not issue new investment
products involving agricultural commodities this year while it
researches the impact of investment in commodities on food
prices.9
→→Barbara Happe & Thomas Küchenmeister
1 Levin, Coburn (2011): Report on Wall Street and the Financial Crisis. US Senate PERMANENT
SUBCOMMITTEE ON INVESTIGATIONS, April 2011.
2 http://www.wiwo.de/unternehmen/vorwurf-des-us-senats-deutsche-bank-ist-mitausloes- 6 http://www.stuff.co.nz/business/7903907/Banks-plundering-society-globally.
er-der-finanzkrise-seite-2/5260132-2.html 7 Foodwatch (2011): How Deutsche Bank, Goldman Sachs and Other Financial Institutions Are
3 http://www.spiegel.de/spiegel/print/d-83774701.html speculating With Food at the Expense of the Poorest.
4 http://www.focus.de/finanzen/news/banken-deutsche-bank-faengt-sich-naechste-us- 8 Oxfam (2011): Don’t gamble with food! How the German financial industry is making a
klage-ein_aid_624221.html business out of hunger, p. 1.
5 http://www.spiegel.de/wirtschaft/unternehmen/bgh-urteil-deutsche-bank-muss- 9 http://foodwatch.de/kampagnen__themen/nahrungsmittel_spekulation/aktuelle_nach-
schadensersatz-wegen-zinswetten-zahlen-a-752374.html richten/rohstoff_fonds_kuenftig_ohne_agrarprodukte/index_ger.html

Banks and Evil Acts
Example 2: Goldman Sachs
G oldman Sachs Group is an American multina-

tional investment banking firm that engages in
global investment banking, securities, investment
management, and other financial services, primarily for
institutional clients. They are recognized as one of the
premier investment banks in the world, but have sparked
a great deal of controversy over alleged improper practices,
especially since the global financial crises began in 2007.
“To put the problem in the simplest terms, the interests
of the client continue to be sidelined in the way the firm
operates and thinks about making money,” stated Greg
Smith, former vice president at Goldman Sachs, in his pub-
lic resignation letter.
Goldman Sachs and Food Speculation

Goldman Sachs is one of the largest players in the commod-
ity speculation market.
About 10 years ago the commodity market was a place
where farmers and food processors could meet and trade
their goods. They fixed prices for their products; this
protected the income of the farmer in the event that prices
fell, but also protected the processor in the event that prices
rose. A single speculator could be of use as an intermediary.
However, the number of speculators has grown steadily
since a political deregulation started in 1991. The specula-
tors purchase future grain from farmers and processors only
to sell it later for a higher price. Through their acquisitions,
they have increased demand and helped to artificially drive
up food prices. Then, when multiple speculators wish to sell
their ‘future’ grain, the price can potentially crash due to
excess supply. The price variations are felt most by the poor
who spend around 80% of their income on food. A price
increase of 71% (like in 2008) puts this basic need out of
reach for them, as the commodity prices have become too
unstable.1
In 2008, food prices reached historic highs. Hunger riots
broke out in over 30 countries and over 100 million people
became undernourished. Many more had to stop their edu-
cation or could no longer afford medical care.2
1 Herman MO, Not a game, speculation versus food security Oxfam issue briefing, oct
2011.
2 Friends of the Earth EU, Farming money: How European banks and private finance profit
from food speculation and land grabs, 2012.

Goldman Sachs and the Euro Crisis Goldman Sachs Rules the World
In the late 90s, just before the birth of the Euro, Greek ac- In the U.S., Goldman Sachs is nicknamed “Government Sachs”
countants found themselves in a tight spot. If Greece wanted due to the frequent changes by policy-makers between these
to participate in the new currency and fulfil the Maastricht two institutions and governments around the world. In 2010,
standard, they needed to rid themselves of 45% of their public a CBS News analysis of the revolving door between Goldman
debt. Such an economic miracle was not feasible in the short and government revealed at least four dozen former employ-
term, so they resorted to some creative accounting.3 Goldman ees, lobbyists, and/or advisers in high ranks of power both in
Sachs offered to exchange Greece’s foreign currency bonds into Washington and around the world.6
Euro, but at a fictitious price. This was called a cross-currency To name a few: Mario Draghi, now head of the central bank
swap. With this, Greece’s debts were artificially reduced by in Europe; Mario Monti, technocratic prime minister of Italy;
2.8 billion Euro. They didn’t, of course, receive this service as Robert Zoellick, former President of the World Bank; and
a courtesy from the bank. The Greeks paid 300 million Euro Lucas Papademous, until recently, Prime Minister of Greece.7
in commission for this accounting trick and every cent of that These institutions often staffed with former Goldman Sachs’
mislaid 2.8 billion will need to be repaid. Furthermore, the employees now require strict budgetary discipline and saving
agreed interest rate is rising every year, says financial journal- measures from the countries mostly affected by the debt crisis
ist Nick Dunbar in his book, The Devils Derivatives.4 in the euro zone. Drastic cutbacks in education, health care,
Through falsifying Greece’s books, Goldman Sachs played a and social benefits are the consequences. According to a recent
fundamental role in undermining the euro zone. Lastly, they Goldman Sachs report, some commentators warn of a financial
profit from a bankruptcy they partially caused by demanding coup d’état: “The more the Spanish administration indulges
such high interest rates.5 domestic political interests … the more explicit conditionality
is likely to be demanded.”
Goldman Sachs and the Housing Bubble Due to the concurrence of banks and government represen-
tatives, Goldman Sachs successfully circumvented trade regula-
Goldman Sachs was one of the key players in the U.S. housing
tions of high-risk derivates. Coincidentally, Goldman Sachs
crisis. In the late ‘90s, many U.S. banks sold mortgage loans to
representatives also took part in most advisory panels of the
people who were not creditworthy. Banks reshuffled and re-
EU Commission concerning financial market regulation.
packed these bad loans and sold them to investors around the
world. Hence, they passed the risk of default on to the inves-
Goldman Sachs and Weapons
tor, often not advising them of the chances that these loans
would never be repaid. Normally, a mortgage loan is a safe Goldman Sachs has held a position in the hall of shame ever
investment for a bank. If the customer cannot pay, the house is since 2007, when NGOs started investigating the links between
sold and the bank still gets its money back. However, so many financial institutions and cluster munitions producers. In con-
people ran into difficulties with their loans and were forced trast to some other financial institutions, Goldman Sachs never
foreclose that it put too many homes on the market and prices developed a policy to avoid doing business with this lethal
collapsed. Goldman Sachs was the first to see this crash com- industry sector. Over the years they have owned and managed
ing. They bought insurance en masse for this type of default so shares and bonds from Alliant Techsystems, Textron, and
they could double their profits: first by selling bad mortgage Lockheed Martin in addition to providing loans to Textron
loans, then from collecting the insurance money. and Lockheed Martin.8
→→Leen Schmücker
In 2010, Goldman Sachs was accused of securities fraud in a
civil lawsuit filed by the Securities and Exchange Commission,
which claimed the bank created and sold a mortgage invest-
ment that was secretly intended to fail. Goldman Sachs agreed
to pay $550 million in a settlement to the SEC. The company
did not admit or deny any wrongdoing.
3 A. Oey, Tegenlicht: Goldman Sachs en de vernietiging van Griekenland, 2011. 6 http://www.cbsnews.com/8301-31727_162-20001981-10391695.html
4 N.Dunbar, The devils derivatives, 2011. 7 Roche M., La Banque: comment Goldman Sachs dirige le monde, 2010.
5 http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs- 8 IKV Pax Christi & NetwerkVlaanderen/ FairFin, Worldwide investments in cluster
helped-greece-to-mask-its-true-debt-a-676634.html, 9-10-12. munitions, a shared responsibility, 2010- 2011 – 2012.

Harmful investments
Analysis of Financial Institutions
and their Harmful Investments
I n 2011, companies* documented in this report earned

combined revenues of at least €1.22 Trillion and achieved
net profits of more than €106 Billion. While a significant
amount was involved, it is impossible to specifically relate
these numbers to human rights violations and environmental
The resource extracting and mining industries dominate four
of the Top 5 slots for financial transactions investigated in
this report:
1. BHP Billiton (€10.330 Billion)
2. Glencore (€6.292 Billion)
damage. The financial institutions** who directly support and
3. ENI (€4.281 Billion)
thus benefit most from business activities resulting in proven
4. Rio Tinto (€3.316 Billion)
and postulated human rights violations and environmental
5. Coca Cola (€2.976 Billion)
damage include: BNP Paribas, Deutsche Bank, ING, Allianz,
UniCredit, and Commerzbank. Two of the investigated
The Top 5 companies in the defence sector whose shares and
financial institutions (PKO Bank Polski, and Pension Fund
bonds are managed by financial institutions investigated in
Anheuser-Busch), showed no involvement whatsoever in this
this report:
category. However, it should be noted that Pension Fund
Anheuser-Busch (like many other pension funds) does not 1. EADS
make its holdings public. 2. Lockheed Martin
3. General Dynamics
Since early 2010, the financial transactions between the select 4. Rheinmetall
16 financial institutions and 28 companies investigated in 5. Alliant Techsystems
this report amount to more than €44 Billion including loans
(more than €16 Billion), underwritings of shares and bonds The companies in the defence sector which had shares and
(more than €10 Billion), and managed shares and bonds (less bonds underwritten by the above mentioned financial institu-
than €18 Billion). tions include Rheinmetall und L3 Communications.
In the defence sector, the Top 5 recipients of loans from the

selected financial institutions in this report:
1. EADS
2. Rheinmetall
3. Textron
4. Lockheed Martin
5. L3- Communication

Ranking of total investments in select companies
(in € Million):
Rank Loans Underwritings S/B Managing S/B Totals

1 BHP Billiton 7,246.17 1,698.72 1,385.11 10,330.00
2 Glencore International 3,730.21 2,407.50 155.25 6,292.96
3 ENI 981.82 888.18 2,411.28 4,281.28
4 Rio Tinto 374.34 1,391.90 1,550.34 3,316.58
5 Coca-Cola 1,623.29 1,352.85 2,976.14
6 Royal Dutch Shell 2,528.02 2,528.02
7 Anglo American 333.34 549.23 1,530.33 2,412.90
8 Anadarko Petroleum 1,076.62 341.14 867.64 2,285.40
9 Vale 175.06 641.00 1,443.82 2,259.88
10 Samsung Electronics 1,537.60 1,537.60
11 Barrick Gold 462.68 62.66 972.46 1,497.80
12 EADS 656.25 0.00 508.53 1,164.78
13 Rheinmetall 264.93 629.05 102.44 996.42
14 Lockheed Martin 71.92 366.29 438.21
15 Wilmar International 337.79 16.61 354.40
16 L-3 Communications 50.67 221.39 66.13 338.19
17 Vedanta Resources 129.67 170.34 300.01
18 Hon Hai Precision Industry 102.50 190.39 292.89
19 Hennes & Mauritz (H&M) 247.42 247.42
20 Alpha Natural Resources 17.10 8.84 215.01 240.95
21 General Dynamics 0.00 158.04 158.04
22 Textron 101.14 41.66 142.80
23 Flextronics International 124.84 17.65 142.49
S/B=Shares and bonds
24 Alliant Techsystems 21.62 97.60 119.22 Source: Profundo: Dirty Profits,
25 Drummond 39.24 39.24 Report on companies and financial
institutions benefiting from violations of
26 Heckler & Koch 9.11 9.11
human rights.
27 Paladin Energy 1.11 1.11 A research paper prepared for FACING
28 Hanwha 0.08 0.08 FINANCE, 10 November 2012.
16,168.24 10,592.57 17,943.11 44,703.92

Harmful Investments
Ranking of Financial Institutions and their transactions with select companies

(in € Million):
Rank Financial Institution Management S/B Underwriting S/B Loans Totals

1 BNP Paribas 3,155 4,494 5,674 13,323
2 Deutsche Bank 3,998 3,305 2,287 9,590
3 ING 1,759 1,009 3,760 6,528
4 Allianz 5,085 20 5,105
5 UniCredit 707 1,285 3,094 5,086
6 Commerzbank 449 498 1,049 1,996
7 DZ Bank 1,301 131 1,432
8 DekaBank 780 780
9 KBC 364 57 421
S/B=Shares and bonds
10 Munich Re 230 230 Source: Profundo: Dirty Profits,
11 LBBW 95 95 Report on companies and financial
institutions benefiting from violations of
12 KfW 94 94
human rights.
13 Argenta 16 16 A research paper prepared for FACING
14 BayernLB 5 5 FINANCE, 10 November 2012.
44,702

Top Financial institutions and their financial
transaction with selected companies
BNP Paribas
There are four domestic markets in retail
banking: Belgium, France, Italy, and Luxem-
bourg.
Total assets 2011: €1.96 Trillion

Net profits 2010: €7.84 Billion
2011: €6.05 Billion
B NP Paribas Fortis Belgium is the com-

mercial name for Fortis Bank NV/SA
(an international bank based out of
Belgium) since the purchase of 75% of its shares
by BNP Paribas. BNP Paribas Fortis is ranked
BNP Paribas’ investments not only violate
the principles of the organizations mentioned
above, but also their own policies and princi-
ples. BNP Paribas states that the pillars of their
sustainable development policy are: economic
Loans (€ Million):
BHP Billiton
Glencore
ENI
Underwriting S/B (€ Million):

2,892.73
756.11
490.91
Glencore 1,455.57
first in deposits and second in consumer lend- responsibility (financing the economy in an Rio Tinto 726.70
ing in Belgium. ethical manner), social responsibility (pursuing BHP Billiton 721.48
The shareholders of Fortis Bank NV/SA are: a committed and fair human resources policy), Management S/B (€ Million):
BNP Paribas (74.93% of the share capital), the and environmental responsibility (combating ENI 1,377.71
Belgian state (25% through SFPI/FPIM), and the climate change).1 Their list of Environmental Royal Dutch Shell 609.12
Samsung Electronics 430.88
public (0.07%). Responsibility Commitments claims that their
BNP Paribas is a member of the executive approach “takes into account every aspect of S/B = Shares & Bonds
committee of the UN Global Compact and a the environment, including biodiversity, water,
signatory of the Equator Principles. It is also natural resources, climate, etc.”2
partner of environmental initiatives like the BNP Paribas’ commitment to human rights,
Carbon Disclosure Project and a signatory of labour standards and environmental issues
the Principles of Responsible Investment. BNP cannot be taken serious as long as they con-
owns shares in almost every company (24 of tinue to invest in companies which do not
28) analysed in this report with remarkable respect these issues.
shareholdings in ENI (€1,377 Billion). They
also provided BHP Billiton with the largest
loan identified in this report (€2.892 Billion).
One would assume, given such a back-
ground, that BNP Paribas would be compelled
to consider environmental and social issues
in their investment decisions. However, BNP
Paribas is highly invested in companies which
cause damage to the environment and violate
human rights and labour standards. As this
report shows, BHP Billiton, Glencore, ENI,
Royal Dutch Shell, Vale, Coca-Cola, H&M, and
Samsung are among these companies.
1 http://media-cms.bnpparibas.com/file/58/2/bnpp_rse_2011_
gb.26582.pdf
2 BNP Paribas „Environmental Responsibilty Commitments“

Harmful investments
Deutsche Bank
Deutsche Bank
As of December 31, 2010, BNP Paribas operated
As of December 31, 2010, Deutsche inBank operatedand controlled 3,083 branches
74 countries
in 72 countries and controlled 3,083
(68%branches
of which were in Germany) worldwide.
(68% of which were in Germany) worldwide.
Total assets (as of September 30, 2012):
Total assets 09/2012: €2.16 Trillion
€2,186 Billion
Net income 2010: €2.33 Billion Net income: (2010):
2011: €4.32 Billion €2.3 Billion; (2011): €4.3 Billion
Glencore
Anadarko
BHP Billiton

756.11
444.50
243.28
D eutsche Bank Group has committed
itself to a large number of voluntary
initiatives such as the UN Global
Compact, Carbon Disclosure Project, Global
Reporting Initiative, UNEP FI, etc. . Deutsche
Hence, Deutsche Bank still provides loans to
manufacturers of nuclear weapons like EADS,
Lockheed Martin and General Dynamics. They
are also invested on a small scale in Hanwha,
an alleged producer of anti-personnel mines
Coca-Cola 1,158.37
Rio Tinto 665.20
Bank is also stating that they have different and cluster munitions.
Anadarko 321.98 credit directives on sensitive sectors like metals Regarding environmental protection,
Management S/B (€ Million):
and mining, oil and gas, chemicals etc. in place, Deutsche Bank claims not to “finance certain
Anglo American 948.87 which are not disclosed. globally banned products, e.g. CFC, asbestos”
Coca-Cola 559.32 Despite this, they still finance companies and to “protect natural resources such as air,
BHP Billiton 332.81
that are breaching human rights and environ- water, and soil”. Thus, Deutsche Bank invests
S/B = Shares & Bonds mental standards. Deutsche Bank manages in mining companies such as Barrick Gold,
shares in almost every company (26 of 28) Rio Tinto, and Vedanta which are rejected by
analysed in this report. They focus on the ex- other financial institutions like the Norwegian
tractive industry and weapons producers. Pension Fund.2
In November 2011, only due to massive Deutsche Bank is also involved in compa-
media and NGO campaigns, Deutsche Bank nies that violate labour rights. Although claim-
finally decided to stop the financing of cluster ing to respect the UN Global Compact and ILO
munitions producers. Until now, this policy is norms3, Deutsche Bank manages shares of Flex-
not implemented. Especially the asset manage- tronics, Hon Hai, and Samsung Electronics –
ment branch of Deutsche Bank is still heavily companies which benefit from child labour, do
involved in cluster munition producers. Aside not respect national working time regulations,
this, Deutsche Bank provides loans to cluster and pay their employees below the decent
munitions producers such as L-3 Communi- living wage.
cations and recently to Lockheed Martin in
August 2012.
Similarly, the affirmation of Deutsche Bank
not to “consider any involvement in trans
actions connected with specific types of weap-
ons, in particular antipersonnel landmines,
cluster bombs or ABC weapons,”1 only refers
specifically to the financing of weapon systems
themselves, but not to the producers.
2 http://www.regjeringen.no/en/dep/fin/Selected-topics/
the-government-pension-fund/responsible-investments/
companies-excluded-from-the-investment-u.html?id=447122
3 http://www.banking-on-green.com/en/content/our_sustainabili-
1 https://www.db.com/ir/de/images/SRI_Roadshow_Paris_15_ ty_approach/labour_rights.html, https://www.db.com/ir/de/
February_final.pdf images/SRI_Roadshow_Paris_15_February_final.pdf

ING
ING offers banking, investments, life insurance,
and retirement services.
Total assets 2011: €1.27 Trillion

Net result 2010: €2.81 Billion
2011: €5.76 Billion
I NG Belgium (formerly Banque Bruxelles

Lambert / BBL) is the fourth-largest
commercial bank in Belgium. ING has two
banking networks in Belgium: ING Belgium, a
universal bank, and Record Bank, a retail bank
devastate primary forests in Indonesia and
Brazil, which as of yet, have not been certified
by the FSC.
Similar to the forestry policy, the scope
and guidelines for natural resource industry
BHP Billiton
Glencore
Anadarko

2,114.16
1,051.38
210.60
Glencore 520.87
which is a subsidiary of ING Belgium. are limited and only apply to certain certified BHP Billiton 488.62
ING claims to follow the Equator Principles areas such as UNESCO World Heritage sites.
Management S/B (€ Million)
in their project financing and thus requires The mines of Glencore, BHP Billiton, Rio Tinto, Royal Dutch Shell 365.49
environmental and social assessments and and Barrick Gold are thus not covered by ING’s Rio Tinto 229.75
minimum standards from their clients. Also, policy. Of the financial institutions analysed Barrick Gold 229.24
in signing the UN Global Compact, they have in this report, ING is the most actively involved S/B = Shares & Bonds
committed themselves to core human rights in these companies.

and environmental values. ING established a comprehensive policy re-
Furthermore, they have crafted policies on garding weapons, especially cluster munitions.
forestry and plantation, natural resources, and However, it doesn’t apply to the whole compa-
defence and manufacturing, among others.1 ny as a United States asset management branch
Most of these policies, however, are too brief still owns shares in Alliant Techsystems, Gen-
to provide useful or efficient guidelines. eral Dynamics, L-3 Communications, Lockheed
ING manages shares in almost every com- Martin, and Textron. ING took at face value
pany (24 of 28) analysed in this report. Focus- EADS’ guarantee not to use their loan towards
ing mainly on the natural resource extraction nuclear-weapons related activities. Thus they
industry, ING gave remarkable loans to BHP became participants in a syndicate which pro-
Billiton (€2.114 Billion) and Glencore (€1.051 vided a 3 billion Euro loan to EADS.
Billion). ING’s policy on labour rights refers to the
According to the policy on forestry and textile industry, among others. Nevertheless,
plantation, ING does not support the financing their US branch manages shares from Hennes
of deforestation or indigenous peoples’ loss of & Mauritz. Furthermore, the policy doesn’t
livelihood. However, this policy only applies to mention the electronic industry. Accordingly
so-called “High Conservation Value Forests” ING has investments in Flextronics, Hon Hai,
as certified by the Forest Stewardship Council. and Samsung. Hon Hai was also given a loan
As such, ING can still invest in or provide loans for its subsidiary in Slovakia.
to companies – like Wilmar and Vale – that
1 http://www.ingforsomethingbetter.com/our-approach/business/

Harmful investments
Allianz Allianz
In view of revenue and market capitalization,
In view of revenue and market capitalization,
Allianz SE is the world’s largest insurance
Allianzcom
SE ispany
the world’s largest insurance compa-
and one of the largest financial service
ny and
groups.
one of the largest financial service groups.
Total assets 2011: €641.50 BillionTotal revenue (2011):

Net profit 2011: €2.80 Billion €103,560 million
2010: €5.20 Billion Net profit: (2011):
€2,804 million; (2010): €5,209 million
Glencore

Royal Dutch Shell
Vale
779.38
695.33
20.49
A llianz SE is a participant of the
UN Global Compact and therefore
declares itself committed to the
compact’s ten principles – in particular, respect-
ing human rights, labour standards, and the
Investors Europe do not invest in companies
that manufacture cluster bombs or anti-person-
nel mines.”5
This policy only applies to the mutual funds
managed by AGI Europe. However, Allianz
Rio Tinto 545.24
environment.1 Furthermore, they are signato- subsidiaries in the United States and United
S/B = Shares & Bonds
ries of the Principles of Responsible Investment Kingdom continue to manage shares and bonds
which demand that environmental, social, and from companies like Alliant Techsystems,
corporate governance (ESG) issues be taken into General Dynamics, L-3 Communications, Lock-
account during the investment decision mak- heed Martin, and Textron. Besides this,
ing process.2 Allianz’s policy claims to provide Allianz manages shares of producers of nuclear
financial resources for a sustainable social con- weapons like EADS and Lockheed Martin.
tribution, to properly address climate change,3 The policy on cluster munitions is the only
and to “devote corporate skills and resources to one that AGI Europe has drafted. Currently,
local communities.” 4 other subsidiaries do not have specific policies
However, this report shows that Allianz in place to deter investment in cluster muni-
is highly invested in companies which cause tions or other controversial issues. Another
severe damage to the environment and do not important subsidiary of Allianz, Pimco, for
respect human or labour rights. Allianz owns example, signed the UN Principles of Respon-
shares in almost every company (24 of 28) sible Investment (PRI) in 2011, because they
analysed in this report and is focused on the ex- reflected “the view that ESG issues can affect
tractive industry, in example Rio Tinto, which the performance of investment portfolios.”
is excluded from the investment universe of In Pimco’s view, the consideration of ESG issues
the Norwegian Pension Fund. “may help reduce the risk of negative surprises
Allianz runs their investments through and increase the long-term quality of managed
their subsidiary Allianz Global Investors (AGI). portfolios.” 6
The European branch of AGI has a specific Despite this, Pimco manages bonds from
policy on controversial weapons, in which they 15 of the select companies, among them:
state that the “mutual funds of Allianz Global Anadarko, Anglo American, Barrick Gold, BHP
Billiton, Coca-Cola, Rio Tinto, Royal Dutch
Shell, Vale and Vedanta.
“We want to actively use our

experience to the benefit of
our customers and shape our
environment in a sustainable 1 http://www.unglobalcompact.org/
2 www.unpri.org
manner.” *
3 https://www.allianz.com/de/verantwortung/stakeholder/ 5 https://www.allianzglobalinvestors.de/web/main?page=/cms-out/
umwelt.html ueber-uns/press/releases/2011/PM_20110124_01.html
* www.allianz.com 4 Allianz Group Sustainability Performance 2011 6 http://media.pimco.com/Documents/UNPRI.pdf

UniCredit Group
UniCredit’s core markets are Italy, Austria,
and Germany.
Total assets 03/2012: €933.10 Billion

Net profits 2010: €1.32 Billion
Net loss 2011: €9.20 Million
I n Germany, UniCredit Group operates

under the names UniCredit Bank AG and
the branch HypoVereinsbank. The Allianz
Group is one of UniCredits key shareholders
(2%). UniCredit’s asset management is carried
Regarding environmental protection, Uni-
Credit is partnered with several environmental
initiatives including the UN Global Compact, the
Carbon Disclosure Project, the UN Environment
Programme’s Finance Initiative (UNEP-FI), and
BHP Billiton
ENI
Glencore

1,996.00
490.91
425.51
BHP Billiton 481.10

out by Pioneer Investment, whose financial others.4 ENI 409.09
products and services are offered in Italy, UniCredit manages shares in almost every Rheinmetall 265.24
Germany, Poland, Luxemburg, and many other extractive industry analysed in this report – the Management S/B (€ Million):
countries. biggest shares being in ENI, Rio Tinto, and Alpha ENI 93.35
Generally, UniCredit claims to be commit- Natural Resources. They also issued new bonds Samsung Electronics 84.17
Rio Tinto 81.12
ted to a wide range of standards. In example, for BHP Billiton, ENI, and Vedanta, and provided
they are signatories of the UN Global Compact1 loans to BHP Billiton, ENI, and Glencore. S/B = Shares & Bonds
and the Equator Principles.2 UniCredit also claims to “address the particu-
The UniCredit Group also claims to operate lar challenges posed by the nuclear sector” and
in accordance with the Universal Declaration accordingly made up a “Nuclear Energy Industry
of Human Rights and the International Cov- Policy”.5 Yet, this policy doesn’t cover the first
enants on Civil and Political, and Economic, step in the nuclear power production: extraction.
Social and Cultural Rights. Additionally, they Thus, UniCredit allows itself to invest in Paladin
allege support for the ILO Fundamental Hu- Energy and Rio Tinto, two companies which run
man Rights Convention.3 uranium mines in Namibia and Malawi.
However, this report shows that they are in- UniCredit’s policy on weapons alleges to
volved in a number of controversial companies. refrain from financial transactions that involve
UniCredit manages shares in almost every nuclear weapons and cluster munitions.6 How-
company (23 of 28) analysed in this report ever, UniCredit’s investment branch Pioneer is
and is focused on the extractive industry. They invested in Alliant Techsystems, General Dyna
also manage shares from the retailer Hennes & mics, L-3 Communications, whereas Unicredit
Mauritz, the electronic industry supplier provided a loan to EADS.
Hon Hai Precision Industry, and Samsung
Electronics, all of which are accused of workers’
rights violations or benefit from child labour.
4 https://www.unicreditgroup.eu/en/culture---society/environment.html
1 https://www.unicreditgroup.eu/en/sustainability/reporting---
5 https://www.unicreditgroup.eu/content/dam/unicreditgroup/
metrics/global-compact-principles.html
documents/en/sustainability/our-vision-of-a-sustainable-bank/
2 https://www.unicreditgroup.eu/content/dam/unicreditgroup/ governance-and-sustainability/Highlights_Nucl_Position_
documents/en/sustainability/our-vision-of-a-sustainable-bank/ Statemnt_ENG_new.pdf
governance-and-sustainability/Human_Rights_Commitment.pdf p.6
6 https://www.unicreditgroup.eu/content/dam/unicreditgroup/
3 https://www.unicreditgroup.eu/content/dam/unicreditgroup/ documents/en/sustainability/our-vision-of-a-sustainable-bank/
documents/en/sustainability/our-vision-of-a-sustainable-bank/ governance-and-sustainability/UniCredit_Position_Statement_On_
governance-and-sustainability/Human_Rights_Commitment.pdf Defence_English_new.pdf

Harmful investments
Commerzbank
Commerzbank
Commerzbank is Germany’s second-largest
Commerzbank is Germany’s second-largest
bank. They are mainly active in commercial
bank. They are mainly active in commercial
banking, retail banking and mortgaging.
banking, retail banking and mortgaging.
However, investment banking, equities, and
However, investment banking, equities, and banking operations are now integrat-
corporate
corporate banking operations are now
ed asintegrat-
divisions of the Commerzbank group.
ed as divisions of the Commerzbank group.
Total assets (as of December 31, 2011):
Total assets 2011: €622.00 Billion€662 Billion
Net profit 2010: €1.43 Billion Net profit (2010):
2011: €638.00 Million €1.43 Billion; (2011): €638 Million
Glencore
Anglo American
EADS

700.12
166.67
93.75
C ommerzbank has commited itself to
several international voluntary initia-
tives like the UN Global Compact,
Carbon Disclosure Project, Global Reporting
Initiative, etc. . Commerzbank is also a corpo-
munitions and nuclear weapons).2 However,
Commerzbank is invested in producers of
nuclear weapons like General Dynamics, Lock-
heed Martin and EADS. In addition, Commerz-
bank has granted a loan to EADS.
Anglo American 281.26
Glencore 118.56
rate member of Transparency International. With its participation in the UN Global
Rheinmetall 98.57 The bank has drawn up guidelines and policies Compact, Commerzbank is committed to not
in relation to human rights, conflict zones, fos- violate human rights by its business activities.
EADS 168.67 sil fuels, power generation, indigenous peoples, This stance is clearly in contradiction to the
ENI 134.45 agriculture and forestry, mining, and toxic bank’s transactions with mining companies
Coca-Cola 80.42
substances. With this, the bank at least dem- like Anglo American and Glencore.
S/B = Shares & Bonds onstrates an increased awareness in relevant What’s more, Commerzbank claims not to
areas, both inside and outside Germany.1 participate in transactions related to the exploi-
Commerzbank manages shares in 16 com- tation of oil-tar sands or similar controversial
panies analysed in this report and is focused methods of extracting oil and gas. However,
on the extractive industry and weapons produc- Commerzbank should scrutinize this in view
ers including a remarkable loan provided to of its investments in ENI, as this company
Glencore. is on the brink of tar sands exploration in the
Commerzbank’s “weapon guidelines” DR Congo.3
prohibit any direct participation in deliver-
→→Julia Dubslaff, Barbara Happe,
ing weapons or military equipment to areas of Jan Schulz & Thomas Küchenmeister
conflict and tension. However, Commerzbank
is still providing financial services to Rhein-
metall, which produces and exports the main
battle tank Leopard 2 to areas, i.e., Saudi
Arabia and Indonesia where human rights
are scantily respected.
Moreover, Commerzbank is self-committed
not to perform financial transactions related
to “controversial weapons” (including cluster
2 During the period of investigation the PROFUNDO research shows,

that Commerzbank has not cut all business relations with
1 https://www.nachhaltigkeit.commerzbank.de/de/internetportal/ companies producing cluster munitions or components of these
governance/internerichtlinien/internerichtlinien.html weapons like Textron, Lockheed Martin, L-3 Communications and
http://nachhaltigkeit2011.commerzbank.de/reports/ General Dynamics.
commerzbank/annual/2011/nb/English/5010/cr-programme. 3 https://www.nachhaltigkeit.commerzbank.de/de/internetportal/
html?search_keywords=weapons governance/internerichtlinien/internerichtlinien.html

Recommendations
and Demands
D uring the 1980’s human rights accuses particularly by

the extractive and infrastructure industries received
increased attention by media and NGOs. Companies
willing to commit the worst human rights abuses flocked to
areas of conflict or countries with highly corrupt governments
where their actions would go unnoticed. Here, human and
labour rights violations such as unregulated land acquisition,
the forced displacement of populations with little or no com-
pensation, refusal of access to necessities, pollution of drinking
water, destruction of livelihoods, and the suppression of rights
like the freedom of assembly became commonplace.
This report calls on financial institutions (FIs) to become
significantly more accountable in order to eliminate human
rights abuses, environmental damages, and tax evasion. They
must also implement policies to prevent corporations from
violating international norms and standards.
Indeed, several financial institutions have expressed their
support for human and environmental rights in recent years
through various policy statements and by signing voluntary
initiatives such as the United Nations Global Compact, the
Principles for Responsible Investment, the Equator Principles,
etc. .
Nevertheless, a large gap still exists between these nonbind-
ing policies and principles and the actual investment practices
of financial institutions. The Dirty Profits financial analysis
proves that financial institutions continue to finance com-
panies and projects which commit serious human rights and
environmental violations.
Binding regulation for financial institutions is therefore

necessary in order to adequately address environmental and
human rights issues. Decision makers have to increase control,
inspection criteria, and sanctions for offending financial
institutions.
Financial institutions are urged to develop and implement
binding standards of practice as this is their only opportunity
to regain credibility. These standards should encompass the
following commitments:

Recommendations
and Demands
Commitment to a Binding Sustainability Approach “As financing is the strongest
FIs must implement a sincere approach to social and environ-
mental sustainability which takes into account the impact of support for economic activity,
their investment and business decisions. Such a commitment
should not simply repeat the countless nonbinding and inef- investors must implement
fective self-commitments that are already in effect. Rather,
FIs should rectify controversial issues in important sectors by strong and binding standards
clearly defining their social and ecological core values and ac-
cordingly developing and implementing solid investment poli- regarding the social and eco
cies. Furthermore, principles must apply to EVERY relevant
area of business, not just to “unproblematic” sectors e.g. apply- logical impact of their invest-
ing the Equator Principles to project financing. Furthermore,
FIs should terminate all direct and indirect business relations ment decisions.”
with companies which finance harmful projects or products.
Thomas Küchenmeister, Coordinator FACING FINANCE
Commitment to “Do Not Harm”
FIs should cease investment in socially and environmentally
harmful activities or companies. Listed below are products and
business activities that should be excluded from investment
and financing.
We implore FIs to abolish finance and investment in:
→→ The arms industry – military expenditure burdens bud-

gets, hampers social and developmental expenditures, and
impedes the achievement of the UN Millennium Develop-
ment Goals (MDG) in many countries. Furthermore, the
arms trade is widely considered to be a leading contributor
to poverty and instability.
→→ The coal industry and fossil fuel projects (e.g. lignite, oil/tar technologies that do not meet western standards. Attention
sands, and mountaintop removal mining) – greenhouse gas should also be paid to the mining industry as the extraction
emissions caused by the use of fossil fuels, especially coal, of raw materials like gold and coltan often leads to severe
are among the leading causes for climate change. environmental damages and violations of human rights,
e.g., the situation surrounding the disposal of mine tailings.
→→ The extraction of fossil fuels – especially highly contro FIs therefore need to pay attention to the track record of
versial, destructive technologies like fracking and other mining companies, and exclude those with inferior stan-
methods which require the non-conventional extraction of dards of operation. In general, they need to pay closer
hydrocarbons. These technologies severely damage the attention to the environmental, social, and human rights
environment. Furthermore, financial institutions need to violations of the mining industry as a whole.
stop financing outdated mineral extraction and processing
→→ The nuclear industry (including uranium mining) – as
nuclear power is the most controversial and dangerous
form of energy production.

Commitment to Accountability and Transparency
→→ Companies and projects damaging the environment or FIs must be more transparent towards their stakeholders. Com-
breaking international law – such as logging and extraction mercial confidentiality should no longer be used as a universal
operations taking place in areas that are protected, vulner- excuse to deny stakeholder information. As financiers, FIs are
able, or carry a high conservation value. responsible for the impacts of their clients’ operations. FIs
should report on the companies, projects, and countries they
→→ Companies and projects involved in forced displacement or finance on a regular basis, e.g., through their CSR publications.
which disregard the land or human rights of local popula- Transparency can also serve a bank’s interests by ensuring
tions and indigenous people. that public concerns regarding the activities they intend to
finance are communicated and resolved before they become
→→ Companies who disrespect fundamental international conflicts. For this reason, multilateral development banks, (e.g.,
labour and human rights standards according to the ILO – IFC), have adopted accessible information policies that, while
such as those who fail to prevent child and forced labour inadequate, provide basic data on pending transactions. Such
and discrimination, as well as those who deny freedom of policies prove that it is possible to overcome client confidenti-
association, the right to collective bargaining, a safe and ality concerns that are often used as a categorical excuse not to
healthy workplace, fair wages, and decent working hours. disclose information.
→→ Companies that refuse to restore adequately compensate Commitment to Remedy

communities for the environmental damage of their opera-
FIs should demand the implementation of consultation and
tions.
grievance mechanisms for their clients in order to ensure an ef-
fective and adequate consultation process for affected commu-
→→ Companies engaged in corruption, illegal activities, or
nities. FIs could use the mechanisms of multilateral develop-
investing in areas of conflict.
ment banks like the IFC as a guide. Their requirements provide
project assessment and consultation processes which include
→→ Companies involved in tax evasion. FIs should not assist
more stringent mitigation and compensation measures, par-
companies or individuals in tax evasion as governments
ticularly regarding indigenous peoples.
around the world lose around $255 billion every year due
Given that FIs bear responsibility for the negative impacts
to tax evasion. This amount would be more than sufficient
of the activities which they finance, they should be required
to plug the financing gap identified by the UN Millennium
to provide compensation for environmental damages and/or
Development Goals to cut world poverty in half by 2015.
human and labour rights violations. In order to ensure that FIs
take their social and environmental responsibilities seriously,
→→ Furthermore, FIs should stop speculation on land and
there should be a voluntary “verification fund” under interna-
related damaging investments which affect the global food
tional, independent supervision, e.g., the UN.
chain, including land deals (e.g., where land grabbing can-
not be excluded ex ante), financial participation in agribusi-
Banks still have a long way to go in order to restore their
nesses, and investing in complex financial products based
reputation after years of neglecting environmental and human
on food commodity derivatives or agricultural land.
rights standards. Although FIs have increased emphasis on
sustainability issues, this study shows they do not have a com-
This list does not claim to be all-encompassing but it outlines
prehensive framework to adequately address unsustainable and
the most controversial and harmful technologies, industries,
irresponsible business practices.
and processes related to violations of human rights mentioned
In conclusion, FIs can only regain credibility by develop-
in this study.
ing and implementing clear and binding investment criteria.
Lastly, supervision and legal regulation is needed in order to
stop the worst practices of the finance industry.

Attachments
Shares and bonds managed
by selected financial institutions
(€ Million)
Commerzbank
BNP Paribas
DekaBank
BayernLB
Argenta
Allianz
Company
S B S B S B S B S S B
Alpha Natural Resources 12.78 15.36 1.37 4.52 1.39 0.02
Anadarko Petroleum Corporation 64.31 274.70 0.18 0.07 20.44 0.56 3.90 3.02
Anglo American 111.78 197.97 0.43 0.09 0.45 14.96 7.63 46.57 9.80
Alliant Techsystems 65.05 10.53 0.62
Barrick Gold Corporation 266.94 230.87 0.05 9.76 0.05 12.01 37.44
BHP Billiton 220.84 220.10 2.86 0.70 78.66 12.69 0.92 81.19
Coca-Cola Company 233.44 46.62 0.39 0.39 93.23 80.42 33.36
Drummond Company
EADS 72.05 2.07 1.92 3.87 168.67 45.54 9.76
ENI 102.87 21.36 2.08 1.28 0.79 1.05 1,343.99 33.72 134.35 124.03 22.12
Flextronics International 0.10 7.16 0.07 0.55
General Dynamics 15.39 2.04 5.89 0.35
Glencore International 7.06 6.14 0.44 0.20 1.90 1.04 0.22
Hennes & Mauritz (H&M) 124.49 2.52 0.11 37.69 8.67
Hanwha Corporation
Heckler & Koch
Hon Hai Precision Industry 18.48 1.96 13.78 0.70 4.23
L-3 Communications 18.56 7.45 0.25 10.40 1.78 0.06
Lockheed Martin 243.40 4.69 2.60 5.73 0.88
Paladin Energy 0.54
Rheinmetall 13.96 8.32 11.37 0.45
Rio Tinto 336.03 209.21 1.62 0.20 92.68 0.99 118.23 0.77
Samsung Electronics 398.47 1.39 430.88 5.73 18.35
Royal Dutch Shell 694.31 85.07 3.32 0.99 606.12 3.00 16.16 188.62 0.20
Textron 14.45 8.47 1.02 1.87 0.09
Vale 278.00 417.33 293.13 10.02 8.86 8.77 1.00
Vedanta Resources 4.29 7.86 0.10 2.85 0.02 1.93
Wilmar International 0.95 0.25 1.93
# of companies 24 11 10 24 16 23
Total value 3,317 1,768 15 1 3 2 3,063 92 449 732 48
Source: PROFUNDO – Dirty Profits, Report on companies and financial institutions benefiting from violations of human rights.
A research paper prepared for FACING FINANCE, 10 November 2012.

Deutsche Bank
Munich Re
UniCredit
DZ Bank
LBBW
KBC
ING
S B S B S B S B S B S B S B
64.06 11.95 0.19 4.47 17.78 0.09 0.01 0.09 80.93
255.17 1.43 27.83 45.17 103.19 15.37 1.07 0.07 22.86 28.30
947.82 1.05 106.00 12.60 19.06 11.03 4.66 2.97 11.46 4.55 0.25 0.20 19.00
20.69 0.58 0.13
107.59 4.86 27.27 135.49 93.75 1.74 4.55 8.07 20.68 10.96 0.38
321.53 11.28 119.88 0.30 115.10 63.67 20.33 3.02 32.56 0.50 0.41 19.96 26.09 32.52
559.23 0.09 0.19 89.01 68.04 50.51 1.31 0.23 10.09 7.71 78.59
141.08 14.40 22.54 20.58 2.34 1.10 1.10 1.51

126.25 64.86 162.42 9.81 22.98 44.57 51.41 24.63 2.51 6.90 13.40 0.55 69.04 24.31
6.19 0.49 3.09
59.46 0.08 74.44 0.22 0.17
21.19 28.64 11.95 35.07 6.75 15.08 0.71 6.87 4.56 0.90 0.06 6.47
42.36 20.35 0.95 2.86 2.19 0.54 4.69
0.08
9.11
70.68 19.63 11.96 0.39 28.98 2.96 4.87 11.77
14.86 3.10 6.30 0.62 0.08 2.46 0.21
67.99 0.17 14.23 4.26 0.26 22.08
0.23 0.15 0.02 0.17
43.05 13.01 4.01 0.63 2.00 5.64
172.26 11.27 208.30 124.95 104.80 23.82 1.08 20.81 3.60 38.60 81.12
225.58 234.62 94.03 43.71 0.67 84.17
203.38 2.10 222.90 0.75 289.32 76.17 44.27 12.59 0.75 0.71 22.54 40.07 14.68
8.89 2.49 4.31 0.07
233.52 44.46 36.90 2.35 16.54 26.39 12.14 1.93 1.89 29.62 18.64 2.33
74.04 13.56 2.16 0.30 7.03 1.27 1.67 0.11 53.15
3.55 1.54 7.19 0.41 0.74 0.05
26 18 24 23 13 15 23
3,791 207 1,232 69 1,123 636 301 63 74 21 43 187 477 230

Attachments
Underwritings of shares and bonds
per selected financial institution
(€ Million)
Deutsche Bank
Commerzbank
BNP Paribas
UniCredit
ING
Company
SI BI SI BI SI BI SI BI SI BI
Alpha Natural Resources 8.84
Anadarko Petroleum Corporation 19.16 84.95 237.03
Anglo American 267.97 281.26
Alliant Techsystems
Barrick Gold Corporation 31.33 31.33
BHP Billiton 721.48 7.52 488.62 481.10
Coca-Cola Company 464.92 1,158.37
Drummond Company
EADS
ENI 479.09 409.09
Flextronics International
General Dynamics
Glencore International 1,053.26 402.31 118.56 312.50 118.56 402.31
Hennes & Mauritz (H&M)
Hanwha Corporation
Heckler & Koch
Hon Hai Precision Industry
L-3 Communications 221.39
Lockheed Martin
Paladin Energy
Rheinmetall 98.57 98.57 166.67 98.57 166.67
Rio Tinto 726.70 665.20
Samsung Electronics
Royal Dutch Shell
Textron
Vale 328.13 312.87
Vedanta Resources 129.67
Wilmar International
Involved in # of companies 9 3 10 2 4
Total Value 1,053 3,441 217 281 184 3,122 119 891 99 1,187
Source: PROFUNDO - Dirty Profits, Report on companies and financial institutions benefiting from violations of human rights.

Participation of selected
financial institutions in loans
(€ Million)
Deutsche Bank
Commerzbank
BNP Paribas
UniCredit
DZ Bank
Allianz
Company
KBC
KfW
ING
Alpha Natural Resources 17.10
Anadarko Petroleum Corporation 421.52 444.50 210.60
Anglo American 166.67 166.67
Alliant Techsystems 21.62
Barrick Gold Corporation 231.34 124.82 106.52
BHP Billiton 2,892.73 243.28 2,114.16 1,996.00
Coca-Cola Company
Drummond Company 39.24
EADS 93.75 93.75 93.75 93.75 93.75 93.75 93.75
ENI 490.91 490.91
Flextronics International 124.84
General Dynamics
Glencore International 20.49 756.11 700.12 756.11 20.49 1,051.38 425.51
Hennes & Mauritz (H&M)
Hanwha Corporation
Heckler & Koch
Hon Hai Precision Industry 102.50
L-3 Communications 50.67
Lockheed Martin 71.92
Paladin Energy
Rheinmetall 88.31 88.31 88.31
Rio Tinto 187.17 187.17
Samsung Electronics
Royal Dutch Shell
Textron 101.14
Vale 78.88 78.88 17.30
Vedanta Resources
Wilmar International 169.51 29.73 81.47 57.08
Involved in # of companies 1 13 4 13 3 7 1 1 5
Total amount (€ mln) 20 5,674 1,049 2,287 131 3,760 57 94 3,094
Source: PROFUNDO - Dirty Profits, Report on companies and financial institutions benefiting from violations of human rights.

Attachments
Norms Convention EPs (Equator Principles) and
and on Cluster EPFIs (Equator Principles
Standards Munitions Financial Institutions)
Abstract – Core Values Elaborated The Convention on Cluster Munitions pro- The Equator Principles are a voluntary set of
hibits the use, stockpiling, production, and standards adopted by financial institutions
Note: For the sake of brevity, many prin- transfer of cluster munitions. It addresses to fund major infrastructure and industrial
ciples have been condensed only to assistance to victims, clearance of contami- projects transactions. They are used for
contain clauses which pertain directly to nated areas and destruction of stockpiles, determining, assessing, and managing the
this document. Please consult the refer- and transparency measures as well as social and environmental risk in project
ences list at the end of this chapter to guidance to address possible compliance financing, particularly in emerging markets.
view the complete lists of values and prin- issues.1 77 states have ratified this treaty. EPFIs, or Equator Principle Financial Institu-
ciples for each organization. — tions, are Financial Institutions who have
Goal: To put an end to the suffering and made a commitment not to lend money
casualties caused by cluster munitions, towards any project that does not uphold
and ensure the rights of cluster munition these principles. 3
victims. —
Goal: Ensure that the projects we finance
→→ Article 1: Scope are developed in a manner that is socially
… never under any circumstances to use, responsible and reflect sound environmen-
develop, produce, acquire, stockpile, tal management practices .
retain, or transfer cluster munitions
→→ Principle 1 – Categorise project(s) based
→→ Article 3: Destruction on the magnitude of potential impacts
… separate all cluster munitions under and risks
jurisdiction and mark for destruction. →→ Principle 2 – Conduct Social and Environ-
mental Assessment to address relevant
→→ Article 4: Clearance social and environmental impacts/risks
… clear and destroy cluster munition of the proposed project
remnants under jurisdiction →→ Principle 5 – Consult with project af-
fected communities in a structured and
→→ Article 5: Assistance culturally appropriate manner
… collect reliable relevant data with →→ Principle 6 – Establish a grievance
respect to cluster munition victims. mechanism as part of the management
system
→→ Article 7: Transparency →→ Principle 7 – Appoint an independent
report to the Secretary-General of the social or environmental expert to review
United Nations the documentation and assess EP com-
(a) … implementation measures; pliance
(b) number of cluster munitions; →→ Principle 8 – Covenant in financial
(c) technical characteristics; and documentation terms of contract with
(d) status and progress of programme 2 affected governments, communities, and
laws
→→ Principle 9 – Appoint an independent en-
vironmental and/or social expert to verify
borrower’s monitoring information4

European Convention FAO ILO
on Human Rights Right to (International Labour
EMRK (ECHR) Food Organization)
The European Convention on Human Rights Right to Food supports the implementation The ILO – a United Nations international or-
outlines fundamental rights and freedoms of people’s right to adequate food, using ganization – is responsible for creating and
for people in Europe. It established the Eu- FAO’s (Food and Agriculture Organization) overseeing international labour standards.
ropean Court of Human Rights (ECtHR). Right to Food Guidelines. The premise The ILO registers complaints against enti-
— behind Right to Food relates back to the UN ties that are violating international rules;
Goal: For the Nations in Europe to collec- International Covenant on Economic, Social however, it does not impose sanctions. It
tively enforce certain rights in the Universal and Cultural Rights (see below): brings together representatives of govern-
Declaration of Human rights for all people Comment 12: The right to adequate food ments, employers, and workers to shape
throughout Europe. is realized when every man, woman and policies and programmes promoting Decent
child, alone or in community with others, Work for all. 8
→→ Article 11: has the physical and economic access at —
1. Freedom of peaceful assembly and as- all times to adequate food or means for its Goals: Promote and realize standards and
sociation with others, including the right procurement rights at work; Create greater opportunities
to form and to join trade unions for the — for women and men to decent employ-
protection of his interests. Goal: FAO Right to Food seeks to use public ment and income; Enhance the coverage
2. No restrictions shall be placed on the awareness to target people in need. They and effectiveness of social protection for
exercise of these rights other than such ensure that people’s right to food is reflect- all, and Strengthen tri-partisan and social
as are prescribed by law ed in legislation and see that policies are dialogue.9
put into action in order to have an impact on
Protocol hunger. 6 Forced/Child Labour
→→ Article 1: →→ C182 – Prohibition and Immediate Action
→→ No one shall be deprived of his posses- The Voluntary Guidelines represent govern- for the Elimination of the Worst Forms of
sions except in the public interest and ments’ attempts to interpret the economic Child Labour
subject to the conditions provided for and social rights of people including their →→ C138 – Minimum Age for Admission to
by law5 right to decent and nutritious food and coin- Employment
cides with the UN’s call to integrate human →→ C029 – Forced Labour Convention con-
rights policies with the work of agencies. cerning Forced or Compulsory Labour
Basic Instruments: Freedom of Association/

1. Eradication of Hunger Collective Bargaining
2. Reaffirming the right of everyone to food →→ C087 – Freedom of Association and Pro-
6. Provide Practical Guidance to States tection of the Right to Organise
15. Establish food security through promot- →→ C098 – Right to Organise and Collective
ing the four pillars: (1) availability, Bargaining
(2) stability of supply, (3) access and,
(4) utilization7 Wages/Benefits
→→ C095 – Protection of Wages Convention
→→ C131 – Minimum Wage Fixing Convention
→→ C132 – Holidays with Pay Convention
→→ C175 – Part-Time Work – workers receive
same basic wages, social security, and em-
ployment conditions as full-time workers
→→ C183 – Maternity Protection Convention

Attachments
International Millennium
Court of Justice Development Goals
(ICJ) (MDGs)
Work Duration The International Court of Justice (ICJ) is a The MDGs are quantified targets for con-
→→ C001 – Hours of Work (Industry) world court and the principal judicial organ fronting extreme poverty while promoting
Convention of the United Nations. It was established gender equality, education, and environ-
→→ C014 – Weekly Rest (Industry) – Minimum in June 1945 by the Charter of the United mental sustainability. The MDGs have risen
rest period of 24 consecutive hours every Nations. Judgments are final and without to the top of the United Nations Develop-
seven days appeal. ment Group agenda.13 Around 196 nations
— and at least 23 corporations have agreed to
Safety Goal: To settle, in accordance with inter- achieve these goals by 2015.
→→ C155 – Occupational Safety and Health national law, legal disputes submitted to it —
Convention by States and to give advisory opinions on Goals:
→→ Community/Land Rights legal questions referred to it by authorized 1. Eradicate extreme poverty and hunger
→→ C169 – Indigenous and Tribal Peoples United Nations organs and specialized 2. Achieve universal primary education
Convention10 agencies.11 3. Promote gender equality and empower
women
ICJ Final Ruling 4. Reduce child mortality
“… the threat or use of nuclear weapons 5. Improve maternal health
would generally be contrary to the rules 6. Combat HIV/AIDS, malaria and other
of international law applicable in armed diseases
conflict, and in particular the principles and 7. Ensure environmental sustainability
rules of humanitarian law …” (International 8. Develop a global partnership for devel-
Court of Justice, 1996) opment 14

OECD
(Organization for Economic
Co-operation and Development)
The OECD is an international economic 5. Refrain from seeking or accepting ex- 12. Seek to prevent or mitigate an adverse
organization consisting of 34 countries emptions not contemplated in the statu- impact where they have not contributed
founded to stimulate economic progress tory or regulatory framework related to to that impact, when the impact is never-
and world trade. They work with govern- human rights, environmental, health, theless directly linked to their opera-
ments to measure and analyse productiv- safety, labour, taxation, financial incen- tions, products or services by a business
ity and global flows of trade investment. tives, or other issues. relationship. This is not intended to shift
They use this information to predict future 6. Support and uphold good corporate responsibility from the entity causing an
trends, set international standards, and governance principles and develop and adverse impact to the enterprise with
recommend policies that will improve the apply good corporate governance prac- which it has a business relationship.
economic and social well-being of people tices, including throughout enterprise 13. In addition to addressing adverse
around the world.15 groups. impacts in relation to matters covered
The OECD Guidelines for Multinational En- 7. Develop and apply effective self-regula- by the Guidelines, encourage, where
terprises (May 2011) are recommendations tory practices and management systems practicable, business partners, including
for responsible business conduct in a global that foster a relationship of confidence suppliers and sub-contractors, to apply
context.16 and mutual trust between enterprises principles of responsible business con-
— and the societies in which they operate. duct compatible with the Guidelines.
Goal: To ensure that the operations of these 8. Promote awareness of and compliance 14. Engage with relevant stakeholders in or-
enterprises are in harmony with govern- by workers employed by multinational der to provide meaningful opportunities
ment policies, to strengthen the basis of enterprises with respect to company for their views to be taken into account in
mutual confidence between enterprises policies through appropriate dissemina- relation to planning and decision making
and the societies in which they operate, to tion of these policies, including through for projects or other activities that may
help improve the foreign investment climate training programmes. significantly impact local communities.
and to enhance the contribution to sustain- 9. Refrain from discriminatory or disciplin- 15. Abstain from any improper involvement
able development made by multinational ary action against workers who make in local political activities.
enterprises. bona fide reports to management or, as
appropriate, to the competent public B. Enterprises are encouraged to:
A. Enterprises should: authorities, on practices that contravene 1. Support, as appropriate to their cir-
1. Contribute to economic, environmen- the law, the Guidelines or the enter- cumstances, cooperative efforts in the
tal and social progress with a view to prise’s policies. appropriate fora to promote Internet
achieving sustainable development. 10. Carry out risk-based due diligence, for Freedom through respect of freedom of
2. Respect the internationally recognised example by incorporating it into their expression, assembly and association
human rights of those affected by their enterprise risk management systems, to online.
activities. identify, prevent and mitigate actual and 2. Engage in or support, where appropriate,
3. Encourage local capacity building potential adverse impacts as described private or multi-stakeholder initiatives
through close co-operation with the in paragraphs 11 and 12, and account and social dialogue on responsible sup-
local community, including business in- for how these impacts are addressed. ply chain management while ensuring
terests, as well as developing the enter- The nature and extent of due diligence that these initiatives take due account
prise’s activities in domestic and foreign depend on the circumstances of a par- of their social and economic effects on
markets, consistent with the need for ticular situation. developing countries and of existing
sound commercial practice. 11. Avoid causing or contributing to adverse internationally recognised standards.
4. Encourage human capital formation, impacts on matters covered by the
in particular by creating employment Guidelines, through their own activities,
opportunities and facilitating training and address such impacts when they
opportunities for employees. occur.

Attachments
Political Principles Concerning Rio Declaration UN Covenant on
Germany’s Conventional Military on Environment Civil and Political Rights
Equipment Exports and Development (ICCPR)
Germany’s stated goal is to maintain what The Rio Declaration is a compact of 27 prin- The International Covenant on Civil and
it refers to as a “restrictive” policy of export ciples on which nations agreed to base their Political Rights is an official internationally
regarding arms exports. environmental and development actions. recognized treaty that puts into legal terms
— — the principles of the Universal Declaration
Goals: To safeguard peace and human rights Goal: To provide a guide for future sustain- of Human Rights. It is the counterpart to
while encouraging sustainable development able and environmentally friendly develop- the UN Covenant on Economic, Social, and
through the arms trade. ment standards for nations. Cultural Rights. The ICCPR outlines tradi-
tional human rights as they are known from
General Principles →→ Principle 1: Human beings are at the cen- historic documents. On 16 December 1966,
(2) “The issue of respect for human rights in tre of concerns for sustainable develop- both Covenants were adopted by the Gen-
the countries of destination and end-use ment. They are entitled to a healthy and eral Assembly without any abstentions.18
is a key factor in deciding whether or not productive life in harmony with nature. —
to grant licences for the export of war →→ Principle 2: Human beings are at the cen- Goal: To extend the Universal Declaration
weapons and other military equipment” tre of concerns for sustainable develop- of Human Rights from declaration to action,
(Fed00, 2000). ment. They are entitled to a healthy and putting into legal terms the principles which
(3) “ … licences for war weapons and other productive life in harmony with nature. lie therein.
military equipment will not be granted →→ Principle 8: Reduce and eliminate un-
where there are reasonable grounds to sustainable patterns of production and →→ Article 9.1:
suspect they may be used for internal consumption No one shall be subjected to arbitrary
repression … or sustained or systematic →→ Principle 10: Access to information con- arrest or detention.
abuse of human rights” (Fed00, 2000) cerning the environment that is held by
public authorities, including information →→ Article 22.1:
on hazardous materials and activities freedom of association, and the right
in their communities, and the opportu- to form and join trade unions for the
nity to participate in decision-making protection of his interests.19
processes.
→→ Principle 13: liability and compensation
for the victims and adverse effects of pol-
lution and other environmental damage
→→ Principle 14: Prevent the transfer to oth-
er States of activities and substances that
cause severe environmental degradation
or are harmful to human health.
→→ Principle 22: recognize and duly support
the identity, culture and interests [of
indigenous cultures] and enable their
effective participation in the achievement
of sustainable development.17

UN Covenant on Economic, UN Comment Concerning UN Declaration on the
Social and Cultural Rights Nuclear weapons and Prohibition of the Use of Nuclear
(ICESCR) the Right to Life and Thermo-Nuclear Weapons
The International Covenant on Economic, The United Nations does not support the This declaration clarifies the stance of
Social and Cultural Rights is the counterpart use of Nuclear weapons as a means of con- the United Nations on the use of Nuclear
to the UN Covenant on Civil and Political flict resolution. The United Nations released weapons.
Rights (ICCPR). It too is an international a General comment clarifying their stance —
treaty, and constitutes the second half of on this matter. Goals: To eliminate the production and use
the legal transformation of the Universal — of nuclear and thermo-nuclear weapons
Declaration of Human Rights into legal Goal: To rid the world of nuclear arms
action. The ICESCR focuses on Economic, Article 1:
Social, and Cultural rights of all people. United Nations General (a) “… use of nuclear and thermo-nuclear
— Comment No. 14: weapons is contrary to the spirit … and
Goal: To extend the Universal Declaration of →→ Article 6: “The production, testing, pos- aims of the United Nations … ,
Human Rights from Declaration to action, session, deployment and use of nuclear (b) … would exceed even the scope of war
putting into legal terms the principles which weapons should be prohibited and and cause indiscriminate suffering and
lie therein. recognized as crimes against humanity” destruction to mankind … and,
(CCPR, 1984). (c) Any State using nuclear and thermo-
→→ Article 7: →→ Article 7: “… calls upon all States … to nuclear weapons is to be considered
… just and favourable conditions of work take urgent steps … to rid the world of as violating the Charter of the United
which ensure, in particular: this menace” (CCPR, 1984). Nations, as acting contrary to the laws
(a) Remuneration which provides all of humanity and as committing a crime
workers with: against mankind and civilization”
(i) Fair wages and equal remuneration (The United Nations General Assembly,
for work of equal value 1961)
(ii) A decent living for themselves and
their families
(b) Safe and healthy working conditions;
(c) Equal opportunity for everyone to be
promoted to an appropriate higher level
(d) Rest, leisure, limitation of work hours,
periodic holidays with pay, and remu-
neration for public holidays
→→ Article 8:
(a) The right of everyone to join trade unions
(d) The right to strike
→→ Article 11.1:
The right of everyone to an adequate
standard of living, including adequate
food20

Attachments
UN documents UNGC UN
on Depleted (United Nations Millennium
Uranium Global Compact) Declaration
Depleted Uranium (DU) is a toxic waste by- The UNGC is a UN strategic policy initiative The Millennium Declaration identifies
product of the refinement and production that encourages businesses worldwide to key challenges facing humanity, outlines
process of weapons, energy, and processes adopt sustainable and socially responsible responses to these challenges, and estab-
that contain Uranium. Depleted Uranium is policies. The UNGC seeks to align busi- lishes measures for judging performance
then recycled to make weapons that deliver nesses with ten core principles that pertain through commitments, goals, and targets
“a type of radiation … that destroys life and to human rights, labour, the environment on development, governance, peace, secu-
the environment in the area in which it is and anti-corruption.22 The UNGC seeks to rity and human rights.24
used for generations to come” (United Na- ensure that business and development —
tions General Assembly, 2000). move forward in a globally sustainable man- Goal: To establish a just and lasting peace
— ner that benefits societies and economies all over the world and to support all ef-
While there is no current regulation that everywhere. forts to uphold the sovereign equality of
specifically bans Depleted Uranium, schol- — all States, respect for territorial integrity,
ars, states, and organizations alike argue Goal: The UNGC asks companies to em- political independence, human rights and
that the illegality of DU is implied in former brace, support and enact, within their fundamental freedoms.
works of legislation sphere of influence, a set of core values in
the areas of human rights, labour standards, I.
Report of the Secretary-General the environment and anti-corruption. Values and Principles
→→ Effects of the use of armaments and am- Paragraph 6:
munitions containing depleted uranium Companies should … →→ Freedom
→→ Lists nations and organizations and →→ Equality
their respective opinions on the use of Human Rights →→ Solidarity
Depleted Uranium – most oppose its use →→ Principle 1 – Support and respect the →→ Tolerance
and support legal action against DU21 protection of internationally proclaimed →→ Respect for Nature
human rights →→ Shared Responsibility
UNEP field report of DU exposure →→ Principle 2 – Make sure that they are not
in Kosovo complicit in human rights abuses. II.
→→ DU was found in drinking water as well as Peace, Security, and Disarmament
air samples. “UNEP urges a precaution- Labour Paragraph 9:
ary approach and recommends a series →→ Principle 3 – Uphold the freedom of asso →→ Implementation of treaties in areas such
of measures to minimise risks to the ciation and … right to collective bargaining as arms control and disarmament, inter-
environment and people of Kosovo and →→ Principle 4 – Eliminate all forms of forced national humanitarian law, and human
the wider Balkans region, both now and and compulsory labour rights law.
in the future” (United Nations Environ- →→ Principle 5 – Effective[ly] abolish child →→ Eliminate weapons of mass destruction
mental Program, 2003) labour and nuclear weapons.
→→ Principle 6 – Eliminate discrimination in →→ End illegal small arms and light weapons
respect of employment and occupation trafficking
→→ Make arms transfers more transparent
Environment →→ Support regional disarmament measures
→→ Principle 7 – Support a precautionary ap- →→ Accede the Convention on the Prohibi-
proach to environmental challenges tion of the Use, Stockpiling, Production
→→ Principle 8 – Undertake initiatives to and Transfer of Anti-personnel Mines and
promote greater environmental respon- on Their Destruction
sibility
→→ Principle 9 – Encourage the development
and diffusion of environmentally friendly
technologies
Anti-Corruption
→→ Principle 10 – Work against corruption
in all its forms, including extortion and
bribery23

Universal
Declaration of
Human Rights
III. The UN established the Universal Declara- →→ Article 30:
Development and poverty eradication tion of Human Rights as a complement “Nothing in this Declaration may be
Paragraph 13: to the UN Charter in 1945. As part of the interpreted as implying for any State,
→→ Transparency in the financial, monetary International Bill of Human Rights, this group or person any right to engage in
and trading systems declaration outlines the fundamental basic any activity or to perform any act aimed
rights to which all people are entitled. It is at the destruction of any of the rights
IV. considered the foundation of international and freedoms set forth herein” (The
Protecting our common environment human rights law. General Assembly of the United Nations,
Paragraph 22: — 1945).26
→→ support for the principles of sustainable Goal: To establish a common standard of
development achievement for all people and nations
Paragraph 23: establishing inherent and enduring human
→→ stop the unsustainable exploitation of rights for all people.
water resources
→→ reduce the number and effects of natural →→ Article 3:
and man-made disasters … the right to life, liberty and security of
person.
V.
Human rights, democracy and →→ Article 17:
good governance (2) No one shall be arbitrarily deprived of his
Paragraph 25: property.
→→ protection and promotion in all our
countries of civil, political, economic, →→ Article 22:
social and cultural rights Everyone is entitled to realization of
→→ protection of the human rights of the economic, social and cultural rights
migrants, migrant workers and their indispensable for his dignity and the free
families25 development of his personality.
→→ Article 23:
(1) … right to work, free choice of employ-
ment, just and favourable work condi-
tions,
(2) … equal pay for equal work.
(3) … just and favourable remuneration
ensuring … an existence worthy of
human dignity
(4) … the right to form and to join trade
unions for the protection of his interests.
→→ Article 24:
… right to rest and leisure, including
reasonable limitation of working hours
and periodic holidays with pay.
→→ Article 25.1:
right to a standard of living adequate for
the health and well-being of himself and
of his family, including food

Attachments
UN Guiding Principles
on Business and
Human Rights
Guiding Principles on Business and Human 13. The responsibility to respect human
Rights by the Special Representative of rights requires that business enterprises:
the UN Secretary- General on the issue of (a) Avoid causing or contributing to ad-
human rights and transnational corpora- verse human rights impacts through
tions and other business enterprises, John their own activities, and address such
Ruggie. impacts when they occur;
As a Special Representative, John Ruggie (b) Seek to prevent or mitigate adverse
advanced the debate on business and hu- human rights impacts that are
man rights and in the five years of his man- directly linked to their operations,
date (2005–2011) elaborated the 'protect, products or services by their business
respect and remedy' framework. relationships, even if they have not
— contributed to those impacts.
Goal: To establish a common global stan-
dard for preventing and addressing the 14. The responsibility of business enter-
adverse human rights impact of business prises to respect human rights applies
activity. to all enterprises regardless of their size,
sector, operational context, ownership
II. The corporate responsibility to respect and structure.
human rights
15. In order to meet their responsibility to
11. Business enterprises should respect hu- respect human rights, business enter-
man rights. This means that they should prises should have in place policies and
avoid infringing on the human rights of processes appropriate to their size and
others and should address adverse hu- circumstances, including:
man rights impacts with which they are (a) A policy commitment to meet their re-
involved. sponsibility to respect human rights;
(b) A human rights due-diligence process
12. The responsibility of business enter- to identify, prevent, mitigate and
prises to respect human rights refers account for how they address their
to internationally recognized human impacts on human rights;
rights – understood, at a minimum, as (c) Processes to enable the remediation
those expressed in the International of any adverse human rights impacts
Bill of Human Rights and the principles they cause or to which they contrib-
concerning fundamental rights set out in ute.27
the International Labour Organization’s
Declaration on Fundamental Principles
and Rights at Work. →→ Compiled by Ruth Vaughan Witt

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A-HRC-17-31_AEV.pdf

Berlin, November 2012. The FACING FINANCE campaign calls on
investors not to invest in companies which profit from human rights
violations, environmental pollution, corruption or the production
and export of (controversial) weapons. FACING FINANCE has striven
to achieve the highest level of accuracy in this reporting. However,
there is still a lack of official information publicly available. Therefore,
the information in this report reflects the publicly available official
information known to FACING FINANCE, its member organisations
and researchers. If you believe you have found an inaccuracy in our
report or if you can provide additional information, please contact
us at [email protected] .
74 | FACING FINANCE | Dirty Profi ts | 2012

Imprint
Responsible publisher:
Thomas Küchenmeister, FACING FINANCE,
Schönhauser Allee 141, Haus 3, D-10437 Berlin
Authors and researchers:
Amani Mhinda (Tanzania)
Barbara Happe
Barbara Kuepper, Profundo (The Netherlands)
Bertchen Kohrs (Namibia)
Donata Wojcik
Grzegorz Piskalski
Jan Schulz
Jan Willem van Gelder, Profundo (The Netherlands)
Jenni Roth
Joeri de Wilde, Profundo (The Netherlands)
Julia Dubslaff
Kathrin Petz
Kentebe Ebiaridor (Nigeria)
Klaus Röhrig
Krzysztof Kutra
Leen Schmücker
Martin Péan
Nikoletta Pagiati
Petra Spaargaren, Profundo (The Netherlands)
Ruth Vaughan Witt
Samuel Mondlane
Thomas Küchenmeister
Proofreader:
Jenny Williams, Ruth Vaughan Witt
Layout:
Ole Kaleschke, www.olekaleschke.de
Cover photo:
Activist Thomas Herget protests at the annual shareholder meeting
against Deutsche Bank and its investments in producers of cluster
munitions, holding up a FACING FINANCE Report.
Photo: Lukas Einsele, 31 May 2012.
A publication by:
FACING FINANCE, www.facing-finance.org
FACING FINANCE consortium members are:
Solidarity international (Solidaritätsdienst-international e.V.)
urgewald e.V.
EarthLink e.V.
FairFin
CentrumCSR.PL
JA! Justiça Ambiental
“This document has been produced with the financial assistance of
the European Union. The content of this document are the sole
responsibility of FACING FINANCE and can under no circumstances be
regarded as reflecting the position of the European Union.”
Funded by Brot für die Welt, Evangelischer Entwicklungsdienst (EED),
and grassroots foundation
Special thanks to:
Alan Pike
Alexandra Huck, Kolko e.V.
Audrey Gallet
Berne Declaration
Bertchen Kohrs
Chantal Peyer, Brot für alle
China Labour Watch
Christoph Richter
ERA
FDCL
Haki Madini
Kent Kessinger
Kirstin Kraft, Allgemeine Zeitung
Rettet den Regenwald e.V.
SACOM
Sarah Günther
Sean Rudolph, Raise the Bar, Hershey!
Sebastian Rötters, FIAN
Stephan Suhner, AG Schweiz Kolumbien
SWR Report Mainz
WEED
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Copper Smelter at Glencore’s Mopani Mine in Zambia
www.facing-finance.org

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Dirty

Report on Companies and Financial Institutions

Company Profiles and Harmful Projects:

Banks and Evil Acts:

Recommendations and Demands 57

2 | FACING FINANCE | Dirty Profits | 2012

FACING FINANCE | Dirty Profits | 2012 | 3

T his report addresses proven and postulated violations

4 | FACING FINANCE | Dirty Profits | 2012

and environmental damage, postulated violations of human rights and environmental

tions that adequately address billion).

nisms for financial trans­- financial sector.

actions.” better address environmental and human rights issues. In

FACING FINANCE | Dirty Profits | 2012 | 5

T he FACING FINANCE campaign calls on investors

6 | FACING FINANCE | Dirty profits | 2012

Does the report only focus on the industrial

FACING FINANCE | Dirty Profits | 2012 | 7

8 | FACING FINANCE | Dirty Profits | 2012

“The ATK Business Ethics Code of Conduct outlines and

Natural Resources Inc.

4 Environmental Protection Agency: What is mountaintop mining?:

10 | FACING FINANCE | Dirty Profits | 2012

“Powering the future …

“Real Mining. Real People.

Barrick Gold Corp.

“Barrick Gold Corporation is dedicated to recognizing and

3 Das Erste (online) 26.06.2012

16 | FACING FINANCE | Dirty Profits | 2012

“Coca-Cola brings the hope

2 Coal mines Mina Pribbenow and El Descanso (both located in the

4 Forbes. “#131 Drummond – Forbes.com.” Information for the

“Drummond has always been respectful of all of the communities where

FACING FINANCE | Dirty Profits | 2012 | 19

“Innovative, clean and

Company (NAOC) from still running gas flaring

4 http://www.eraction.org/component/content/article/5/423-field- “Agip operates massive gas

“ENI is committed every day to respecting human rights in areas

“At Flextronics, we believe that a sustainable approach to business is essential and

“… (Our) ethics program also helps sustain our reputation

24 | FACING FINANCE | Dirty Profits | 2012

12 http://oecdwatch.org/cases/Case_209 18 Monitor, 4 August, 2011

“Glencore’s global presence and economic strength has a positive impact

“Our vision is that all business operations shall be run in a way

“Everyday we are creating

rights for many years. appropriate payments. 3

FACING FINANCE | Dirty Profits | 2012 | 29

“Engaging employees with respect, establishing continuing improvement,

“There is evidence that L-3 is still

“We are committed to the highest standards

“Act with integrity, honesty

“Our goal is to sustain solid growth

Rio Tinto plc

“Our operations give us the opportunity to bring long-lasting positive change

“Designed for Humans”

“Vale is working to create prosperity, with social responsibility

40 | FACING FINANCE | Dirty Profits | 2012

“Upholding people’s fundamental rights

“Setting the standards for

nisms for financial trans- financial sector.