Dutch pension fund ABP has admitted their €47m investment in a Mozambique forestry project failed to meet its environmental, social and governance (ESG) criteria, after a Dutch daily paper reported that the project had been involved in land-grabs and threatened the food security for locals.

Dutch paper De Volkskrant wrote that farmers were threatened, crops destroyed and farms burned down. A survey by the Mozambican government found that 32,000 hectares of land had been taken illegally, on top of the 30,000 hectare for which the government had given permission. Promises to compensate the local population were broken.

Public sector fund ABP has been a stakeholder in the Global Solidarity Forest Fund (GSFF) since 2007. The fund is aimed at forestry in Mozambique and managed by the Global Solidarity Fund International (GSFI), an asset manager for Swedish and Norwegian churches.

In a statement, the pension fund said it is taking the allegations “very seriously” and said it had invested in the fund because of attractive investment returns and the attractive ESG profile, like employment in Mozambique. It was agreed with GSFF to start a route to get the forestry projects FSC certified, ABP said.

“However, gradually it became clear the forestry projects in Mozambique did not meet our responsible investment policy. Among other things, this became clear after an independent judgement in light of the FSC certificiation. We have therefore already expressed grave concerns to GSFF about the management of the projects and we have insisted on new management,” the statement said.

The CEO, the chairman of the board and the CEO of the four subsidiary companies of GSFF in Mozambique were replaced in 2011 and ABP said it has confidence in the new management and expects them to deal with the problems to ensure the project will meet ABP’s standards.

“It is our belief that as a stakeholder we have more influence on the process than if we would withdraw from the investment.”

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