Date filed
12 December 2019
Keywords
Countries of harm
Current status
Under review
Sectors
NCP

Allegations

On 12 December 2019, KTNC Watch, PUSAKA, SKP-KAMe, and WALHI Papua filed a specific instance against Posco International and two of its financiers, the the Export-Import Bank of Korean (KEXIM) and the National Pension Service (NPS) at the Korean NCP. The complaint argues that POSCO International‘s subsidiary in the palm industry in Papua, Indonesia, has been engaged in business activities causing a range of adverse health, labour rights, and environmental impacts. The complaint alleges that POSCO as well as its financiers (lenders) failed to implement adequate human rights due diligence to identify and address the adverse impacts caused by the subsidiary.

The complainants seek the Korean NCP’s good offices to encourage the three companies to adopt policies for reviewing environmental and social risks in developing natural resources overseas, and more specifically to refrain from providing further loans to support the operations of POSCO International‘s subsidiary in Papua, Indonesia.

Relevant OECD Guidelines

Outcome

On 17 March 2020, the Korean NCP issued an initial assessment accepting the complaint for good offices. The NCP accepted the complaint regarding POSCO and the National Pension Service. The NCP also accepted the complaint against KEXIM. The NCP clarified that in this matter, KEXIM could be considered a multinational enterprise covered by the OECD Guidelines because 1) it has oversea branches in the United Kingdom, Indonesia, and Vietnam; 2) in this case, its funding of POSCO was not related to any official development assistance projects; and 3) the financial services it provided to POSCO, providing loans and taking interest, were commercial in nature like those of a typical financial institution. The NCP also found the complaint satisfied the other Guidelines’ admissibility criteria.

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