Statement on Nevsun

Statement on Nevsun Resources - 20 May 2018

Through an institutional mandate, M&G Investments holds 9% of the shares of Nevsun, a Canadian-listed mining company.

It has been alleged that during the construction of Nevsun’s Bisha mine in Eritrea in 2008-2009, the government employment contractor used by Nevsun employed conscripted labour as part of the country’s national service program. Campaign groups, including Freedom United and Eritrea Focus, have called on shareholders in Nevsun to divest, in protest of this alleged use of forced labour.

As a responsible investor and signatory to the United Nations Principles for Responsible Investment (PRI), M&G takes the issue of forced labour very seriously. We raised concerns with Nevsun when we first became aware of these allegations several years ago and engaged ISS Ethix, an independent human and labour rights research group, to advise us on the issue. Based on our dialogue with the company and ISS Ethix, we understood that Nevsun disputed the historic allegations (which feature in an ongoing lawsuit we are monitoring closely). Given the seriousness with which we consider such allegations, we have also held a number of meetings with the campaign groups and facilitated a meeting in December 2017 comprising of representatives of both the company and the campaign groups. This dialogue is ongoing.

In our view, the company has established high standards of safety, working conditions, transparency, and employee and contractor engagement. Nevsun has been proactive and thorough in implementing the recommendations of human rights impact assessment audits undertaken in 2015 and 2017. In addition, in considering this very complex case we remain mindful that the Bisha mine is an important contributor to its local community and economy, in a developing nation in great need of investment.

We continue to engage with the management of Nevsun to ensure it continues to improve human rights and employment standards, and to monitor its progress with the help of independent research service providers.  We maintain an open dialogue with the campaign groups, other groups and non-governmental organisations to understand their concerns on this issue and represent these to Nevsun’s management.

 
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