Australia Council of Trade Unions (ACTU) May 2018 Newsletter

ACTU reports on the following items:

XPO Logistics

The ACTU continues to support the CWC campaign, being coordinated on behalf of the Teamsters and ITF, against XPO Logistics. The ACTU wrote to the CEOs of 8 Australian superannuation funds we are advised have exposure to XPO Logistics through engagement of asset managers Orbis Investment Management and or Allen Gray Australia. The ACTU requested those funds to confirm if there is exposure and if so to assess the risks of exposure. The letter requests that the fund consider commencing an engagement with asset managers with a view to requesting that those asset managers confer with XPO Logistics and report back on how the fund manager intends to work with the company to mitigate the risks the company’s human capital management practices could have on the fund’s investment in XPO Logistics. Several superannuation funds with exposure have responded to the ACTU advising that the issues were taken up with Orbis Investment Management and or Allen Gray Australia. We understand that Orbis has responded with a detailed briefing addressing the main concerns and risks that the Teamsters/ITF identified in its investor briefing. In addition the ACTU has met with Allan Gray Australia, with the aim of establishing an ongoing dialogue on the way that these asset managers engage on the labour issues in companies in which they invest.

Aerocare

The ACTU is consulting Australian aviation unions, who are in turn consulting with the ITF, on whether there could be an ongoing capital strategies element to the union campaign against Aerocare under its new ownership – Swissports, owned by the Chinese conglomerate HNA (Archer Capital sold Aerocare late in 2017). The unions are also considering if there could be an opportunity to exercise leverage on the entire Australian aviation supply chain though superannuation funds’ investments in Australian airports, most of which were privatised over the past decade.

Asbestos

The Australian Manufacturing Workers Union (AMWU) made a presentation to the last meeting of the ACTUs Workers Capital Committee meeting on 19 January on the opportunity for a national and international campaign for super and pension fund divestment from all aspects of the asbestos supply chain. This was foreshadowed at the CWC Conference in Berlin in September 2017. AMWU research indicates however that there may be limited opportunities for capital strategy initiatives given much of the production, manufacturing and distribution of asbestos is undertaken by non-public companies. The issue will be the subject of further research and consideration of strategy before a report back to the CWC. This campaign is supported by the Construction Forestry, Mining Maritime and Energy Union (CFMMEU).

US Communications Workers of America (CWA) dispute with US Infrastructure Corporation (USIC) owned by private equity firm Partners Group

Union trustees on two Australian superannuation funds with an allocation to the private equity firm Partners Group, which owns the US Infrastructure Corporation (USIC – a provider of underground pipe and cable services to North American utility operators) have been approached by a representative of the Communications Workers of America, which is in dispute with USIC over a collective agreement, seeking the support of super and pension funds globally to step up engagement with Partners Group. The Australian superannuation funds have been contacted and follow up will occur based on any further request from the CWA.

ACTU letter to US SEC on mandatory disclosure of payments to governments by resource extraction companies

The ACTU wrote to the US Securities and Exchange Commission (SEC) on 29 March 2018 expressing support for the mandatory disclosure of payments to governments by resource extraction companies. In particular the ACTU urged the SEC to ensure that the new SEC rule for the bipartisan Cardin-Lugar anti-corruption provision, Section 1504 of the Dodd-Frank Act, aligns strongly with existing reporting requirements for oil, gas and mining companies incorporated and publicly listed on stock exchanges in Europe, the UK and Canada.