Engagement – example:
Charoen Pokphand Foods (CP Foods)
Most of our readers will probably remember idyllic images of Forrest Gump and
Captain Dan on their shrimp boats: sun, ease, and a liberating jump into the refreshing
sea to take in half an hour of swimming before reeling in the nets. Unfortunately reality
does not measure up to fiction.
Therefore Erste Asset Management initiated a dialogue in collaboration with its partners with Charoen Pokphand
Foods (CP Foods) in 2014. CP Foods from Thailand is not only the world’s largest producer of shrimps and thus
consumer of fishmeal, but also supplies fish meal to other farms.
The Company
The ERSTE RESPONSIBLE funds currently do not invest
in CP Foods; However, we are monitoring the progress
of the company. As a result we will reassess an invest-
ment as soon as further infringements can be ruled out
with sufficient probability.
The fish that is the basis for this product is partially sourced from slave ships. Human trafficers sell the workers
on these ships to the operators. Long working hours without pay are often the least of the problems for the
fishermen. The imprisonment at sea sometimes ends in death from violence, torture, suicide, or even murder.
CP Foods declared the fight against slavery an important goal of its sustainability programme in 2013. The
company pays higher prices to suppliers who can rule out slave labour in their supply chain. However, Erste
Asset Management and its partners had to find out that these promises were not verified. It was this issue in
particular that our partners and EAM focused the discussion on with CP Foods, demanding actual control.
CP Foods did not only prove cooperative, but the CEO participated personally in the talks. This highlights the
importance of such investor initiatives and the attention that they draw these days.
And indeed, words were followed by action. Not only did the company install a comprehensive control system
for suppliers and ships, but the entire purchase strategy of the company was revised. Of the 600 to 800 large
ships that supply CP, only those 200 that had successfully completed audits are able to sell their goods now.
Also, the purchase strategy now focuses on small, familyowned boats that come with no risk of slave labour.
While this engagement contributes only partially to the solution of the wider problem of the slave boats in
Thailand and does not mitigate all ESG risks of the company, it does show the power that we as sustainable
investors have to instigate changes for the better.
(Dominik Benedikt)
