May 30, 2019
CPPIB challenged to divest from Chinese firms tied to abuses against Muslim minority
The Canadian Press
CPPIB CEO worried about rise in geopolitical tensions
OTTAWA -- The Canada Pension Plan Investment Board is facing pressure to divest from companies allegedly tied to human rights abuses in China.
"I have constituents of mine who've come to see me over the past few weeks because they have family members who have been interned," said Conservative MP Tom Kmiec at the House of Commons finance committee Thursday.
He spoke about the re-education schools, which he referred to as concentration and internment camps, that hold hundreds of thousands of China's Muslim minority, the Uyghurs.
People sent to the camps do not get a trial or access to a lawyer, according to Amnesty International, which says they can be left in detention for months and it is up to authorities to determine when an individual is transformed.
"This is a major human rights violation of the Uyghur population, the Muslim Uyghur population in China," said Kmiec.
The CPPIB is invested in two companies -- Hangzhou Hikvision Digital Technology Co. Ltd. and Zhejiang Dahua Technology Co. Ltd. -- that are involved in the manufacturing of surveillance equipment used to repress Muslim Uyghurs in Western China, he said.
"They are directly involved in the repression of Muslim Uyghurs in Western China."
He asked CPPIB to say if they've divested from these holdings and if not, called on them to explain why.
CPPIB executive Michel Leduc said that until recently it has been very cost prohibitive to apply an assessment across 10,000 worldwide holdings to check for issues like human rights abuses. The board recently found a tool that it is now using to help it identify red flags among thousands of holdings.
"Those two assets have been red flagged," said Leduc.
CPPIB reports to the public at regular intervals, much like a public company, he said, and will update its holdings list at year-end once it has made investment decisions, including whether to divest from the red-flagged assets.
Kmiec called it "a very cold answer," and continued to press the issue later in the session.
"Will you commit to divesting CPPIB funds -- the funds that Canadians are paying? Like, all of us here. Every single Canadian is basically paying into these companies and equity stakes to facilitate the oppression and repression of Muslim Uyghurs in Western China for nothing more than their ethnicity and their religion," he said.
The CPPIB manages hundreds of billions of dollars worth of Canadians' retirement savings.
Leduc countered that "it can't be a personal decision," but the board is committed to taking the issues Kmiec identified very seriously and ensuring they put them into the process of investment decision making.
Kmiec urged the board to make it "much faster" than the end of year.
"These camps are expanding day to day, week to week, month to month," he said.
Mark Machin, CPPIB's CEO, reiterated that the company is aware of the allegations, and noted these are not direct investments, but rather very small ones within indices. The board will put them through the new rigorous process that enables them to check for red flags in these kinds of investments, he said.