The HESTA industry super fund has sold its 3.5% stake in Transfield Services because of reported human rights violations against asylum seekers at detention centres.
Transfield has government contracts valued at $1.2 billion to run detention centres at Manus Island, Papua New Guinea, and Nauru.
“A number of independent non-government organisations have found that the mandatory, prolonged, indefinite, and non-reviewable nature of detention at asylum seeker processing centres breaches the fundamental principles of international human rights law,” HESTA said in a statement.
The board of directors of HESTA, which has $32 billion in funds under management, ordered that the $23 million stake in Transfield be sold.
HESTA chief executive Debby Blakey says the fund believes it is highly likely the social governance issues associated with the detention centre contracts will have a negative impact on Transfield’s business and share price.
“It was in the best financial interests of our members to divest the stake,” Blakey told the Australian Financial Review.
The super fund says the review of the investment involved a well-established environmental, social and governance escalation process.
“If a company is identified as not complying, directly or indirectly, with international laws, standards or guidelines, we may consider divestment of any such companies,” HESTA said.