Swedwatch report highlights important issues

Swedwatch has presented a research report around the human rights impact from Swedfund’s investment in Addax Bioenergy during the investment period and in connection with the exit in 2015.

Gerth Svensson, acting CEO of Swedfund, comments:

”Swedfund’s objective is to combat poverty through investing in sustainable businesses in the poorest countries in the world. We are continuously improving our operations, and we value the research made by Swedwatch, highlighting important issues. This is a clear example of a very challenging and complex situation, where our human rights efforts could have been stronger in some areas. We have in our strategic process identified human rights processes in connection with investments and exits as an area for improvement going forward.”

Swedfund entered into a minority holding (8%) in Addax Bioenergy, producer of bio-ethanol, in 2011. The project had the prerequisites for becoming a sustainable business, creating employment and contributing to reduction of poverty in Sierra Leone, one of the poorest countries in the world. However, the project did not develop according to plan, partly due to the dramatic change of the European price of bio-ethanol and the outbreak of Ebola, which led to production halts during a longer period. In connection with further capital injections, Swedfund’s holding was reduced to 1%, seriously limiting our possibilities of meaningful impact with regards to our three fundamental pillars, impact on society, sustainability and financial viability. Consequently, Swedfund transferred the holding to the main shareholder at that time, AOG. Later, the business was acquired by Sunbird Bioenergy, and today employs around 2,500 individuals according to the Swedwatch report.

Human rights is one focus-area for Swedfund. In order to further develop Swedfund’s Human Rights work and to ensure that Swedfund complies with the UN’s Guiding Principles on Business and Human Rights and Sweden’s National Plan for Human Rights, Swedfund performed a gap analysis in 2016 of our human rights processes. The objective was to support Swedfund in the evaluation and management of human rights risks and consequences in connection to new and existing investments and exits. We identified strengths, deficiencies and areas for improvement. In line with this, Swedfund has offered a partly-financed study covering aspects of human rights and development impact in Sierra Leone to the new owners of Addax Bioenergy, Sunbird Bioenergy, in order to transfer valuable knowledge and experiences. Further, Swedfund intends to further develop the dialogue with civil society and development actors to improve the overarching co-operation in connection with exits having human rights impacts.