What started out as a tuna adventure hoping to make millions ended up with a $2 billion bill for the Mozambican citizens. With the newest payment plan for the payback of the illegitimate loans to the Mozambican tuna company Ematum two Danish pension funds could look forward to a profit from their investments in this dirty affair. But pressure from Danish activists might end up making a difference.

It is known that 6 Danish financial institutions and pension funds were among the original lenders of controversial state-guaranteed loans to the Mozambican tuna company, Ematum. The loans were arranged by the Swiss bank Credit Suisse and the Russian bank VTB and have been revealed as a big fraud. Since the Mozambican government guaranteed the high-interest loans, it means that the local taxpayers now are likely to have to repay the loan to the foreign investors.

An auditing report from the auditing company Kroll revealed that only a small portion of the loans have been used to invest in a couple of fishing boats, which never left the harbor of Maputo. The larger portion of the money was not accounted for, which made the creditors go to the Mozambican state with a claim of the state-guarantee. The loan-guarantee was not agreed upon in the Mozambican parliament making them illegal. The affair made the Danish Government to hold back the Danish aid programs for Mozambique in 2015, where after they stopped it completely from 2016.

"It is poor people who end up paying the bill. We must have a new international agreement on debt restructuring. Today, the debt can only be spread on populations whose governments have borrowed, illegally or not. There must be a creditor's responsibility”. Says Lars Koch, the political head of Action Aid Denmark, to the Danish newspaper Information.

Danish pension funds have a chance on profiting from new payment plan
In February 2016 the Danish newspaper Information revealed that two Danish investment companies and four Danish pension funds owned bonds in the controversial loans. The 28^th of December 2018 the same newspaper could report that three Danish pension funds still own their bonds.

In December 2018, the largest Ematum creditors agreed to postpone installment payments on the loan. This gave the government a respite, but significantly increased the country's debt burden. The population of Mozambique would thereby end up repaying between $1.7 billion and $2.2 billion for a $760 million loan, from which they do not receive any benefit. Meanwhile, companies who now own the debts are set to make potentially huge profits. Among those companies are three Danish pension funds.

"The agreement with the owners of Ematum bonds must be seen as an attempt to get the Mozambican taxpayers to pay for loans that others have taken up," says Ole Stage, representing the Critical Pension Customers Association in Denmark, to the Danish newspaper Information.

The recent arrestments of five persons behind the scam, including former finance minister of Mozambique Manual Chang, and three former executives of the bank Credit Suisse, might void the loans.

Pressure from Danish civil society has influenced the investors
The publicity in 2016 resulted in the selling of the bonds from the biggest Danish investors, Sydinvest and Danske Bank Invest. Which can be considered a clever move from the investors, who this way avoid the critics from the recent developments in the case, and also pass the opportunity to take responsibility in the question of the payback of the loan after the reveal of the scam.

Three Danish pension funds still own their bonds. Two of those - PensionDanmark and Nordea Liv og Pension are expected to accept the new payment plan. They argue that their shares are so small that the selling of the bond will not affect the process. The bonds must though still be considered to be in conflict with their own responsible investment guidelines.

As a result of pressure from the ‘Critical Pension Customers’ network, the third pension fund MP Pension has as the only of the three funds investigated their investment loans.

"This bond investment was a mistake in the retrospect, and we have now strengthened our processes in this field, so I really hope we can avoid such mistakes in the future". The head of investment for MP Pension, Anders Schelde, says to Information.

Furthermore, in December 2018, MP Pension decided to add the Mozambican state to their list of exclusion of state bond investments, and on this basis to divest their bonds in Ematum no later than end March 2019.

According to Vibe Johnsen from Critical Pension Customers network, citizens are becoming increasingly aware of their possibilities to influence their Pension agencies towards more responsible investments, increased transparency and other changes. They are organizing themselves, in networks exchanging information, strategizing and having success in influencing and changing investment policies and practices of the financial institutions.

Our pressure for increased accountability has, among other things, contributed to MP Pension now profiling themselves on responsibility and profit must go hand in hand and making a real effort on living up to this.

Danish pension funds also invest in Mozambican natural resources
The controversial state-guaranteed loans in Ematum are not the only interests the Danish pension funds have taken in Mozambique. In February 2018 the Danish NGO Afrika Kontakt launched a report that revealed the investment from eight Danish pension funds in the extractive industry in the Tete province. Here the Danish pension funds have investments in the damaging coalmine Moatize, which has caused water and air pollution and the displacement of 1365 households. Three of the eight pension funds have reacted on Afrika Kontakt’s report, but none have fully disinvested.

However, upon initiative from the member base, MP Pension started a process of close follow up, investigation and defining a  way forward with their investments in the Moatize mine, using the case as a precedent for future investment politics in similar investments.

When the Danish trade movement in the early 1990s, together with the then liberal Danish government, introduced the decentralized labor retirement schemes, the reasoning was that the member-based funds could influence on business and ensure decent investment practice for our collective savings. As the above mentioned cases show, the reality is that the main goal of the investments is profit not people. This time resulting in Mozambican citizens to pay for the retirement of the Danes. 

On the other hand there is hope as more and more critical voices in Denmark starts influencing the investment policies towards more socially, environmentally, and financially responsible investments of the Pension Funds and holding them accountable.