Trade unions have demanded 30 union-backed industry superannuation funds use their leverage as shareholders to pressure mining giant BHP to save the jobs of 80 local seafarers who work on ships hauling iron ore.
Days after global miner Glencore bowed to investor pressure to cap its coal output, the president of the Australian Council of Trade Unions, Michele O'Neil, has written to 30 industry funds to seek their "active support" in dealing with alleged human rights and social governance failures by BHP.
Ms O'Neil expects industry funds to exert pressure on BHP to reverse its decision to terminate vessel management and crewing arrangements for two ships that carry iron ore from WA to Bluescope's Port Kembla steelworks in Newcastle.
"Industry funds have a proud history of using their investment power to advance the interests of Australian workers, as do pension and superannuation fund managers around the world," she said.
"If BHP wants working people to invest their retirement savings in the company they must act appropriately and protect the jobs, wages, conditions and lives of working people, and respect the communities that they're operating within."
The ACTU claims that ending the shipping arrangement will cause up to 80 domestic seafarers to be replaced by foreigners, which would constitute a breach of human rights obligations and be an affront to the "intent" of Australian shipping laws.
Labor Leader Bill Shorten has previously accused BHP of jeopardising national security and local jobs.
Accompanying the letter by Ms O'Neil is an investor briefing prepared by the Maritime Union of Australia, which accuses BHP of a "hat trick" of environmental, social and governance issues including tax avoidance and deaths in Brazil.
"I anticipate your fund is invested in BHP, either directly or indirectly through asset managers, given the company's global footprint and its listing on the London, Australian and Johannesburg stock exchanges," Ms O'Neil writes.
"I request that your fund (at senior management or investment committee level) assess BHP's ESG [environmental, social and governance] performance and investment risk profile against your fund's investment policy ... and that your fund seek to engage with BHP at board or senior management level in the near future.
"We believe that BHP's ESG failure is creating material risk that must be of concern to investors and which requires investor action."
BHP, which declined to comment, does not own or operate any vessels or employ seafarers. Shipping industry executives insist Australian-crewed vessels are prohibitively expensive.
The MUA investor briefing accuses BHP of a failure to comply with the "intent" of Australian shipping laws by creating a labour dispute rather than fostering local jobs.
"BHP's cavalier approach means it has failed to uphold its human rights commitments as a signatory to the UN Global Compact and the UN Guiding Principles on Business and Human Rights," the briefing says.
"BHP's decisions are likely to attract an adverse response from global and national labour unions, resulting in further investment risk, detrimental to the millions of superannuation and pension fund members who are invested in BHP."
The campaign is another sign of the enormous pressure that institutional investors, such as super funds, are exerting on companies over ESG issues.
Glencore this week announced it would freeze coal production at 2019 levels, citing pressure from Climate Action 100+, a group comprised of more than 300 investors globally.
AustralianSuper is on the global steering committee and helped design the initiative, which requires greater action to reduce carbon emission in line with the Paris Agreement.
In her letter Ms O'Neil says she expects industry funds to ask BHP to commit to meet with the ACTU to discuss human rights issues.
"I look forward to your reply as a matter of urgency ... ideally by early March 2019, on the actions taken by your fund in response to this letter and, importantly, your advice on the response of BHP and asset managers to your engagement."
The MUA says the industrial dispute in Australia is part of a wider pattern of ESG failures by BHP.
These include tax avoidance as "evidenced by its out of court settlement of an Australian Taxation Office underpayment dispute relating to its Singapore iron ore marketing hub" and a failure to avoid environmental damage and loss of life in the Samarco mine disaster in Brazil.
Read the ESG report here