Super Fund keeps Israel Chemicals stake
White phosphorous maker Israel Chemicals will remain in the New Zealand Superannuation Fund's portfolio after a review found no grounds for exclusion.
Fund chief executive Adrian Orr said the review had found no evidence that Israel Chemicals' products had been used against civilians in the Gaza conflict.
"Our analysis suggests Israel Chemicals operates within national and international laws and conventions New Zealand has signed," he said.
The fund was responding to calls to divest its holding in the company, which supplies white phosphorous to the United States military for use in ammunition.
The product is highly incendiary but its technical military function is as a smokescreen.
Its use as a weapon against civilians is illegal.
Israel said last year that it would find alternatives to white phosphorus after condemnation of its use on civilians during the 2008-09 Gaza conflict, the fund said.
Although white phosphorus did not appear to have been used in Gaza this year, Orr said, the fund would reassess if evidence emerged to the contrary.
"We continue to follow the United Nations investigation into this distressing conflict."
He said fund divestment decisions were based on government and international policy on the arms sector.
"We take our lead from national and international laws, conventions to which the New Zealand government is a signatory, and significant policy positions of the New Zealand government," he said.
"We have excluded companies involved in weapons banned by conventions which the New Zealand government has signed, such as cluster munitions and landmines.
"Acting consistently with these principles is the basis on which we fulfil our obligation to avoid prejudice to New Zealand's reputation as a responsible member of the world community.
"It is not our role to make government policy."
The fund has a passive $900,000 investment in Israel Chemicals, one of more than 6000 global equity stocks in its portfolio.
Labour defence spokesman David Shearer, who worked for the UN in some of the conflict zones where white phosphorus was allegedly used, this month called for the fund to sell its Israel Chemicals stake.
"We should be divesting from that [shareholding] immediately," he said.
"New Zealand should not be investing in any type of munitions that can be used in the way Israel is using them at the moment.
"It is absolutely unacceptable and I think most New Zealanders would agree. I don't believe it is right.
"There are plenty of good investments in the world without having to invest in armaments."