Super funds still invested in cluster bomb makers

WILLIAM MACE
Last updated 10:53 07/12/2012

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Government superannuation funds are still investing in companies that manufacture cluster bombs despite adoption of a law against the practice.

The Green Party brought the investments to Parliament's attention yesterday by asking Finance Minister Bill English how much was invested in dozens of companies, including known cluster munitions producers Lockheed Martin, Raytheon and L-3 Communications.

The Government's National Provident Fund [NPF] and Government Superannuation Fund [GSF], which is for government employees, have invested $2.2 million in those three companies, said English.

Green Party co-leader Dr Russel Norman said the investment contravened the Cluster Munitions Prohibition Act 2009 which prohibits the use of Government money in funding cluster bomb production.

''New Zealanders will be horrified to know their Government is profiting from the production of cluster munitions - bombs that kill so indiscriminately, 98 per cent of all reported casualties from them are civilians,'' said Norman.

''When we adopted the Cluster Munitions Convention in 2008, we made a commitment to 'never under any circumstances assist or encourage' the cluster munitions industry.''

The Government funds' investments were made through trusts and managed fund portfolios which made them difficult to track, and English had not yet stated what action, if any, would be taken on the issue.

Norman also cited a letter in which the Auditor General agrees with him that ''the law prevents the Fund from investing in'' companies involved in cluster munitions.

That letter refers to earlier accusations that a different fund - the New Zealand Super Fund [NZSF] - was investing in cluster munitions manufacturers, but the Green Party believed the same principle applied to the NPF and GSF.

In that case last year, Norman's belief that NZSF was investing in five different companies which were making cluster munitions was denied by the fund's guardians who said the named companies were not cluster bomb manufacturers.

"The Guardians are therefore comfortable that we are acting in accordance with our responsible investment policies and are not in breach of New Zealand's obligations under the Cluster Munitions Convention," NZSF said in a statement.

However in September this year NZSF dumped investments in four companies deemed to have fallen foul of social and environmental standards.

The fund sold holdings in US miner Freeport-McMoRan Copper & Gold, US petrochemical engineering firm KRB, Japanese electricity firm Tokyo Electric Power Co, and Chinese resource firm Zijin Mining because the firms failed to meet responsible investment standards over corruption, human rights, safety and environmental issues.

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Holdings in the four companies totalled $1.8 million, or just 0.01 per cent of the fund's $19 billion investment portfolio.

- © Fairfax NZ News

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