Funds clam up on holdings in cluster bomb companies

WILLIAM MACE
Last updated 11:07 10/12/2012

Relevant offers

Minister of Finance Bill English has asked two government superannuation funds to confirm whether they are investing in cluster bomb manufacturing companies, but so far they're not talking.

Investment in companies manufacturing cluster bombs, which have a high collateral damage effect and often kill civilians, was outlawed by an international Cluster Munitions Convention in 2008 and passed into New Zealand law a year later.

The Green Party forced English to acknowledge in Parliament last week that the Government's National Provident Fund and Government Superannuation Fund had investments in 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 between them, English said.

Asked what action was being taken to identify and address the problem, a spokesperson for English said the funds needed to comply with the law and with their own investment policies.

"The Government is asking them to confirm that they are doing that."

Both funds are managed by Annuitas Management and the company's chief executive, Simon Tyler, did not respond to questions on the issue.

Green Party leader Dr Russel Norman called on English to direct the fund managers to divest from investment vehicles which held cluster bomb manufacturers in their portfolios, or that did not screen their investments adequately.

"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," Norman said.

"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 said "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 making cluster munitions was denied by the fund's guardians who said the named companies were not cluster bomb manufacturers.

Ad Feedback

"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.

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.

Holdings in the four companies totalled $1.8 m.

- Fairfax Media

Comments

Special offers

Featured Promotions

Sponsored Content