
“
How local authorities are investing in unscrupulous corporations” Last week I went to a meeting at the left wing bookshop
Housmans in Kings Cross. This is the first time that I have been to Housmans. It is the sort of place that you could easily spend a hour or so looking through bookshelves at various bits and bods. It also hosts a number of evening events for “
community and radical groups”.
I had never heard of the "London Local Authorities Pension Campaign" and being the anorak that I am, decided to play a visit to this event.
Redpepper described it as such “
Thursday 3rd July 2008 – 7pm This talk will mark the launch of a new campaign that aims to disclose how local authorities are investing funds from our council taxes and pension schemes into some of the world’s most unscrupulous corporations – often without knowing it.By collecting data through the Freedom of Information act, and networking with a range of anti-corporate and corporate accountability campaign groups and individuals, a picture has emerged in which local authorities are investing in companies that are raping the environment, profiting from war, and trampling over human rights. The campaign has received support from Corporate Watch, Campaign Against Arms Trade, Islington Friends of the Earth, Greenpeace and FairPensions amongst others”.
I went with a shy and retiring UNISON colleague.
The meeting was organised by Michael, who by co-incidence is a member (paid worker?) of the Amicus UNITE housing branch. There was about 20 people present, half of which, Michael said were his “friends and relatives”. He described how first got involved in this issue because he was horrified that his Council tax payments was being used to invest in the Arms trade in such companies as
BAE. He had used the Freedom of Information (FOI) Act to contact all of the London Councils to find out what the top investment holdings were. All the councils replied, except for the City of London (who very efficiently replied to his request but simply refused to disclose – so no real surprise there) and Croydon Council (who claimed that they could not supply such details since they had “
pooled investment funds” – hmmmm, what nonsense). Michael apologised that a speaker from
Fair Pensions was not able to attend. He was (for reasons he explained fully afterwards) not very happy about this.
The next speaker was Richard from the Mining Network (which I think is connected to the website
Mines and Communities). London is the world's centre for raising finance for international mining companies. Nearly all the major companies are listed on the London stock exchange. Richard described how some of these companies have driven people off their land without compensation and ruined the environment. However, he said that his group had used the “engagement” argument with these companies to try and encourage them to do some good things rather than bad. London Council pension funds invest a lot of money in mining companies.
The final speaker was Robin from the London branch of the Campaign against the Arms Trade (
CAAT). Their main campaign at the moment is with Islington Council who has 0.6% of its pension fund invested in the "arms trade". He does not believe in the engagement argument for arms companies. He is pretty confident that they will be successful in Islington. He pointed out that if some councils do not invest in the arms trade for investment reasons, without any apparent negative cost to the scheme, then why shouldn’t other councils decide not to do so on grounds of principle. In
Merseyside, the majority of councils who contribute to the local pension fund, had voted not to invest in the arms trade (actually it was over "cluster bombs" but nevermind) but the fund had refused to accept their decision.
There was in my view anyway, a pretty useful and wide ranging discussion afterwards about the campaign. The ambitious UNISON
capital stewardship programme was brought up. I think that it is also fair to say that there was a polite frank exchange of views on some matters. In particular the view that actually pension funds do not belong to the Council's nor tax payers but actually to the Council employees. Also, the primary purpose of the funds is to provide a safe and decent retirement for employees. Actually, I thought that there was a broad consensus on the need for council pension funds to manage their funds in a socially responsible manner.
I have always thought that the disinvestment argument (not investing in companies such as British Aerospace) for the arms trade was counterproductive. Like it or not, it is clearly unlawful for Council pension funds not to invest purely on “
ethical” arguments. That is not to say that you could not argue against not investing in a company, that say produces landmines. Since you could argue that there is a risk to the fund by investing in such a company, because the reputational risk could harm the value of the investment.
Personally, I think that the campaigners in CAAT are actually letting pension funds off the hook by concentrating on the disinvestment argument rather than the more difficult to argue against “engagement” argument (check out the UN
Freshfields report).
I will also declare a personal interest. My father was for many years employed as an aircraft electrician by a company that ultimately became a part of
Airbus. He has the assistant branch secretary for the electrician union at this factory in the 1950’s. For many years, the production of war planes at Broughton brought bread to our family table. The factory was/is a major employer in my home town. Keeping it in the family, one of my brother-in-laws, is also an aircraft technician and often works on military contracts. If we are not pacifists and continue to have an army, navy and air force in this country how can we be against investing in companies that manufacture arms? This argument is utterly different from that about selling arms to dictatorships or paying bribes for contracts.
Michael gave out a list of the top 24 holdings by London Council pension funds. At the end of the meeting I went through this list with him. At the TUC pension trustee conference recently there was a comment that how could any pension fund not invest in BAE since there was practically no other major manufacturing company in Britain?
Arguably, my own pension fund in Tower Hamlets Council would have "problems" (moral hazards) with investing in nearly every company listed. Oil and gas (destroying the environment); banks and insurance (for usury - many members are Muslims); Mining companies (as above); Tobacco (obvious); drugs companies (animal experiments); drink companies (obvious); Nestle (baby milk powder). In fact the only companies in the list that I could not think would be objected to by someone would be Videophone and BT.
Of course, I have now remembered that telecommunication companies sell and export military communication equipment as well! So they are out! The problem is even more complicated since Michael’s own union UNITE organises in BAE. No doubt these trade union members will also have a view on their jobs.