"You Cannot Pick & Mix Which Human Rights to Respect" National Express LAPFF14

The President of the USA Teamsters Union, James Hoffa, sent a video message to the LAPFF conference to thank them for our support in their campaign to stop the North American arm of British company National Express's union busting.

Teamster Louis Malizia then explained to the conference more about the low pay & exploitation by National Express of school bus drivers as part of an "International Activism" debate.

He pointed out the reputational risk to the company from such behaviour and the considerable USA litigation risks from commonplace breaches of Labour law and health & safety legislation.

In the Q&A I made a contribution that there are Ten United Nations Universal Principles of Human Rights. Responsible investors have to respect all Human Rights and this includes Principle 3 regarding trade unions - "Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining".

My point is that you cannot "pick and mix" which particular Human Rights you want to uphold. You have to uphold all of them equally. I hope that National Express and other rogue employers such as the Board of UK Catalysis Housing Association, will understand that if they do not uphold all human rights - then they run the obvious risk that they will be accused of not respecting human rights.

Cherie Blair CBE QC "how better business practice can drive both market & social returns" LAPFF14

Picture of Guest Speaker at LAPFF conference, Cherie Blair, with the youngest member of the Newham Council Pension Committee (and possibly in the entire UK?) Cllr Seyi Akiwowo.

Cherie spoke about how when she started to practise law, human rights was not on the agenda especially for pensions. A common view at the time was that of the economist, Milton Friedman, that the only job of business was to maximise profit.

Nowadays most retail shoppers surveyed say that business ethnics matters but will they remember this during a Black Friday wrestle?

Socially responsibly investment is not a drag on company performance but improves it. According to the FT only 50% of companies currently comply to the Code of Practice.

Pension funds are holding the keys to capital, you can demand good business practises. You can help bring about change in the world - in the here & now. Issues such as child trafficking are not just for the  Police & Governments but also for pensions funds.

Those who are sceptical of this should remember the German philosopher, Schopenhauer's, three stages of truth "First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident".

Cherie also referred to the glass ceiling of women on Company boards. Research shows that most board appointment are made are the basis that "they know the company Chairman". Diverse boards result in better financial returns

Cllr Akiwowo asked Cherie on behalf of young people "How do we make pensions more sexy and make all aspects of diversity important? While Newham's elder Pension statesman, former Chair of LAPFF, John Saunders, also asked her a question relating to her work for the Kazakhstan government. Both questions were smoothly and calmly answered by her.

She agreed with Cllr Akiwowo that we need to educate young people about pensions and make pensions more relevant to all.  Also in response to John, that you cannot live in an  "ivory tower" and must be prepared to do the right thing even in a different and difficult environment.

Engagement Panel at LAPFF14

The next item at the Local Authority Pension Fund Forum (LAPFF) conference was a panel on  "engagement" with Cllr Kieran Quinn GMPF, Chair Sir Merrick Cockell, Cllr Richard Greening LBI and Cllr Cameron Rose LPF.

Investor engagement is probably one of the most significant things that LAPFF does on behalf of its members. "By bringing local authority funds together to work collectively, the Forum is able to maximise their influence" .

Cllr Quinn started by pointing out how important it was for investors to engage and keep an eye on  all the companies they invest in - who would have expected Tesco's to have behaved in such a way? Trinity Mirror refused to accept that they had a problem with the Hacking scandal but all the information from "Hacked off" proved to be true. How could Barclay's justify giving three times as much money in bonuses as they returned to investors?

One of the most positive engagements he experienced was after the Rana Plaza garment factory collapse in Bangladesh when reputable companies were coming to us to explain what they had done and what they were planning to do. There was no investor rush to exist Bangladesh which would have not helped.

Sir Cockell pointed out that with engagement "you may lose the vote at Company AGM but still win the argument"

Vice Chair of LAPFF, Cllr Rose discussed the engagement he has had on Carbon risk with the UK major oil majors and the fall out from falling prices.

Cllr Geening talked about how engagement can take time and be difficult. Such as the lack of progress with National Express on their anti trade union activity in the USA. Management don't think there is a problem. However, it took time for similar issues to be dealt with at First Bus and engagement did eventually work.

I raised a question to the panel about whether they would support disinvestment in a company as a last resort if engagement failed?

The panel response was as a very last resort they would consider disinvestment but it would have to be at the very end of the road. The whole purpose of engagement is to change company behaviour and if we walk away from a company then it won't necessarily change anything.

There was a good point made about what would be the future of engagement if the LGPS was forced to invest only in passive (tracker funds) and therefore could never disinvest.

LAPFF Conference 2014: Public Funds & Public Purpose

Yesterday I came back from the Local Authority Pension Fund Forum (LAPFF) conference. I will post more on the conference later on.

It was I think the best attended LAPFF conference I have been to which reflects the huge changes and chellenges that the Local Government Pension Schemes (LGPS) faces and that membership of LAPFF is at an all time high.

The conference opened with a welcome from LAPFF Chair, Cllr Kieran Quinn Greater Manchester Pension Fund.

The Conference Chair was Sir Merrick Cockell, former Conservative leader of Kensington and Chelsea Council and the Local Government Association. He is now deputy Chair of LPFA. I found his remark that "No matter what your politics are you must be concerned about the under supply of housing" interesting.

He also said that we nationally need to invest in infrastructure for not only social purposes, but for sustainable and better returns than gilts & bonds. He believes the future is pooling & collective investments and you don't just need sovereign investment funds such as Qatar for such infrastructure & housing projects.

In the past Sir Cockell has publicly supported the merger of all 101 LGPS into just 5 funds and that this could result in some 300,000 new homes being built every year.

Next was a debate on LAPFF "engagement".