Local Authority Pension Fund Forum (LAPFF) Annual Conference 2022: Day 1

 

Last week I went to the Local Authority Pension Fund Forum (LAPFF) Annual 3 day Conference in Bournemouth. I have been one of the Joint Vice Chairs for the past 3 years and an active participant in LAPFF both as a trade union pension rep and a Councillor for many years. 

LAPFF is the leading voice for Local Authority Pension Funds in the UK and its members assets exceed £350 Billion.  

There were Councillors, Council officers, trade union reps, fund managers, advisors and guest speakers from all over the UK and even the world. Some joined virtually while most were present in person. 

On day one, the Chair of LAPFF, Cllr McMurdo, formally opened conference and the first presentation was by a representative of  French energy giant Total on its recent (welcome) withdrawal from  Myanmar. 

The conference is held under what is called "Chatham House" rules which means that you should not repeat what is said without the permission of the speaker. I have reached out to the speaker since I am genuinely interested on the reasons why Total did not decide to pull out in the past (also see picture in collage) during previous horrible military dictatorships and repression. It would be good to understand why now and what actually changed their mind?

Next was a powerful presentation on the recent visit to Brazil by LAPFF to the local communities who had suffered grave loss of life and devastation following the apparently negligent collapse of  the so called Tailings Dams. 

There was a virtual video with a community leader from Brazil (name withheld due to fears for their safety) and from a concerned Brazilian investor. The Chair of Vale (the 5th largest Mining Company in the world) actually came in person to conference and also spoke to us. 

It is more than a pity that some large mining companies have failed to engage with LAPFF on this very important matter. 

1st anniversary of the coup in Myanmar - TUC Statement

 

Picture from this BBC report on young people training to fight the vile military dictatorship in Myanmar. Below is TUC statement. It is good to see that Total are withdrawing their operations in Myanmar. Not so 14 years ago. I must find out which garment companies are still investing there. @TomPowdrill - any thoughts?

"1 February 2022 marks the one-year anniversary of the seizure of power of a military junta in Myanmar, deposing the legitimate government in a coup d’etat. The TUC expresses our admiration for all the democratic forces, including the trade union movement, which have bravely resisted the military at great cost to themselves. 

We warn against any normalisation of the illegitimate junta and reiterate our call for diplomatic recognition of the National Unity Government in its place. We also echo the calls of the international trade union movement to target the military government economically. In particular, by placing embargos on the sales of arms and aviation fuel to the Burmese military and cutting off its revenues by refusing to purchase Burmese oil and gas.  

We welcome the decision by Total and Chevon to withdraw from their operations in Myanmar - and urge all other oil and gas stakeholders to do so too.  

To private sector enterprises in the garment trade, including several British brands, who purchase stock from Burmese textile factories, we raise the issue of the human rights abuses, political violence, and union busting taking place in these factories, communicated to us by our Burmese sister centre, the CTUM.  

We believe, based on the information provided to us by the CTUM, that any realistic assessment of whether companies can actually exercise human rights due diligence in their supply chains, including by protecting the trade union organisations in the factories, will show that it is currently impossible to meet the obligations of the UN Guiding Principles on Business and Human Rights. That being the case, companies should cease all new orders and make arrangements to withdraw their business in a responsible manner". 

First Trade Union Protest on Second Life

I couldn’t make the Newham UNISON rally tonight with Guest speaker, Tony Benn, in support of their sacked branch Chair, Michael Gavan, (I’m laid up and off work with a dodgy Achilles heal). However, I was able to visit the brand new on-line “Union Island” on “Second Life” to listen to an on-line debate on “union busters”.

I had registered for a Second Life account yesterday, but I couldn’t work out how to enter the site. Tonight, I just followed the links from the SLUnions blog; it took me about 15 minutes to work out how to travel inside the site. It was actually quite logical and straight forward, since they had 4 short compulsory training modules. Then I was teleported to” Union Island” (just like in Star Track!).

The Union Island site is very much “under construction”; however you can navigate it quite clearly. Once you get over the overall “weirdness” of Second Life, it’s not that strange and you can see potential positive benefits. While many users did have rather exotic “Second Life” names and choose to be rather imaginative with their profile and dress. On the other hand, you can see how “Second Life” could be (not definitely at this early state) an effective means for trade unionists to be able to communicate across the world.

The conversion tonight on “union busting” (companies who employ consultants to defeat union recognition ballots) and the sharing of experiences between the US AFL-CIO and the CWU was interesting in itself. However, you could also see how union reps who work for multi-national companies could arrange to meet up to discuss common concerns. Also, in the pension capital stewardship field. “Union Island” could be an invaluable resource to enable international union pension fund trustees to meet up very cheaply and work together.

Its early days yet and we should wait and see before being too carried away about the organisational potential of "2nd Life". However, I am really pleased that the trade unions are dipping their toes into the water and being imaginative about the future direction of our movement.

Finally, although tonight, I was unable to attend the Newham rally, I was able to hold a “Second Life” union protest about Michael Gavan’s dismissal (see above). Maybe the first ever? Must see if I can also organise a lobby over any Burmese Military collaborators Total presence in “Second Life”?

Burma: We don’t want our Pay and Council Tax used to support the Military Junta.

I found out last night at the Tower Hamlets Council Pension Investment Panel, that one of our fund managers have £2.3 million invested in Total (the 2nd highest holding in that particular fund) and £1.3 million in Chevron (7th biggest holding).

I suspect that our other Global equity fund will have similar investments in companies who have trading interests in Burma. We also own shares in companies such as GlaxoSmithKline (the huge British based drug company) who according to the International Trade Union Confederation (ITUC – click on this link for a full list) has business links with the Burma.

Many members of the pension scheme are furious that their pension contributions and council tax are being invested in companies that support the Burmese military junta and allow the murder of unarmed monks and civilians who are peacefully calling for democracy.

This is part of a complaint that local Tower Hamlets resident, UNISON member and Head Caretaker, Tony Boyce, has sent off to his Labour councillors (seen left with his granddaughter).

“I have been a member of the Tower Hamlets pension scheme and a Council tax payer for over 20 years. I have lived in Tower Hamlets for all my life. I am looking forward to eventually retiring and then being able to spend more time seeing my grandchildren grow up.

I would like to think that I would be able to help them out with them going to college or leaving home and getting their own place. What I would hate to think, is that my pension (which is my deferred pay) is being paid out in part, out of money earned from investing in Burma.

Burma is a horrible military dictatorship, which kills and enslaves its own people. I think that due to sanctions and criminal legal investigations that the pension fund could also lose money if they continue to invest in Burma. I ask the trustees of my pension scheme to stop investing my money in Burma”.

The Labour Councillors present, Bill Turner (Chair of the Pension and Accounts Committee) and Joshua Peck (Cabinet and Lead member for Performance and Resources) asked for a full report on what companies the fund held that had business interests in Burma. I volunteered to send over the ITUC list.

At the same meeting we discussed the scheme signing up for the UN Principles for Responsible Investment (PRI)

Finally, to illustrate how difficult these issues are – I asked the Global Equities fund manager after he gave his presentation to the Council investment panel (who are quasi-pension trustees) about the financial risk of sanctions, boycotts, criminal prosecutions and the reputational risk of investing pension money in Burma. Surely, the pension fund was facing a financial risk of continuing to invest in Burma?

He argued that the proportion of Total or Chevron assets invested in Burma may appear to be a large figure (up to $1.2 billion) however; they are only a tiny part of the total assets of that country. So if they lost money over Burma it would arguably not make that much of a difference to the company share price (I disagree).

Also, this fund manager is what they call a “quantitative” investor. That is they try to emotionally detach themselves from the companies that they invest in and only concentrate on the financial “fundamentals” (balance sheet, long term profits, market share, share price compared to profits, orders etc).

They actively invest in companies where they think the fundamentals are sound but where due to “market sentiment” the price of a company is lower than they should be.

(I accept that I have probably not adequately explained this properly, remember the usual health warning, this is my report back to members, my interpretation, not that of the Tower Hamlets Pension fund)

So we may have this crazy, crazy situation where some investors think that now is the time invest in Burma because many investors are pulling out on political sentiment rather than economic fundamentals

Personally, I think since it is now accepted that owners of capital in modern day democracies won't make money out of trading in opium then equally they should not think it is acceptable to make money out of Burma.

Newham “Total out of Burma” pickets

On route this morning to Lyn’s T Party I stopped off at the East Ham “Total out of Burma” picket outside the "Total" Petrol garage in High Street North. Today there has been a national day of action outside the French oil company “Total” Headquarters and their petrol garages across the UK.

"Total" is simply a dreadful and unethical organisation, which despite being the 5th biggest oil company in the world, is one of the very few that insists on investing in Burma and gives the military junta hundreds of millions of dollars each year in taxes and kick backs.

This money is used to buy guns and bullets to shoot and kill monks and other unarmed peaceful protesters who just want democracy and freedom for their country.

After the “T Party” I went to the picket outside the "Total" garage in Romford Road, Manor Park with another Labour Party colleague, former Councillor and UCL branch Chair, John Whitworth (seen wearing the placard “Total-ly out of order”).

There were 9 of us on this picket, 5 of which were Burmese. This is very good for an overseas solidarity picket. (There were 12 picket lines across London alone). We were carrying placards and leafleting motorists who were caught up in the usual very heavy traffic along that stretch of Romford Road.

I was on the entrance to the petrol station speaking to motorists who had pulled over for fuel. I must admit that this was one of the most successful pickets that I have ever been on. Nearly all vehicles pulled over allowed us to speak to them. They remembered the awful scenes of soldiers shooting unarmed monks in Burma. Most agreed to drive away to Tesco’s at Barking (I also told then that it was cheaper!).

Nearly everyone was pretty horrified at the connection of "Total" with the murderous regime in Burma. They did not know that their money was being used to profit a company that condoned mass murder.

Many were dismayed that they would in anyway at all be supporting the Burmese junta and insisted that I look at their petrol gauges, which were near empty and that they had to get fuel in case they ran out. We agreed that maybe they could get a gallon of petrol to get them out of trouble.

Lyn Brown MP had asked if she could attend however after the T Party she had to go to a service for a new church in Stratford. The protest had to finish before she could get to us, but she will send the Burma campaign a message of support.

I’m not going to romanticise this protest too much. However, I have been on a fair number of pickets over the years. It was firstly good to be out numbered by Burmese members of the picket (even though I suppose we should have been able to get more non-Burmese protesters out).

It was also encouraging to speak to ordinary people about something “political” and get what I thought to be a thoughtful and positive reaction. I don’t think that I have ever been on a picket line were we have ever turned back so many people. People also understood the argument and agreed that boycotting was an appropriate and legitimate response to what has gone on in Burma.

It was something that all East End Brits regardless of race, religion, nationality or class wanted to support. Chauffeur driven Rolls Royce’s and Citroen 2CVs were all turned back when we spoke to them about why we were picketing.

We had loads of cars “hooting” in support and people shouting supportive remarks as they went by. OK, as you can imagine not all remarks were 100% supportive, especially as traffic was held up at times when motorists stopped to talk to us. But overall the protest was very successful. As you can see from the pictures, we persuaded lots of people to boycott Total, this is normally their most busy day. I suspect that this will contribute towards the long term "reputational risk" that "Total" faces for its policy towards Burma.

I couldn’t make it to the final picket tonight at the "Total" HQ in Baker Street. Hope it went OK. Will speak to Labour Party comrades about organising further pickets at these garages in the future. Maybe monthly? Next week I am due to go to a Local Government Pension Union trustee conference. I will try and bring this issue up here as well. Watch this space.

Total "Out of Burma" – Day of Action Sat 24 November

The campaigning group “Total Out of Burma” is holding a national “Day of Action” next Saturday 24 November 2007. They are planning protests at petrol stations owned by French Oil Company Total.

Total have massive investments in Burma which generate hundreds of million of tax dollars for the military junta in Burma. Remember the regime need foreign exchange in order to oppress and control its own people.

Aung San Suu Kyi the Burmese democracy leader is quoted as saying “"TOTAL is the biggest supporter of the military regime in Burma". While still under house arrest (12th year of detention) she has also pleaded for a total withdrawal of investments in Burma

Click on “Total Out Of Burma” to find the location of the nearest protest to you.

At my recent Labour Party ward meeting the (Newham) Councillors present promised to investigate whether or not their pension scheme had any investments in Burma such as Total (they probably do). Also following representations from trade union members I have contacted the Chair of my own Council Pension scheme in Tower Hamlets asking similar questions.

I think that apart from the overwhelming moral case not to invest in Burma and therefore support this murderous junta, this is also a fiduciary issue. Pension and life assurance funds ought to assess the potential financial risks to their funds from such “investments”. For example, Total is the lead partner in a $1.2 billion investment in an off shore gas field in Burma. If European or US sanctions are tightened and they have to sell off these assets quickly then Total could face huge losses. Nevermind the widespread boycotts of Total and its reputational risk.

Why we don’t want pensions paid by the blood of the Burmese People

This afternoon I appeared on the BBC The “Politics Show” (London Region slot) to be interviewed with Cllr James King (who was on behalf of LAPFF) about Council pension schemes who invest in companies that trade with Burma. Cllr King was arguing that it may be appropriate for pension funds to invest in companies who trade with Burma, if they engage with these companies to influence and change their behaviour.

While I was arguing that we should pull out of all investments in Burma. I need to carry out more research but I suspect that a majority of all pension and investment funds in the UK have some investment exposure to Burma. This is not just a local authority issue. You can see the interview again, here. Just click on the “latest programme” button and it is about 13 minutes into the London show after the interview with Lord Coe.

It was the first time I have been interviewed on television (apart from on demos) and I will post about the experience another time. However, investing in Burma is a complex as well as an emotive issue. We only had 4 minutes to tackle the arguments. I’ll try now to spell out the 3 main arguments for disinvestment (pulling out of all investments) in Burma and why it is also in the best financial interests of the pension funds that they do so.

Firstly, there is the Citizen Investor argument, which is quite clear and relatively simple. If you have any investment savings or contribute to a pension; there is a risk that you are a part owner in companies that benefit from forced labour and military repression in Burma. I believe that trade unionists and the majority of people with such savings do not want their pensions or life assurance policies paid by the blood of the Burmese people. I don’t think that I have to persuade people about the hideous nature of the Burmese regime. If you do need reminding check out the Burma Campaign UK web site.

Then there is the call for International solidarity. Burmese trades unions as well as democratic political organisations are calling for disinvestment. They say that only the regime benefits from commercial ties with the country, and that the isolation of the regime is the most effective help that can be given. UNISON is affiliated to the Burma Campaign UK and the International Trade Union Confederation (ITUC) which also calls for disinvestment and has a register of 427 companies who have trading links with Burma, including household names such as Rolls Royce and GlaxoSmithKline.

Finally, there is a Capital Stewardship argument that that there is in fact an unacceptable financial risk to funds from investing in Burma. For example, many funds will have shares in Total the French oil and Gas Company simply due to its size. . It is the 6th biggest in the world. It is part of a consortium which has invested $1.2 billion in an off shore Burmese gas field and pipe line. This field is of course pouring hundreds of millions of dollars each year into the hands of the Junta in taxes. This money is partly used to buy the guns and bullets for the Burmese military.

However, whether or not you think it is right or not to disinvest, you should be concerned that if European sanctions were tightened and Total is compelled to sell off its Burmese investments, it would have to be a discounted “fire-sale” price. This would mean huge losses to Total which would depress its share price and value of funds investing in it.

There is also a huge reputational risk. Belgian prosecutors recently reopened an inquiry into alleged crimes against humanity by Total in Burma. Total faces the risk of lawsuits in the US. It has also been subject to growing media criticism, political pressure, consumer boycotts, and even demonstrations at its offices and petrol stations. In fact there have been demos and blockades of Total garages in London and Cardiff in recent weeks. The Northern Rock fiasco is not a direct comparator but does demonstrate what can happen to a share price and investments in it when a company’s reputation is at risk.

What can you do about it? Write to your pension’s administrator, contact your pension’s trustees, and write to your insurance company or savings plan requesting that they:-
1. Consult with scheme members about Burma
2. Identify if they hold stock on your behalf in any of the 427 companies
3. Actively engage with these companies and insist that they immediately cease all investment and commercial activity in Burma and report back to members.

"Please use your liberty to promote ours" Aung San Suu Kyi

Danes take on Burmese Military collaborators

It was good to receive a welcome email today via the International Trade Union Confederation and Committee Workers Capital. The Danish pension fund ATP, which every working person in the country has to pay into (3 million people in 2005 with assets around 50 billion EURO) - has just announced that it will dis-invest from all oil companies that deals directly with Myanmar Oil, including Total. As well as any other companies that fail to comply with EU sanctions. Apparently this is 100 million EURO of shares.

I can’t find any link to confirm yet but it seems genuine. Check out Tom at Labour & Capital who has been following the British “dirty 32” who have trading links with Burma.