Lothian Pension Fund drops Israeli bank at centre of divestment campaign

Lothian Pension Fund no longer holds shares in an Israeli bank which finances illegal West Bank settlements, prompting pro-Palestinian divestment campaigners to claim to have won a “landmark victory”.

The Ferret reported last year that LPF, Scotland’s second largest council pension fund with 84,000 members and £8bn of assets, had 967,246 shares in Bank Hapoalim worth £6,194,290. 

Bank Hapaolim is the target of a global divestment campaign due to its financial support for controversial settlements in occupied Palestinian territories. The bank is listed by the UN for activities in the West Bank that “impact on the civil, political, economic, social and cultural rights of the Palestinian people”.

This is the third such decision in Scotland to divest from Bank Hapoalim; Falkirk Pension Fund divested in 2018 and in early 2019 Tayside Pension Fund followed suit

Gerry Coutts, chair of the Time to Divest campaign

Both the Scottish Palestine Solidarity Campaign (SPSC) and Unison Scotland have been urging LPF to divest from Bank Hapoalim. According to LPF’s latest list of investments – dated 31 March 2021 – the fund no longer has shares in the bank.

Gerry Coutts, chair of the Time to Divest campaign and vice-chair of SPSC, said: “This is the third such decision in Scotland to divest from Bank Hapoalim – Falkirk Pension Fund divested in 2018 and in early 2019 Tayside Pension Fund followed suit.  

“Scottish Palestine Solidarity Campaign work with partners, in particular Unison Scotland, in the Time to Divest campaign to secure these landmark victories.”

Simon Watson, of Unison Scotland, said: “Pension fund investments have got to provide for a decent retirement for members. But some investments, such as those in the occupied territories, are not just unethical but also carry a higher level of risk due to political instability.  We welcome moves by pension funds to review these.”

LPF declined to comment. The fund says its pensions committee believes “decisions to invest in, or divest from, a particular company should be made by an investment manager based on a holistic analysis of financially material issues, including environmental,
climate change, social and governance issues.”

Last year The Ferret reported that Bank Hapoalim was involved in a football corruption case. The bank was fined for tax evasion and conspiring to launder kickbacks to officials in a Fifa scandal which involved marketing rights for Copa America – the South American football championship.

The US Department of Justice said Bank Hapoalim admitted to conspiring with US taxpayers to hide more than $7.6 billion from the tax authorities in more than 5,500 secret Swiss and Israeli bank accounts.

Bank Hapoalim pleaded guilty to criminal conduct and agreed to pay $875 million to the US authorities in a deferred prosecution agreement. LPF said at the time it was “disappointed” at the development and would “engage” with the bank.

In 2018 The Ferret reported that Falkirk Pension Fund (FPF) had sold its shares in Bank Hapoalim. The fund had £6m invested but sold its holding on the advice of a fund manager.

In February, we revealed that Scottish universities had shares worth more than £2m in companies linked to settlements in the West Bank.

Freedom of information requests showed that Glasgow University had £751,568 invested including shares in Hewlett Packard (HP) worth £85,412. HP is a target of BDS which says the company provides computers and technology for Israeli security forces who occupy the West Bank.

The universities said in reply then they are fully committed to socially responsible investments.

Bank Hapoalim did not respond to our request for a comment. But a statement on its website outlines its commitment to “corporate and social responsibility”.

It says: “As a leading financial organisation, we have a significant financial, social, and environmental impact on the Israeli economy.

“This impact creates the commitment to ensure that as an integral part of the operation of our business, our actions promote social and environmental values to the benefit of our customers and all of our stakeholders.”

Cover image thanks to iStock/Ryan Rodrick Beiler.

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