View of Palestine

Revealed: Scots pension funds invest in firms blacklisted by UN

Scotland’s two largest council pension funds have invested in companies reported to be on a United Nations (UN) blacklist for doing business in illegal Israeli settlements in the West Bank and East Jerusalem.

We can also reveal that Scots pension funds have invested tens of millions in arms firms selling to Israel.

It was reported recently that the UN sent letters to 150 firms warning they would be added to a database of companies doing business in Israeli settlements.

The UN’s blacklist details firms acting in violation of “internal law and UN decisions”and Israeli media named 25 of the companies including HPE, RE/MAX and Bank Hapoalim who carry out business in the Occupied Territories.

Strathclyde Pension Fund invests in HP and RE/MAX indirectly.

Lothian Pension Fund invests in Bank Hapoalim which provides financing for the construction of housing projects in Israeli settlements, according to a pressure group called Time to Divest.

Critics argue that pension funds should exclude controversial investments from their portfolios and abide by ethical principles, while funds say they are legally bound to get the best returns for investors.

According to Time to Divest, Bank Hapoalim acted as a “guarantor and loan maker to major contractors and construction companies who build in the Occupied Territories”.

“The bank is a guarantor of the state loans to the companies that built the light rail in Jerusalem, which is designed to connect the settlement neighbourhoods around Jerusalem with the city centre,” Time to Divest claims.

In October, Denmark’s third largest pension fund excluded Bank Hapoalim and three other firms from its portfolio, citing links to Israeli settlements.

RE/MAX Holdings Inc is the parent company of RE/MAX LLC, a US multinational real estate franchise company headquartered in Denver, Colorado.

Time to Divest says that RE/MAX Israel operates a licensed RE/MAX office in the settlement of Ma’ale Adumim.

The Ma’ale Adumim office and other Israeli offices offer real estate for sale and for rental in all the major West Bank settlements, the pressure group says.

HP Inc – formerly Hewlett Packard – has worked closely with the Israeli military and several Israeli authorities on a wide range of occupation-related projects at least since the 1990s.

Campaign groups condemned the investments and called for funds to divest and focus instead on ethical investments.

Sofiah MacLeod, chair of Scottish Palestine Solidarity Campaign, said: “We welcome UN moves to at least bring some accountability to corporations that facilite and profit from war crimes and human rights abuses.

“Local authority pension funds in Scotland should live up to their ethical and social responsibility principles and exclude these companies from their portfolio, or else abandon the pretence that they uphold any such principles at all.”

Scots pension funds also invest heavily in arms firms trading with Israel.

Strathclyde Pension Fund has £3.5 million invested in Northrop Gruman which sells parts for fighter jets and £3.7 million in Raytheon, which has a factory in Glenrothes making laser guided systems for Paveway IV missiles. These smart bombs were used in Gaza by Israel.

Lothian Pension Fund also invests in Raytheon, around £8m, and it has £79 million with Lockheed Martin. The fund also has £27 million invested in General Dynamics and £26 million in Northrop Grumman.

Andrew Smith of Campaign Against Arms Trade said that councils are meant to “work for the social good, and that should be reflected in the investments they make and the money they spend”.

He added: “By investing public money in companies that have profited from atrocities, these councils are enabling them to continue ignoring the human rights abuses taking place in the occupied territories.

“It is time for Scotland’s councils to put their money where their mouths are, end these investments and show support and solidarity with those suffering under occupation.”

However, pension funds defended their investments and said that divestment can be ineffective.

Lothian Pension Fund said it takes its responsibilities as a shareholder seriously and that it has a duty in law to “invest for the best returns to ensure pensions are paid when due”.

A spokesperson added: “The fund includes these issues in its investment analysis and decision-making. Where we have invested in a company, we engage on our own, and with other investors, to improve corporate standards.

“We believe that engagement to alter a company’s long-term behaviour is more productive than a policy of divestment, which results in a loss of influence.”

Strathclyde Pension Fund said it is a signatory to the United Nations Principles for Responsible Investment and has appointed independent monitors to ensure investment managers adhere to guidelines.

A spokesperson added: “It (the fund) takes its social responsibilities seriously and is recognised as a fund that is showing leadership both nationally and internationally in actively engaging with the companies in which it invests; to challenge them to address risks and improve performance.

“However, the fund does not generally consider divestment an effective strategy for securing change or encouraging responsible behaviour; given that it clearly reduces investor influence.”

RE/MAX and Bank Hapoalim did not reply to our request for a comment.

HPE said it is “strongly committed to socially responsible business practices and has been throughout its history”.

A HPE spokesperson added: “Our work in Israel is consistent with our values and standards.It is not our policy to take sides in political disputes between countries or regions.

“Instead, we are committed to making the benefits of technology available to all people as a means to learn, to work and to thrive.”

Fergus Moffat, head of public policy at UK Sustainable Investment and Finance Association, said that rules require councils to publish a statement which covers policy on how far they consider “social, environmental or ethical considerations”.

He added: “For members who are concerned about controversial investments they should write to the people involved in the running of their scheme.

“In local government pension schemes this includes members of the pension fund committee, the pension fund’s human resource team and potentially local councillors – details for all of whom should be available on the website.”

Photo courtesy of Billy Briggs.

Leave a Reply

Your email address will not be published. Required fields are marked *

Hi! To read more you need to login.
Not a member yet? Join our co-operative now to get unlimited access.
You can join using Direct Debit, payment card or Paypal. Cancel at any time. If you are on a low-income you may be eligible for a free sponsored membership. Having trouble logging in? Try here.
Hi! To read more you need to login.
Not a member yet?
Hi! You can login using the form below.
Not registered yet?
Having trouble logging in? Try here.