Sunday, 8 July 2007

Local authority funds probe BAE

From today's Observer, there's a mention of Unison in there too -

Defence firms face bribery probe by pension funds

Oliver Morgan, industrial editor
Sunday July 8, 2007
The Observer

Local authority pension funds are to tackle arms companies about their activities, including allegations of bribery levelled at the UK's biggest defence contractor BAE Systems.

The Local Authority Pension Fund Forum (LAPFF), which represents 40 funds with invested assets totalling £70bn, is drawing up a series of questions to put to defence companies as it seeks to encourage responsible investment by pension funds.

Among the areas to be probed will be the conduct of companies in winning contracts, including the use of bribery. Both BAE and the government are at the centre of a political storm over the issue, following the abandonment of an investigation by the Serious Fraud Office into bribery connected to the £40bn al-Yamamah arms deal with Saudi Arabia in the Eighties and Nineties.

The news comes as the pressure group Campaign Against Arms Trade (CAAT) publishes figures showing that 75 local authority funds have a total of £311m invested in BAE.

CAAT made requests under Freedom of Information rules for details of investments in BAE at the end of December last year from all of the UK's local authority pension funds. The results show holdings ranging from £27.9m by the West Yorkshire Pension Fund to an investment of £128,437 from the Powys fund.

Symon Hill of CAAT said: 'BAE's reputation has plummeted in recent months. Local residents and council employees have a right to know how employee pensions funds are invested.'

Hill pointed to a vote at the recent conference of public service sector union Unison, which represents local government employees, for an end to investment in arms companies. Unison said the amount of money invested was 'phenomenal' and that it was 'disgusting'. Hill added: 'Any council can enhance its reputation by getting rid of these shares.'

Of the 99 funds surveyed by CAAT, 24 had no investment in BAE.

The LAPFF will be seeking talks with defence companies in coming months to raise a wide range of concerns, including the allegations against BAE, as well as the relationship between arms companies and governments, the use of technology, and the way labour is exploited.

A spokesman said the forum's policy was still being prepared, but that engagement would begin later this year. He said LAPFF concerns were not rooted in pacifism but reflected its desire for 'responsible investment'.

The CAAT showed that West Yorkshire had the largest investment in BAE, with West Midlands in second place with £16.8m, Strathclyde in third with £11.4, followed by Kent with £11.2m and Aberdeen with £10.6m

No comments: