An unethical investment

Twenty years ago, New Zealand took a stand on the world stage against nuclear weapons by declaring itself nuclear free. But today, our government profits from the design and manufacture of nuclear weapons. That profit comes from the New Zealand Superannuation Fund's investments in several high-profile arms manufacturers involved in the nuclear industry. It is unethical and hypocritical - and contrary to the NZSF's own investment guidelines.

The first two go without saying. Nuclear weapons are an abomination and their use a violation of international law. New Zealand has taken a strong stance in support of nuclear disarmament, and so it is utterly hypocritical to be profiting from the manufacture of such weapons at the same time. As for the latter, the New Zealand Superannuation Fund is a party to the UN Principles for Responsible Investment, and has adopted the United Nations Global Compact principles as its benchmark for investment standards. But as the Greens point out, the Norwegian Pension Fund uses exactly the same standards - and interprets them rather more robustly as banning investment in companies involved in the manufacture of nuclear weapons. But it's not just a matter of different interpretations of international standards: s58 (2) (c) of the New Zealand Superannuation and Retirement Income Act 2001, the NZSF's governing legislation, requires the fund to manage its investments so as to

[avoid] prejudice to New Zealand's reputation as a responsible member of the world community.

It is difficult to see how investing in nuclear weapons manufacture when the government has taken such a strong international position against it meets that goal.

But that's not all. The fund's ethical investment guidelines forbid investing in entities engaged in activities contrary to New Zealand law. The Manufacture of nuclear weapons is illegal under the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987. By its most basic standard, the NZSF should not be putting our money with the bomb-makers.

The amounts involved are small compared to the overall size of the fund - $28.7 million vs $11.2 billion - but it is still wrong, and the NZSF should not be doing it. The Minister of Finance should exercise his duties as controlling Minister to ensure that the NZSF conforms to the ethical guidelines it has adopted, rather than investing our money in an immoral industry.