20. Nov 2012
Danish pension funds and investment funds are using their customers' savings to invest heavily in illegal Israeli settlements. The UN special rapporteur recommends the selling of shares, but this is not the way to go, investors say.
Danes with savings in pension funds or investment funds most probably have some of their money invested in companies which support Israeli settlements on Palestinian land. According to a new survey by DanWatch, the ten biggest pension funds and the eight biggest investment funds in Denmark each have approx. EUR 150 billion invested in companies that take part in the establishment and operation of illegal settlements.
The UN has several times declared the Israeli settlement a violation of international law, and there is unanimous agreement in the EU that the settlements are illegal. Therefore pension funds and investment funds cannot ignore the criticism, explains Steen Valentin, associate professor at Copenhagen Business School and expert in responsible investments.
”When international law, UN conventions or human rights are violated, there is no other way around it. The companies must consider the issue and ask themselves: Where do we draw the line? Do we really want to support this cause?” he says.
Investors deny responsibility – UN special rapporteur disagrees
The pension funds and investment funds explain DanWatch that their investments comply with the UN principles for responsible investment, and that the share holdings are evaluated continually in relation to the principles of the Global Compact. The Global Compact is a UN initiative whereby companies commit themselves to comply with basic standards within the fields of human rights, environment, anti-corruption and workers’ rights.
However, in a new report, UN Special Rapporteur Richard Falk stresses that the principles in the Global Compact are incommensurable with the companies’ involvement in the settlements. Therefore Falk urges people to ”boycott, sell shares and impose sanctions against companies until their operations are brought in compliance with international rules and standards.”
Thomas Torp, Director of Public Affairs at PFA, the biggest pension fund in Denmark, admits that there is a problem but does not believe that selling shares will make a difference.
”We fully recognise that the there are considerable ethical problems associated with investing in companies operating on the West Bank,” he says to DanWatch. ”But generally, it is our view that we as investors solve nothing by selling our shares. We believe that we contribute best by conducting active ownership and by trying to influence these companies.”
Thomas Torp confirms to DanWatch that PFA is currently engaged in cases involving some of the companies. However, he refuses to tell which.
Construction machinery, infrastructure, surveillance…
The pension funds and investment funds have huge sums invested in companies that have supplied construction machinery and cement for the construction of settlements as well as the West Bank barrier. Banks with branches in settlements and suppliers of telecommunications, infrastructure and security services are also on the list.
The Israeli arms manufacturer Elbit is among the more controversial investments: Elbit is the company behind a specially developed surveillance system along the barrier, which has been ruled illegal by the International Court of Justice. This has prompted several Danish pension funds to ban the company, just like the Norwegian state-owned pension fund Oljefondet has done. Nevertheless, Denmark’s third biggest pension fund, Sampension, has EUR 400,000 invested in Elbit.