One of our members Vicky Guedalla’s letter responding to Hackney Couuncil’s statement about stopping investing in Israel’s illegal occupation is excepted on p.12 of the August edition of the Hackney Citizen. The full version of her letter is below.
I am a member of the Labour Party and of the Hackney Palestine Solidarity campaign. I write in response to the statement made by Cllr Chapman, Chair of Hackney Council’s Pensions Committee, which is published on the Council’s website.
I was struck first by Cllr Chapman’s statement that “Hackney Council does not directly invest council taxpayers’ money in companies”. But what is in contention is not taxpayers’ money. The Pension Fund belongs entirely to its beneficiaries – Hackney’s employees, past and present, whose deferred earnings constitute the Fund. No wonder they have never been consulted about how their money is used if there is doubt in the mind even of the Pensions Committee Chair about who it belongs to!
Cllr Chapman distinguishes between “direct” investment and investments managed by external managers. The difference that this makes to the ethical issue is one that escapes me. It might make the process of divestment more complex, but the fact that doing something that is right would be difficult is no reason not to do it.
I take little comfort in being told that the Pensions Committee will “continue to monitor relevant legislation, court decisions and other developments”. It is after all well over a year since the Supreme Court put it beyond doubt that non-financial factors may be taken into account by local authority pension fund administrators, provided there is no “significant” risk of financial detriment and “where they have good reason to think that scheme members would support their decision”. What has resulted from the Committee’s monitoring so far? As for being part of a forum which is “actively engaging with companies cited by the UN…”, words almost fail me. It reminds me of sanctions and boycott busters justifying continued trade with UDI Rhodesia and apartheid South Africa – misguided at best. Any miracle-working skills capable of reforming Elbit Systems would be better applied to overcoming the obstacles to divestment.
Part of Cllr Chapman’s statement engages in mere shadow boxing. The divestment campaign has not suggested that the Fund can “make investment decisions based on moral or political grounds alone”. It neither should nor legally could. Its task is to make ethical investment decisions that are consistent with its fiduciary duty to protect the fund. The council seems confident of its ability to do so in respect of decarbonization, why not in respect of the Occupied Territories?
I struggle to grasp the ethical relevance of the argument that one of the obnoxious investments (in Elbit Systems) is worth only a small fraction of the value of the external fund which contains it. Every little helps, as the slogan goes. And Elbit is far from the only complicit company in which the Hackney Pension Fund invests. Yes, it invests via externally managed funds, but that doesn’t justify holding our noses and ignoring the stench.
I question the quality of advice the Pension Fund is receiving. £1.5 million to dispose of the existing fund sounds a lot, but we are given no idea of the context in terms of the costs of administering the Fund as it is, or what leverage Hackney might have in negotiating. I understand that specialist financial advice on divestment is available. Sometimes the answer you get depends on the question you ask.
Why is the response of the Pensions Committee Chair to the evidence of so much popular support for divesting from companies profiting from illegal activity in the Occupied Territories not simply, “Yes. It is difficult, but we are committed to divestment and are actively seeking a way”?
