Why we don’t want pensions paid by the blood of the Burmese People

This afternoon I appeared on the BBC The “Politics Show” (London Region slot) to be interviewed with Cllr James King (who was on behalf of LAPFF) about Council pension schemes who invest in companies that trade with Burma. Cllr King was arguing that it may be appropriate for pension funds to invest in companies who trade with Burma, if they engage with these companies to influence and change their behaviour.

While I was arguing that we should pull out of all investments in Burma. I need to carry out more research but I suspect that a majority of all pension and investment funds in the UK have some investment exposure to Burma. This is not just a local authority issue. You can see the interview again, here. Just click on the “latest programme” button and it is about 13 minutes into the London show after the interview with Lord Coe.

It was the first time I have been interviewed on television (apart from on demos) and I will post about the experience another time. However, investing in Burma is a complex as well as an emotive issue. We only had 4 minutes to tackle the arguments. I’ll try now to spell out the 3 main arguments for disinvestment (pulling out of all investments) in Burma and why it is also in the best financial interests of the pension funds that they do so.

Firstly, there is the Citizen Investor argument, which is quite clear and relatively simple. If you have any investment savings or contribute to a pension; there is a risk that you are a part owner in companies that benefit from forced labour and military repression in Burma. I believe that trade unionists and the majority of people with such savings do not want their pensions or life assurance policies paid by the blood of the Burmese people. I don’t think that I have to persuade people about the hideous nature of the Burmese regime. If you do need reminding check out the Burma Campaign UK web site.

Then there is the call for International solidarity. Burmese trades unions as well as democratic political organisations are calling for disinvestment. They say that only the regime benefits from commercial ties with the country, and that the isolation of the regime is the most effective help that can be given. UNISON is affiliated to the Burma Campaign UK and the International Trade Union Confederation (ITUC) which also calls for disinvestment and has a register of 427 companies who have trading links with Burma, including household names such as Rolls Royce and GlaxoSmithKline.

Finally, there is a Capital Stewardship argument that that there is in fact an unacceptable financial risk to funds from investing in Burma. For example, many funds will have shares in Total the French oil and Gas Company simply due to its size. . It is the 6th biggest in the world. It is part of a consortium which has invested $1.2 billion in an off shore Burmese gas field and pipe line. This field is of course pouring hundreds of millions of dollars each year into the hands of the Junta in taxes. This money is partly used to buy the guns and bullets for the Burmese military.

However, whether or not you think it is right or not to disinvest, you should be concerned that if European sanctions were tightened and Total is compelled to sell off its Burmese investments, it would have to be a discounted “fire-sale” price. This would mean huge losses to Total which would depress its share price and value of funds investing in it.

There is also a huge reputational risk. Belgian prosecutors recently reopened an inquiry into alleged crimes against humanity by Total in Burma. Total faces the risk of lawsuits in the US. It has also been subject to growing media criticism, political pressure, consumer boycotts, and even demonstrations at its offices and petrol stations. In fact there have been demos and blockades of Total garages in London and Cardiff in recent weeks. The Northern Rock fiasco is not a direct comparator but does demonstrate what can happen to a share price and investments in it when a company’s reputation is at risk.

What can you do about it? Write to your pension’s administrator, contact your pension’s trustees, and write to your insurance company or savings plan requesting that they:-
1. Consult with scheme members about Burma
2. Identify if they hold stock on your behalf in any of the 427 companies
3. Actively engage with these companies and insist that they immediately cease all investment and commercial activity in Burma and report back to members.

"Please use your liberty to promote ours" Aung San Suu Kyi