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I found out last night at the Tower Hamlets Council Pension Investment Panel, that one of our fund managers have £2.3 million invested in Total (the 2nd highest holding in that particular fund) and £1.3 million in Chevron (7th biggest holding).I suspect that our other Global equity fund will have similar investments in companies who have trading interests in Burma. We also own shares in companies such as GlaxoSmithKline (the huge British based drug company) who according to the International Trade Union Confederation (ITUC – click on this link for a full list) has business links with the Burma.
Many members of the pension scheme are furious that their pension contributions and council tax are being invested in companies that support the Burmese military junta and allow the murder of unarmed monks and civilians who are peacefully calling for democracy.
This is part of a complaint that local Tower Hamlets resident, UNISON member and Head Caretaker, Tony Boyce, has sent off to his Labour councillors (seen left with his granddaughter).
“I have been a member of the Tower Hamlets pension scheme and a Council tax payer for over 20 years. I have lived in Tower Hamlets for all my life. I am looking forward to eventually retiring and then being able to spend more time seeing my grandchildren grow up.
I would like to think that I would be able to help them out with them going to college or leaving home and getting their own place. What I would hate to think, is that my pension (which is my deferred pay) is being paid out in part, out of money earned from investing in Burma.
Burma is a horrible military dictatorship, which kills and enslaves its own people. I think that due to sanctions and criminal legal investigations that the pension fund could also lose money if they continue to invest in Burma. I ask the trustees of my pension scheme to stop investing my money in Burma”.
The Labour Councillors present, Bill Turner (Chair of the Pension and Accounts Committee) and Joshua Peck (Cabinet and Lead member for Performance and Resources) asked for a full report on what companies the fund held that had business interests in Burma. I volunteered to send over the ITUC list.
At the same meeting we discussed the scheme signing up for the UN Principles for Responsible Investment (PRI)
Finally, to illustrate how difficult these issues are – I asked the Global Equities fund manager after he gave his presentation to the Council investment panel (who are quasi-pension trustees) about the financial risk of sanctions, boycotts, criminal prosecutions and the reputational risk of investing pension money in Burma. Surely, the pension fund was facing a financial risk of continuing to invest in Burma?
He argued that the proportion of Total or Chevron assets invested in Burma may appear to be a large figure (up to $1.2 billion) however; they are only a tiny part of the total assets of that country. So if they lost money over Burma it would arguably not make that much of a difference to the company share price (I disagree).
Also, this fund manager is what they call a “quantitative” investor. That is they try to emotionally detach themselves from the companies that they invest in and only concentrate on the financial “fundamentals” (balance sheet, long term profits, market share, share price compared to profits, orders etc).
They actively invest in companies where they think the fundamentals are sound but where due to “market sentiment” the price of a company is lower than they should be.
(I accept that I have probably not adequately explained this properly, remember the usual health warning, this is my report back to members, my interpretation, not that of the Tower Hamlets Pension fund)
So we may have this crazy, crazy situation where some investors think that now is the time invest in Burma because many investors are pulling out on political sentiment rather than economic fundamentals
Personally, I think since it is now accepted that owners of capital in modern day democracies won't make money out of trading in opium then equally they should not think it is acceptable to make money out of Burma.
6 comments:
I think Glaxo should continue to supply their products to the people who need them. Supplying the Burnmese people with cancer drugs is actually a good plan.
Hi Anon
Very true, they should supply products to those who need them, but I suspect that the only people in Burma who are wealthy enough to buy cancer or other western drugs are members of the military junta or their cronies. There is nothing stopping wealthy companies such as GSK from giving drugs (or at cost price) to independent NGO’s who can make sure they reach those in need rather than those with deep or corrupt pockets. I say this as a “part owner” of GSK (I wonder how many shares are owned by the LGPS nationally in GSK?).
GSK are a little cagy about what exactly they are doing in Burma but it would appear from their website http://www.gsk.com/worldwide/mm.htmthat they have some sort of a SE Asian regional Headquarters in Burma? This should be closed immediately.
Remember it is the Burmese people themselves are calling for disinvestment.
It makes no difference to me - if someone is ill and a Glaxo drug helps them - so much the better.
And what exactly is a "wealthy company"? Glaxo shares are owned by tens of thousands of people, its not a Privately owned company? Why are you so anti commerce and anti profit - its a well run company that pays a lot in tax and employs many people It's an example of a decent company..you should be applauding them.
I suspect British Leyland is more your style though comrade.
Hi Anon
Its not that I’m anti-commerce or ant—profit. What concerns me is why it appears that a “well run” company is propping up a fascistic murderous regime? It doesn’t need to make profits from the misery of the Burmese people.
I’m actually more of a Skoda man myself.
Actually it sounds like your pension is more involved than Glaxo comrade...
Hi Comrade Anon
Well, I not that sure we compare to GSK? – but yes we need to get our money out of Burma
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