Voluntary calls for Kiwisaver funds to clean up their portfolios and get out of funding weapons that cause massive suffering and fatalities hasn’t worked. The Green Party is calling for the National Government to step up to its obligations to enforce the law.
Six months ago there was an outcry when it was revealed that $152 million of the public’s Kiwisaver funds were invested in corporations that are acting against New Zealand’s policies on anti-personnel landmines, cluster bombs and nuclear weapons, as well as tobacco. Some funds divested, but six months later, RNZ has reported that four of the nine default KiwiSaver providers have still not divested from weapons.
These investments are profiting from an industry that is killing and maiming innocent civilians. In a recent incident, Human Rights Watch documented Saudi-led forces dropping US-made cluster bombs on villagers in Yemen. Around 97% of the cluster bomb casualties are civilians. It’s why they’re illegal.
Since its establishment, successive governments have encouraged us to put our savings into KiwiSaver, but this Government has now failed to ensure that basic standards of human rights are upheld.
Some activities are clearly illegal and the Government has a responsibility to enforce the law — investing in some weapons manufacture is illegal, including under the Cluster Munitions Prohibition Act 2009. Now the government is ducking their responsibility to ensure that the law is enforced, arguing that voluntary action by companies will take care of the problem. Where have we heard that before?
When there was public concern six months ago, the Green Party called on the Government to require KiwiSaver funds to divest, but the government said it would call on companies to take action. It is now clear that hasn’t happened. The government’s ‘light regulation’ has failed again.
Evidence obtained under the Official Information Act shows that Parliament clearly intended to make investment in cluster bombs illegal and this was passed in law. Analysis showed that KiwiSaver default providers ANZ, Kiwibank, Westpac and Mercer are still invested in anti-personnel mines, cluster bombs and/or nuclear weapons.
These companies are arguing that they need more time, but the other five KiwiSaver default providers acted quickly to take the public’s savings out of supporting weapons production – as James Shaw has noted, the default provider Booster (previously called Grosvenor) divested within a week.
Ethics of Kiwisaver funds
This should be the entry point into a wider debate on ethical standards for Kiwisaver. Currently, the approved KiwiSaver default providers hold other investments that are contrary to government policy and public expectations. For example, these funds are invested in corporations that damage the environment, kill whales, produce cigarettes, use child labour, encourage gambling or produce fossil fuels. There are ‘responsible’ Kiwisaver funds available, but few members of the public know about them and they aren’t the default funds.
Shifting to a responsible fund doesn’t necessarily cost money. This is not financial advice (as they say) but there is growing evidence that investing responsibly pays off financially as well as morally. The Responsible Investment Association of Australasia’s analysis of responsible investment funds showed a significantly higher return than the benchmark. New Zealand is way behind responsible investment in much of the OECD, but we’re catching up. The RIAA report showed that NZ responsible investments grew by 28% in 2015-16.
And if you’re interested in checking out the Kiwisaver ethical options, here’s a good place to start.