Pension fund invests in arms firms

THE State’s National Pensions Reserve Fund (NPRF) has invested in six of the seven companies blacklisted on ethical grounds by the Norwegian State pension fund.

The Norwegian Ministry for Finance has blocked its pension fund from holding shares in companies involved in producing nuclear weapons on ethical grounds.

But according to its 2004 annual report, the NPRF has shares worth tens of millions of euro in six of the seven companies now excluded by the Norwegian pension fund.

These are BAE Systems, Honeywell International, Northrop Grumman, Boeing, United Technologies and Finmeccanica.

They are among the largest arms companies in the world and produce everything from fighter jets engines to tanks, armoured personnel carriers, submarines, missile guidance systems and aircraft carriers.

Based on the shares prices of these firms yesterday, the investment by the NPRF is worth more than €40 million.

The Norwegian finance ministry said it made the decision to sell the shares based on advice from the pension fund's ethics council.

"According to the ethical guidelines for the Government Pension Fund companies that produce weapons that through normal use may violate fundamental humanitarian principles shall be excluded from the fund," the ministry said.

"Nuclear weapons are considered to be in this category of weapons."

The council also reviews human rights and environmental records of firms before investing.

A spokesperson for the Department of Finance said it was the NPRF Commission who decided the instructions for the various managers who oversee the fund's €15.3 billion assets. The only guideline given when the Fund was set up in 2001 was to get the maximum return for the State.

Yesterday, the Green Party called on the Government to introduce an ethical investment policy for the NPRF similar to that of Norway.

Green Party finance spokesman, Dan Boyle TD, said: "These stricter ethical guidelines mean that Norway's National Pension Fund is achieving its role of earning additional money but doing so in the right ways, in ways that the manager of Ireland's National Pension Fund has been unwilling to do.

"These stronger ethical guidelines include not being allowed to invest in companies involved in the production of nuclear weapons, having to consider human rights values, and having to avoid environmental degradation."

The Norwegian pension fund has sold its holdings in 17 companies that it considered to have unethical practices.

The NPRF has invested around €12bn in 1,800 companies worldwide. The remaining €3.3bn is held in property, cash bonds and commodities.

The pension fund was set up to finance public sector pensions from 2025 onwards.