Fund Members and Arms Investments
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Campaign Against Arms Trade (CAAT) has been conducting, for some time, a Clean Investment Campaign calling upon a range of public bodies, including local authority pension funds such as Greater Manchester Pension Fund, to end their investments in arms companies.
As a member of Greater Manchester Pension Fund your contributions are used for investments in arms companies. A retired member receives profits from arms companies in their pension. The Fund's investments in arms companies mean that the Fund and its members endorse arms exports and their effects.
CAAT is opposed to the billions of pounds of exports made by the UK arms industry every year. Many of these exports go to regimes with poor human rights records, for example Indonesia, to both sides in areas of conflict or tension such as India and Pakistan. Exports also go to countries with huge development needs such as South Africa at the cost of socially beneficial expenditure.
The arms trade is far from being a normal, legitimate business. It fuels war, undermines development and breeds corruption. Unlike other major UK businesses, its transactions are shrouded in secrecy and are heavily subsidised by the government.
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 BAE Systems Hawk powered by a Rolls Royce engine exported to Indonesia, Kenya, Saudi Arabia, South Africa, Zimbabwe, Brunei, Kuwait, Oman, South Korea, UAE and Malaysia. |
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The Fund has investments in major UK arms companies such as Rolls Royce, Smiths Group, Alvis and BAE Systems which is one of the top ten of world arms companies. In 2002, the Fund revealed it had, at that time, shares in US arms companies United Technologies and General Electric, respectively the ninth and twenty-eighth largest arms companies in the world. The Fund has the capacity to invest internationally and could therefore be investing in arms companies around the world. Profits from these investments - from arms exports and also more recently as a result of the invasion of Afghanistan and Iraq - form part of the current and future pensions of Fund members.
The primary objective of the public bodies that form the Fund and those working for them is to strive daily to ensure the welfare and well-being of the people within their communities. The Fund by investing in arms companies devalues these public bodies, the efforts of their employees and stains the pension of retired employees.
Greater Manchester Pension Fund should therefore end its arms investments now and in the future.
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The Fund states that it "does not interfere in the day to day investment decisions of its investment managers". The Fund, however, does have the ability to invest ethically. Its investment decision-making has been influenced by environmental issues and also by overseas labour standards. During the apartheid regime, the Fund ensured that it made no investments in South Africa.
The Fund's Report and Accounts 2003 gives no details of its approach to or any action related to socially responsible investment (SRI). It refers on a number of occasions to its Statement of Investment Principles, which details its approach to SRI. In a 2001 Friends of the Earth survey of the top 100 UK pension funds, however, the Fund was placed in the poorest category of performance with regard to taking social, ethical and environmental issues into its investments decisions. The Fund still has the same "poor statement" on SRI despite a revision in 2002. Read the Chair of the Fund's views on ethical investment and Manchester CAAT's response as published in the Manchester Evening News.
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 F16: American fighter plane powered by General Electric engine and using BAE Systems parts and technology exported to Israel, Jordan, Egypt, Pakistan, Greece and Turkey, Jordan and UAE. |
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The Fund does have guidelines about the purchasing of the US dollar, the Japanese Yen and the Pound Sterling but not on the billions it invests.
Disinvestment from UK arms companies is not a high-risk strategy for Greater Manchester Pension Fund. An investment portfolio that avoided investment in BAE Systems the leading UK arms exporter, for example, would be less than 0.4% short on an FTSE Index weighting. An investment portfolio that excluded all UK arms companies would still be only 1.19% short on the FTSE Index (Figures taken at the end of December 2003).
Job losses are constantly raised when dis-investment from arms companies is promoted. A recent Ministry of Defence/York University report, however, stated that if subsidies to the arms industry were cut by 50 per cent, 49,000 job losses would be offset by 67,000 jobs created in the civil sector.
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Adair Turner, Director General of the CBI (1995 -1999) said:
"The ultimate case for ethical conduct is that it is right to act morally, but the good news is that the cost of ethical conduct in the affairs of developed countries is massively less than often supposed.
We are not condemned by some economic necessity in a harsh competitive world to sell arms and instruments of torture to dictatorial regimes, or to stay silent about human rights violations, and our attainable rate of employment will not be reduced if we cease doing so."
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 Scorpion Tank - made by Alvis now owned by BAE Systems exported to Indonesia and use for internal repression in Aceh province. |
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Other Ways to Help
Also, Manchester CAAT has launched a petition [MS Word Document] calling for the end of the Fund's arms investments. Please download, sign it and collect some signatures, returning it to the address on the bottom.
You can help with the collection of signatures in your area or help in other ways - email us for more information.
If you want to consider the issues further, have a look at CAAT's Clean Investment Campaign.
Members
Council tax payers
Councillors
Letter to the Chair