NZ Super Fund: Links to Myanmar military

This article originally featured on Good Returns and was written by Daniel Smith.

The Green and National parties are calling for NZ Super to face a government inquiry over its links to a company supplying aid to the Myanmar military.

The Green and National parties are requesting NZ Super face a parliamentary select committee after it was revealed that the scheme has investments in the Indian Adani Group that has close ties to the Myanmar military.

NZ Super holds just under $2 million in Adani Ports and Special Economic Zone in a passive index fund. Adani is building a port in Myanmar, paying tens of millions of dollars in lease fees to a company run by the military.

As of March 3, 550 civilians have been killed as a result of the military uprising in Myanmar.

National's foreign affairs spokesperson Gerry Brownlee is asking for the NZ Super Fund to face the Foreign Affairs, Defence and Trade Committee “to discuss the ethical investment parameters they work within”.

The calls come following NZ Super’s appearance in the High Court for investments in phosphate mining in the Western Sahara region (a case which NZ Super won), as well as the discovery that investments at the super fund were producing nuclear weapons systems.

The ethical investment parameters of the superannuation programme are currently under scrutiny by the Government.

Finance Minister Grant Robertson wrote an open letter to the NZ Super Guardians in March. Of the Government’s expectations from the fund he asked that they “ensure evolving global best practice continues to be understood and applied into responsible investment policies; and [lend] support to officials' development of a framework to support the transparency, and application, of the Government's responsible investment priorities.”

A review of the responsible investment framework at NZ Super Fund is underway and expected to be complete mid-2021.

A spokesperson for NZ Super has said that “Decisions on investments in certain companies, sectors or countries are governed by our Responsible Investment Framework, which is guided by the UN’s Principles for Responsible Investment, domestic and international law and policy positions of the NZ Government.

“Last year we began a refresh of our framework, which will consider our approach to engagement, exclusions and expectations of external stakeholders.”

Barry Coates, founder of Mindful Money says that the review is timely.

“It is a good time for NZ Super to review their practices and to re-evaluate their approach to responsible investment. They have fallen behind good practice, which is a real shame. But this review is an opportunity for them to bring themselves back up to standard.”

Coates says that a problem for NZ Super is that its strategies are based on outdated legislation.

“The legislation needs to be updated and made more explicit. The NZ Super Fund needs to not only avoid damaging New Zealand’s reputation, but also to have a stronger formulation to say that they should be taking the ethical standard that most New Zealanders would hold into account in their investments.”

NZ Super said, “It’s important to note we don’t reflexively exclude companies when issues emerge. We use international experts to monitor the business practices of the more than 6,000 companies the Fund is invested in and engage with individual companies where concerns arise.”