PSC supporters outside High Court demand judge rule pension regulations illegal
By Mike Cushman, FSoI
June 22, 2017
A High Court judge has ruled that the Government was exceeding its power in trying to direct Local Government Pension Funds to ignore calls for BDS and abandon ethical investing. The Government, he said: “has acted for an unauthorised purpose and therefore unlawfully“.
Sajid Javid, the Secretary of State for Communities and Local Government, has a record of fierce partisanship in favour of Israel. As Culture Secretary he lobbied hard to punish the Tricycle Theatre for declining to accept Israeli Embassy funding. In his current post he attempted to misuse the review of Local Government pension regulations to prohibit funds from taking Israeli Human Rights abuses and other ethical considerations into account when deciding investment priorities. He sought to include
“In formulating and maintaining their policy on social, environmental and corporate governance factors, an administering authority…
• Should not pursue policies that are contrary to UK foreign policy or UK defence policy.”
in the guidance.
The Palestine Solidarity Campaign crowdfunded a judicial review of this manifestly politically motivated and partisan restriction.
Sajid Javid, former managing director at Deutsche Bank, acted unlawfully by trying to prevent pension funds from taking human rights into consideration. His government experience was largely in economic and financial posts. He became Secretary of State for Communities and Local Government in July 2016 and met Israel’s anti-BDS minister Gilad Erdan 2 months later. He issued the BDS ban shortly after.
High Court judge Sir Ross Cranston heard the review. In his judgement, published on 22 June, he said:
Yet it is clear from the Secretary of State’s own evidence that the parts of the guidance the claimants challenge were not issued in the interests of the proper administration and management of the local government pension scheme from a pensions perspective, but are a reflection of broader political considerations, including a desire to advance UK foreign and defence policy, to protect UK defence industries and to ensure community cohesion.
This led him to conclude
But the flaw in the Secretary of State’s approach is that the guidance has singled out certain types of non-financial factors, concerned with foreign/defence and the other matters to which reference has been made, and stated that administering authorities cannot base investment decisions upon them.
In doing this I cannot see how the Secretary of State has acted for a pensions’ purpose. Under the guidance, these factors cannot be taken into account even if there is no significant risk of causing financial detriment to the scheme and there is no good reason to think that scheme members would object. Yet the same decision would be permissible if the non-financial factors taken into account concerned other matters, for example, public health, the environment, or treatment of the workforce.
In my judgment the Secretary of State has not justified the distinction drawn between these and other non-financial cases by reference to a pensions’ purpose. In issuing the challenged part of the guidance he has acted for an unauthorised purpose and therefore unlawfully.
Ben Jamal, Director of PSC said:
”Our recent YouGov polling shows 43% of the public think BDS is reasonable. We couldn’t be happier that this right has been upheld by the Court in the month the illegal occupation of Palestine turns fifty years old. PSC will take forward its campaign for justice for the Palestinian people with renewed vigour.”
Jamie Potter, Partner in the Public Law and Human Rights team at Bindmans LLP said:
“This outcome is a reminder to the Government that it cannot improperly interfere in the exercise of freedom of conscience and protest in order to pursue its own agenda.”
This goes beyond a welcome victory for BDS campaigners. All supporters of the right to free expression and the right to oppose Government policies will welcome this push back against executive over-reach.
PSC Press Release
June 22, 2017
The Government has acted unlawfully by attempting to restrict local councils from pursuing boycott, divestment and sanctions (BDS) against the state of Israel through their pension schemes.
Palestine campaigners hailed the triumph the ruling represented for the BDS movement, stating “Today is a victory for Palestine, for local democracy, and for the rule of law.”
Administrative Court judge Sir Ross Cranston granted the judicial review on 22 June, determining that the Government had acted for an improper purpose.
The Palestine Solidarity Campaign has won a key victory for the peaceful Boycott, Divestment and Sanctions movement against the UK government today. War on Want, Campaign Against Arms Trade and the Quakers supported the legal challenge with witness statements. PSC was represented in the proceedings by Bindmans LLP, Nigel Giffin QC and Zac Sammour.
The embattled minority Tory government suffered a new blow as parts of its Guidance governing investment by Local Government Pension Schemes (LGPS) were struck down as unlawful.
The Guidance was announced by the Department for Communities and Local Government in September 2016 specifically to curtail divestment campaigns against Israeli and international firms implicated in Israel’s violations of international law, as well as to protect the UK defence industry. This occurred despite a public consultation indicating that 98% of respondents thought this was the wrong thing to do. Pension holders would have been forced into investing in companies that are complicit in human rights abuses contrary to their conscience and beliefs.
The Administrative Court today held that the Government had acted for an improper purpose by seeking to use pension law to pursue its own foreign and defence policy. Accordingly the relevant parts of the Guidance were held to be unlawful and no longer restrict LGPS in their pension decisions.
In 2005 Palestinian civil society called for a campaign of boycott, divestment and sanctions measures until Israel adheres to its obligations under international law. It is modelled on the successful South African anti-apartheid boycott of the 1980s. Various local councils responded to the Palestinian call by passing motions to boycott goods from illegal Israeli settlements. Campaigners have been calling for councils to consider divesting from companies complicit in human rights violations in the occupied West Bank, such as Hewlett Packard.
Hugh Lanning, Chair of the PSC said: “Today is a victory for Palestine, for local democracy, and for the rule of law. Absolutely everyone has a right to peacefully protest Israel’s violation of Palestinian human rights. This ruling upholds the right of local councils and their pension funds to invest ethically without political interference from the government of the day.
– The Department for Communities and Local Government issued guidance on LGPS in September 2016 declaring ‘divestment and sanctions against foreign nations and UK defence industries are inappropriate, other than where formal legal sanctions, embargoes and restrictions have been put in place by the Government.’
– This guidance came in despite a public consultation on the issue in which 98% of respondents vehemently disagreed with the plans.
– The Palestine Solidarity Campaign applied for judicial review of the new government measures for LGPS in December 2016.
– New YouGov polling on British public attitudes to Palestine shows that 43% of the public consider the BDS movement to be reasonable.