Four Swedish government pension funds with combined assets of SEK800bn (€81.8bn) have mirrored a decision by the Norwegian Government Pension Fund and blacklisted Elbit Systems, the Israeli defence technologies firm, from their investment portfolios for human rights violations in the Palestinian territories. The move by pension buffer funds AP1, AP2, AP3 and AP4 followed a recommendation from the funds’ Ethical Council. It said it had recommended the ban because it deemed Elbit Systems was linked to violations of international rights conventions through its building and maintenance of a surveillance system for parts of the separation barrier on the West Bank. A 2004 ruling by the International Court of Justice in The Hague found that the construction of the Israeli separation barrier contravened international law – a ruling that Israel has challenged. The boycott decision by the Swedish funds could be controversial. A diplomatic stand-off developed between Israel and Norway when the €276bn Norwegian Government Pension Fund blacklisted Elbit Systems in September last year. In a statement, Michael Eligal, Israel’s Ambassador to Oslo, reacted angrily to the findings of the Norwegian fund’s Council on Ethics. The Swedish AP Ethical Council says that despite “repeated requests”, Elbit Systems has refused to comment on the issue and that, while it prefers dialogue to exclusion, it will exclude a company as a last resort. The Council said it wanted Elbit to desist in supplying the surveillance system and associated services for the sections of the barrier wall that lie in occupied territory. It also wants Elbit to adopt a corporate policy that prevents it from contributing to contraventions of international humanitarian law.
According to its investor relations web site, Elbit’s three largest shareholders are Migdal Insurance of Israel, BlackRock Institutional Trust Co. and hedge fund Renaissance Technologies.
The AP funds Ethical Councils’ 2009 report outlining its exclusion and engagement decisions is now available in English.Here is its brief explanation of its work:
About the Ethical Council
AP1, AP2, AP3 and AP4 are buffer funds in the Swedish national pension system, mana-
ging the pension capital accrued by everyone who has ever worked in Sweden. In 2001,
the four competing funds were given a common mission: to invest their pension capital
in order to achieve the greatest possible benefit for the pension system and generate
high long-term returns with a low level of risk. In so doing, the funds should take ethical
and environmental consideration, but without compromising the overall objective of
attaining high returns.
Since 2007, AP1, AP2, AP3 and AP4 have been coordinating their work on environ-
mental and ethical issues through the joint Ethical Council. The purpose of the Council
is to join forces to work for positive change in companies outside Sweden associated with
violations of international conventions on the environment and human rights.
The Ethical Council consists of an ordinary member from each Fund. The Chair,
which alternates between the Funds, was held by AP3 in 2009 and has now transferred
to AP4 for 2010.