THE NATIONAL Pensions Reserve Fund (NPRF), set up by the Government to finance the State's future pension requirements, is preparing to withdraw €27 million in investments from six international companies which are listed as being involved in the production of cluster munitions.
The new policy is likely to be adopted in the lead-up to a major international diplomatic conference on cluster munitions scheduled for Croke Park on May 19th-30th. The Government has taken a strong stance in favour of a total ban on cluster munitions.
A spokesman for the fund said it was likely to use the list of companies excluded from the Norwegian government's pension fund as a guideline. Eight companies were excluded by the Norwegians and the Irish fund had invested in six of these.
It was now proposed to withdraw these investments. The spokesman said five of the companies were US-based: Raytheon, General Dynamics, Lockheed Martin, Alliant Techsystems and L3 Communications. The sixth was a French company, Thales.
The National Pension Reserve Fund spokesman pointed out that the sum involved, €27 million at the end of last year, was only a small percentage of the total amount of €21 billion invested annually by the fund.
In a recent letter to Minister for Finance Brian Cowen, which has been seen by The Irish Times, fund chairman Paul Carty said the legal advice available "does not give us much comfort" but that it was unlikely there would be objections from any group "in the Oireachtas or elsewhere" if the fund withdrew investments from these companies.
"In fact, in our view, the maintenance of such investments could give rise to growing public outrage and be contrary to Government policy. It would not be appropriate for the NPRF to continue to invest in this specific category.
"While it could be alleged that from a legal point of view we might not be in conformity with the NPRF Act, and that this Act should be changed before we do anything, the matter appears now to us to be urgent and uncontroversial."
In addition, the National Pension Reserve Fund Commission, responsible for controlling and managing the fund, was required to "exercise due care, skill, prudence and diligence" in the discharge of its functions. But Mr Carty asked for an assurance from Mr Cowen "that such legislation as may be considered necessary would be enacted in due course" to ensure the NPRF Commission was acting fully in conformity with the law.
The move is being undertaken following strong pressure from Minister for Foreign Affairs Dermot Ahern, who has been actively involved in the cluster munitions issue and has made repeated calls for an international ban on this type of military equipment.
Observers say this is the first time ethical investment has figured in Irish foreign policy. Mr Ahern, who is currently visiting Argentina, commented by telephone yesterday: "I saw at first hand on my visit to Lebanon last year the havoc that cluster bombs can cause. These small bomblets can look like decorations or toys and, as a result, children are very vulnerable to them.
"There is absolutely no justification for their use and Ireland will continue to campaign vigorously to have them completely banned. I am delighted that the NPRF managers are moving to end any investment of our pension money in companies that are linked to cluster munitions manufacture.
"This is a very significant move by Ireland and sends a clear message to the world in advance of the vital Croke Park conference," Mr Ahern said. He continued: "While not seeking to interfere with the statutory independence of the National Pensions Reserve Fund Commission, my objective was to try and ensure that no public funds are invested in any company involved in or associated with the production of cluster munitions. While there are a number of legal and practical issues still to be teased out, I can say that the reaction has been very positive and supportive."
The fund was established in 2001 by then minister for finance Charlie McCreevy to help with the financing of the State's future pension requirements.
