Justice Simon Mount determined that the fund’s policies were “unreasonable and unlawful”
The New Zealand Superannuation Fund (NZSF) has lost to activists in Auckland High Court over its divestment policy, reported the NZ Herald.
Three applicants, one of whom is Palestinian Solidarity Network Aotearoa co-chairman John Minto, had taken the matter to court after they failed to convince the NZSF to divest from Airbnb, Booking.com, Expedia and Motorola – organisations the applicants said were connected to Israeli settlement-building in the West Bank, per the Herald.
The fund held $190m in shares in those companies, which the activists said were complicit in human rights violations. The matter that went before the court centred on how the NZSF’s founding legislation, which mandated it to meet investing requirements while “avoiding prejudice to New Zealand’s reputation as a responsible member of the world community”, according to a statement published by the Herald.
Justice Simon Mount determined that the NZSF’s responsible investing policies were vague, particularly when it came divestment decisions.
“So far as exclusion from the fund for alleged breach of human rights standards is concerned, the policies fail to meet the basic requirements of the act in my view and are therefore unreasonable and unlawful”, Mount said in a statement published by the Herald.
The judge said in his 16 April ruling that the fund was duty-bound to overhaul its policy documents “as a matter of law”. He pointed out that a previous version of the responsible investment policy had resulted in the divestment of $7.5m in shares in five Israeli banks.
“They had a good policy in 2020, then a mysterious thing happened: the following year they gutted that policy”, Minto told the Herald in a statement celebrating the decision. “Any reasonable policy would exclude all those companies we’ve identified. What’s going on in the occupied West Bank is unconscionable”.
He expressed hope that with a policy reform, the fund would divest from the four companies he had raised concerns with.
NZSF chief executive Jo Townsend said in a statement published by the Herald that the organisation was considering the court’s decision.
“We recognise that we are investing on behalf of all New Zealanders and that gives people a legitimate interest in how we manage the fund. We will thoroughly evaluate today’s decision and determine how best to respond to it”, Townsend said.
The NZSF was established by the government in 2001. It partially finances New Zealand Superannuation expenses, which are set to soar in the next few decades.
