Source: Radio New Zealand
The court also ordered the crown entity to pay PSNA’s legal costs. RNZ / Dan Cook
The managers of the country’s $86 billion Super Fund failed to properly address human rights issues when considering whether to exclude companies from its investments, the High Court has found
Justice Simon Mount granted an application by the Palestine Solidarity Network Aotearoa (PSNA) for judicial review of Guardians of New Zealand Superannuation’s policies relating to ethical investment.
In a decision released Thursday, Justice Mount declared part of the fund’s policy documents, standards and procedures, and its sustainable investment framework were “unreasonable and unlawful”.
The court also ordered the crown entity to pay PSNA’s legal costs.
The sovereign wealth fund was created in 2001 to partially provide for New Zealander’s superannuation costs.
By law Guardians are required to invest the fund’s on a prudent commercial basis, manage and administer the fund with best-practice portfolio management, and avoid prejudice to New Zealand’s reputation as “a responsible member of the world community”.
That last duty formed the backbone of the case taken by PSNA, who have long lobbied the Guardians to divest from companies it claims to be complicit in human rights abuses in the occupied Palestinian territories.
The Guardians excluded development, construction and technology companies involved in settlements in the occupied territories in 2012.
In 2021, following years of lobbying by PSNA, the Guardians also excluded five Israeli banks from its portfolio on the grounds there was an unacceptable risk the banks were materially contributing to breaches of human rights standards and that engaging with the banks themselves was unlikely to be effective.
PSNA continued to request the exclusion of other investments on the grounds of alleged human rights breaches and focused on four companies that featured on a United Nations Human Rights Council database identifying companies trading with illegal Israeli settlements – Airbnb, Booking.com, Expedia, and Motorola.
Justice Mount said the chief executive of the Guardians replied to the group in mid-2024 noting none of the companies “currently meets the exclusion threshold under our Sustainable Investment Framework”.
In later correspondence the Guardians’ Head of Sustainable Investment reiterated that stance, which led PSNA to indicate it would seek the judicial review.
The judge noted the Guardian’s approach to making decisions to exclude investments was not “entirely coherent” and the policies failed to meet the basic requirements of the law that created the fund when it came to excluding investments where an alleged breach of human rights standards was concerned.
Justice Mount said the Guardians had a duty to reformulate its policy documents to be consistent with the Act.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand