Amendment No. 1 seeks to amend section 7 of the Bill by inserting a new subsection which would require that, in developing the investment strategy for the future Ireland fund, the agency would act in a way consistent with obligations under the Cluster Munitions and Anti-Personnel Mines Act 2008 and the Fossil Fuel Divestment Act 2018.
Amendment No. 7 would insert a new section in the Bill which would provide that the Minister - whom I welcome to the House - lays a report, within 12 months of the passing of the Bill, outlining the issue of the use of the external investment managers for the future Ireland fund and the infrastructure, climate and nature fund, as well as any other funds which may be controlled by the agency, and how that impacts, relates or indeed implements the State's national divestment obligations under the Cluster Munitions and Anti-Personnel Mines Act 2008 and the Fossil Fuel Divestment Act 2018 as well as any future divestment policies which the State may be mandated to pursue in respect of, for example, the State's obligations under international law to not invest in illegally occupied territories. The Minister will be aware there are legislative proposals before the Houses in that regard. Crucially, it should not be happening in the first place. There should be no legal basis for investment in illegally occupied territories.
I will continue to amendment No. 11 and then refer to the wider points. Amendment No. 11 would insert a new section into the Bill which would provide that the agency ensures assets of a relevant fund are not directly or indirectly invested in a manner which would contravene part 4 of the Cluster Munitions and Anti-Personnel Mines Act 2008, and where the agency becomes aware of an undertaking in which the assets of the relevant funds are invested in an area that comes into a state of contravention of part 4 of Cluster Munitions and Anti-Personnel Mines Act 2008, that it would divest the assets of the relevant fund from such investment as soon as practical.
All of these amendments surround a similar issue, of which we, sadly, have examples of it occurring, namely, the real danger of the public's money - this is, ultimately, the money of the Irish public - being invested in ways that go against the already established principles we have in our national legislation under the Cluster Munitions and Anti-Personnel Mines Act 2008 and the Fossil Fuel Divestment Act 2018, as well as international law and what international law obliges from us in the context of investment in illegally occupied territories. In my previous engagement with the Minister of State in this respect, there was discussion that there would be guidance for the agency to apply its tests. Sadly, we know the tests which were applied previously were not sufficient to exclude investment in illegally occupied territories, for example. Very recently, up until the discussion arose to divest partially from those, we had a situation in which our public assets had been invested in illegally occupied territories and in undertakings which were operating in illegally occupied territories - it may be in that indirect way - and where there was no legal basis. That is a very significant concern and one could say an error of judgment but let us not attribute an error of judgment to those who were asked to invest on our behalf as the Irish public. When we discussed the divestment legislation on the finance committee, on which I sit, it was made clear that unless there is clear legislative guidance, they do not see themselves as having an obligation to screen for this under general corporate responsibility. They do not see it as a responsibility. They did not see investment in illegally occupied territories that are illegally occupied by a nation which is currently acting in absolute blatant disregard of international human rights law right across the board as being something that raises a red flag for our existing systems.
That is why there is a concern about having similar systems applied to these two new very large funds of public money.
Regarding cluster munitions, sadly, we have seen a failure to check policy decisions and financial decisions against the provisions of our own cluster munitions legislation. Most recently we saw it again in scrutiny at the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach when we discussed the €500 million given from the EU budget under the ammunition production support Act at EU level. There is an EU law question here because the treaty of the European Union explicitly provides that there should not be investment of the multi-annual financial framework into areas with defence or military implication unless it has been agreed by a unanimous vote of the Council.
However, under qualified majority voting, there was a decision to proceed with the investment of €500 million directly into - let us be clear as to what this fund is - ammunition production support. It was not even the purchase of ammunition by member states. It was just as a subsidy to those producing arms. In one instance, this included a company which has exported 10,000 tank shells to Israel. Based on the estimated opinion of the experts in the Department, Ireland's portion is about €17 million of that €500 million fund which is going to arms manufacturers just to give them a helping hand as if theirs was a struggling industry when it is not a struggling industry. They are able to increase arms production very rapidly when they have customers such as Israel, with a tenfold increase in arms exports from Germany to Israel over the last year.
While it may seem to be a step further away from this legislation, it actually relates very directly. There is the European law concern over interpretation of the treaty. I do not believe it is in line with the letter and certainly not in line with the spirit of the treaty. Crucially, it goes directly against our own cluster munitions legislation which explicitly prohibits the State from investing not just in cluster munitions production but in any munitions production. The Act states that no Irish State money should directly or indirectly go to munitions production. Yet, we are contributing €17 million to a fund to support munitions production which is directly in conflict in our Cluster Munitions and Anti-Personnel Mines Act. I know the obvious response will be not to worry because that legislation is already there and obviously our investments need to be in line with it. However, sadly I have a very recent example whereby €17 million of Irish public money has been allocated and invested in a way that does not reflect the provisions of the Cluster Munitions and Anti-Personnel Mines Act. That is why we may need to copper-fasten it.
Amendment No. 1 seeks to underscore what should be the legal case anyway that the agency would have to act in a manner consistent with obligations under the Cluster Munitions and Anti-Personnel Mines Act, and the Fossil Fuels Divestment Act. If there is a reluctance to put that into the primary legislation because it should already be applied but it is not being applied, the issue could be addressed through amendment No. 7 which calls for a report. This would be a very useful report which would be able to identify exactly what is going on with how our public money is being spent from an ethical and legal perspective. Amendment No. 7 simply requires a report, as does amendment No. 11.
When we use external investment managers, it is one thing to say, "Here is your mandate. Away you go." However, what scrutiny has there been of how that mandate has been implemented by external investment managers? When there are, for example, packages, are investment managers working with investments that are outside what is ethically and legally appropriate for the State? Besides saying that we know the mandate we gave them, we need scrutiny of how that mandate is or is not interpreted, how that mandate is or is not implemented and whether the letter and the spirit of that mandate has been reflected. There has not been a deep analysis of how external asset managers have been working and the ultimate implication of how our public money has been applied. We know they work with multiple clients and Ireland will be one client. That is why it is not adequate to outsource our obligations of these issues to them. There need to be questions about the use of external asset managers in general. If they are to be used, the oversight function needs to be much more robust and needs to be located within the State.
Amendment No. 11 also addresses deeper work to ensure the fund is not directly or indirectly invested in a matter which would contravene that part of the Cluster Munitions and Anti-Personnel Mines Act 2008 which explicitly prohibits investment relating to the production of munitions or investments in companies which engage in the production of munitions. That wording of direct or indirect comes from Cluster Munitions and Anti-Personnel Mines Act. Back when that legislation was going through in 2008, there was a recognition that it sometimes can be indirect and can be hard to identify. That is why I am suggesting that the agency needs to have much better and more robust tools to ensure there is not a risk of direct or indirect investment in a way that contravenes that cluster munitions legislation.
I was there in Croke Park when Ireland negotiated the global ban on cluster munitions which was probably one of the global high points for Ireland. The reason we were able to negotiate it and were able to take what are effectively landmines from the sky out of commission in so much of the world was that we were not in any way implicated in the arms industry. We were not part of the military industrial complex in its different forms in different countries. Ireland was able to be a genuine honest broker with a record in disarmament and with a consistent position that investment in arms and weapons creates greater risk and greater death. We recognise the reality that when weapons are designed, they are designed to land on someone and to land somewhere. It is something for Ireland to be very proud of.
It is spoken of alongside Ireland's visionary leadership from Frank Aiken in pushing for the nuclear non-proliferation treaty at a time when, much like now, all the narrative was that because Russia had it, we had to chase. There was a sense of who will get it next and let us have an arms race where every country needs to get in. The race for nuclear arms was well under way and Ireland was able to be a country that pointed out that an increase in arms does not actually make us safer; it creates greater danger for all of us.
Therefore, the context is any risk at all of us indirectly providing subsidy. Sadly, right now it is not just a risk; it is a reality that Irish public money has contributed to a fund that has contributed to the productive capacity - I think that was the line from the Commission - of arms companies which are also exporting large amounts of arms to Israel which is acting out of line with the International Court of Justice and with any decent common humanity. That is a concern and that is why I want to see from the Minister a seriousness in ensuring that these new funds are not implicated in those same ways and that those risks are not taken again. We need to recognise that we need to be stronger and more careful about how we protect Irish public money from any implication in these terrible actions.
