Dáil Éireann Debate, Tuesday - 21 May 2024
64. Deputy Catherine Connolly asked the Minister for Finance to provide details of his engagement with the NTMA with regard to ensuring that the NTMA divest from all ISIF global portfolio investments in companies on the UN Human Rights Council database of business enterprises; the expected timeline for this divestment; and if he will make a statement on the matter. [22730/24]
View answerMy question relates to what engagement the Minister for Finance has had with the NTMA around ensuring the agency divests from all Ireland Strategic Investment Fund global portfolio investments in companies on the UN Human Rights Council database of enterprises. What is the expected timeline for the total divestment? I ask this in the context of the resolution that was passed more than eight years ago by the UN council.
I thank the Deputy for the question. The Ireland Strategic Investment Fund, which is a business unit of the NTMA, is statutorily independent and is subject to oversight by its investment committee and the NTMA's board. My officials are in contact with the NTMA on an ongoing basis across a range of issues, including those arising from the Illegal Israeli Settlements Divestment Bill 2023. On 20 March this year the director of the ISIF attended the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, for a meeting on pre-Committee Stage scrutiny of the Illegal Israeli Settlements Divestment Bill 2023. At that committee meeting the ISIF director outlined that as at 31 December last year the fund's direct investments in companies on the UN database totalled approximately €4.2 million in 11 companies. He also outlined that the ISIF's indirect investments include eight companies totalling approximately €9.4 million.
ISIF has since taken an investment decision to divest from six of these companies, with a total value of approximately €2.95 million, involving a number of Israeli banks and an Israeli retail chain. I understand that the divestment process has nearly been completed following the recent divestment on the basis of the risk presented. ISIF will continue to keep under review the alignment of relevant investments within its investment parameters and commercial objectives. In practice, this means that if any other investments have or are later found to have the same risk characteristics as those six companies those other investments then fall for consideration for divestment also.
The Deputy will be aware the Illegal Israeli Settlements Divestment Bill 2023 is currently before the Oireachtas. The Government does not oppose that Bill and the only formal decision on it to date was to propose a nine-month timed amendment on Second Stage in the Dáil in May of last year. This was to allow for the consideration of the issues raised by that Bill including alternative, non-legislative based approaches, or a combination of legislative and non-legislative based approaches that could achieve a similar outcome.
Finally, following the expiry of the timed amendment, pre-Committee Stage scrutiny of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach is ongoing and I await the outcome of that process, which I expect very shortly.
I thank the Minister for the update on that. The background to this is the UN council and the particular committee, which set out 112 businesses. That was published in February 2020 and since then it has been reduced to 97. With regard to Ireland and the ISIF, the amount is relatively small given the overall investment internationally by ISIF.
I am aware it is independent, and I know there are experts and their role is to get value for money and invest, but is that done within a policy of human rights? What engagement has the Department had with NTMA on this? I welcome that there has been divestment from six companies. Will the Minister explain whether this involved direct investment, indirect investment or pooled investment? Why were those six picked as opposed to the total figure there? How was that done? Has the removal of the investment been completed on those six companies?
Perhaps I could write to the Deputy with detail of the investments that have been divested. The majority of what was announced has been completed at this stage. She will acknowledge that difficult and harrowing as the issue is with the occupied West Bank and the conflict and the terrible events happening in Gaza because of the excessive use of force by the Israel Defense Forces, it is not the only environment, social, or governance issue that will need to be addressed by the NTMA in the context of the management of this fund, but also other funds. There are a number of conflicts and ongoing violations of human rights and abuses, which are likely to have to be addressed in this fund and the other funds. It is important that the commercial mandate and fundamentally the independence of ISIF is respected so that its officials are allowed to make their own investment decisions in line with the mandate, and that they retain primary responsibility for decision-making.
In addition, when it comes to the question of legislating, we have examined, and continue to examine, this issue closely.
There are quite substantive and important reasons as to why enshrining the UN database in primary legislation as a reference point and anchor for divestment is not a good idea. I am happy to go into them in more detail.
I understand that. The Minister has taken the trouble to read the reports. I understand the difficulties. Suggestions have been made by the Department of Finance to establish our own database. What progress has been made on that?
Let me come back to the decision, which I welcome. Obviously, those concerned are operating in a policy vacuum. It has come from Dáil questions and pressure. I would have believed there would have been a proactive approach to taking the responsibility seriously. This happened previously with regard to Deputy Pringle's legislation, the Fossil Fuel Divestment Bill. The question of where our money is being divested is really serious. Regarding companies located in territories occupied by Israel, which is before the International Court of Justice for genocide, we must be seen to take action regarding where we invest public money, while acknowledging the independence of the NTMA and ISIF. What is the policy? Who is the fund reporting to? Who is monitoring what it is doing? Asking questions like this is part of it but there needs to be proactive monitoring to ensure we do not invest in companies that are part of a genocide or associated with the weapons that ensure that genocide.
The factual position is that ISIF is statutorily independent and subject to oversight by its investment committee and the NTMA's board. Under statute, I, as Minister for Finance, do not have a role in ISIF's implementation of its investment strategy. The investment strategy does operate within an ESG framework, which the Deputy has correctly highlighted. This is not the only ESG issue it has to consider. It is important that I continue to respect ISIF's independence and commercial mandate.
The Deputy mentioned the issue of fossil fuel divestment. As she knows, the House has previously legislated in respect of fossil fuel divestment, and that is reflected in the ESG parameters within which ISIF operates and is fully respected by it. However, I will write to the Deputy and give further detail on all this.
