A question received in advance of the meeting was presented to the Committee and responded to as follows.

Q: The people of Palestine have been living under occupation and denied their human rights for more than 50 years. 1.9 million Palestinians are cut off from the outside world by a blockade of Gaza and 4 million live under an Israeli government occupation that continues to build illegal settlements that segregates them behind a wall. There are many companies that are profiting from this illegal breach of human rights.

Does the Merseyside pension fund invest in any such companies and if so how much does it invest?

A: The Fund takes its responsibilities as an asset owner seriously and Human Rights are a fundamental element of those responsibilities.  Our policy of Responsible Investment (RI) reflects the view that environmental, social and corporate governance (ESG) factors can materially affect investment performance.

Accordingly, we take ESG issues seriously and place importance on active ownership in managing and shaping ESG matters. We principally do this through collaborative working whether that is with other local government pension schemes through the Local Authority Pension Fund Forum (LAPFF), or with our Northern LGPS partner funds (Greater Manchester & West Yorkshire).  We also appoint a third party, currently Pensions & Investment Research Consultants (PIRC), who assist us in fulfilling our fiduciary responsibility as a long-term investor. 

Where we become aware that companies may be involved in breaches of international law or complicit in human rights abuses, we seek to engage with companies in order to gather information and evidence. Our objective is to see that companies are acting in accordance with their responsibilities to respect human rights, as detailed by the United Nations Guiding Principles on Business and Human Rights.

In relation to your question, we have been advised that the Fund is invested in some companies featuring in a database, created by the United Nations High Commissioner for Human Rights, of business enterprises involved with or operating in the Occupied Territories.

The Fund’s present holdings and values are:

TOTAL across seven companies is currently valued at £2,741,773

In the main, these are large, international companies with wide-ranging interests. Consistent with our policy, we are engaging with them to understand how they are addressing the reputational implications of their activities. Useful further understanding and context of the issues has been gained.  LAPFF has also met with the UN Special Rapporteur to discuss the companies linked to the Occupied Territories. The advice received remains that we need to give the engagement process time, but that we also give companies a clear sense of human rights expectations and why they are considered to fall short.

The Chair of the Committee noted that the response to the question raised would also be sent to the member of the public in writing. Through the NLGPS the Chair of the Pension Committee had specifically raised the issue with the Palestinian Solidarity Campaign and asked for the Policy to be enhanced.  A supplemental question was then raised;

Q: Does the Pensions Committee agree with me that it is a priority to investigate the issue and consider special proposals at its meeting to divest investment from companies assisting in the violation of Palestine?

A: We take Human Rights very seriously particularly in conflict areas. The Policy is under review, but I would advise that the policy has to operate within the legal framework that is set down by Government and we operate in the legal framework.  The Policy will return to Committee no later than November 2021 when the Pension Committee will discuss, debate and review that Policy and satisfy itself that the Policy is robust enough to deal with the issues you have raised.