11 Jan 2014

Council invests in oil companies

10:15 pm on 11 January 2014

Dunedin City Council has confirmed it has invested in oil companies.

It holds shares worth almost $1.7 million in petroleum producers, but the council is not saying which companies.

The council says the investments were made through the city's Waipori Fund and account for about 5% of its holdings.

It has been investigating an ethical investments policy, but says no details will be made public until a report on the policy has been discussed by councillors.

Local Government New Zealand president Lawrence Yule says there are no legal guidelines for council investments.

Anadarko, a Texan company, is to begin exploratory drilling offshore from Dunedin next month and Shell has confirmed plans to drill for gas nearby in 2016.

Dunedin has been tipped as the likely service base for their drilling programmes.

Comment

Councillors in Dunedin are split on how to respond to the possibility of a major gas or oil strike offshore.

Cr Jinty MacTavish says the council should not hold shares in any company that produces fossil fuels. She says the investment fund should avoid oil companies in the same way it avoids tobacco and arms companies.

Greenpeace says the council must be morally confused if it's investing in oil companies. Campaigner Steve Abel says the council should not be able to benefit financially from oil companies.

The Green Party is urging the council to divest its investments in oil companies.

The party's energy spokesperson Gareth Hughes says the council should not be associated with fossil-fuel production and other cities around the world, such as Seattle, are divesting from fossil fuels and Dunedin should do the same.

However, Peter McIntyre, a broker with Craigs Investment Partners, says opposition to this kind of investment is inevitable but from a return point of view, it's an appropriate move for the council.

Dunedin mayor Dave Cull on Saturday defended the investment:

''That fund is designed to make a return for the benefit of ratepayers,'' he said.