22 Aug 2016

KiwiSaver provider moves funds away from bomb companies

2:14 pm on 22 August 2016

One KiwiSaver provider is moving its investments out of a fund that has shares in companies making cluster bombs.

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Photo: 123rf

RNZ revealed last week that at least five of the nine default KiwiSaver providers have money tied up in companies making cluster bombs, anti-personnel mines and nuclear weapons.

The Grosvenor Default Saver Fund said it was switching from the Vanguard International Share Index Fund into socially responsible investment funds.

Grosvenor said that would remove the fund's exposure to the cluster bomb manufacturers that existed in the Vanguard fund.

On Friday, AMP said it had been moving away from the types of investments called into question by the media reports since 2014, and would be fully out by the end of the year.

ASB said it was already reviewing its policy, and Westpac and ANZ said they were now looking into theirs. BNZ said it had no plans for a special review.

Govt to carry out legal check

The government is expected to know this week if KiwiSaver providers investing in companies that make cluster bombs are breaking the law.

Knowingly investing in companies that make cluster bombs is illegal under the Cluster Munitions Prohibition Act 2009, and Commerce Minister Paul Goldsmith has since requested legal advice on the issue.

Mr Goldsmith told Parliament last week a verbal briefing from the Ministry of Business Employment and Innovation (MBIE) gave some indication the law might apply to KiwiSaver funds that either directly or indirectly invested in these companies.

"I've asked for advice on that and there is some indication that the law relating to Cluster Munitions Prohibition Act may apply, but that is up for the appropriate enforcement authorities or not to decide whether there has been a breach of the law," he said on Thursday.

A spokesperson for the minister said formal advice from MBIE and Crown Law was expected in the next few days.

Police said they were aware of the discussion held in Parliament regarding the matter but no investigations were under way at this stage.

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