The government's decision to allow KiwiSaver funds to continue investing in controversial weapons companies is being described as 'wishy-washy' and unsatisfactory.
Commerce Minister Paul Goldsmith said there was no need to change the law, because providers had been quick in pulling out of such investments, so consumers were already seeing the changes they wanted.
Mr Goldsmith said the three laws banning cluster munitions, anti-personnel mines and nuclear arms fulfilled New Zealand's legal obligations under international conventions and treaties, and the government had no plans to review them.
Police said last week they would not take any action against KiwiSaver providers who invested in manufacturers of these banned weapons, saying there was no evidence of offending.
That was because the laws were unclear, Green Party co-leader James Shaw said.
"The law is fuzzy and leaves it open to interpretation and we've been calling on the minister to set some clear bottom lines for what responsible investment is when it comes to cluster bombs, land mines and nuclear weapons."
"I think it's extraordinary that our government just doesn't get that," he said.
Police said their decision not to lay charges was based on the fact that shares traded on the stockmarket resulted in money changing hands between shareholders, as opposed to providing funds directly to the companies that produced these banned weapons.
Amnesty International executive director Grant Bayldon disagreed, saying that was a legal answer about how police had interpreted the law.
"But if you talk to anyone about investments and how they work, of course it's the market for the trading of shares that sets what companies are worth, it sets what they can raise on the capital markets, it even sets their borrowing costs, so that's completely unrealistic," he said.
It would be easy for the government to ban KiwiSaver funds from investing in these banned weapon manufacturers if it wanted to, Mr Bayldon said.
"This is something the government could solve with the stroke of a pen. It sets the regulation that KiwiSaver providers must meet and it could easily change those," he said.
Amnesty said the burden should not fall on consumers to have to research where their money is being invested.
In a statement, Mr Goldsmith said he was encouraged that the work done by media on the issue had heightened the public's engagement with their KiwiSaver.
"As Commerce and Consumer Affairs Minister I am focused on ensuring the disclosure requirements around KiwiSaver investments are working so that consumers can make a choice that's right for them, based on information that's easy to access and understand.
"MBIE, in conjunction with the Commission for Financial Capability and FMA, is currently reviewing the content of the annual statements KiwiSaver schemes must provide to their investors. The aim of the review is to make the information provided to investors clear and easy to understand, and standardise key figures and messages about retirement savings. Changes should start to take effect in 2017 annual statements," he said.