UN divests from Israeli settlements
The United Nations has confirmed that in early January it divested from two investment funds holding shares in companies illegally operating in the Occupied Palestinian Territories. A New Internationalist investigation in November 2018 revealed that the UN had invested hundreds of millions of dollars in these funds.
The UN’s holdings in the funds constituted just a fraction of the organization’s $64 billion staff pension fund, known as the UNJSPF, which falls under the direct administration of the UN Secretary General. The composition of the UNJSPF’s investments is a closely guarded secret, with only select handful of UN employees allowed to know where its money goes.
However, an investigation by The Guardian last April found that the UNJSPF held up to $1 billion in shares of publicly listed companies ‘whose activities are or have been incompatible with core UN principles and programmes’, leading to calls from civil society for the UN to practice better due diligence on its investments.
Those calls were renewed in November when New Internationalist’s investigation showed that two ‘low-carbon’ funds, named LOWC and CRBN, that a separate tranche of UNJSPF funds were sunk in, held investments in companies whose activities in the Occupied Palestinian Territories both contributed to human rights violations and were in contravention of multiple UN General Assembly resolutions.
Stephane Dujarric, chief spokesperson for the Secretary General, confirmed early this month that UNJSPF has since withdrawn its holdings in the controversial funds.
‘In accordance with its move to a more active strategy in partnership with Entelligent to mitigate climate-related risks in its investment portfolio, the UNJSPF decided in early January that investing in the two low carbon ETFs (LOWC and CRBN) was no longer necessary,’ Dujarric wrote in an email. The new partnership with Entelligent will cost the UN $170,000 spread out across the next two years, according to records published by the UN’s procurement division.
Dr Susan Power Head of Legal Research and Advocacy at Al-Haq, a Palestinian human rights NGO, said in an email that while she welcomed the UNJSPF’s decision to divest, it troubled her that it was purely ecologically motivated.
‘Al-Haq is concerned that the reasons cited for the divestment relate narrowly to environmental considerations rather than to international law obligations to act with due diligence in situations of armed conflict,’ she wrote. Dujarric did not answer questions about whether the fund would heed civil society’s calls for greater due diligence and transparency regarding how it invests its money.
UNJSPF came under fire over its seeming allergy to transparency in a report issued last September by the UN’s Office of Internal Oversight Services, OIOS. ‘Members of the [UNJSPF] Board and its committees sign a declaration that requires them to maintain the confidentiality of all non-public information entrusted to them,’ the report notes. ‘OIOS is of the view that many of the restricted documents are, in fact, not confidential in nature and should be made available to Fund stakeholders, who may not be assured of accountability if the required transparency and access to information are absent.’
OIOS’s concerns about the pension fund’s opacity were echoed by Al-Haq’s Dr Power.
‘In particular, Al-Haq notes with concern, that the UNJSPF, who actively manages 85 per cent of its $64 billion global investment portfolio in-house, has not operated in an open and transparent manner,’ she wrote. ‘Al-Haq calls on the UNJSPF as a matter of urgency to immediately make public its investment portfolio, to publicly renounce the financing of unlawful settlement activity and to publicly commit to refraining from investment in unlawful settlement activity in the occupied Palestinian territory.’
Michael Lynk, the UN’s Special Rapporteur for human rights in Palestine, believes the UNJPSF needs to do more to ensure it is not getting its hands dirty when investing its considerable capital. In an ideal situation, he said, the fund would submit its investments to an independent, third-party human rights auditor.
‘Pension funds are notoriously lacking in transparency. I’m not an expert in them, but I understand to some degree their wish to be protective of their investment information,’ he said. ‘And if that is actually a necessary business requirement, then they must have internal human rights audits that are contemporary and distinct from the fund itself and can provide dispassionate advice.’
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