KEY POINTS:
Prime Minister Helen Clark says she finds the idea of taxpayers' money being invested in tobacco companies offensive.
Last week the Green Party revealed that the Government's New Zealand Super Fund invested in companies that manufacture nuclear weapons and others that the Norway Pension Fund refuses to support for ethical reasons.
At the weekend the Listener magazine reported that the fund had also invested in other companies of dubious ethical merit including tobacco firms.
Action on Smoking and Health is outraged by the revelations and its spokeswoman Sneha Paul has called on the Government to end it.
Helen Clark said: "I personally find investment in tobacco companies very offensive.
"Personally I don't like seeing superannuation fund money going to tobacco companies. I don't think that's ethical at all."
Helen Clark said the fund had a responsibility to act ethically but some of the concerns raised about companies such as Rio Tinto "may be drawing too long a bow".
"Let's remember that Rio Tinto runs the smelter at Bluff which employs a lot of New Zealand workers so I think we have to get some of these things in perspective."
The Prime Minister believed nuclear weapons were unethical but said the issue was not clear-cut.
"New Zealand's position on nuclear weapons is very clear but the problem you have with a lot of the multi-nationals is that they have many arms of business. Boeing is probably one of the businesses referred to. Now I just think we need to sort through what the issues are here and work them through."
Labour MP Maryan Street has drafted a bill which deals with responsible investment issues for Crown financial institutions and Helen Clark was asked if she would elevate it to a Government bill to address the issue.
"Obviously we are going to support the bill at such time as it comes out of the ballot, as I hope it does. If the practice of the superannuation fund raises more questions it's always possible that the bill's status could change."
She pointed out that if the fund kept investing in a way that did not meet ethical guidelines the government has the power to sack its board.
"But I think you'd be some way away from drawing that conclusion at this point."
Fund board chairman David May said investment in tobacco was not covered by its mandate not to harm New Zealand's international reputation nor a United Nations agreement it had signed up to.
"Because it [the tobacco industry] is still engaged in what is still a legal activity in New Zealand. It's not of itself grounds [to divest]."
Mr May said it was not up to the board to make moral judgments but it did ensure it did not invest in companies that flouted New Zealand laws.
The board was considering the investment in the company that manufactured nuclear arms.
Mr May said the board had pulled out from companies that were involved in landmines and whaling.
It had also signed the United Nations Global Compact focusing on labour and human rights and environmental and anti-corruption.
- NZPA
