St Anne’s College invested in corporations associated with environmental damage and the production of nuclear weapons, Cherwell can reveal.
A Freedom of Information request made by Cherwell shows that St Anne’s invested in BAE Systems, Rio Tinto Group, and Barrick Gold Corporation – all of which have been excluded from the world’s largest sovereign wealth fund, the Norwegian Government Pension Fund Global, following recommendations from its Council on Ethics. Nuffield College also invested large sums in Rio Tinto, totalling £2.5 million from 2006 to June this year.
Together, the corporations have been accused of selling arms to Saudi Arabia, producing nuclear weapons, causing huge environmental damage, and committing human rights abuses. Despite this, St Anne’s were found to have invested in the corporations after their controversies had been publicly reported.
Oxford SU VP for Charities and Communities, Rosanna Greenwood, told Cherwell: “It is scandalous that colleges still invest in Fossil Fuels and companies with dubious ethics. We would want to see all the colleges disinvesting from unethical investments. We have seen the University make that commitment after lobbying from us and it’s time that colleges follow suit.”
A spokesperson for St Anne’s told Cherwell: “The College employs a third party fund manager to manage its investments. Both the College and its fund manager take Environmental, Social and Governance standards seriously and have recently undertaken ESG benchmarking as part of a regular review of its investments.”
A Nuffield spokesperson noted that “the transactions in respect of Rio Tinto plc were made through an investment portfolio managed on the College’s behalf by an external investment manager”, and that the college “no longer has any holdings with that investment manager”.
St Anne’s and Nuffield are two of only a handful of colleges that invest directly in individual shares rather than through pooled investment funds. Foremost among such collective investment schemes is Oxford University Endowment Management (OUem), which manages investments from 25 colleges, as well as the University and six associated trusts.
As a wholly owned subsidiary of the University, OUem – which manages a combined £3bn – is also subject to the Freedom of Information Act. However, citing a duty of confidentiality to their fund managers and the need to protect commercial interests, they refused Cherwell’s request for information about their transactions in specified securities.
OUem follows the University’s ethical investment guidelines which prohibit direct and indirect investments in “tobacco companies, manufacturers of weapons illegal under UK law, or companies whose main business is the extraction of thermal coal and oil sands.”
As part of a broader environmental, social, and governance (ESG) policy, they also evaluate investment ideas for “social, environmental, political and reputational risks,” and use the UN Global Compact to guide due diligence. The full OUem ESG policy can be found on their website.
However, there are no absolute prohibitions other than those restricting investment in tobacco, illegal weapons, and thermal coal and oil sands extraction.
A spokesperson for the Oxford Climate Justice Campaign (OCJC), Pascale Gourdeau, told Cherwell: “In 2015, after a long debate about fossil fuel and arms investments, the University Council acknowledged serious issues in transparency, requiring OUem to improve its reporting on societal and environmental impact. Cherwell’s failure to obtain information on the University’s basic investment strategies casts worrisome doubt on that promise.
“As students, faculty, and staff, we should not have to rely on leaks such as the Paradise Papers to get an accurate picture of the University’s indirect investments and to understand what our University endorses with its financial and cultural clout.”
The University’s ethical investment guidelines are also employed by a number of colleges. Of those which responded to Cherwell’s request by the statutory deadline, none had more substantive de facto ethical investment policy than the University. Several have no substantive ethical investment policy at all, instead relying on case-by-case assessments or the judgement of their investment managers. The latter is the case for St John’s, the University’s richest college, whose transactions records remain undisclosed.
A St John’s spokesperson told Cherwell: “The College’s largest investment adviser, Cazenove, operate[s] a programme of socially responsible engagement with the management of companies in which they invest and the College takes account of advice from its investment and property managers about the social and ethical dimensions of its investment holdings.”
On their ethical guidelines and transparency, a University spokesperson said: “The University has a clearly set out Policy on Socially Responsible Investment, ensuring investment decisions taken on its behalf consider social, environmental and political issues in maintaining ethical standards. The policy includes a ban on direct investment in coal, tar sands, tobacco and companies involved in illegal arms.
“We work closely with our colleagues in OUem in applying the policy, through the University’s Socially Responsible Investment Review Committee and the Investment Committee of the Oxford Funds.”
They added: “Breaches of confidentiality on investments could restrict OUem’s ability to make the decisions which ultimately provide an important source of funding to the University, with many scholarships, bursaries and fellowships funded by this charitable money.
“The University is confident that OUem operates entirely within the Policy on Socially Responsible Investment and has a transparent approach to its investment decisions, providing as much information as is consistent with its obligations to confidentiality and commercial sensitivity.”
When asked for further comment regarding transparency, OUem told Cherwell: “We are conducting a review of our original decision dated 18 October 2018, as requested by you yesterday (31 October). This is a request we must take very seriously, and dedicate enough time to undergo a thorough review. It would be inappropriate to make a comment for your article before we have completed the review. We will provide a response within 28 days and by no later than 28 November 2018.”
Citing concerns about severe environmental damage, the Norwegian Pension Fund Global ruled to exclude Rio Tinto Group in 2008. The company operates a joint venture with Freeport-McMoRan Copper & Gold Inc to run the Indonesian Grasberg mine, which, according to the Indonesian Supreme Audit Agency, had caused $13.5bn worth of environmental as of 2017.
The mine is also controversial due to conflicts about the area’s indigenous peoples’ right to the land the mine pollutes and on which it operates. The Indonesian police and military, who provide security to the mine due to its status as “strategic industry”, have been accused failing to respect workers’ rights by the International Federation for Human Rights (FIDH).
Freeport, though they defend making use of services provided by Indonesian security forces, have never been implicated in these human rights abuses.
The year after Rio Tinto was excluded, Barrick Gold was excluded on similar grounds. The Council on Ethics’ investigation into the Porgera mine in Papua New Guinea, in which the company has a significant stake, revealed substantial issues related to the disposal of mining waste in the river. In particular, the Council cited concerns over accumulation of heavy metals, which could have serious negative consequences for human life and health.
A Human Rights Watch report from 2011 revealed that members of the mine’s private security personnel were implicated in “violent abuses” including gang rape. Barrick has since taken action, and recently commissioned a human rights report which was published in September this year. The report revealed a backlog of more than 940 human rights cases.
BAE Systems is a UK based defence contractor which which has contracts with the US Air Force and the US Navy for the maintenance and upgrade of Minuteman III and Trident missiles, both purpose-built to carry nuclear warheads. The Council on Ethics argues that, along with cluster bombs and anti-personnel landmines, these weapons “violate fundamental humanitarian principles through their normal use.”
BAE has also faced criticism for supplying Saudi Arabia with 72 fighter jets used in airstrikes targeting Yemen. Saudi Arabia has been accused of targeting hospitals, including those run by the Red Cross and Médecin Sans Frontières, and a UN report published in August this year reveals that at least 6,660 civilians have been killed from March 2015 to 23 August 2018. Most of these casualties were caused by airstrikes conducted by the Saudi-led coalition. The UN report claims that the actions of the Saudi government may amount to war crimes.
St Anne’s have conducted several transactions in the shares of these three corporations since the issues above became public knowledge. Whilst they do not currently hold shares in the two mining companies, they did as of mid-October hold £88,400 worth of shares in BAE Systems.
A BAE Systems spokesperson told Cherwell: “As a global company, BAE Systems has operations in numerous countries and it complies with all relevant export control laws and regulations in the countries in which it operates.”
They added: “BAE Systems provides defence equipment, training and support under government–to-government agreements between the United Kingdom and Kingdom of Saudi Arabia.”
Freeport-McMoRan, Rio Tinto, and Barrick Gold were all contacted for comment.