On Friday July 3rd, the University published their new Ethical Investment Policy. This followed the acceptance of the findings of the Working Group on Institutional Neutrality. Those findings included a recommendation to develop and adopt an ethical investment policy.
Why did the University develop an Ethical Investment Policy?
In May last year, a twenty five page report was tabled by the University’s Working Group on Institutional Neutrality. The report followed calls for the University to directly condemn the ongoing genocide in Gaza involving the states of Palestine and Israel. The Working Group recommended adopting a stance of institutional neutrality, which meant that the University would not take any position on political affairs that don’t relate to the everyday operation of the University. It was also recommended that ethical procurement and investment policies were adopted.
The University Council subsequently adopted all recommendations from the Working Group. Now, with the policy published, some members of the University community are paying close attention to these policies, especially in light of the University’s controversial partnership with Israeli-linked Palo Alto Networks in the planned Queenstown Campus.
In a statement given to Critic Te Ārohi, OUSA President Daniel Leamy said that “OUSA supports the University continuing to make progress on ethical issues of importance to students, including sustainability and responsible funding”. Daniel added that OUSA welcomes the new Ethical Investment Policy as a “step toward ensuring the University’s investments align with the community's values.”
What are the key takeaways?
The policy lays out both what the University should not invest in from here on out (“prohibited investments”), and in what circumstances current investments should be disposed of or sold off (“grounds for divestment”).
The first key takeaway is that prohibited investments fall into three main areas, recognising that they do not align with the University's “strategic vision in principles”. Firstly, investment in entities involved in the manufacture of tobacco products is prohibited. Secondly, investment in entities involved in armaments (the “manufacture, distribution, or sale of anti-personnel landmines, cluster munitions, nuclear weapons, biological or chemical weapons, or any other weapons deemed illegal under international law, or of civilian automatic and semi-automatic firearms, magazines or parts) is prohibited. Lastly, entities participating in fossil fuels (involved in the “mining of coal and tar sands, or the exploration and production of oil and gas”) is prohibited.
For these prohibited areas, the policy states that a “proactive” approach should be taken. Consideration of investments linked to these fields should be excluded well in advance of any investment decisions.
The other key takeaway is what constitutes grounds for divestment – when the University should dispose of investments that don’t align with the Ethical Investment Policy. There are three key actions that, if undertaken by an entity, require the University withdraw their investment in that entity. The first no-no is actions involving corruption. Entities that are proven to be engaged in “illegal or criminal activity, including money laundering, human trafficking or bribery” won’t be getting a cent. Secondly, entities that cause unlawful environmental harm through being proven to cause “significant, deliberate, and ongoing environmental degradation, including deforestation or unremediated toxic waste dumping” are subject to divestment. Thirdly, actions involving unlawful violation of human or labour rights won’t fly. Divestment is possible where entities are proven to be “complicit in systematic human rights abuses, including forced labour or child exploitation”.
The University states that materiality thresholds and timelines for divestment “may need to be determined” in the policy. In layman's terms, this means that the University still might need to figure out at what point an investment becomes problematic, and how quickly it should be divested.
Practically, how will this policy be engaged with?
While institutionally neutral, the University notes that it can “positively influence corporate behaviour” through active engagement and shareholder advocacy. For the University, that could look like engaging with sectors or entities to encourage practices in line with the policy, exercising voting rights to support shareholder resolutions that align with the policy, and collaborating with others to advance investments that align with the policy.
There is nothing in the contents of the policy that prevents anyone in the University community (including students) from expressing their thoughts on ethical investment. This applies to views on any sector or entity behaviour, consistent with the “principles of academic freedom” and the University’s Statement on Free Speech.
If you want to raise a complaint about the policy, the University directs complaints to the Chief Financial Officer (cfo@otago.ac.nz), or through their Protected Disclosures Policy (which basically protects whistleblowers).
