CAATnews December 2006/January 2007 - Clean Investment

Clean Investment Update

Forty-five UK universities and university colleges currently hold significant investments in arms companies. CAAT research published this November revealed that universities including Oxford, Cambridge and UCL invest millions of pounds in companies such as BAE Systems, Rolls Royce and the Smiths Group that sell arms to repressive regimes. These universities also carry out research in partnership with the same military companies.

Southampton and the Saudis
Many universities with investments in the arms trade are members of the Russell Group – a collection of elite institutions that accounts for 65 per cent of UK universities’ research grant and contract income. Perhaps these universities want to stay on good terms with the companies that supply them with much needed investment? Earlier this year, Malcolm Ace, Director of Finance at Southampton University, told students that it would be “hypocritical” to sell his university’s shares in BAE Systems when it receives hundreds of thousands of pounds worth of research funding from the arms company each year. BAE Systems has been in the news recently as the company is under investigation by the Serious Fraud Office over allegations of multi-million pound bribery during sales to Saudi Arabia (see page 10). In recent months, BAE Systems has announced another huge arms deal with Saudi Arabia – a country that has no political parties or trade unions, no freedom of association and no independent media. Women are denied the vote and face severe restrictions on movement. Amnesty International reports that torture and extra-judicial killings by Saudi security forces are escalating under the cloak of the ‘war on terror’. According to Malcolm Ace, Southampton University has invested in BAE Systems “since approximately 1987”. We may hesitate to believe that anyone purposefully invests in an arms company because it may secure a lucrative contract to export weapons – thus raising its stock price. Nonetheless, incidences of public institutions, such as universities, profiting from such deals are an inevitable consequence of investing in the arms trade.

Effective activism
Over the past twelve months, however, there have been encouraging signs of resistance to the influence of militarism on campus. Thousands of students and staff around the country have mobilised and taken action, resulting in policy changes at student union and university level. Protests, petitions and student journalism caused SOAS, Bangor, St Andrews and Goldsmiths to take real steps towards divestment. Students at Manchester held die-ins and other high-profile events, culminating in 300 students passing a student union motion for ethical investment. This has led to the university engaging directly with students over the future of university finances.

These changes have occurred only because activists have used persuasive moral and financial arguments to explain why investing in the arms trade is unnecessary and wrong. They have shown that it is possible for universities to fulfil their financial duty whilst investing ethically. Ethical investment funds that preclude arms company shares are amongst the most profitable: in the past decade the Church of England’s £4.3bn ethically-managed fund was the second best performer out of more than 1,000 funds. Furthermore, the fact that the majority of university arms investors hold less than 2 per cent of their overall investments in arms companies means that divestment will not have a significant impact upon their portfolios.

Kick the habit
Unfortunately, several universities persist in denying access to data concerning their finances. Even after requests made through the Freedom of Information Act they cite commercial confidentiality or simply ignore requests for information. Universities must become transparent and accountable in order that students and staff can fully understand how their institutions are managed. If students are to be more than indebted consumers of knowledge, they must be given access to all relevant information – thus enabling them to participate meaningfully in university life.

It seems that the justification for such investments often boils down simply to financial habit. Without anyone questioning the status quo, institutions renowned for their commitment to internationalism and human progress will continue to support companies whose profits rest upon proliferating weapons and sustaining international tension. By uncovering the scale of university investment in the arms trade and by providing university members with information and support, CAAT’s University Clean Investment campaign empowers students and staff to lead the way in getting arms out of education. Divestment from companies that market killing will be a major step forward.

TIM STREET