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News Release - FAO Newsdesks  Wednesday 30th March 2005 - For immediate release

'Dirty Dozen' local authorities hold huge investments in arms company

LONDON: Campaign Against Arms Trade is publishing its annual survey of organisations with investments in arms companies, today Wednesday 30 March 2005 [1]. CAAT surveyed 99 local authority pension funds in England, Wales, Scotland and Northern Ireland as part of its Clean Investment Campaign 2005. Twelve local authority pension funds, dubbed 'The Dirty Dozen', each have 1 million shares or more in BAE Systems, Europe's largest arms manufacturer. The Dirty Dozen includes: West Yorkshire, West Midlands, Strathclyde, Lancashire, South Yorkshire, Kent, Derbyshire, East Riding (Yorkshire), Hampshire, Teeside, Essex and the London Borough of Southwark [2]. CAAT is calling for all local authorities to adopt ethical investment criteria and to not invest in arms exporting companies.

CAAT's survey revealed that at least 6 local authority pension funds hold no shares in the six arms companies identified. Furthermore there are at least another 27 local authority pension funds that have no BAE Systems investments at all. CAAT is targeting UK based BAE Systems as it is this country's largest arms exporting company, selling indiscriminately and undermining peace and security. Ethical reasons aside, investment in BAE Systems is financially risky. It is dependent on government subsidies; if these end, then so will shareholders' profits (CAAT estimates that government subsidy for arms exports are worth about £890 million each year). Furthermore, there are ongoing corruption allegations and investigations, including by the Serious Fraud Office of BAE Systems - one debt rating service put BAE Systems on a 'negative ratings watch' following the company's announcement of this investigation last year.

Ian Prichard, CAAT Research Co-ordinator said

"Local authority pension funds are being invested in arms companies which export to countries in conflict zones or regimes with unacceptable human rights records. Public money is invested in these pension funds often without the knowledge or agreement of contributors or people living in the local authority. It's about time public money was invested for the public good and that means excluding arms exporters such as BAE Systems."

ENDS

For more information please contact: CAAT Press Office on 020 7281 0297

Notes

[1] CAAT's Clean Investment Campaign started in 1991. The survey shows local authorities, charities, health organisations, religious organisations, educational institutions and their investment in arms companies. CAAT undertakes its annual survey by scrutinising the share registers of the six largest arms companies based in the UK and then checking with the pension funds for: BAE Systems, Rolls Royce Group, GKN, Smiths Group, Cobham and VT Group.

Since the 2004 survey there have been some changes. For example, in the charity list for 2005, the Leukaemia Research Fund now has holdings and National Kidney Research Fund appears to have sold almost all its shares. The Royal National Lifeboat Institute and Charities Official Investment Fund still retain a large number of shares in arms companies. For religious organisations, the last two large Church arms company shareholdings have been sold - the Church of England's holding in Smiths Group and the United Reformed Church Trust's holding in GKN. Five years ago the Church of England adopted ethical investment criteria excluding arms company holdings. (Smiths Group have only recently increased their military work and now breached this policy). Despite excluding arms company holdings, the Church's funds remain the second best performer of more than 1,000 funds over the past decade (source: Financial Times 30/3/05).

[2] Twelve local authority pension funds hold more than a million shares in BAE Systems: West Yorkshire Pension Fund - 5,457,603 shares; West Midlands Pension Fund - 4,228,553 shares; Strathclyde Pension Fund - 3,817,000 shares, Lancashire County Council - 3,481,396 shares, South Yorkshire Pensions Authority - 2,244,000 shares, Kent County Council - 1,923,825 shares, Derbyshire County Council - 1,640,000 shares, East Riding of Yorkshire Council - 1,500,000 shares, Hampshire County Council - 1,332,289 shares, Teeside Pension Fund - 1,300,000 shares, Essex County Council - 1,149,300 shares, London Borough of Southwark - 1,071,670 shares.

Campaign Against Arms Trade, Unit 4, 5-7 Wells Terrace, London, N4 3JU
Tel: +44 (0)20 7281 0297   |   Email: enquiries(at)caat·org·uk

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