Wednesday, 1 February 2017
I thank the Minister of State, Deputy Stanton, for coming to the House to discuss the investment of taxpayers' money in the tobacco industry by two publicly funded organisations under the remit of the Department of Justice and Equality, namely the Charities Regulatory Authority and the Courts Service.In response to a parliamentary question submitted by Deputy Jack Chambers, the Minister confirmed that the common investment fund, CIF, holds a small proportion of tobacco-related stocks as part of a dividend reinvestment scheme that affords charities the choice of receiving dividend income in cash or reinvesting it back into the fund. According to the Minister's response, the Courts Service also invests in a small proportion of tobacco stocks on a passive basis.
Following the recent commercial decision by the Ireland Strategic Investment Fund, ISIF, to exit from its legacy tobacco investments, it is now, more than ever, untenable for a Department or Government agency to have investments in this industry. The Minister for Finance, Deputy Noonan, the Minister for Health, Deputy Harris and the Minister of State at the Department of Health, Deputy Corcoran Kennedy, have each acknowledged and shared my concerns regarding the investment of taxpayer's funds in the tobacco industry. It must not be forgotten that the companies in which the Department of Justice and Equality has investments are the same companies that threatened to sue the former Minister for Health and current Fine Gael Senator James Reilly and his successor, Deputy Leo Varadkar, for doing their job with regard to cigarette packaging and advertising.
In response to Deputy Jack Chambers, the Minister acknowledged that no guidelines are in place in her Department regarding such investments. The Minister further acknowledged that she was not aware of all of the investments made by organisations that are in receipt of grant funding from her Department. There must be a commitment to divest from such investments and guidelines must be put in place to ensure that no future investments in tobacco stocks are made. These guidelines should be Department-wide and prohibit any investment in tobacco companies.
On behalf of the Tánaiste and Minister for Justice and Equality, I thank Senator Swanick for raising this matter. The Tánaiste appreciates the Senator's interest in the subject.
As the Senator will be aware, the Courts Service, in accordance with the Courts Service Act 1998, is responsible for the management and administration of the courts and the provision of support services for judges. It is in this capacity that the Courts Services has a role in the management and investment of court funds, which are held in trust by the courts on behalf of wards of court, minors and other beneficiaries. The Office of the Accountant of the Courts of Justice has responsibility for the management and investment of funds. The funds managed by that office are those that are held under the control of the courts and are managed in a fiduciary capacity on behalf of the beneficiaries who include various categories of litigant, persons who are wards of court and minors who have been awarded damages by the courts. The investment committee oversees the implementation of investment strategies. It comprises members of the Judiciary, county registrars, court officers, Courts Service officials and independent external members. The committee is chaired by the President of the High Court. The funds are invested in line with the provisions of the Trustee (Authorised Investments) Act 1958 and subsequent orders. In accordance with that Act and based on independent investment advice, the Courts Service invests a proportion of these funds in equities and shares on a passive basis, which means that the funds are invested, in line with FTSE All-World index, across a very wide range of diversified funds in the best interests of the beneficiaries. As of 12 November 2016, the percentage allocation within the FTSE All-World index to tobacco stocks was 1.51%. The Senator will appreciate that the fund is operated independently of the Department of Justice and Equality and in the best interests of the beneficiaries. The Department has no role in managing or directing investments. It should be noted that court funds are not public funds and are not under the control of the Government.
The Department of Justice and Equality understands that ISIF management and the National Treasury Management Agency, NTMA, board’s investment committee are currently reviewing the sustainability and responsible investment policy to examine the potential of adding to the list of excluded investment categories, so as to consider excluding investment in tobacco companies. This process is expected to be completed by the end of the first quarter of 2017.
In regard to the common investment fund, CIF, the Tánaiste has been informed it holds a small proportion of tobacco-related stocks as part of a dividend reinvestment scheme which gives unit holders, namely, charities, the choice of receiving dividend income in cash or reinvesting back into the fund. The Charities Regulatory Authority has oversight of the CIF, which is independently managed and the Tánaiste has been informed that it is currently reviewing all legacy matters, including those relating to the CIF and ethical indices will form part of that review process.
I thank the Minister of State for his response. I believe that the 1.51% allocation for stocks in tobacco companies is too much. I am aware of the NTMA's willingness to divest of its tobacco stocks but my question relates to the CIF. While I appreciate what the Minister of State has said, I will continue to pursue this issue and will work with others to bring a motion of resolution before the Seanad seeking a full divestment and the implementation of guidelines to ensure that no further investments in tobacco companies will form part of any portfolio within this State.
As I said, the Courts Service and the Accountant of the Courts of Justice and the investment committee are all independent in their duties in terms of managing court funds. As of 12 December 2016, only a very small part of those funds were invested in tobacco stocks. It should be noted that court funds are not public funds and are not controlled by the Government. As the Senator will appreciate, the funds are operated independently of the Department of Justice and Equality in the best interests of the beneficiaries. The Department has no role in managing or directing investments. However, the review currently under way by ISIF management and the National Treasury Management Agency, NTMA board’s investment committee, in terms of excluding certain investment categories, including tobacco companies, will be of interest. The Tánaiste has arranged for its findings to be brought to the attention of the Courts Service and the Charities Regulatory Authority. Similarly, the review by the Charities Regulatory Authority of the CIF will also be relevant and the Courts Service will be kept informed of any developments in this area.
Before I leave I wish to congratulate the new Clerk of the Seanad, Mr. Martin Groves, on his appointment.