Trevor Sargent (Dublin North, Green Party)
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Question 61: To ask the Minister for Finance his plans to introduce legislation allowing the National Pensions Reserve Fund to avoid investing in unethical industries, such as the arms and tobacco industries; and if he will make a statement on the matter. [24814/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The goal set for the National Pensions Reserve Fund (NPRF) under its establishing legislation, the National Pensions Reserve Fund Act 2000, is to secure the optimal return over the long term, having regard to (a) the purpose of the Fund as set out in section 18(1) of the Act, and (b) the payment requirements of the Fund as provided for under section 20 of the Act, provided the level of risk to the moneys held or invested is acceptable to the NPRF Commission.

The National Pensions Reserve Fund Commission, which under the Act is independent of Government, controls and manages the Fund with discretionary authority to determine and implement its investment strategy.

The NPRF Commission announced in April this year that they had signed up to the United Nations' new "Principles for Responsible Investment". The Principles, which are voluntary and aspirational, are intended to encourage institutional investors to take account of environmental, social and governance (ESG) issues.

I understand that the Principles would not, for example, require disinvestment from certain sectors or companies. Instead, the Principles encourage institutional investors to engage on ESG issues with the companies in which they invest and generally to raise the profile of such issues by making it clear that they are a matter of concern.

I have no plans to amend the National Pensions Reserve Fund Act.

Gerard Murphy (Cork North West, Fine Gael)
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Question 62: To ask the Minister for Finance the terms on which funds in the National Pension Reserve Fund have been made available for public sector projects; the reason they have not been taken up; and if he will make a statement on the matter. [24925/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The National Pensions Reserve Fund Commission is independent of Government in the exercise of its functions. It controls and manages the Fund with discretionary authority to determine and implement the Fund's investment strategy in accordance with the Fund investment policy set out in the National Pensions Reserve Fund Act 2000. This investment policy is effectively a commercial investment mandate with the objective of securing the optimal return over the long term subject to prudent risk management.

The independence of the Commission is a cornerstone of the legislation which ensures that the Commission will invest in a manner that maximises returns. Essentially, it is similar to the trustee arrangements that apply to private pension funds and places an obligation on the Commission to act commercially and in the best interests of the Fund.

With regard to commercial investment in public sector projects in this country, the Annual Report of the National Pensions Reserve Fund Commission for 2004 states that the Commission has made an initial allocation of €200 million for investment in public-private partnerships in Ireland and will increase this allocation should suitable opportunities arise. The Report also states that the Commission will make equity and/or debt finance available to the winning bidder in the tender process for public-private-partnership projects, provided it is satisfied with the prospective rate of return. I understand that, to date, no moneys have been invested by the Commission in any such projects.

The Commission was a member of a consortium — the Celtic Roads Group — which was a bidder in a competition for the contract to upgrade the M50 which was conducted by the National Roads Authority. The NRA abandoned the original competition some time ago and launched a new competition on different terms. The Celtic Roads Group consortium decided not to enter the new bidding competition and the Commission's involvement in that project as a member of a bidding consortium is accordingly now at an end.