IRELAND - The Irish government will examine ethical investment following increased calls for independent scrutiny of the National Pension Reserve Fund's (NPRF) holdings in companies operating in Zimbabwe.

Micheál Martin, the minister for foreign affairs, told members of parliament (TDs) that following concerns about ethical investment Brian Lenihan, the minister for finance, had "agreed to examine the overall issue".

Martin said the finance minister intended to "look at international examples of how other countries deal with this issue and to report back", although the foreign affairs minister highlighted that "there are no proposals on the table at this stage".

But following arguments over how much NPRF money is invested in companies with operations in Zimbabwe, Martin told the committee the government needed to "ascertain objectively" an accurate figure. (See earlier article: NPRF to raise concerns over Zimbabwe investments)

Development agency, Progressio told TDs the figure at the end of 2006 was €596m, or 3.17% of the fund. The NPRF said this figure was incorrect.

Martin pointed out "some work needs to be done" to clarify whether investment from international pension funds into a company with multiple locations - including ones such as Zimbabwe - should be treated as if all of the investment is automatically placed in one location and not the others.

The minister also suggested there might be an "alternative to the all-embracing legislative framework approach" to ethical investment, as he highlighted that "engagement" with the NPRF on issues such as cluster munitions had proved "responsive".

However, Senator David Norris called for the committee on foreign affairs to examine a Bill on ethical investment - that will be re-tabled by the Green Party - as he said engagement had "never once worked" and "is a camouflage for doing nothing".

John Corrigan, director of the NPRF, admitted the fund "accepts the situation in Zimbabwe is appalling and is actively pursuing, via corporate engagement specialist, Hermes, the concerns [expressed]."

But Emmet Bergin, advocacy officer for Progressio Ireland, a development agency, said the "raising of concerns" was "not an adequate response to the scale of the problems which have been identified", and claimed the NPRF's "narrow" investment remit is "no longer appropriate" given the scale of its investment in private companies - estimated at €20bn in 2008. 

Progressio called on the government - through the NPRF - to ask companies with proven links to the Mugabe regime to pull out of Zimbabwe or face disinvestment, and asked for independent scrutiny of all the companies the fund is investing in that have operations in Zimbabwe, with the firms required to "prove they act in a manner that does not directly or indirectly finance the Zimbabwean regime".

However, Corrigan argued that imposing ethical investment requirements on a fund is "not uncomplicated" as even the Norwegian Government Pension Fund - Global, which he claimed is "held up globally with respect to its stance on environmental, social and governance issues", invests in 12 of the 14 companies listed in Progressio's original report on Zimbabwe.

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