GLOBAL - A number of the larger Dutch pension funds have said they will not immediately cease investing in companies that supply controversial political regimes such the Syrian government with so-called "repression-supporting" equipment.
Several schemes told IPE they preferred to engage with such companies first, as they considered this a more effective means of bringing about change.
The pension funds were responding to calls from non-governmental organisations such as Oxfam Novib and IKV Pax Christi to stop investing in these companies.
Their call for action followed on the heels of a recent survey by economic research bureau Profundo, which found that the Netherlands' five largest pension funds had invested in Italian weapons technology firm Finmeccanica and/or US electronics company Netapp, which have supplied the Syrian government with equipment in the past.
According to Profundo, Finmeccanica supplied Syrian police forces with radio sets, while Netapp sold part of a data storage system for Internet monitoring via another Italian company.
Oxfam Novib and IKV Pax Christi said pension funds should include equipment that could be used for repression in their exclusion policies.
Yet the metal schemes PME and PMT made clear that their exclusion policies - which focus on "controversial" weapons - currently ruled out neither deal, although they added that they had already entered a dialogue with Finmeccanica.
Annemieke Biesheuvel, a spokeswoman at PMT, said: "We have engaged the company on the Ruggie Principles for human rights, and we expect it to comply," she said.
"However, if the dialogue doesn't result in improvements, we will disinvest."
Gerda Smits, spokeswoman at PME, added that the pension fund was currently looking into whether it should widen its engagement programme.
Jos van Dijk, spokeswoman at ABP, expressed similar views for the civil service scheme.
"We are also worried about what is going on in Syria, but, following our responsible investment policy, we have chosen to start a dialogue with the companies," she said.
"However, if the engagement doesn't lead to improvements, we are prepared to pull the plug."
ABP has invested €3m and €28m in Finmeccanica and Netapp, respectively.
The pension fund for the building industry BpfBOUW has also entered a dialogue with the companies involved through its asset manager APG, according to David van As, the scheme's director.
"Our current impression is that Finmeccanica and Netapp haven't acted illegally, but new information could be a reason to change our approach towards these companies," he said.
The scheme has invested more than €600,000 and €4.2m in the two companies, respectively, while PME and PMT declined to provide financial details.
A spokeswoman at healthcare scheme PFZW, which has invested €5m in Netapp, stressed that it was assessing the situation and would make a statement in due course.