Swiss state pension fund stops investing in arms firms

Cluster bombs are reviled for their indiscriminate effect and potential to kill and maim people if unexploded Keystone

The leading Swiss state pension fund, Publica, has announced that it plans to disinvest from five weapons companies. This follows a national campaign by a responsible investment pension group to blacklist 15 international arms firms. 

According to a report by Swiss public radio, SRF, Publica, the biggest pension fund in Switzerland, is dropping five arms manufacturers from its investment portfolio and selling its stake in them. Publica currently has 63,000 people paying in to the fund and 43,000 recipients, mainly government civil servants and employees at the federal institutes of technology. 

The news is a victory for the Swiss Association for Responsible Investments (SVVK-ASIR)External link, which at the beginning of the year published a blacklist of 15 arms firms. It called on its members – major Swiss pension funds – not to invest in them. 

The 15 companies are from India, Israel, Romania, Russia, South Korea, and the United States. They include firms such as General Dynamics, Lockheed Martin, Hanwha and Poongsan. 

The firms are accused of making products that violate Swiss law and internationally recognised conventions, such as the Ottawa Convention – banning anti-personnel mines – and the Oslo Convention on cluster munitions. 

Investments in five firms on the list will be completely sold off, Patrick Uelfeti, head of portfolio management at the state pension fund, told SRF. 

However, he refused to reveal which firms would be affected, aside from hinting that they were among the biggest on the list. 

“We want to ensure that the assets that we have invested in at Publica do not violate Swiss laws and norms or international treaties,” Uelfeti added.

Last September the government revealed that federal investments in arms manufacturers amounted to CHF110 million, or 0.3% of the total fortune of the Publica state pension fund.

People’s initiative

The news comes just two months after the pacifist group ‘Switzerland Without an Army’ launched a people’s initiative to ban the financing of companies that produce war materiel. The group has 18 months – until October 11, 2018 – to collect 100,000 valid signatures to force a nationwide vote. 

The text of the campaign wants to bans the Swiss National Bank, foundations and pension schemes from investing in the arms industry. 

In the past, Swiss banks, including Credit Suisse and the SNB, have been accused of controversial investments in firms that produce cluster bombs and landmines – which they have refuted. 

Supporters of the people’s initiative, like Green Party MP, Balthasar Glättli, say they hope the move will encourage other pension funds to take a similar step. 

But Swiss People’s Party parliamentarian Thomas Aeschi said those covered by the pension fund would lose out if ethical arguments overrule financial criteria for investing. 

“Investments should be made where the insured person gets the highest return,” he told SRF.