USS under scrutiny over Israeli investments

The University and College Union (UCU) has raised concerns over the Universities Superannuation Scheme’s (USS) position on Gaza, calling on the trustee to review its investment links with Israel in light of the International Court of Justice’s (ICJ) ruling.

The ICJ recently presented its preliminary findings on the case lodged by South Africa against Israel, ordering Israel to take all measures within its power to prevent acts of genocide.

In a letter highlighting this ruling to the USS trustee, UCU general secretary, Jo Grady, argued that while UCU was told last year that there was a diversity of views on this issue, “the time is well past for considering this matter as holding diverse views”.

Given this, she called on USS to immediately convene a meeting of the USS trustees to consider its position on Israeli investments and “those companies that have been found to be complicit and give support to this corrupt and now genocidal government”.

She stated: “We call on the USS trustee board to cease all investments with companies linked to the production of the F35 Combat Aircraft and other machines of war that have wrought such destruction on Gaza.

“And we call for an immediate review of all investments that may be linked directly or indirectly to the Israeli Government given the gravity of this decision by this prestigious court.

“On behalf of all scheme members, we demand urgent visible, transparent action by the trustee board to uphold the dignity of its position as the International Court of Justice has upheld its.”

Grady also argued that the fiduciary duty required of trustees is such that it would allow the USS to make this decision given “the importance of the decision reached, the implications not just on Israel but governments and companies that support Israel but also the devastation any delay in taking this decision will have on the Palestinian people”.

However, in its response, the USS trustee emphasised that “while this is of course a hugely emotive and important area that the court has been deliberating on in the awarding of interim measures, it does not change the legal or regulatory investment backdrop we operate to and the robust investment framework for USS we’ve outlined”.

“That is of course the same as other ICJ cases in recent times (including where genocide has been alleged) where the court has ordered provisional measures,” Trustee board chair, Kate Barker, clarified.

Barker also clarified that while the interim measures stated by the ICJ shine an “important light” on events and place imperative immediate demands on the State of Israel, Hamas and others, the order is not of itself a decision by the ICJ on whether it finds as a matter of law and fact that the violations alleged have occurred or not at this stage.

Despite this, the trustee acknowledged that the ICJ order does form part of the evidence and context in which the trustee considers its legal duty to invest in the best financial interests of the scheme’s members and beneficiaries.

“As we’ve previously noted we keep our investments under regular review and we are considering the implications of the order,” Barker continued.

“Any subsequent final judgement from the ICJ, future enforcement actions by the UN Security Council and imposition of international sanctions would be similarly important.”

And further discussions are expected on the issue, as Barker said that the issues raised by the union should be discussed at an upcoming meeting between UCU and USS, which was set to specifically discuss (amongst other things) investment in the defence sector and fiduciary duty.

Specific detail would be required though, as Barker argued that there are a “number of potential challenges” to the points raised by UCU, calling for a much wider call for divestment than USS has ever previously considered or adopted (including those in respect of Russia-related investments), while some of the descriptions used by the union are potentially very broad and seem to involve aspects of opinion.

Given this, she asked UCU to provide further detail as to how it would propose to approach the preeminent financial best interests context, given that trustees can only act on matters of established fact or law .

“I wholeheartedly agree with you that ‘USS must support the rule of law’,” she added. “I trust that you will understand that the trustee must seek to act within the legal duties that fall upon it. Not acting in the specific manner that you request cannot and should not be construed as our not yearning for a rapid end to the current violence in the Middle East.

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