York policy on ethical investment counters student group’s

Nicholas Maronese
Editor-in-Chief
A new student group campaign is encouraging York University to divest from companies they think violate international human rights laws, but the administration argue their stake in those companies gives them a voice they can use to change unethical business practice.
A recent report from the Students Against Israeli Apartheid (SAIA), “Holding York University Accountable,” pressed York to withdraw its endowment and pension fund investments and refrain from reinvesting in BAE Systems, Northrop Grumman and Lockheed Martin, manufacturers of components for Israel’s F-16 Falcon fighter jets; and from Hewlett-Packard, who supply Israel’s military with computers.

In the report, SAIA says that by investing in companies that manufacture weapons “used to kill and maim Palestinian civilians,” York may be complicit “in the commission of crimes under international law.”
Trudy Pound-Curtis, assistant to the vice-president finance, explained York doesn’t actually choose which particular stocks it invests in, but only selects an investment manager.
“What we do, however, is provide each manager with our mandate,” said Pound-Curtis. “Included in that mandate is that they take into consideration environmental, social and governance factors in their formulas.”
The university’s “best practice” policy on investments, built on advice from major consulting firms, forbids “negative screening” or divesting from particular companies.
“[Mercer Ltd. consulting] believe the best approach to make a difference is through something called ‘active engagement’ where we would have our managers engage with managers in those companies’ behaviours, and we’ve built that into our investment philosophy,” said Pound-Curtis. “If we give up our stock, we have no vote, no say, no anything.”
But SAIA’s Katherine Lapointe thinks the university is using corporate rhetoric to complicate the situation.
“York can, and is indeed under the obligation to, instruct the investment manager to refrain from investing in companies based on defined criteria, including compliance with international law and respect for human rights,” she explained. “York cannot hide behind the fund managers and pretend that there is no problem. It is York’s money, and it is York’s ethical obligation.”
Lapointe said the university’s investment philosophy is inherently flawed.
“As long as our university remains invested in companies that profit from war crimes, it continues to make a mockery of its stated commitments to human rights and social justice,” she said. “‘Active engagement’ is a very
slow and ineffective tool [and it’s] not possible at all when the company’s main business is to manufacture weapons which are, by definition, death machines.”
Omar Dominguez, chair and co-founder of the Coalition of Universities for Responsible Investing, said York is on the right track.
“Issues like military spending are bound to be controversial,” he said. “But if you divest from these companies, it really leaves you out of an opportunity to negotiate with the companies and try to address your concerns.”
Nevertheless, Dominguez appreciated SAIA’s efforts to include students in these discussions.
“We encourage universities to combine the university trustees – who are ultimately responsible for these decisions – with faculty who have expertise on the very issues, to include the views of students, who are some of the beneficiaries, and to include multiple stakeholders,” he said of his coalition’s goals.
Pound-Curtis also pointed out that since they switched investment managers in late February, York is no longer investing in Hewlett-Packard or Northrop Grumman, and that they have not invested in Lockheed Martin since August 2010.
In fact, York is currently invested in only one of SAIA’s four target companies, BAE Systems, via the university’s pension fund.
“We’ve about a million dollars [in BAE Systems] out of our total pension fund, which is $1.4 billion dollars – it’s insignificant,” said Pound-Curtis. “We will have a discussion with our investment manager to ask if they’d considered any of the facts [of SAIA’s report].”
Lapointe emphasized that York has not yet promised not to reinvest in these companies.
“Pound-Curtis has not addressed any of the three demands of our divestment campaign,” she said.
Anne Bayefsky, a political science professor at York University who specializes in international human rights, thinks the campaign is wrongheaded because of its focus on Israel as an apartheid state.
“Israel, like all states, is entitled to the rights of self-defense,” she explained. “Efforts to deny Israel’s right to self-defense are, in fact, the inverse of the declared intention of people concerned with apartheid because it would deny the Jewish people a homeland where they can find protection and security.”
In their report, SAIA compares Israeli policy to apartheid South Africa, citing a study, “Occupation, Colonialism, Apartheid?” by the Human Sciences Research Council of South Africa. But Bayefsky thinks the evidence points in the opposite direction.
“Everyone should be concerned about human rights, but we have to take a good hard look at the facts,” she said. “The evidence clearly indicates that Israel – a country where one-fifth of the population is Arab with full democratic rights and representation at the highest levels of Israeli society – is not an apartheid state.”
To read SAIA’s full report, “Holding York University Accountable,” visit  www.toronto.saia.ca.
With files from Brent Rose and Yuni Kim