Yesterday it was reported that HESTA, the industry superannuation fund dedicated to workers in health and community services, sold its Transfield Services shares. The ASU supports this decision by HESTA, which represents many of our members in the social and community services sector, as the Union has been lobbying for this outcome on our members' behalf.
In response to requests from ASU members who were very concerned with Transfield's operations in offshore detention centres, a meeting of the ASU National Executive in March 2014 resolved the following:
"The ASU National Executive calls for HESTA to divest from Transfield Services. Social and community workers do not want their retirement savings used to support a system of mandatory detention of asylum seekers and believe it is immoral for corporations to profit from the indefinite and inhuman detention of other human beings. We also note that Transfield has no experience or background in welfare. We undertake to advocate this position to HESTA Board and to also provide our members with information on how to take individual action to ensure their money is not being invested in Transfield by exercising investment choice within the fund."
We have been involved in discussions with HESTA ever since with National Secretary David Smith in contact with the fund on behalf of the ASU.
The super fund has been very open to our concerns and examined them carefully. The ASU recognises that divestment from any company is a major decision that cannot be taken lightly and we commend HESTA's due diligence on this matter.
Through our lobbying and that of our members directly, HESTA became very aware of and understood community apprehensions regarding the mandatory detention of asylum seekers in offshore processing centres run by Transfield Services.
As reported in yesterday's article in The Age (link below), Transfield was also invited to address concerns directly with HESTA as part of the thorough investigation into the matters raised by our members.
We are happy to report to our members with funds in HESTA that their concerns have been borne out and the super fund now no longer invests in Transfield Services.
This matter highlights the important role played by unions in defending their members' superannuation, a role that will be undermined by the Federal Government's attempts to vary governance of industry super funds. We'll report further on this matter in another item.
HESTA dumps Transfield citing detention centre abuses, by Sally Rose, The Age, 18 August 2015
HESTA's divestment from Transfield Services Pty Ltd
After careful consideration, and following an extensive period of consultation with relevant stakeholders and engagement with the company, the HESTA Board determined to divest from Transfield Services.
Our review of this investment involved a prescribed and well-established environmental, social and governance (ESG) escalation process.
In accordance with our ESG policy, if a company is identified as not complying, directly or indirectly, with international laws, standards or guidelines, we may consider divestment of any such companies.
A number of independent non-government organisations have found that the mandatory, prolonged, indefinite, and non-reviewable nature of detention at asylum seeker processing centres breaches the fundamental principles of international human rights law.
For this reason, the outcome of the escalation process was that HESTA should divest from Transfield, as determined by our long-standing ESG policy.
As a responsible owner of the companies we invest in, the decision to divest involved a rigorous process, informed by advice from our internal investment team and external engagement service providers.
Of HESTA's $32 billion in assets, the Fund's investment in Transfield was approximately $23 million, representing a 3.5% stake in the company