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Courts Service of Ireland still holds €6 million worth of shares in tobacco companies

The Charities Regulator sold off its shares this year.

Image: Shutterstock/Jne Valokuvaus

THE COURTS SERVICE of Ireland still holds about €6 million worth of stocks in companies that make and sell tobacco products.

Last week, the Seanad unanimously passed a motion calling on the Minister for Justice Charlie Flanagan to bring an immediate end to the investment in the tobacco industry by the Charities Regulator and the Courts Service of Ireland.

Today, TheJournal.ie can reveal that while the Charities Regulator has already offloaded its stocks, the Courts Service of Ireland – as of November 2016 – still has 1.51% of its equity-fund investments in tobacco shares.

Its latest annual report said nearly 25% of the service’s €1.675 billion in total investments were in an equity fund. Of that fund, 1.51% was invested in tobacco shares – putting its stake in tobacco firms at about €6.3 million.

Controversy

Last December, the Irish State finished its sell-off of any legacy holdings in Big Tobacco (the name given to the five largest firms that make cigarettes and related products).

The decision was taken to remain in line with Ireland’s wish to become smoke-free by 2025.

At the time, former Finance Minister Michael Noonan said the decision reinforced the government’s policy on smoking.

He noted that the Ireland Strategic Investment Fund (Isif) had sold off its legacy investments in tobacco manufacturing companies.

Tobacco stocks

Following the sell-off of those shares, Fianna Fáil Senator Keith Swanick claimed the Courts Services of Ireland and the Charities Regulatory Authority continued to invest in the tobacco industry.

The then-Justice Minister Frances Fitzgerald confirmed in December 2016 that the Courts Service invests what she called a “small portion” of its funds in tobacco stocks.

She said the funds are operated independently of the Department of Justice and “in the best interests of the beneficiaries”.

In last year’s report, the Courts Service Investment Committee confirmed there are 20,003 such beneficiaries.

Among them are 2,850 wards of court and 15,394 minors who have had financial awards valued at €299 million made to them through the courts.

The remainder of the €1.675 billion  mostly consist of monies from cases pending further court orders, residential redress board cases, lodgements with defence case types and the Insurance Compensation Fund.

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In response to a parliamentary question on the topic last year, Fitzgerald made clear that her department had “no role in managing or directing investments”.

“Neither am I aware of all the investments, either directly or through a pension or other investment funds, by organisations that are in recipient of grant funding by my department. There are currently no guidelines regarding such investments but the matter is kept under review,” she said.

In a statement to TheJournal.ie, the Courts Service echoed the points of the former justice minister, stating that the funds are not public ones. The monies are controlled by the Courts Service Investment Committee which was set up 15 years ago to oversee investments made.

It is tasked with managing and investing court funds – over which it holds a custodial role – appropriately. It devises investment policy after receiving advice from independent financial advisors.

Its chairman and President of the High Court, Judge Peter Kelly, wrote in last year’s annual report that the committee “continues to seek opportunies for adding value and ensuring that the investment approach is at all times discharged in the best interests of beneficiaries”.

The statement from the Courts Service also went on to say that should the government determine a policy or amend legislation as to how certain funds should be invested, including the exclusion of certain stocks, the Courts Service and the Investment Committee would take account of that.

“If the law were to be changed, the Courts Service would obviously seek to comply, but, in the short-term, it would not be a straightforward issue to withdraw from tobacco stocks,” said the statement.

A spokesman added:

Essentially, if the law was to be changed, or a policy decision not to invest in tobacco was made, the Courts Service would seek to take all necessary measures to comply, however it would take time to bring about the changes required. We would also wish to ensure that we limit any negative impact from such changes, on the performance of court funds, which we invest for the benefit of minors and wards of court.

‘Unconscionable investment’

Swanick said he believes it is “unconscionable that money from wards of court and money awarded to children – often arising from serious medical or health issues – would be invested to prop up the balance sheets of global tobacco giants”.

“Everyone knows that according to the World Health Organisation, half of all users of tobacco will die from that using that product. As an industry, the tobacco industry is no friend to anyone and is most definitely no friend to people who are unfortunately addicted to tobacco here in Ireland,” said Swanick.

He said it is not tenable for the government “to turn a blind eye” to what is happening in the organisations and that it is “completely unacceptable” for taxpayers’ money to be used to support the commercial viability of the tobacco industry.

As a doctor I believe that it is unconscionable that public funds would be invested in tobacco companies. It does, I believe, make a mockery of the stated government objectives of making Ireland Tobacco Free by 2025, the cornerstone of tobacco free Ireland.

Anglo Court Cases Source: Laura Hutton/Photocall Ireland

While the Seanad motion also called for the Charities Regulator to divest its shares in the tobacco industry, the regulator confirmed in a statement to TheJournal.ie this week that the Common Investment Fund (CIF) sold off all its tobacco-related shares earlier this year.

The CIF manages pooled investment funds on behalf of 410 charities in Ireland. It provides access to a range of assets including equity, bonds, property and cash.

Previously-held stocks in Japan Tobacco and Marlboro

It is understood that it continued to invest in tobacco shares as of December 2016. The CIF amounted to €38 million and held stocks in Japan Tobacco and Altria (the parent company to some of the world’s largest producers and marketers of tobacco, including PhilipMorrisUSA which makes Marlboro).

At the end of 2016, 2.64% of the Charities Regulator’s overall portfolio was invested in tobacco-related stocks.

During questioning by Fianna Fáil’s Jack Chambers last year, Fitzgerald explained the fund was independently managed, adding that the Charities Regulator was due to review all legacy matters relating to investments in tobacco companies. Fitzgerald said any ethical factors would be taken into consideration.

As part of that process this year, the fund manager Davys Asset Management was instructed to divest stocks in the tobacco industry. The Charities Regulator now holds no shares in any Big Tobacco firms.

Read: The Irish State has just sold its shares in big tobacco companies>

Read: Fine Gael sees a bump in the polls with Leo as leader>

Read: The Irish State has just sold its shares in big tobacco companies>

Read: Fine Gael sees a bump in the polls with Leo as leader>

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