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Courts Service of Ireland reduces shares in Big Tobacco, but still holds €4.5m worth in stocks

Critics state the Courts Services continued investment in the tobacco industry flies in the face of the government’s Tobacco Free Ireland vision.

Image: Shutterstock/phonrat

THE COURTS SERVICE of Ireland still holds about €4.5 million worth of stocks in companies that make and sell tobacco products.

This is a reduction of about 50% in tobacco stocks in one year, according to the Courts Service.

In 2017, there was a 1.89% exposure in tobacco shares – putting the funds stake in tobacco firms at about €8.7 million.

The investment in tobacco shares has now almost halved to €4.5 million, with the exposure reduced to 1.06%.

The holdings specifically relate to the investment of Court Funds, which are held by the Courts on behalf of wards of courts, minors and other beneficiaries.

Other monies held in the account relate to cases pending further court orders, residential redress board cases, lodgements with defence case types and the Insurance Compensation Fund.

The latest annual report, published last week shows that Court Funds increased from €1.676 billion to €1.842 billion.

TheJournal.ie revealed last year that the Courts Service held about €6 million worth of stocks in companies that make and sell tobacco products in 2016.

In 2017, 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 Courts Service of Ireland.

However, a July 2017 letter from the President of the High Court, Justice Peter Kelly said it may not be possible for the Courts Services to totally divest its shares in tobacco company stocks, despite the Seanad voting for it to do so.

He said, “It may not be possible to exclude tobacco stocks from the current fund or index as there are other investors involved whose agreement would be required to change the investment strategy.”

The holdings specifically relate to the investment of Court Funds, which are held by the Courts on behalf of wards of courts, minors and other beneficiaries.

Flying in the face of government policy 

However, Fianna Fáil Senator Keith Swanick and TD Sean Fleming say that the Courts Services’ continued investment in the tobacco industry flies in the face the government’s Tobacco Free Ireland vision.

Swanick told TheJournal.ie this week that he welcomed the reduction in tobacco shares, but said the current situation is “farcical”.

I welcome the reduction of holdings in tobacco by the Courts Service, this is progress. However any investment whatsoever, regardless of how nominal it is, is not acceptable.
“The Department of Health published a Tobacco Free Ireland plan in October 2013 with the aim of making Ireland a ‘tobacco free’ nation by 2025. For a state agency under the remit of the Department of Justice to facilitate the investment of monies in tobacco is nonsensical.
I have published the Courts Service (Amendment) Bill 2017 to prohibit investment by the Courts Service in tobacco-related companies. This Bill is unnecessary and cumbersome as it is within the gift of the government to bring an end to this farcical situation.

Sell-off of tobacco shares

In 2016, 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. Last year, the Charities Regulator completed its divestment of tobacco stocks.

Continuing the trend of divesting in shares of companies that contradict government policy, last week the government agreed to support a private member’s Bill to offload its shares in fossil fuels.

anglo-court-cases-40-390x285 Source: Rollingnews.ie

‘Turning a blind eye’

Swanick and Fleming have accused Justice Minister Charlie Flanagan of “turning a blind eye to what is going on under his remit”.

In his reply to the two politicians last year, Justice Kelly said of the total fund there is a “very small exposure to tobacco related equities”.

He also set out why it may not be possible for the Courts Service to divest its shares in tobacco companies.

Having checked with the Courts Service fund managers, he said he was informed that because other investors are involved, it would require their agreement to change the investment strategy.

He said the investment committee did consider the matter earlier this year. However, he states it was advised that “it was quite complex to find a solution”.

“It would be expected that any solution would likely result in higher fund management fees for beneficiaries and would quite possibly require a full EU open procurement process to be undertaken. The latter would take between 12 and 18 months,” he said.

Change in policy or legislation

Should the government decide to introduce a policy or legislation as to how funds are to be invested, including the exclusion of certain stocks, the Courts Service and its investment committee will take that into account, continued Justice Kelly, adding that in the meantime the matter will be kept under review.

Since that Seanad motion was passed last year an estimated 6,000 people will have died from smoking-related illnesses, said Swanick.

“If that does not portray the urgency of this issue, I have no idea what does,” he added.

A statement to TheJournal.ie from the Department of Justice said it does not play a role in determining how the monies are invested:

“The Department of Justice and Equality does not have a role in managing or directing investment of Court funds. Court funds are not public funds. They are funds administered by or on behalf of the Courts and the Courts and Judiciary are constitutionally independent in the performance of their functions.
The funds are held in trust by the courts on behalf of persons under the protection of the courts and are invested in accordance with investment strategies approved by an Investment Committee, chaired by the President of the High Court.
“The Trustee (Authorised Investments) Act 1958, which governs the investment of court funds, does not preclude investment in tobacco products as such.”

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