Councils’ Investment in Tobacco Giants Must Stop, Say Campaigners

Indonesian tobacco farmers protest in Jakarta on July 13, 2011 against a new law which would ban cigarette advertising and sponsorship, prohibit smoking in public and add graphic images to packaging. Around 30 percent of Indonesians above the age of 10 smoke an average of 12 cigarettes a day, according to a 2008 report. And cigarettes are cheap at less than a dollar a pack. According to the World Health Organisation, smoking rates have risen six-fold in Indonesia over the last 40 years. Smoking kills at least 400,000 people every year and another 25,000 die from passive smoking. Adek Berry/AFP/Getty Images

An NHS public health campaigner is urging councils to stop investing pension fund holders’ money in the tobacco industry.

In the southwest area of England alone, local authorities have invested over £100 million in Imperial Tobacco, Altria Group, and British American Tobacco, with Cornwall Council topping the list with a £24.5 million sum, according to an Observer report on July 17th.

“I am shocked by the size of the southwest local government pension investments in the tobacco industry and I am sure many of those contributing to the funds, as well as those receiving local government pensions, will be as well,” said Dr Gabriel Scally, regional director of public health for the southwest.

He criticised the southwest councils for making unethical decisions.

“If it were my pension contributions being invested in an industry whose only product line killed people in the numbers that die from tobacco, I would be absolutely horrified. As a doctor I think it would be completely unethical to have any part of it.”

“The tobacco industry is destructive, dishonest, and deceitful. We need to put them out of business,” Dr Scally added.

Echoing his views, Dr Vivienne Nathanson, head of science and ethics at the British Medical Association, said in a statement, “It’s sad organisations are continuing to invest in tobacco, given that it shortens people’s lives.”

Dr Nathanson urged employees to put pressure on the councils to invest elsewhere.
While supporting the tobacco industry carries moral implications, arguing on ethical grounds has no legal precedent.

In an interview with The Epoch Times, Martin Dockrell, director of research and policy at ASH (Action on Smoking and Health), said that investing pension funds in the tobacco industry might be a risk in financial terms. “It is better to forego short-term profits in the face of long-term liabilities for companies facing a declining market, litigation, and increased regulation around the world,” he said.

Pension fund investors have a duty to ensure a maximum return on their employees’ money.

Cornwall Council justified its investment in tobacco firms, saying: “The overriding concern of the pension fund is to provide a sound financial return for thousands of people reliant on the pension in Cornwall.”

Dockrell argues that the best argument from a legal standpoint is that disinvesting in the tobacco industry is “financially prudent rather than an ethical issue”.

“It is extremely regrettable that organisations engaging in public welfare invest in the tobacco industry,” Dockrell concluded.

Cornwall Council played down the scale and risk of investing in these controversial corporations, saying, “We aim to keep a balanced portfolio of investments, and investment in tobacco-related industries represents just 2 per cent of the total fund value.”

According to ASH, 81,400 deaths in England in 2009 were smoking-related.

This investment issue was highlighted in September 2010 in a report by the Evening Standard. It questioned the decision of London boroughs to invest shares of up to £100 million in tobacco firms to fund pensions while at the same time spending £600,000 a year of council money on smoking cessation programmes.

In the Standard report, Wandsworth council defended its position, stating, “Just about anyone has got investments in tobacco companies if they’ve got any sense.”

From an ethical standpoint, Martin Dockrell said: “Pension investors should be given a choice. Why should a doctor be forced to invest his pension in Britain’s biggest killer?”