LPHR today publishes an accessible briefing primarily aimed at local authorities that provides a legal and human rights analysis of the UK Government’s position in relation to: a) local authority pension funds’ (LAPFs) investment in companies operating in the occupied Palestinian territory and/or Israel; and, b) local authorities’ approach to procurement decisions in relation to the same.
It importantly addresses and clarifies two recent Government initiatives that have caused some concern and uncertainty in relation to these two areas. It further makes specific recommendations to LAPFs and local authorities on essential actions to be adopted to better protect and promote Palestinian human rights.
A summary of the briefing is provided below.
Overview of Part I of LPHR’s briefing: Investment in companies operating in the occupied Palestinian territory and/or Israel
LPHR has reviewed in detail the Department for Communities and Local Government’s ‘Guidance on Preparing and Maintaining an Investment Strategy Statement’ (Guidance) that has been issued to assist LAPFs in devising their Investment Strategy Statements pursuant to The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016. We have also considered correspondence with the Minister for Local Government, Marcus Jones MP, on the issue.
In addition, we have considered the judicial review in relation to certain provisions of the Guidance which sought to prohibit LAPFs from potentially using pensions policies to pursue boycott, divestment and sanctions against foreign nations. As a result of the judgment published in June 2017, these sections of the Guidance have been found to be unlawful and accordingly removed from the amended Guidance published in July 2017.
Our resulting position is:
a) LAPFs should incorporate into their Investment Strategy Statement a policy of necessarily taking into account their international law obligations, and business and human rights responsibilities under the United Nations Guiding Principles and the UK National Action Plan, when making investment or divestment decisions.
b) In accordance with the above recommended legal and human rights-based policy, LAPFs should, on a case-by-case basis, decide whether or not to divest from, or to invest in, a particular company on the basis of genuine and substantiated concerns about the adverse human rights impacts that are linked to that company’s activities.
c) There is nothing preventing or restricting LAPFs from applying this above recommended policy specifically in the context of the occupied Palestinian territory and/or Israel.
Overview of Part II of LPHR’s briefing: Public procurement decisions relating to companies operating in the occupied Palestinian territory and/or Israel
LPHR has considered the UK Government’s Procurement Policy Note (2016), in tandem with the UK Public Contract Regulations 2015. It has also been in direct written correspondence with the then Minister for the Cabinet Office, Matthew Hancock MP on the issue.
Our resulting position is:
a) Pursuant to the UK Public Contract Regulations 2015, where a contracting authority can demonstrate by appropriate means that a company is guilty of grave professional misconduct (which arguably includes involvement in human rights violations) which renders its integrity questionable, that company may be excluded from participation in a procurement procedure. The February 2016 Procurement Policy Note does not, in our view and as confirmed by the then Minister for the Cabinet Office, alter this legal position.
b) The UK Parliament Joint Committee on Human Rights has recently recommended that the UK Government makes it mandatory that companies found to be involved in violations of human rights should be excluded from public procurement processes, and so the direction of travel on this issue may be towards greater regulation and enforcement in the future (rather than the current voluntary exclusion process).
LPHR takes a legal and human rights-based approach to all of its analysis. In accordance with this approach, LPHR’s concern is that LAPFs and local authorities should give necessary consideration as to whether any company within a LAPF’s portfolio, or a local authority’s procurement process, is involved with infringing Palestinian human rights and if so, take appropriate action to responsibly address this.
Our analysis confirms that LAPFs and local authorities can respectively make decisions to a) divest from, or b) not to invest in, or c) to exclude from participation in a procurement procedure, individual companies on the basis of involvement in human rights violations against Palestinians in the occupied Palestinian territory and/or Israel.
LPHR’s briefing can be viewed here.