[PEN-L:33603] the contradictions of investment

["Ian Murray" <seamus2001@xxxxxxxxx>]

[ The Independent ]
Government's green agency invests millions in companies that pollute
By Marie Woolf, Chief Political Correspondent
07 January 2003


The Government's environment watchdog has been investing tens of
millions of pounds in oil companies and firms which have been sharply
criticised for their records on green issues.

The Environment Agency, which is in charge of flood protection, has
invested £64m in oil firms which have been condemned for contributing to
flooding by causing climate change. Last year the agency's pension fund
invested £46m in BP Amoco - its largest holding - and £18m in Shell.
Both firms have been fined large sums by the agency for polluting water
with petrol or oil products.

The watchdog also invested £19m in Barclays Bank which has been
challenged by green groups for allegedly helping to finance logging in
the Indonesian rainforest. Barclays has also been criticised for
allegedly helping to arrange finance for the Yusefeli dam in Turkey that
would flood environmentally sensitive areas.

MPs and environmental campaigners yesterday called on Michael Meacher,
the Environment Minister, to order the agency to abandon its stocks
immediately.

Friends of the Earth said it was a "scandal" that the body charged with
protecting Britain's environment had a financial interest in companies
which pollute. "This is astounding," said a spokes- man. "BP has been
prosecuted for a succession of environmental and safety breaches in the
last three years. As an oil company they have a heavy responsibility for
the climate change that's causing so much flooding which the Environment
Agency has a duty to try and prevent."

A Labour MP said it was "inconceivable" that the Environment Agency
should not pursue an ethical investment policy which ruled out the
purchase of shares in companies it investigates. Alan Simpson, MP for
Nottingham South, said: "Investing in the same companies that are
prosecuted raises serious questions about a conflict of interest."

Last autumn BP was fined £60,000, thought to be the highest fine in the
UK for pollution from a petrol station, after fuel leaked into
groundwater in Luton. Shell was fined £20,000 by the Environment Agency
in 1998 for spilling 140 tons of a non-toxic soap into the Manchester
Ship Canal.

Last night a spokeswoman for Shell said the company took its
environmental performance "extremely seriously". She said: "We endeavour
to maintain high standards, report on incidents that have happened and
what we have done about them every year."

BP Amoco said: "Our environmental record is a good one. From time to
time we make mistakes and when we do we take action to correct them."

Barclays said it had no direct investments in Asia Pulp and Paper Group
which has been accused of logging in Indonesia. "As a general rule
Barclays policy is to maintain relationships with companies able to
demonstrate good environmental performance and risk manage- ment," a
spokesman said.

Around 11,000 employees make contributions to the Environment Agency
pension fund which is worth over £200m and is also funded by
contributions from government.

The Environment Agency's finance director, Nigel Reader defended the
fund which is managed by a number of investment managers under the
guidance of a committee.

He said that the agency did not use an "ethical investment fund" but was
willing to apply some environmental criteria, without excluding stocks.

"Like any pension fund the overriding duty it so maximise the return in
the fund - that is the overriding criteria," he said. "We are not saying
'thou shalt not invest in oil companies'. But we do have the opportunity
to apply best environmental practice."