Sunderland and Durham council pension funds invested in tobacco

Millions of pounds of council workers' pension funds are invested in tobacco companies.
Millions of pounds of council workers' pension funds are invested in tobacco companies.
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MILLIONS of pounds have been invested through Sunderland Council’s pension fund in tobacco companies and firms accused of environmental damage, the Echo can reveal.

The Tyne and Wear Local Government Pension Fund, of which Sunderland City Council is a member, has over £35million tied up in tobacco companies.

This breaks down into £17million in British American Tobacco, £11million in Imperial Tobacco Group, £4million in Japan Tobacco and £4million in Lorillard Inc.

The figures come despite the fact Sunderland Council is heavily involved in non-smoking initiatives such as Fresh Smoke Free North East and the Sunderland Tobacco Alliance.

Through these groups the council states its aims are to reduce smoking prevalence and associated diseases, reduce the uptake of smoking and encouraging and supporting people to stop smoking.

Fresh declined to comment however when the Echo asked it about the council pension fund investments.

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

“Obviously it’s up to them what they do, but it would be good to see their employees putting pressure on them to invest elsewhere.”

The fund also has more than £40million sunk into Rio Tinto and Barrick Gold Corp, two corporations that have been accused of severe environmental damage through their mining exploits.

A recent study by the British Lung Foundation also revealed that the North East has some of the worst lung cancer rates in the country.

South of Tyne and Wear Primary Care Trust, which covers Sunderland, was the eighth worst for the number of cases.

The information, which was obtained by the Echo through a Freedom of Information request, also revealed the investments Durham County Council has made.

Durham has tens of millions invested in tobacco as well as some of the same companies which are accused of environmental damage.

But it also invested just under £9million of pension contributions in General Dynamics Corp, an American arms manufacturer producing components used in cluster bombs.

Oliver Sprague, Amnesty International UK arms programme director, said: “Dynamic Corp is known to produce rocket systems which can release cluster bombs, which are deadly, indiscriminate and banned under UK law.

“Whilst their rocket systems are capable of firing a variety of weapons Durham County Council is sailing too close to the wind in investing in a company which can be closely linked to the production of a banned and deadly weapon.

“We would strongly urge that this local council applies the highest scrutiny to this and future investments to ensure that it does not bring UK law into disrepute.”

Cluster bombs pose a huge risk to civilian populations as they release many small bombs on impact and can detonate long after being dropped.

A statement from Durham County Council said: “Durham County Council adheres strictly to government regulations when it comes to investment. We have a financial responsibility to obtain the best possible return on investments to keep costs low.

“As part of the investment decision-making process, investment managers are also required to consider the practices of companies and assess the extent to which this will detract from company performance and returns to shareholders.”

Sunderland Council did not comment on its investments but a statement was provided by South Tyneside Council, which manages the Tyne and Wear Local Government Pension Fund.

It said: “The approach to investing the fund is set out in the Pension Committee’s Statement of Investment Principles.These documents cover the extent to which social, environmental and ethical considerations are taken into account in the selection of investments.”

Twitter: @sunderlandecho