Agenda item

To consider the Member motion regarding an Ethical Investment Protocol as proposed by Councillor Fairhurst.

Councillor Fairhurst presented his motion relating to an ethical investment protocol. He said he had questioned the governance process surrounding investments for three years, and had asked for a number of measures to be put in place, including the appropriate training for Members who sit on the Investment Board. He said it was essential that an ethical protocol was put in place, and that Council listened to residents, regardless of whether dissenting voices were in the majority. He said it was right that a protocol was put in place now, even if there were no plans to add to the investment portfolio, as it would give a clear message that the Council was committed to integrity and good governance. He proposed the motion as follows:

 

 

Recent controversy surrounding a particular investment has once again raised the issue of ethical investments considered by the Council.

It is unfortunate that these parameters were not agreed when the Investment Board was established, but the Council recognises that it has a public mandate and is using public money which warrants a higher degree of ethical selectivity than a private investment portfolio.

 

This Council therefore resolves to establish and agree an Investment Protocol and process which reflect the highest ethical standards and values and will exclude all investments that compromise or do not meet or exceed these values.

This Council will demonstrate its commitment to ethical integrity by requiring its investment strategy not to include the purchase of any commercial assets which are directly or indirectly associated with issues of human rights, environmental or social harms.

 

Councillor Khan seconded the proposal and reserved his right to speak.

 

Councillor Luck said he had been impressed by Councillor Reeve and his account on Investment Opportunity 12.

 

 Councillor Lodge raised a point of order and said the amendment should be taken at this point.

 

In response, the Chief Executive explained that the amendment had yet to be proposed and a number of Members had raised their hands indicating that they wanted to speak on the substantive motion first. The correct procedure was being followed.

 

Councillor Light said she was in mourning as children were dying in Yemen every 10 minutes. She said investments had to be ethical and asked whether councillors could make such investments in good conscience. She said the first draft of the motion had been deemed too prescriptive by officers, and now the amendment was reducing the scope of the motion even further. She supported the motion.

 

Councillor Freeman said he supported an ethical policy but he said the reason the Council were making commercial investments was in order to protect finances and fund services in light of the reduction in central Government funding. 

 

Councillor Reeve proposed an amendment to the motion as follows:

 

To strike out the substantive motion and replace with the following wording

 

This Council commends the commitment to ethical integrity as set out in paragraphs 36 and 37 of the Commercial Strategy 2021 – 2025, and the requirement therein to formulate an Investment Protocol to include ethical and environmental considerations.

 

He said the Administration had already proposed an ethical investment protocol within its Commercial Strategy and that had been approved by Council. He said all councillors had a say on investments and deliberated on all elements of an investment, including ethical considerations. He declared a non-pecuniary interest as his son worked for Oxfam.

 

Councillor Hargreaves seconded the amendment.

 

Councillor Khan said the amendment was weak. It did not set out what assets the Council would invest in, and what type of assets they would not. He said it did not acknowledge the fact that there was no ethical policy in place. He asked Members to consider what type of message this sent out to the wider public.

 

Councillor LeCount said he was offended by the comment that the Investment Board members were untrained. He questioned the ethics of purchasing goods from Amazon and China.

 

Councillor Fairhurst raised a point of clarification; he said it was the officers report that stated that Members of the Board were untrained. Furthermore, he had requested training for all Board members before it was established.

 

Councillor Lodge said he supported an ethical investment policy, and the amendment spelt out the Administration’s commitment to one. He said the Chesterford Research Park investment had been determined before any governance had been in place, in contrast to this Administration, which had established an Investment Board, including independent members with the necessary expertise. He said the previous Administration had left a hole in the Medium Term Financial Strategy (MTFS).

 

Councillor Barker raised a point of clarification and said the previous Administration had not left a hole in the finances. She said she was now leaving the meeting but supported an ethical investment policy.

 

Councillor Barker left the meeting at 10.26pm.

 

In response, Councillor Lodge said in the fourth year of the MFTS, as handed by the previous Administration, had a £3.5 million “gap” that would have led to a cut in services if it were not for the success of the Councils investment portfolio. This money was being spent on a range of services and several schemes across the district.

 

Councillor Lavelle said a number of points had been misunderstood. The Administration as not investing in companies; they were purchasing land with leasers. Secondly, decisions that had come to the Investment Board had been considered in an ethical light. He said this was not easy as many companies were involved in multiple activities, but such considerations were given time at meetings of the Board. He believed all investment decisions made by this Council were justifiable.

 

Councillor Driscoll said Councillor Khan had agreed at the Investment Board meeting on 22 December to assist with the drafting of an ethical protocol.

 

Councillor Isham said there was broad agreement that the Council required an ethical investment policy. He did not understand why an amendment had been tabled and wanted an end to the political point scoring.

 

Councillor Sell said there was often unanimity at the Investment Board, but not at its previous meeting. Furthermore, it was not Councillor Khan’s role to draft policies on behalf of the Administration. He cited an article in The Independent and said the Council’s reputation was being damaged.

 

Councillor Lees took issue with an earlier comment regarding children dying in Yemen as it was offensive to bring such an issue into a political debate. She said all Members wanted an ethical investment policy and she asked Members to agree on a way forward.

 

Councillor Gregory said the substantive motion did not reflect the complexities of the world we live in and was based on a number of assumptions. He used the Oxfam scandal, an organisation which purportedly was held to the highest ethical standards, as an example to demonstrate these complexities. Furthermore, technological advancements often went in hand in hand with the defence industry. He said disparaging the defence industry per se, which had largely kept the peace in the West, was to misunderstand the history of the second half of the 20^th century. He said the amendment was robust and urged Members to support it.

 

Councillor Dean said although the Council was investing in land, it was wrong to say that it was not investing in the companies leasing the land, as the Council was freeing up capital which the company would use to invest in its activities.

 

Councillor Khan said it was not his role to produce an ethical policy; it was for the Administration and salaried officers to take the issue forward. He asked councillors to support the substantive motion.

 

Councillor Hargreaves said the reason for the amendment was that it conformed with the Council’s approval of the Commercial Strategy. The motion itself was unnecessary as there was already a commitment to an ethical investment protocol. 

 

Councillor Fairhurst said he agreed with Councillors Isham and Lees comments earlier in the meeting; all Members wanted an ethical policy, and it was necessary to establish one. He said Councillor Gregory’s statement that the substantive motion was “based on assumptions” and said he had referred to several themes that were not mentioned in the motion. 

 

Councillor Gregory said his point was that the world was complex and nuanced. He asked Councillor Fairhurst to withdraw his comment.

 

Councillor Fairhurst said he refused on the basis that he felt the comments were irrelevant to the motion before Members.

 

The Chair moved to a vote on the amendment. The amendment was carried 25 for, 9 against and 1 abstention.

 

Councillor Dean read a statement outlining the opposition of Liberal Democrat and Green members to Investment Opportunity 12. He said ethical considerations had not been raised in the Investment Board meeting until Councillor Sell had raised the subject, and rejected previous claims that due diligence and good governance had been applied. He said Liberal Democrat and Green members would disassociate themselves from the investment and called on other councillors to do the same, as the failure to produce an ethical investment protocol, combined with a lack of full disclosure at the Investment Board meeting, was a major governance failing. 

 

Councillor Reeve disputed Councillor Dean’s statement. He said the nature of the company was discussed at the Investment Board and that there were no objections at this meeting, although there were two abstentions. Furthermore, at the Full Council meeting in January the nature of the company was further discussed, along with wider ethical considerations.

 

Councillor Sell raised a point of clarification and said details of the company were not disclosed in full at the Investment Board meeting. He agreed that he had abstained, but he and Councillor Khan had advised strongly against the opportunity due to their strong ethical concerns.

 

Councillor Driscoll asked for an investigation into how the confidential information had entered the public domain.

 

The Chair moved to a vote on the substantive motion. The motion was approved 32 for, none against and 3 abstentions.

 

RESOLVED:

 

This Council commends the commitment to ethical integrity as set out in paragraphs 36 and 37 of the Commercial Strategy 2021 – 2025, and the requirement therein to formulate an Investment Protocol to include ethical and environmental considerations.

 

 

The meeting was closed at 11.16pm.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PUBLIC STATEMENTS  

 

L Thomas

 

Ms Thomas spoke on the Ethical Investment Protocol and said it would be sensible to implement one and said the Council could look at other local authorities, such as Norwich City Council, for guidance. She highlighted the lack of expertise of councillors in the matter of commercial investments, and that this should be treated as a matter of urgency in light of the reduction in central Government funding. She urged councillors to introduce an ethical investment policy. 

 

T Roberts

 

Ms Roberts also spoke on the Ethical investment protocol. She said the motion on the agenda had stripped away the specifics that should be enshrined in an ethical investment policy, and questioned the length of time that it would take if the amendment was successful. She said if an ethical policy had been in place, the Council could have avoided the embarrassment caused by the most recent investment. Furthermore, millions of pounds had been spent in the interim and an ethical policy needed to be put in place immediately.

 

Dr Ghosh

 

Dr Ghosh said she was a local resident with twenty years’ experience in campaigning on human rights issues. She expressed disgust at the recent news of Investment Opportunity 12 due to her ethical concerns relating to the company in question.

 

The Chair took a point of order from Councillor Coote, who said details relating to the investment were still confidential, and he asked the speaker to refrain from revealing further confidential information.

 

Dr Ghosh highlighted Oxfam’s and the Campaign Against the Arms Trade opposition to the investment. She asked the Council to not pursue the investment and to establish an ethical investment protocol that would prevent investment in the defence industry.

 

G Darcy

 

Mr Darcy said his concerns related to the process of the investment and asked whether it had been properly scrutinised, whether elected Members had sight of the investment, whether the financial benefits had been set out and whether there had been local consultation with residents. He said this could lead to additional costs if the investment was located in the district. He had concerns regarding the framework in which the decision was made and urged adoption of an ethical investment policy.

 

B Ross (read on his behalf by Democratic Services)

 

Mr Ross said Stop Stansted Expansion were putting all efforts in defending the Planning Committee’s decision to refuse the Stansted Airport application. He said the Committee refused the application despite pressure from officers, and had been mindful of the wider impact on global sustainability and future generations when coming to their decision. He said it was wrong that officers were now putting across an “apologetic defence” and questioned the point of elections if the decision was overturned.