Friday, 15 December 2006

Article in The Bell

This is a link to the article that appeared in The Bell (RUMS medical student magazine) this summer - it refers to last year's campaign (and the significantly lower number of UCL shares) but is worth a look... (pg. 4)

Wednesday, 13 December 2006

Facebook group

Disarm UCL now has a Facebook group, join it to keep up to date with the campaign, and help spread the word by inviting your friends!

FAQs on Ethical Investment and the Arms Trade

1. Why do universities such as UCL invest in arms companies?
There are several reasons why this occurs - they include (in no particular order):

  • Since 9/11 and the “war on terror” many arms company share prices have sharply risen as defence budgets have increased and new orders have come in. At the same time, universities find themselves strapped for cash due to the current funding crisis in education and so try to make money from investments to stay in the black.
  • Many elite, research-intensive universities in the UK receive large amounts of research funding from arms companies through contracts they carry out in their science, engineering and technology departments. They therefore want to retain good relations with these companies and perceive them as economic partners rather than merchants of war.
  • Investing in the arms trade is common practice for many universities (45 universities confirmed to Campaign Against Arms Trade that they invest in the arms trade) and so forms the economic status quo. Finance directors may feel it is therefore easier for to carry on as they are rather than making time-consuming changes.
  • There is often nothing preventing universities from investing in the arms trade. Without ethical investment policies expressly prohibiting such investments finance directors will see their fiduciary duty to maximize profits as their one and only concern.

2. Who is to say which companies are ethical and which aren't? Where do you draw the line?/ Ethical criteria are too tricky to define and apply to an investment policy, so what's the point?
A university's investment decisions rely upon the information and instructions that the finance director receives. Ethical concerns can form a part of this process as there are recognised frameworks for socially responsible investing- and for ascertaining institutional values. Directors of finance can be instructed to weigh ethical and financial considerations and the evidence from the size of the UK ethical investment market (£17bn screened + £280bn under 'engagement' instructions), and its positive performance shows that many do so successfully.

3. Do we really think that by getting one university to withdraw it's shares in a company that produces weapons that this will stop the arms trade? Someone else will buy them and nothing will have changed.
When a university or any other institution invests in a company it confers upon that company a credibility that would not otherwise have existed. Taken in isolation, one university divesting from the arms trade will have a small impact, but as more universities divest and are seen to be able to manage quite well with alternative investments the economic status quo will be brought into question and universities which continue to invest will be pressurised into justifying their continued association with arms companies. Furthermore, the debate which arises around divestment issues allows the culture of military influence on campus- through funding of research- to be broached.

4. The same people who argue against the university investments also want more money to pay lecturers and support staff with. Providing the best facilities for students requires income from sensible investments, so why not invest in a company that makes a profit? Doesn't it makes financial sense to invest in a company the government is throwing money at?
Whilst it is true that arms companies receive a unique subsidy of £890million from the UK government every year, the idea that universities should benefit from this seems absurd given the current funding crisis they face and the recent introduction of top-up fees. It would be far more prudent economically for the government to invest more money in universities directly, so that they don't have to rely upon market speculation for income.

5. Won't Socially Responsible Investment harm financial returns?
Ethical investment funds that preclude arms company shares are amongst the most profitable. In the past decade the Church of England’s £4.3 billion ethically-managed fund, for example, was the 2nd best performer of more than 1,000 funds.

6.Aren't Colleges and Universities, as charities, legally prohibited from investing ethically?
Trustees are obligated to pursue the best interests of the Charity – but this specifically does not exclude Ethical Investment. In fact, Charity Commission regulations (2001) state, ”trustees of a charity should decline to invest in a particular company if it carries out activities which are directly contrary to the charity's purposes.” Amongst other precedents from law and government recommendations, the Goode Committee on Pension Law Reform concluded “Trustees...are perfectly entitled to have a policy on ethical investment and pursue that policy.”

7. What alternative investment opportunities are available?
The ethical investment industry is well-established in the UK and offers a range of services for institutional investors. A good place to start would be Ethical Investment Research Services (EIRIS), who produce guides for investors and fund managers so that they can find the ethical policy which is right for them.

8. The Armed Forces need the best equipment and these companies provide it. What's wrong with supporting British industry and British jobs?
The seven UK-based arms companies which the Clean Investment Campaign focuses on are primarily arms exporting companies. When a contract for equipment for the UK armed forces comes up, it is often possible to buy cheaper (and arguably better) military equipment from abroad. However, government ministers often 'buy British', helping companies sell their equipment abroad. In July 2003, BAE Systems sources were reported as saying that export orders were 'a vital factor' in the recent decision by the government to buy BAE Systems Hawk jets. The Treasury had estimated that opening the bid to competition from other companies would save the UK tax-payer £1 billion. Choosing more expensive equipment in order to support exports is a direct subsidy to the arms trade. The MoD's own estimates show that 65,000 jobs are sustained by military exports, just 0.2% of the national labour force.

9. Could my tuition fees be invested in the arms trade?
It is possible that money from tuition fees could end up being invested in the stock market and thus in the arms trade. One scenario would be if there was a surplus from the tuition fees fund after the money for, for example, staff pay, the university estate and bursaries/scholarships had been allocated and the surplus funds were not ring-fenced. However, because every university manages its finances in a different way, with different operating costs, this could only be known for certain following access to an institution’s accounts.

Smiths Group / Cobham info


Smiths Group

CAAT freedom of information request to UCL / Provost Newsletter

UCL - Unethical College, London and the Arms Trade

When calling for divestment and the adoption of an ethical investment policy at a university, it is firstly vital to know the nature of the university's investments and the way in which the university presents its investment policy. Once we understand a university's level of investment and its investment policy we can begin to analyse and then challenge the economic and moral assumptions they represent.

In the case of UCL we can look at two documents to provide us with crucial information on UCL's current position- these are their Freedom of Information Act response and the Provost's statement on arms investment in his weekly newsletter.

On 9th August 2006, Campaign Against Arms Trade (CAAT) received a reply to their freedom of information act request regarding UCL's arms trade investments. The main points of information it contained are as follows: (NB. UCL's replies are in bold. Comments in red. CAAT enquired about 19 arms companies- included are the two which UCL confirmed they have shares in).

CAAT Freedom of Information request:
From: Mrs R.H. Cummings, Freedom of Information Officer

Please see below for UCL's response to your FOI Request:

1. Please state the value of the University's total investment assets.

£95,229,586 at 31 March 2006

2. Please state the number and value of shares that the University holds directly in each of the following companies as of 31st March 2006:

Cobham 449,750 shares, value £845,530

Smiths Group 75,900 shares, value £746,097
These direct shareholdings mean that UCL's total investment is £1,591,627 making it the largest known university investor in the UK. This amounts to 1.7% of its total investment assets.
3. Please state the number and value of shares that the University holds indirectly (e.g. in pooled funds) in the companies listed above, as of 31st March 2006.
Unable to identify the information we have.
If UCL invests in managed or pooled funds- which we can assume it does- then there is the possibility that some of the money in these funds will be invested in arms companies. So long as UCL prefers not to provide information on this subject- information which they can obtain from the fund managers- there will not be full transparency over their finances.
4. Please say whether you have an ethical investment policy and if so please attach a copy.
Yes: no direct investment in tobacco companies.

Please also see attached document, which is a Resolution from the UCL Council Minutes of 14 June 2006.
Mrs R.H. Cummings

UCL Council Minutes 14 June 2006- Minute 89 on "Ethical Investments".
The resolution states that:
"Resolved on the recommendation of Investments Committee - that UCL's investment policy not restrict investment in the defence industry; and that UCL therefore continue to invest, as and when recommended by UCL investment managers, in defence/arms manufacture companies, subject to the investment managers submitting regular reports to Council, via the Investments Committee, to provide assurances that such companies were operating to appropriate ethical criteria."

From this information it is clear that UCL regards tobacco companies as ethically unacceptable and the defence industry as ethically acceptable in terms of investments. For a further exploration of why this is the case, we can turn to the Provost's statement on arms investments in his November newsletter.

The Provost's Newsletter - Arms investment:
I have had a query from a member of staff in response to a recent press statement from a group calling themselves the Campaign Against Arms Trade, which maintains that UCL currently has investments of £1.591 million in the arms trade. Our investment advisers have now advised me on the actual position. UCL presently holds shares in two companies in the aerospace and defence sector: Cobham, and Smiths Group. None of the other stocks identified by CAAT are held by UCL, and indeed several are not even in the aerospace and defence sector. Both Cobham and Smiths are engaged in wide-ranging engineering and manufacturing activity that includes military-related activity. This is not the same thing as arms trade activity: indeed, much of their activity relates to the UK’s own civil and military defence.

As you would expect, UCL takes seriously its ethical responsibilities in investment and takes regular advice on this front. There have been lively debates on the legal framework and principles of ethical investment both on Finance Committee and on the UCL Council over the last year, as a result of which our Investments Sub-Committee now relies upon independent advice from the Ethical Research Investment Service ("EIRiS"). Their advice is that Cobham and Smiths Group are ethically acceptable investments. Both companies clearly have involvement with the supply of strategic parts of weapons systems, but neither manufactures entire weapons systems themselves, and Smiths has a major role in improving civilian security. EIRiS will continue to screen and advise on UCL investments.
So, UCL's line is that Cobham and Smiths are ok to invest in because they engage in civil production, much of which benefits the UK's 'national interest'. To see whether this argument is justifiable and truly representative of these companies, we can examine what their military output is, who they sell it to and how much money they make from it.

Cobham is a multi-national group of companies that is heavily involved in a number of major military aircraft programmes including Eurofighter, the US Joint Strike Fighter and BAE Systems’ Hawk jet. It produces avionics, aircraft and missile components and provides military training and communication equipment. Cobham's flight refuelling equipment facilitated long-range bombing during the Falklands war, the Gulf war, and recent operations in Afghanistan (Cobham plc website). In 2002 Cobham's total military sales were £360million, constituting 49% of their total sales.

Smiths is a wide-ranging group with Aerospace, Medical, Sealing Solutions and Industrial businesses. Though a UK-based company, nearly 50% of its production is in the US, with 29% in the UK, 15% in the rest of Europe and 7% elsewhere. Through its Aerospace business, Smiths is a first-tier supplier to UK and US aircraft and engine manufacturers. Gun pods for Hawk jets, gun-turret actuators for Apache attack helicopters and cockpit control panels for the B-2 bomber, F-16 fighter and the A-10A 'tank-buster' provide a few examples of their products.
In 2002, Smiths received unwelcome attention amid the growing concern over Israeli activities in the Occupied Territories - it was reported by the Guardian that missile trigger systems made by Smiths Group were used in US-made Apache attack helicopters supplied to Israel. However, such revelations are rare - not because Smiths' equipment is not being used by oppressive regimes or in regions of conflict or tension, but because we generally hear only about the company that markets the complete weapons system. Smiths' military involvement is far less widely known than its size merits- its total military sales in 2004 were $1.2bnconstituting 25% of total sales.

With regards to the 'ethical acceptability' of these companies, EIRIS does not make decisions as to whether companies are ethically acceptable or otherwise. Their role, as a company paid by UCL, is to conduct research on companies and provide reports detailing those companies production and behaviour. It is then up to the client i.e. UCL to make a decision from the information provided as to whether a company is 'ethically acceptable.' As such, EIRIS recently wrote to UCL highlighting this 'inaccurate and misleading' element of the Provost's statement.

Thursday, 7 December 2006

Disarm UCL

Disarm UCL is a campaign which has widespread support among UCL students, staff and alumni. UCL Student Union fully supports the campaign.

It aims to get UCL to divest its shares in arms company Cobham plc, which profits significantly from the sale of military components. Cobham plc is the world's 46th largest arms producer by military revenue. UCL as a major university sets an important precedent for the whole sector. Its claim to be a 'global' university with a tradition of liberal ideals and social justice is undermined by its direct support of the 'global' arms trade.

The campaign has already been successful in achieving an ethical investment (ei) policy for UCL.

On 1 January 2009 UCL adopted its ethical investment policy.

Click here for the full text of the policy and to read about the ei review committee.

Members of the campaign have now oficially requested the review committee to divest from arms trader Cobham. Click here to read the letter.

Disarm UCL has put forward a policy proposal for ethical investment at UCL. Download the proposal here.

UCL alumni have been at the forefront of the campaign. Many have written to Provost Malcolm Grant informing him that they will not support UCL financially or otherwise as long as the investment in arms trader Cobham plc continues. More about the Disarm UCL alumni network here.

Please support the campaign and call on UCL to ditch the arms shares NOW !

Display the Disarm UCL banner on your blog or website:

The Disarm UCL campaign has featured prominently in the international and national media:

The International Herald Tribune on Disarm UCL

The Guardian on "The Gower Street Gunrunners"

The New Statesman on "A global university without a global conscience"

For further information on the campaign and how to get involved please contatct us:

Monday, 4 December 2006



Welcome to the website for Disarm UCL - the campaign for UCL to disinvest from the arms trade. There'll be more information on the campaign available here soon!

In the meantime, click here to find out about UCL's investments in the arms trade.