Weapons, gambling, fossil fuels, child labour and slavery are not industries the ACT Government – perhaps Australia’s most progressive – wants to be associated with. But questions asked by the Opposition and by the government’s own Greens partners have revealed the government holds stocks in some companies whose ethics are at odds with its own.

The ACT Government said it will divest these shares by the end of the year, as it amends its criteria around investment exclusions.

Its Responsible Investment Policy creates long-term value for the government’s financial investments, including not just economic value, but also broader values such as sound corporate governance and environmental sustainability, a spokesperson said.

The new Responsible Investment Policy criteria will be implemented in December.

Gambling

The ACT Government has committed to reduce the number of poker machines in Canberra, but in Estimates hearings last week, Liberals MLA Mark Parton pointed out it also held shares in a dozen major gambling businesses, or those with a strong gaming interest in their commercial portfolios – including eight of the top 20 gambling companies in the world.

According to the ACT Listed Company Shareholdings (30 September), the ACT Government owns shares in:

• Aristocrat Leisure 
• Betmakers Technology Group Ltd 
• Caesars Entertainment Inc 
• Crown Resorts Ltd 
• Draftkings Inc 
• Entain PLC 
• Flutter Entertainment PLC 
• Las Vegas Sands Corp
• MGM Resorts International 
• Pointsbet Holdings 
• Tabcorp Holdings Ltd
• Wynn Resorts  

ACT Greens leader Shane Rattenbury, Minister for Gaming, said he was unaware the government held stock in these companies.

The Greens, he said, had sought to bring ethical investment filters onto the ACT Government investment portfolio. (“This means ensuring that the investments we hold align with our social and environmental values,” he later told Canberra Daily.)

Now his attention had been drawn to it, he would take the matter up with the Treasurer, Chief Minister Andrew Barr, “in order to clean up” the portfolio.

“I don’t think that is a place that we should be seeking to benefit from,” Mr Rattenbury told the hearing.

“I will raise with the Chief Minister the need to make changes so that the ACT divests from shareholdings in companies that derive profits from gaming,” he later said.

The ACT Government will divest its shares in gambling operations with a revenue greater than 10 per cent by the end of the year, a spokesperson said. This means companies that own or operate gambling facilities such as casinos, racetracks, bingo parlours, or other betting establishments, including horse, dog, or other racing events that permit wagering; lottery operations; online gambling; pari-mutuel wagering facilities; bingo; pachislot and pachinko parlours; slot machines; Jai-alai; mobile gambling; and sporting events that permit wagering.

Mr Parton said he was surprised that Mr Rattenbury, “a tireless campaigner for the reduction of gambling harm in the ACT”, particularly poker machines in community clubs, did not know.

“You’re constantly seeking to – many suggest – close down gambling in the Territory, and imposing restrictions that are extremely onerous on our clubs, but while that’s going on, your government’s taking dividends and capital gains from the likes of Caesar’s and Las Vegas Sands.”

Fellow Liberal MLA Peter Cain pointed out that ex-Greens MLA Caroline Le Couteur – at the time the ACT’s only other Greens politician – had raised the same issue in 2017, asking the ACT Government about its investment in poker machine manufacturers. The Canberra Times had published an article on 19 June. How, Mr Cain wondered, could Mr Rattenbury not be aware?

“It escaped my attention at the time,” Mr Rattenbury replied.

Subsequently, Mr Rattenbury told Canberra Daily that in the previous Assembly, his focus on ethical investment was on the need to divest from fossil fuel companies, as the then Minister for Climate Change and Sustainability.

After the hearing, Mr Parton remained unconvinced. “It is astounding that the Leader of the Greens, a senior member of the Labor-Greens Government who has been in the Legislative Assembly for over a decade, has no knowledge of this extensive portfolio in betting and gaming,” he said.

“The Greens’ political catch-cry should be ‘Do as I say, not as I do’, as this is unbelievably hypocritical from the Leader of the Greens,” Mr Parton said.

Fossil fuels

The week before, during Budget hearings, Greens MLAs Jo Clay and Andrew Braddock questioned the ACT Government about its investment in fossil fuel companies and companies that manufactured weapons or were weapons-adjacent, specialising in weapons guidance and lasers.

According to the ACT Listed Company Shareholdings (30 September), for instance, the ACT Government owns shares in the following fossil fuel / mining companies:

• Beach Energy Ltd         (oil and natural gas exploration & production company) 
• Cheniere Energy Inc      (natural gas) 
• Cooper Energy Ltd        (oil and gas) 
• Coronado Global Resources Inc (high-quality metallurgical coal) 
• Devon Energy Corp       (oil and gas) 
• Iluka Resources (mineral sands exploration – zircon and rutile) 
• Imperial Oil 
• Lundin Energy  (oil and gas) 
• Oil Search Ltd 
• Origin Energy Ltd 
• Rio Tinto Ltd 
• Sandfire Resources Ltd 
• Santos Ltd        (oil and gas) 
• Woodside Petroleum 

“The ACT Greens don’t accept donations from fossil fuel companies and the other parties shouldn’t, either,” Ms Clay later told Canberra Daily. “There is no place for the fossil fuel industry in the ACT Government that is taking such strong action against climate change.”

Only around 1 per cent of the total portfolio were fossil fuels, replied Patrick McAuliffe, the ACT Government’s borrowings and investments manager. By the end of the calendar year, he said, the ACT Government would have no holdings in fossil companies. Its criteria around investment exclusions would be amended to exclude investments with direct exposure to proven fossil fuel reserves (coal, oil, and gas – both conventional and unconventional, i.e. shale oil, tar sands, and shale gas), a spokesperson said.

The criteria would be expanded to cover controversial weapons manufacture: companies that have any ties to the cost of munitions, landmines, biological / chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, and non-detectible fragments. Currently, only cluster munitions and landmine manufacturers are excluded.

Chief Minister Andrew Barr said this was “a very tricky area” because the space industry, for instance, was associated with satellites and precision platforms and systems that could be used for military targeting.

The new criteria will also exclude investment in the manufacture of tobacco and related products.

Child labour

Canberra Liberals leader Elizabeth Lee noted the ACT Government also held shares in companies alleged to have engaged in child labour and slavery: Barry Callebaut AG, Hershey Pany, Mondelez Intl Inc, and Nestlé SA.

Earlier this year, The Guardian reported, these companies were sued in the US on charges of using child slaves on cocoa plantations in Côte d’Ivoire. The US Supreme Court dismissed the court case because it was ‘improper’, the BBC stated.

The ACT Government, Mr McAuliffe replied, engaged global finance company Morgan Stanley Capital International (MSCI) to continually monitor holdings against ESG (environmental, social, and governance) criteria and the United Nations’ global norms assessment.

MSCI screens and assesses each company in a parent global and Australian share index across multiple ESG factors, a spokesperson said; any company that fails this screening process is excluded from the custom ESG index construction, and cannot be invested in.

“We can’t sit down and look at every holding,” Mr McAuliffe said. “We’re hopeful that our process is being done for us in the back end.”