Archive for May, 2013

Surrey County Council will continue to invest in tobacco companies | This is Surrey

Surrey County Council will continue to invest in tobacco companies | This is Surrey.

Surrey has decided to continue with tobacco investments.  The report is in the public domain here on the SCC  website and is fairly typical of those reports I have seen in the public domain. What do I mean by this?  Well,

  1. It fails to mention, let alone consider in any depth the requirements of the Framework Convention on Tobacco Control, and does not mention at all the Guideline to Compliance which states that councils should not invest in tobacco companies.
  2. It repeats hoary old chestnuts, such as where do you draw the line, trotting out the whole tobacco supply chain such as major retailers, and suppliers of services to tobacco companies, as well as the slippery slope argument re alcohol, gambling.
  3. Fails to mention that funds in many other jurisdictions with similar fiduciary duties have divested from tobacco companies.
  4. Fails to seek the views of the Director of Public Health, even though the report has been produced precisely because public health has transferred to the council.

The pension fund committee may well have reached this decision even if it had been given a more rounded picture, but the public health case for divestment was barely made.  Surely Councils must consult their Director of Public Health in future when considering this issue, and committees be at least  made aware of UK obligations under the FCTC.  Otherwise these committees are taking decisions without a full picture which potentially leaves them open to challenge.





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Public Health England calls on councils to disinvest from tobacco

EHN Online | PHE calls on councils to disinvest from tobacco.

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Local authorities, pensions and the FCTC

The UK is a signatory to the Framework Convention on Tobacco Control, as I have mentioned many times.  The obligations thus entered into are binding on all parts of UK Government including local government.  This is a fact that many councils are in blissful ignorance about, judging by the absence of any consideration of the implications of the FCTC for their tobacco investments.

So, it is worth taking a moment to just read a few key sections from the Convention, and then reflect on the implications for tobacco investments in the medium to long term.

Article 3 sets out the objective of the Convention

The objective of this Convention and its protocols is to protect present and future
generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco
smoke by providing a framework for tobacco control measures to be implemented by the Parties at the national, regional and international levels in order to reduce continually and substantially the prevalence of tobacco use and exposure to tobacco smoke.
Most of the world’s population is now covered by this convention.
Article 5.2 (b)  states that the Parties will
adopt and implement effective legislative, executive, administrative and/or other

measures and cooperate, as appropriate, with other Parties in developing appropriate
policies for preventing and reducing tobacco consumption,nicotine addiction and
exposure to tobacco smoke.
It ought to be abundantly clear from these commitments that most of the world’s governments are committed to driving down tobacco consumption.  Meanwhile UK local authority pension funds are investing in tobacco companies which have precisely the opposite objective to the commitment given by our Government. It is surely time that this inherent contradiction in public policy is addressed by Parliament, if not by local authorities themselves.




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Norway Excludes Schweitzer-Maudit and Huabao From Wealth Fund – Bloomberg

Norway Excludes Schweitzer-Maudit and Huabao From Wealth Fund – Bloomberg.

Two companies that produce tobacco products have been excluded from the Norwegian state pension fund.  One of them produces RTL, reconstituted tobacco leaf.  Smokers might be interested to read what goes into their cigs as RTL!

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Imperial profits go up in smoke

Imperial profits go up in smoke –

Imperial Tobacco, based in Bristol, has reported a drop in profits for the first time since listing on the stock market.  Sales are markedly down in many first world markets such as Europe.

The pace of tobacco control efforts around the world is accelerating as governments realise the huge harms to their populations from smoking and implement the framework convention on tobacco control.  Recently we saw the first actual worldwide fall in sales volumes.

Tobacco stocks are not necessarily the safe haven for pension fund managers that they might think, certainly in the medium to longer term.

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