Page 5653 - Week 14 - Tuesday, 6 December 2011
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the objectives underlying the bill could be captured by a specific interest group to further its own political objectives.
In the context of the exposure draft for this bill, the public accounts committee notes that this has been drafted by the Greens. It is reasonable, therefore, to hypothesise that the passing of this bill in its current form will simply provide that political party with a platform to pursue its own political ideology. The committee would be most concerned if this approach by a political party placed the territory’s investments in jeopardy in any way.
In view of these most serious and fundamental concerns about the nature of this bill, the committee does not support the bill proceeding. In a spirit of tripartisanship, however, the committee has considered an alternative approach to that set out in the exposure draft, to strengthen the government’s investment framework with regard to the practice of reasonable investment. This alternative approach has enabled the committee to develop nine recommendations which would provide a somewhat different framework within which the strategy for the territory’s investment portfolio would be implemented.
The committee’s report examined a number of key themes that became apparent during its inquiry, including evidence that the bill be supported in its current form, with some amendments dealing, for example, with shareholder advocacy as an additional investment strategy; and support for the objectives of the bill, although noting concerns with regard to the specified investment strategy and criteria.
We had evidence from some witnesses who did not support the bill and who highlighted the additional cost to the territory if the bill was implemented in its current form, together with a range of information and administrative challenges that the proposed changes would create for the management of the territory’s investment portfolio. We also heard of the challenging nature of seeking to implement responsible investment in terms of consistent definitions and the subjective nature of investment criteria and thresholds; the important role of the United Nations principles for responsible investment in encouraging a principles-based approach for this alternative form of investment that considers criteria other than maximising returns when making investment decisions; and, finally, the role of governments as institutional investors.
The committee received a number of submissions to its inquiry from interested stakeholders. This evidence provided a very broad range of expertise and experience that were very valuable for the committee in its deliberations. The committee recognises and appreciates the significant commitment of time and resources required to participate in an inquiry of this nature, and many of the recommendations, or variations thereof, suggested by participants have been adopted as recommendations in the committee’s report.
It is pertinent to note that the ACT government was the first government in Australia to become a signatory to the United Nations principles for responsible investment, the UN PRI. In becoming a signatory the government has committed to increase transparency with regard to its investments and to incorporate environmental, social
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