Future Fund investment risks and compliance

Question

Questions for Department of Finance and Treasury 1. Has the Government undertaken any assessment of whether Future Fund investments may expose Australia to legal, reputational or ethical risks in light of the ICJ Advisory Opinion regarding Israel's occupation and in light of a recent New Zealand HIgh Court ruling that its sovereign wealth fund's ethical investment policies were unlawful? 2. Can Treasury or Finance clarify whether the Government has sought advice on whether investments linked to settlement activity or military operations in occupied Palestinian territory are consistent with Australia's international legal obligations? 3. The Government frequently says the Future Fund operates independently. Can the department confirm that the Government nevertheless retains the power to issue and amend the Investment Mandate governing the Fund? 4. Has the Government considered reviewing the investment mandate to explicitly require the fund to align its investments with our international human rights law commitments? Has it considered adding companies linked to unlawful settlement activity, occupation infrastructure or serious alleged breaches of international law to the Future Fund exclusion list? 5. Why was Elbit Systems reportedly removed from the exclusion framework after previously being excluded under controversial weapons criteria? 6. Has the Treasurer or Finance Minister had any discussions with the Future Fund Management Agency regarding investments in companies linked to: ? settlement infrastructure ? weapons systems used in Gaza ? surveillance technologies ? military contractors operating in occupied Palestinian territory? 7. Does the Government consider there to be any distinction between: sanctioning individual Russian entities linked to violations of international law and permitting Australian sovereign investments in companies linked to unlawful settlement activity? 8. Has the Government considered introducing human rights or international law due diligence requirements into the Future Fund Investment Mandate? 9. The Government claims the Future Fund is operationally independent. a) The Government still issues the Investment Mandate, correct? b) The Government can amend exclusion policies through the Mandate, correct? c) Ethical exclusions already exist within the Fund framework, do they not? 10. The Government claims the investments comply with Australian law. a) Is the Government considering international legal obligations beyond domestic compliance? b) Has any advice been sought specifically regarding the ICJ Advisory Opinion? c) Has the Government undertaken any genocide-risk or occupation-risk assessment regarding these investments? 11. The Government says it does not comment on individual investments. a) Is there any category of investment the Government would regard as incompatible with Australia's international obligations? b) Does the Government accept there are reputational risks associated with these holdings? 12. Did the Government raise concerns with the Board regarding these investments? 13. Have Treasury or Finance provided any policy guidance on this issue? 14. Please provide all correspondence between: ? Treasury ? Finance ? The Treasurer's office ? The Finance Minister's office and the Future Fund Management Agency regarding: ? Israel ? Palestine ? settlement activity ? Gaza ? international humanitarian law ? Weapon manufacturers/defence contractors ? responsible investment since 1 January 2024. 15. Please provide details of any legal advice, briefing notes or departmental analysis relating to: ? the ICJ Advisory Opinion of July 2024 ? sovereign investment obligations ? international humanitarian law risks associated with Future Fund holdings. 16. Please provide details of any companies considered for exclusion from the Future Fund on: ? human rights grounds ? international law grounds ? controversial weapons grounds, since 2022. 17. Please provide details regarding: ? the removal of Elbit Systems from any exclusion framework ? the rationale for that decision ? Whether ministerial offices were informed. 18. Has the Government considered introducing mandatory human rights due diligence obligations into the Future Fund Investment Mandate? If so, please provide details. 19. Please provide any internal guidance used by Treasury or Finance in assessing sovereign investment exposure to: ? sanctions risk ? occupation-related activities ? international humanitarian law concerns.

Answer

See attached response.

Documents

• Question with answer (PDF) (opens in a new tab)
• SQ26-000264 BET149 - Future Fund investment risks and compliance.pdf (opens in a new tab)