'Where do you draw the line?' Council rejects ethical investments amid Qatar backlash

As Argyll and Bute Council reels from revelations it invested £155million over five years in the state bank of Qatar, where homosexuals can face the death penalty, its finance chief says an ethical policy is too difficult.

 

'I am not of the view that we should build an ethical policy into our treasury strategy,' said the council's chief finance officer Kirsty Flanagan at its Policy and Resources Committee meeting on Thursday December 8.

 

'It's not routine to have an ethical policy and the treasury advisors said it is a difficult area, that's fairly subjective, and where do you draw the line, as there could be a number of ethical considerations, and different people will have differing views.

 

'It is likely many banking organisations we invest in could also be connected to something that could be deemed unethical - again, subjective view - so it would be extremely difficult for us to monitor and police that.

 

'Adding ethics into the strategy would also make it very challenging to spread the risk of our investments, could reduce the return on our investments and would likely be very resource intensive for the treasury team in terms of the research into every single investment decision they undertake on a daily basis.

 

'Having said that, we will give it further consideration as part of reviewing our treasury strategy which we do every year and bring that back to the budget meeting in February.'

 

Cowal SNP councillor Gordon Blair asked: 'Do the treasury [advisors] tell us where we can invest, or is that an option we can decide ourselves from their checklist?'

 

Ms Flanagan replied: 'We take advice from our treasury advisers on what counterparties we would invest in.

 

'Ultimately the decision lies with me as the section 95 officer, within the parameters of the treasury strategy approved by members every February.

 

'Our treasury strategy is that we invest based on three principles: one is security, one is liquidity and one is return. That is the three criteria we work to.

 

'And there are also a number of other rules that we have in our treasury strategy in terms of how much we can invest, who we can invest with, countries we can invest in, that sort of thing.'

 

Cowal Conservative councillor Yvonne McNeilly, policy lead for education, said: 'This is an absolute minefield. We are talking about international global finance here and basically the way the world's run.

 

'Of course we would like the perfect world where people were enjoying the standards of living that we are enjoying here in the west, and people were not being exploited, but I will just add this little nugget.

 

'At the moment there seems to be a thing called the football World Cup going on in a place called, let me guess, oh Qatar. So lots of people have decided that they'll go there, their choice absolutely, and hang around and watch the 'fitba'.

 

'I'm just saying it's not a perfect world is it? It's a bit on the murky side, so you're going there, spending your money and maybe supporting the regime.'

 

Councillor Blair said: 'There are concerns, and it is not our money: it is our council tax payers' money and we are to be good custodians of those funds.'

 

Councillor McNeilly replied: 'When it comes to public finances, perhaps to paraphrase the first minister, we will not be taking any lessons on how to invest wisely given the ferries fiasco.'

 

Councillor Blair attempted a reply, but council leader Robin Currie ruled: 'I'm closing this down.'