What a shemozzle

The ANU divestment story just keeps giving. Today in the AFR we read:

University council member and Deutsche Bank global transactions head Naomi Flutter refused to ­comment on any conflict of interest that may arise from the bank’s current “buy” recommendations on two of the stocks being culled by the university: Sandfire Resources and base metals producer Independence Group.

I suspect there is going to be substantial blow back:

The blacklist has raised eyebrows because it goes far beyond the movement to divest fossil fuel stocks to ensnare producers of everyday industrial materials for which there is no ready substitute in sectors that form the backbone of the Australian resources sector.

ANU vice-chancellor Ian Young, the chairman of the Group of Eight richest universities which is spearheading the deregulation of the sector, has refused to release the company profiles compiled by Canberra-based consultant CAER on which its decision was based.

He has declined to elaborate on his original explanation that the seven blacklisted stocks were rated in the ­bottom quintile for social and environmental responsibility by CAER.

“The ANU should reconsider its approach as a matter of urgency,” Mr Pearson told the Australian Financial Review.

“It has unfairly traduced the reputations of some of Australia’s most important resources companies and that of the resources sector more generally. In doing so, it has been unwilling or unable to provide any justification for its actions.

“This is unacceptable for a publicly funded institution which also benefits from substantial charitable donations and funding support from the very sector it seeks to stigmatise.”

Then there is this from Martin Ferguson:

Former Labor energy minister ­Martin Ferguson said he was astounded by the ANU decision.

“They’ll have to explain themselves,” he said in Melbourne. “I must say the naming of some of those companies is beyond belief.”

Mr Ferguson, now head of resources at Seven Group and a director of BG group, said he had worked with gas ­producer Santos – one of ANU’s blacklisted stocks – for many years and could speak to its “very strong commitment to working with the indigenous community . . . understanding of environmental regulation and adherence to best ­practice”.

“I’d invest in a company such as ­Santos before I’d invest in a renewable energy company. Santos has got a far brighter future,” he said.

Contrast that with what the ANU Vice-Chancellor has said:

“We need to be able to put our hand on our heart when we talk to our students and to our alumni and to our researchers and be able to say that we’re confident that the sort of companies that we’re investing in are consistent with the broad themes that drive this university,” Professor Young told the program.

That’s fine, but if the ANU is too good for investment returns from the resources sector – or some of them anyway – then it is too good for their tax dollars and too good for their charitable donations.

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35 Responses to What a shemozzle

  1. stackja

    That’s fine, but if the ANU is too good for investment returns from the resources sector – or some of them anyway – then it is too good for their tax dollars and too good for their charitable donations.

    Yes. Then, close them down if they cannot pay their bills.

  2. Snoopy

    Yes. Then, close them down if they cannot pay their bills.

    No. Just cease all government support.

  3. Jock

    Have the persons on this committee sold their cars? Do they have big four wheel drives. A bit more transparency would certainly be interesting. Love to see hypocrisy revealed. Anybody know?

  4. Demosthenes

    then it is too good for their tax dollars and too good for their charitable donations.

    The latter, no question. The former, though… There might be an argument for forcing publicly funded universities to have a non-discriminatory investment strategy, but that’s about it. Otherwise it sounds like you’re suggesting companies can refrain from paying a portion of their tax bill because a quango won’t invest in them, which would be weird.

  5. Sinclair Davidson

    Demosthenes – I would never advocate a tax revolt. Perish the thought. 🙂

  6. Ant

    The ANU could well use a massive ‘flush’ button and to evacuate the stinking merda that exists amongst its administration I’d gladly push it.

  7. Talleyrand

    Make sure all of the staff superannuation is never topped up by the taxpayer when the inevitable comes, and this reduce set of investments fails to fund those beneficiaries on defined benefits.
    Ie no more moral hazards covered over by the rest of us whilst these self righteous poseurs take on no risk to their own wealth.

  8. Sinclair Davidson

    Talleyrand – that isn’t the staff super fund, but the university endowment.

  9. buckshot

    Talk about kicking the resources sector when it’s down. Good on Martin Ferguson for sticking up for the sector. I also hold Santos shares and am currently looking to buy more. One thing I learnt from when the Future Fund was selling off some of its large Telstra stake, it can artificially depress the share price for a while and create a good buying opportunity.

    Disclaimer: This does not constitute financial advice, and you should do your own research and/or seek financial advice. (Maybe I should post this on HotCopper also 🙂

  10. Des Deskperson

    The interesting thing here is that VC Ian Young is widely regarded by ANU staff – particularly academic staff – as an arbitrary, dictatorial and ruthless cost-cutter.

    I have no idea whether this is a fair or accurate assessment, but, prima facie, he’s not the first person one would have expected to be spearheading something as, well, wet as this.

    Is he trying to convince his people that he’s actually a caring sharer after all??

  11. Leigh Lowe

    That’s fine, but if the ANU is too good for investment returns from the resources sector – or some of them anyway – then it is too good for their tax dollars and too good for their charitable donations.

    Thank you.
    Saved me typing that out.

  12. Leigh Lowe

    The latter, no question. The former, though… There might be an argument for forcing publicly funded universities to have a non-discriminatory investment strategy, but that’s about it. Otherwise it sounds like you’re suggesting companies can refrain from paying a portion of their tax bill because a quango won’t invest in them, which would be weird.

    No.
    It’s saying that if Universities want to engage in gesture politics it should be more than a gesture. That is, the taxpayer doesn’t get soaked for the shortfall caused by sub-optimal investment strategies.
    In short, make your grandiose investment decisions and simultaneously announce where funding will be cut and which jobs will go to maintain funding equilibrium.

  13. 3d1k

    Pathetic. I really have no other description for the stranded assets/divestment mob.

    They should be called to account. Fossil fuels are the bedrock of modern existence. Without them or their derivatives – count the ways life would be different. Let’s start with aviation fuel; or vehicular fuels; or myriad plastics and polymers; God forbid for students (and Uni’s and staff) – no computers, no iPads, no smart phones NO APPLE …and on and on.

    What has infected our intelligentsia?

  14. duncanm

    One just has to look at the list of colleges to wonder what ANU is all about.

    For the national university of such a resource-rich country to have no schools of mining, geology, or even any serious engineering, says it all, really.

    Oh, but they do have a “Gender Institute”.

    FMD.

    The ANU council needs to act on item 7 of the Finance Committee Terms of Reference and give them their due review.

  15. 3d1k

    Interesting to note the attention an important post like this garners. Not as much as deserved.

    Everyone too busy running of on tangent issues, whereas in fact, at least until fossil fuels are no longer essential, movements against our modern life should be seriously critiqued.

    Plenty of time for basket weaving…

  16. Disillusioned

    Obviously their position on the resource industry and their endowment investment should put them in a position of independence from the public purse. If they want the right to hold their views given they are a public institution they should be given the option of surrendering their investments to central government revenue or be cut off from all future government funds. To have it both ways is screwing the taxpayer. Time to pay the piper.

  17. Notafan

    Yes they should vote to divest that proportion of taxpayer’s money that is derived from the resource sector and stop using all product made from fossil fuels.
    Its not a university, it’s a hypocrites and liars institution of lower education.

  18. Notafan

    Isn’t anu the place to go and do a masters of climate change?
    They must hand out a lot of dunce’s hats at their graduation ceremonies.

  19. Jessie

    Given ANU’s monopoly in indigenous development economies inc PNG, they would be quite interested in the ‘further debate’ with mineral resource industry.
    Suit their decades of Marxism/communism and the colonial studies guilt industry they have developed. And future social impact studies industry and the carbon [dioxide] industry of Oz and PNG.

    Bullshit that Ferguson cares. Or their union of students and employees with the reality of tribal [cunning leaders] environments. That’s why they all chose to return after PhDs and live in Canberra, bringing up and educating their children. Writing crap for decades on behalf of the outposts they own, with a few NHMRC/ARC study trips to ensure their key informants are kept in line. Or their key informants keep them in line. It is parasitic symbiosis to a degree never studied.

    *debate = control of all ‘observations’ and ‘data’ as consequence of monopoly of academic input/output in anthro-pological, ABS demographics and from their key contacts/elder spokespersons.

  20. Zatara

    Aren’t we missing the more elemental issues here?

    Powerful institutions funded by tax dollars are actively participating in the market, and in this case obviously trying to influence that market to meet their view of social justice or whatever their activist cause. Am I the only one who has a problem with that?

    But assuming that is acceptable then the most obvious question is why a does publicly funded institution have enough spare cash on hand to invest in anything, much less the stock market? Sounds like a fabulous place to start the cutbacks.

    While we are at it, who exactly authorized people like the ANU Vice-Chairman to make and execute (*NADT) such policies in the first place? I don’t recall his being on the ballot.

  21. Notafan

    The government should at least be able to look at the level of endowment income in determining how much additional taxpayers money needs to be given to universities.
    All that bleating about cuts to funding and ANU have a billion dollar piggy bank.
    To whom are they accountable?

  22. johanna

    The endowment fund is not necessarily available as cash. Many donors specify as a condition of their gift that the money can only be used for investment purposes.

    That said, the University has a fiduciary duty to maximise its returns.

  23. buckshot

    According to the Fin Review (October 8, p4), the companies that ANU will be divesting shares in are:
    1. Iluka Resources (mineral sands);
    2. Independence Group (gold, nickel, copper, zinc, silver);
    3. Newcrest Mining (gold);
    4. Sandfire Resources (copper, gold, and other base metals);
    5. Oil Search (oil & gas);
    6. Santos (oil and gas); and
    7. Sirius Resources (base metals explorer).

    I can’t see a consistent ethical theme here other than getting out of all resource shares. In which case, are there any resource company shares they are retaining, like major donors (and major coal miners) BHP and Rio Tinto? If so, why?

  24. Boambee John

    “That’s fine, but if the ANU is too good for investment returns from the resources sector – or some of them anyway – then it is too good for their tax dollars and too good for their charitable donations.”

    I understand that the ANU has around $1 billion stashed away in investments.

    At a time when universities seem to be unhappy about the level of taxpayer funding they receive, perhaps it is time to draw down some of that lazy billion and put it into current operations?

  25. Boambee John

    “his reduce set of investments fails to fund those beneficiaries on defined benefits”

    I understand that the defined benefits part of Unisuper already has some “issues”.

  26. Sinclair Davidson

    Yes – the defined benefit part of UniSuper does have a problem, but this is unrelated to that problem.

  27. Winston Smith

    Zatara, see The Doomlords ms above and the one yesterday where he explains that the Fund is an endowment fund and most likely there are caveats to the contributions that mean they cannot use them for other purposes.
    Mind you, this peeves me also – the fact that there are no Schools of Mining, Geology, or even any Serious Engineering.
    Thanks DuncanM 🙂

  28. Megan

    Fossil fuels are the bedrock of modern existence. Without them or their derivatives – count the ways life would be different. Let’s start with aviation fuel; or vehicular fuels; or myriad plastics and polymers; God forbid for students (and Uni’s and staff) – no computers, no iPads, no smart phones NO APPLE …and on and on.

    What has infected our intelligentsia?

    Wish I knew…just had a colleague victorious on FB that LEGO will not renew it’s contract with Arctic destroyer, Shell. I wanted to ask her when she was giving up her car, walking to her next holiday interstate, tossing her computer, phone and iPad? And does she really think that Lego won’t sign a contract to get those derivatives somewhere else? I refrained because it is like trying to reason with an over emotional two year old despite this person being of above average intelligence. Supposedly.

  29. Andrew

    So Martin Ferguson…where have I heard that name before? He seems to have some strong views on the encouragement of energy production in AUS, and appears opposed to the subsidisation by the public purse of essentially useless “green” energy. I wonder if he’s ever been involved in the development of energy policy and taxation?

  30. Zatara

    Thanks all for the clarifications, but aside from the endowments, it still leaves the fact that a taxpayer funded institution is actively attempting to manipulate the market.

    Johanna of course you are right, which begs an explanation of their investment theory and why they see it as the method to “maximize its returns”, as compared to being a plaything for activist administrators which goes unchallenged.

  31. Squirrel

    It’s really good to know that our universities are churning out vast amounts of research, which is constantly being commercialised here in Australia, such that we now have a world-leading knowledge sector economy – producing vast, and ever-growing revenues, and a very healthy trade surplus……oh, that’s right, that was just a dream – but let’s get off on a righteous frolic of divestment, it will make us feel so much better about ourselves, and help us to forget about grim realities.

  32. .

    1. Iluka Resources (mineral sands);

    This is a potnetial source of thorium. They hate nuke too. Anti civilisationists.

  33. Ozgrandpooba

    Understand why so many Cats are pissed off. Rather than expecting our wonderful leaders to actually do something to increase liberty, there is a much better private sector response. Any company that is blacklisted just needs to put out a statement that 1) they wont hire a single grad or any new employee with an ANU degree 2) they will withdraw every single endowment and sponsorship to ANU 3) they have the supportof other (unmentioned to make it scary) companies in the same and similar position that the same will be done by them too.

    Watch how these retard educrats fold like a cheap suit with popcorn and beer.

  34. Andrew

    Oooooh, interesting idea Pooba! “The values expressed by the Uni you chose to go to are so diametrically opposed to our corporate culture as to render us a prohibited entity for their endowment. Therefore, we consider you are unlikely to be a fit in our corporate culture.” (Just like if you vote LNP or LDP and believe others should do likewise, you’re not going to be welcome at Their ABC.) I like this.

  35. Boambee John

    “Yes – the defined benefit part of UniSuper does have a problem, but this is unrelated to that problem.”

    The difference between the two is noted Sinc, but I suspect that Unisuper also follows the “socially responsible investing” mantra.

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