In light of the devastating Israeli-Palestinian conflict, we, as conscientious Canadian investors, want to ensure that our investments respect human rights, which at a minimum requires ceasing to invest in weapons manufacturing when we have evidence that the investment will likely be used to violate human rights.
Canada regularly imposes sanctions in response to human rights violations, which constitutes one of the tools of its foreign policy. Currently, sanctions, ranging from bans on technical assistance to asset freezes to import and export restrictions, are in force for 25 countries.
For example, the Government of Canada explains the rationale and type of sanctions imposed on Russia: “ Russia-related sanctions were imposed under the Special Economic Measures Act to respond to the seriousness of Russia’s violation of Ukraine’s sovereignty and territorial integrity, as well as the serious human rights violations that have been committed in Russia. (…) The Regulation also prohibits providing to Russia or any person in Russia technical or financial assistance, technical or financial services or brokerage or other services related to the supply, sale, transfer , the manufacture or use of weapons and related equipment.1 »
We believe that sanctions on weapons financing, similar to those imposed on Russia, should be imposed whenever and wherever there are serious concerns about human rights violations. However, it appears that Canada applies these sanctions unevenly.
In recent months, in Israel and Palestine, there is sufficient evidence that all parties to the conflict are violating human rights and international law.
Civil society organizations have urged an end to the export of arms to the conflict, which the Government of Canada recently committed to doing2.3.
As investors, we have become aware of another, less visible, way in which the conflict is supported by Canada, namely the investments of Canadian financial institutions in arms manufacturers operating in Israel.
Five months after the start of the dispute, available information, although difficult to obtain, indicates that major Canadian financial institutions, such as RBC, Scotiabank and TD Bank, are likely investing in companies linked to hardware manufacturing Israeli military4.5.6.7. Continuing to hold such investments would suggest an unwillingness or inability on the part of banks to take steps to comply with the United Nations Guiding Principles on Business and Human Rights, which explain that “businesses should respect the human rights. This means that they should avoid violating the human rights of others and address adverse human rights impacts in which they are involved.8 “.
Scotiabank, for example, owns 1832 Asset Management LP (1832 AM), a fund that owns shares of Israel’s largest arms manufacturer, Elbit Systems9,10,11. Scotiabank says it has no control over 1832 AM fund manager’s independent investment decisions12despite the fact that the fund is designated as a Scotia Fund, because the fund is a separate legal entity.
It is difficult to accept that Scotiabank, as the sole owner of the fund, has no responsibility or influence over these decisions. It is likely that other financial institutions will avoid liability in the same way, using existing legal loopholes.
This situation is possible due to the unequal imposition of sanctions. On the one hand, Hamas has been on the list of terrorist organizations in Canada since 2002 and, on the other hand, sanctions have recently been imposed on Hamas leaders, which means that Canadians are prohibited from maintaining financial relations with them13. Canadian investors therefore do not risk inadvertently financing the arming of Hamas.
In contrast, no such sanctions have been imposed for financing Israeli weapons manufacturing. Therefore, Canadian financial institutions offer mutual funds that invest in Israeli companies such as Elbit Systems, which manufacture weapons in Israel. With this fact largely hidden, Canadians invest in these mutual funds in good faith, often without knowing that they hold Israeli arms manufacturers in their portfolio.
If sanctions were imposed on arms manufacturers who sell weapons to all parties to the conflict – until the significant risks of human rights violations cease – then, regardless of complex legal structures, banks, Fund managers and pension funds would be required by law to divest.
The Ethical Investment Group calls on the Canadian government to systematically apply sanctions on the financing of the manufacturing of all weapons used, by all parties, in the current Israeli-Palestinian conflict, given the significant evidence of legal violations international and human rights.
In the absence of such sanctions, we, as conscientious investors, will carefully review our investments and express our concerns about any investments that may support ongoing war crimes and human rights abuses. We call on other investors to do the same.
*On behalf of the members of the Ethical Investment Group
1. Visit the Canadian sanctions linked to Russia page
2. Read “Canada must end military exports to Israel”
3. Read Canadian humanitarian organizations join global call to stop arms transfers to Israel and Palestinian armed groups
4. Read General Dynamics Corp Stock Ownership – Who owns General Dynamics? (in English)
5. Visit the Iron Fist Active Protection System page
6. Read ““Hamas has created additional demand”: Wall Street eyes big profits from war” (in English)
7. Visit the TD US Equity Index ETF page
8. View the Guiding Principles on Business and Human Rights document
9. See page 1832 Asset Management LP Conflicts Disclosure Statement
10. Visit the Elbit Systems Ownership page
11. Visit the Elbit Systems page of the Database of Israeli Military and Security Export
12. Read a letter from Scotiabank to the Ethical Investing Group
13. Read “Canada sanctions Hamas leaders, condemns group’s “heinous” tactics”
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reference: www.lapresse.ca