Law changes to stop KiwiSaver funds investing in controversial weapons are not needed because providers have been quick to dump these investments, Commerce Minister Paul Goldsmith says.
All nine default KiwiSaver providers were found to have invested in companies that made cluster bombs, anti-personnel mines or nuclear weapons. Photo: 123RF
Last month, an RNZ investigation found all nine default KiwiSaver providers had either directly, or indirectly, invested some of their members' savings in companies that made cluster bombs, anti-personnel mines or nuclear weapons.
All nine of the providers, which were hand-picked by the government, have since either dumped the investments, were in the process of doing so, or were reviewing their policies.
Amnesty New Zealand has called for the government to strengthen the law that makes it illegal to knowingly invest in companies that make cluster bombs, to include investment funds like those used by the providers.
Commerce Minister Paul Goldsmith Photo: RNZ / Rebekah Parsons-King
Mr Goldsmith said there was no need to change the current laws.
"Given the quick response of KiwiSaver providers to public concern about indirect investments in cluster munitions and other weapons, consumers are already seeing the changes they want without a regulatory intervention.
"These three statutes fulfil New Zealand's legal obligations under the Convention on Cluster Munitions, the Anti-Personnel Mine Ban Convention, and various international treaties relating to nuclear disarmament. I understand the responsible ministry has no current plans to review them.
Initial advice provided to Mr Goldsmith suggested the Cluster Munitions Prohibition Act, the Anti-Personnel Mines Prohibition Act and the New Zealand Nuclear Free Zone, Disarmament and Arms Control Act might apply to KiwiSaver funds.
But police decided last week it would not lay any charges against KiwiSaver providers who invested in banned weapons, because there was no evidence of offending under current laws.
That was because the shares in the companies were bought on the stock market and traded between shareholders, and this was not providing a new source of capital.
That was opposed to providing funds directly to the companies, such as in an initial public offering of fundraising.
ANZ is among those reviewing its indirect investments in weapons and tobacco companies as a result of the investigation. Photo: RNZ / Cole Eastham-Farrelly
Mr Goldsmith said he was focused on ensuring the disclosure requirements around KiwiSaver investments were working, so consumers could make informed decisions based on information that was easy to access and understand.
The Ministry of Business Innovation and Employment, the Commission for Financial Capability and the Financial Markets Authority had been reviewing the content of annual statements sent to KiwiSaver investors by providers for several months.
The aim of the review was to make the information provided to investors clear and easy to understand, including standardised figures and messages about retirement savings.
The changes are expected to start taking effect from next year.
Banks pull weapons investments
Last week, the country's biggest bank, ANZ, said its board had voted to dump all direct KiwiSaver investments in weapons and tobacco. It was still reviewing its indirect investments that had exposure to these types of companies.
Westpac said it would get rid of any holdings in such companies, not matter how indirect, and ASB would be divesting from its passive funds that had exposure to these companies by 10 October.
AMP and Fisher Funds were also getting rid of its investments in this area.
BNZ and Kiwibank were the last two default providers to still be reviewing investments.