Opposition parties have called on the Government to ensure the National Pensions Reserve Fund adopts ethical investment guidelines after it emerged that taxpayers' money was being invested in the arms and tobacco industry.
In the organisation's annual report for 2002, it listed a range of controversial global companies in which international fund managers, who act on its behalf, have invested.
They include arms suppliers such as Canada's Bombardier, French group Thales and Boeing and US firms such as Lockheed Martin, Boeing and Raytheon.
Despite the plan to ban smoking in the workplace from next year, the investments also included British American Tobacco and Philip Morris in the US.
The reserve fund's investment guidelines relate to generating maximum commercial return and are not bound by ethical investment policies. This contrasts with Britain where legislation obliges pension fund trustees to consider, "the environmental, ethical and social implications of investing in a company's shares".
Labour and the Green party yesterday said the lack of any ethical approach to the fund's activities was unacceptable and insisted that taxpayers' money be more carefully invested.
Green Party TD, Mr Ciarán Cuffe, said: "The UK has criteria for an ethical approach to investment and we should follow suit. It's ludicrous, for example, that we're investing in tobacco companies, given the cost of it to the health system." Mr Cuffe was at the centre of a controversy after it emerged he held shares in firms linked to arms as part of a €1.1 million portfolio. He has since reinvested these shares in "socially responsible" companies.
Labour spokesman Mr Brendan Howlin, said: "The reserve fund managed to lose more money than the average Irish pension fund last year. They lost around 25 per cent compared to an average of 20 per cent. So, it's not as if unethical investments are sure-fire winners."
The Minister for Finance, Mr McCreevy, said he had considered whether investment should be qualified by ethical or environmental factors, but concluded it would be very difficult to reach consensus on what constituted ethical investment.
