THE DEPARTMENT OF Finance will today tell an Oireachtas Committee that the adoption of the Illegal Israeli Settlements Divestment Bill would make Ireland an “international outlier”. 

The Bill was sponsored last year by Sinn Féin TD John Brady. 

It seeks to impose “prohibitions and restrictions” on the National Treasury Management Agency (NTMA) in dealings with any entities that appear on a UN Database of companies operating in illegal Israeli settlements on Palestinian land. 

The database was mandated by the U.N. Human Rights Council in 2016.

It aims to ensure transparency around business activities in the West Bank and to prompt companies to rethink their activities in the occupied territories.

The Ireland Strategic Investment Fund, which is managed and controlled by the NTMA, currently has direct investments in 11 companies on the UN database, totalling around €4.2 million.

The Bill would require that the NTMA ensure that assets are not invested in companies on this UN database and that where it becomes aware of such an undertaking, to divest the assets of the fund from these investments.

A Joint Committee will meet this afternoon to scrutinise the Bill. 

Oliver Gilvarry, Assistant Secretary of the banking division within the Department of Finance, will tell the Committee that Finance Minister Micheal McGrath “understands the motivation and intentions behind the Private Members Bill”.

He will add that there was a closed session with the Foreign Affairs Committee on 24 October last, when a report was prepared that recommended “further scrutiny and further legal analysis” of the Bill. 

Gilvarry will remark that the adoption of this Bill would make Ireland an “international outlier” because to his knowledge, “no other state has adopted this (UN) list into primary law”.

Gilvarry will also outline a number of issues with the UN database. 

He will argue that the UN list is “not comprehensive” and that its use would not be appropriate since it “does not respond quickly to changing circumstances”.

For example, the UN database was last updated in June of last year and it’s unclear when and how often the list will be updated. 

Gilvarry will also tell the Committee that the status of the UN database within the UN legal order is “uncertain” and that it doesn’t appear that the database was intended to have a “particular legal status”. 

“It  appears  that  the  list  can  be  seen  as  a  non-binding  instrument for the guidance of Contracting States as the UN has not  recommended its adoption,” Gilvarry will tell the Committee.

Gilvarry will also raise issues with placing “unconditional reliance” on the UN database and add that the Bill would need to be amended so that the reference list of excluded companies is a list developed by the Irish State.

However, Gilvarry will remark that the analysis needed to maintain and update this list would “result in operational and resourcing implications for the Department and the NTMA”. 

He will add that other amendments will be required to “ensure the Bill is compatible with European Law”.

Meanwhile, Nick Ashmore, Director of the Ireland Strategic Investment Fund, will tell the Committee that investments with companies on the UN database are not an “endorsement” or a “political statement”.

Ashmore will say these investments arose as a result of external investment managers selecting global investments on the ISIF’s behalf and that “this is not uncommon”. 

Ashmore will add that he is “not aware of any sovereign wealth fund or pension fund which has divested from its exposure to companies operating in the Occupied Palestinian Territory, or excluded investments in such companies”.

He will also note that the Bill could run afoul of the United States’ anti-boycott legislation, which requires people in the US to refuse to participate in unsanctioned foreign boycotts. 

Ashmore will also raise issues with the reliance on the UN database for excluding companies and that exclusions may be subject to a legal challenge. 

He will add that the Bill would “potentially limit our investment universe” and would result in the ISIF being “unable to avail of the services of some external investment managers”. 

Elsewhere, in a submission from Trócaire, it will be argued that the ISIF is “not keeping to the UN Guiding Principles on Business and Human Rights”.

Trócaire supports the Bill and will add that “Irish taxpayer money should not be invested in companies that are complicit in human rights violations of Palestinians”.