11 March 2009
‘Complaint Made to UK Universities Pensions Fund USS Over M3 Motorway at Tara’
TaraWatch wrote today to the UK universities pension fund, Universities Superannuation Scheme (USS), who are institutional investors in Cintra, the subsidiary of Ferrovial, who are building the M3 motorway, to inform them of the ethical investment issues involved with the Hill of Tara and to ask for stakeholder engagement.
The Universities Superannuation Scheme is a pension scheme in the United Kingdom. Its members include academic and academic-related staff (including senior administrative staff) in certain United Kingdom universities. It claims to be “the second largest pension scheme in the UK by fund size.”
The complaint was made to USS after the Financial Times today published an article entitled, ‘Ferrovial faces revolt over Cintra move’, which revealed that USS is among a groups of shareholders who are in revolt against plans by
Ferrovial to completely take over Cintra. The article states:
“In a letter to Cintra’s board, Universities Superannuation Scheme (USS) of the UK, together with the State of New Jersey and Australian infrastructure fund managers CP2 and Magellan Asset Management, say the deal would give them “unwanted exposure to operations in new sectors and geographic regions” and that they want to be compensated for the “substantially greater risk profile of Ferrovial shares [compared with] Cintra shares”.
TaraWatch has informed USS that dozens of leading academics, from notable institutions all around the UK and Northern Ireland have publicly denounced the M3 route, and have sought to have it altered. USS was informed that TaraWatch will be writing to these academics, to inform them that they may in fact be investors in the M3.
Vincent Salafia of TaraWatch said:
“We have written to USS to ask for stakeholder engagement, and to inform them that many of their pension-holders are opposed to the investment in the M3 companies.
“Many leading UK and Northern Ireland academics and institutions who protested against the M3 route will be appalled to know that they are in fact investors in the M3 tolling scheme.
“It is ironic that while pensions of Irish academics are being cut in order to pay for the M3 motorway being built through Tara’s landscape, the UK academics pensions are being secured by investing in the same motorway’s tolling scheme."
The Capel Building
Republic of Ireland
Universities Superannuation Scheme Limited
2nd Floor Royal Liver Building
Andrew Fleming & Clare Murphy-McGreevey
London EC2R 6DN
11 March 2009
Re: The Hill of Tara and the M3 Motorway - Unethical Investment by Cintra/Ferrovial in Ireland
Dear USS & Penrose Financial Limited,
I am writing to you on behalf of TaraWatch, an NGO campaigning for the preservation of the Hill of Tara, Ireland's premier national monument, which is threatened by the M3 motorway construction works. We have successfully lobbied for Tara to be placed on the World Monuments Fund, 2008 List of 100 Most Endangered Sites, and we have been invited to resubmit Tara for the 2010 List. This month Smithsonian magazine listed Tara as one of ten must-see endangered sites in the world.
During the course of our campaign, over the last six years, hundreds of international academics, including dozens of British archaeologists, historians and academics, from leading institutions all around Great Britain and Northern Ireland, have publicly condemned the route of the motorway. Some statements are attached below.
It has come to our attention that USS is an investor in the M3 motorway tolling scheme, since you are shareholders in Cintra, a subsidiary of Ferrovial, the M3 construction company. The PPP Contract was awarded in April 2007 to the Eurolink Consortium (SIAC Construction Ltd and Cintra - Concesiones de Infraestructuras de Transport S.A.)
This project lies on the Monaghan to Dublin route and will involve the construction of a 50 km stretch of motorway/dual carriageway, and 11 km of single carriageway. The motorway passes within 1000 metres of the top of the Hill of Tara, and dozens of archaeological sites, some of them national monuments, have been demolished already.
The Financial times has a story today entitled, 'Ferrovial faces revolt over Cintra move', which includes the following statements:
"Ferrovial faces a shareholder revolt over plans to buy out minority investors in its separately listed Cintra toll road group. Institutions representing about 13 per cent of the company's free float have clubbed together to oppose the merger, which they say has "extremely limited rationale" for Cintra, with 'all the benefits flowing to Ferrovial'."
"In a letter to Cintra's board, Universities Superannuation Scheme (USS) of the UK, together with the State of New Jersey and Australian infrastructure fund managers CP2 and Magellan Asset Management, say the deal would give them "unwanted exposure to operations in new sectors and geographic regions" and that they want to be compensated for the "substantially greater risk profile of Ferrovial shares [compared with] Cintra shares".
"Since its initial public offering, Cintra has represented a logical investment opportunity for specialist toll road investors," they say in the letter. "However, the merger transaction that is currently being evaluated by the respective boards would fundamentally change the nature of our investment."
We have been seeking stakeholder engagement with Ferrovial, in an effort to negotiate an alternative route, but they have not responded to our request. Ferrovial has been confirmed in the Dow Jones Sustainability Indexes. In 2002, Ferrovial became a member of The Global Compact, an initiative involving UN organizations, workers’ associations, non-governmental organizations, and others committed to promoting and respecting nine universal principles in the field of human rights, labour and the environment. We have also signed the UN Global Compact, and are currently making our reports there, in an effort to have the M3 project reviewed.
TaraWatch is also working closely with GES Investment Services, in attempting to initiate stakeholder engagement. GES provides analyses and consultation for institutional clients with an estimated amount of assets of more than €220 billion. In 2007, GES noted that "Grupo Ferrovial and its Polish subsidiary Budimex are two of four new-comers to GES' latest list of companies to engage with or exclude, according to the analysis model GES Global Ethical Standard which is based on international norms for environment, human rights and business ethics." This was due to a motorway in Poland being built through a protected area, which was eventually halted by the European Court of Justice. The European Commission has already condemned the M3 route near Tara, and was reported to be taking legal action.
Currently, there is a public consultation under way, being administered by the Department of the Environment, to review Ireland's list of UNESCO sites. Tara has been nominated, and consultation continues. As you may be aware, UNESCO have ordered the UK Government to move the roads at Stonehenge. At last year's 32nd World Heritage Committee Meeting in Quebec, the Committee asked the UK Government why they had not initiated plans to move the roads, to which they replied it would cost upwards of a billion pounds to do so. UNESCO was not satisfied, and is still threatening sanctions. We are trying to avoid that scenario from being repeated here in Ireland. Therefore it is critical that engagement with Cintra and Ferroival is initiated immediately, and that they participate in the UNESCO public consultation.
We are aware that USS was the first big pension fund in the United Kingdom to adopt a socially responsible investment policy, in 1999, as a result of a sustained two-year Ethics for USS campaign by university staff and the student campaign organisation, People & Planet, led by the late Guy Hughes. Its genesis lay with a handful of USS members outraged that their money was being used to finance activities they found morally unacceptable.
Your web site states: "USS announced its commitment to a socially responsible and sustainable investment (SRSI) approach in 1999 and further elaborated this with a detailed SRSI strategy in 2000. At the time of the initial announcement Professor Sir Graeme Davies, USS Ltd chairman, said: "Today no properly run public company – or fund manager – should be unaware of the importance of public opinion and ethical issues." We use our influence as a large £20 billion fund to encourage socially and environmentally responsible corporate behaviour and good standards of corporate governance, and wherever appropriate, we work with other powerful shareholders to achieve this objective."
"Our strategy is based on active engagement with the companies whose shares we hold. This involves dialogue about acceptable standards of corporate governance, environmental, ethical and social performance. This dialogue is professionally planned and when needed, robust. Engagement also involves work to shape the context in which company-specific discussions take place (for example, see below for our work on climate change). Apart from the moral issues involved, proper assessment of the reputational impact of the company’s performance on these wider fronts is increasingly material to investment considerations. That is why we are working to fully integrate SRSI issues within USS’s investment methodology."
We are contacting People & Planet, in an effort the get this issue addressed. We are also contacting all of the UK academics who objected to the M3, in order to inform them that they may in fact be investors in the project.
However, it is crucial that we establish a constructive dialogue with you, in order to move swiftly to have these critical issues addressed.