Documents obtained under FOI reveal Australia’s Future Fund has shares in controversial Israeli defence contractor Elbit Systems, a company associated with the making of cluster-bombs. Michael West and Kim Wingerei report.
Elbit Systems is blacklisted in countries like Norway and Denmark for violations of humanitarian law, and the group has been subject to divestment by global banks and pension funds for ethical concerns. But that has not stopped Australia’s Future Fund from becoming a financier.
Documents obtained under FOI by Greens Senator David Shoebridge reveal the Future Fund has a $488,768 investment in Elbit Systems, the Israeli company that produces “a broad portfolio of airborne, land and naval systems and products for defence, homeland security and commercial applications”. This is beside the hundreds of millions the fund has invested in its broad ‘Aerospace and Defence’ portfolio such as Boeing, BAE Systems, Thales, Lockheed Martin and Rheinmetall AG.
Elbit Systems is now engaged in supplying bombs to the Israeli Defence Forces which have killed more than 15,500 Palestinians, more than half of them women and children, since the Hamas attacks on Israel on October 7. The extreme civilian death toll and the bombing of has brought global condemnation of Israel for war crimes and genocide of the Palestinians. The Australian government has not supported UN calls for a ceasefire.
The investment in Elbit Systems has been made despite the group being on the Future Fund’s ‘banned’ list, along with several other companies that are “related to military weapons-related Conventions or Treaties ratified by Australia.”Elbit acquired IMI Systems in 2018, another Israeli company that “is engaged in the design and manufacture of a wide range of precision munitions for land, air and sea applications…”
IMI produces technology used in cluster bombs, which are banned in Australia and 110 other nations. Cluster bombs are not permitted in modern warfare on humanitarian grounds.
Green’s Defence Spokesperson David Shoebridge said yesterday afternoon in Parliament:
The Future Fund was correct when it put Elbit Systems on its list of companies excluded from investment. Elbit Systems is deeply implicated in the current destruction in Gaza, from artillery pieces to drones.
Elbit Systems
Elbit has repeatedly denied that it produces cluster bombs, but KLP, a Norwegian Pension Fund that has also excluded Elbit from its investee companies, says otherwise.
According to The Guardian, KLP found that Elbit subsidiary IMI does produce cluster munitions, including “miniature intelligent multipurpose submunitions, which are a smart cluster munitions system equipped with sensors to program and identify targets, as well as conventional munitions that each contain dozens of bomblets.”
Norway’s Sovereign Wealth Fund banned Elbit as far back as 2009, due to the company’s supply of surveillance systems for the Israeli West Bank barrier; as did both the Danske Bank and a Swedish Pension fund a year later.
Financial behemoth HSBC divested itself from Elbit in 2018, following the acquisition of IMI Systems, citing their manufacturing of cluster munition.
Elbit’s Australian subsidiary is also a major supplier to the Australian Defence Force. They won numerous contracts with the ADF while Christopher Pyne was Minister of Defence. Pyne’s company is now engaged by Elbit as a Lobbyist.
“The Future Fund’s board needs to explain how it continues to invest in Elbit Systems despite the publicly announced direction it gave to withdraw those funds for ethical reasons,” Senator Shoebridge said.
Elbit has also been embroiled in a bribery scandal in Colombia.
Future Fund weapons industry investments
In total, the Future Fund’s response to Shoebridge’s FOI request reveals that it has more than $650M invested in 30 companies in the ‘Aerospace and Defence’ category as of October 31, 2023.
This includes $71.3M in Lockheed Martin, manufacturer of the F-35 fighter jets that Israel uses in the bombing of Gaza, and other weapons of mass destruction, such as sophisticated missile guiding technology.
The Future Fund’s investments in the weapons sector also include $43M in Northrop Grumman Corp, which produces a range of gadgets for killing people, such as artillery and mortar systems and battle tanks.
On the list is also $3.5M in Thales, a manufacturer of assault rifles, as well as sophisticated surveillance and weapons control systems, and well known to MWM readers as sponsors of ASPI.
The second largest investment ($72.4M) in the Future Fund’s weapons company portfolio is RTX Corporation (formerly Raytheon), which produces Patriot Missiles used by the Israel Defence Force.
According to Shoebridge, “The Albanese Government needs to introduce some clear ethical investment rules for the Future Fund and that should absolutely include not investing in weapon companies.”
Without a clear direction from the government, the Future Fund will continue to pour public funds into multi-national weapons manufacturers like Thales, Lockheed Martin or BAE Systems.
“The majority of Australians want peace and justice, not just in Palestine, but around the world, yet the country’s wealth is instead being funnelled into companies that fuel violence. The Future Fund is meant to benefit future generations. That rings very hollow when they are investing in companies making equipment that ends future generations.”
The largest chunk of the Future Fund’s $650M+ ‘Aerospace and Defence’ is a $192M investment in Rocket Lab, New Zealand’s space success story, which does not – to our knowledge – engage in supplies to the military.
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Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.
Kim Wingerei is a businessman turned writer and commentator. He is passionate about free speech, human rights, democracy and the politics of change. Originally from Norway, Kim has lived in Australia for 30 years. Author of ‘Why Democracy is Broken – A Blueprint for Change’.