Inexplicable investments: Elbit Systems and Australia’s Future Fund

June 5, 2024
Elbit Systems is receiving funds from the Australia Future Fund, a sovereign wealth fund. Photo: Elbit Systems of Australia

Australia’s modest $272.3 billion sovereign wealth fund is under the spotlight over where its funds are being deployed.

A Freedom of Information request by NSW Greens Senator David Shoebridge, filed last October, revealed that as much as $600 million from the Australian Future Fund had found their way to defence companies.

In December, it was reported that of the 30 defence and aerospace companies featured, some received the following:

• Thales ($3.5 million);

• Lockheed Martin ($71 million);

• BAE Systems ($26 million);

• Boeing ($10.7 million);

• Rocket Lab USA ($192 million); and

• Elbit Systems ($488,768).

The findings gave Shoebridge a chance to interrogate the board administering the fund.

“The Future Fund is meant to benefit future generations. That rings hollow when they are investing in companies making equipment that ends future generations,” he said.

Shoebridge urged the government to introduce “mandatory ethical investment rules” and “that must absolutely include a prohibition on investing in weapon manufacturers.” He said Elbit Systems must be excluded “because of exclusions related to military weapons-related conventions and treaties ratified by Australia”.

In May, the board divested from funds associated with the People’s Liberation Army of China.

Eleven companies were noted, among them Xinjiang Guanghui Energy, a natural gas and coal producer whose chairperson, Sun Guangxin, had purchased ranches, near to a US Air Force base in Texas, to build a wind farm. 

Others included Jiangsu GoodWe and LONGi, both with expertise in the line of solar energy generation.

“Taxpayer funds and Australians’ retirement savings should never be invested in companies linked to serious human rights abuses, sanctions evasion or military suppliers to an authoritarian state,” gloated Opposition home affairs spokesman, Senator James Paterson.

The same did not apply to human rights abuses committed by Israel, a purported democratic state.

Israel’s military poster child, Elbit Systems, continues to be favoured by Australian defence and finance departments.

Despite Israel’s ongoing war on Gaza, Elbit Systems managed to convince the Australian government to throw $917 million its way in a contract signed in February.

The five year contract will supply “advanced protection, fighting capabilities and sensors” for the Infantry Fighting Vehicles (IFVs) of Korean design.

The vehicles are being constructed in Defence Minister Richard Marles's electorate of Corio in Victoria.

And what of the near half-million dollars invested by the Future Fund in Elbit Systems?

list of the fund’s holdings in various companies was published last October and it included Elbit Systems.

This was odd given that the company, since 2021, is precluded from investing in the fund given, as Shoebridge said, the ratification by Australia of various “military weapons-related conventions or treaties”.

The board, accordingly, had to furnish reasons “how it continues to invest in Elbit Systems despite the publicly announced direction it gave to withdraw those funds because of Australia’s international legal obligations”.

The internal correspondence of December 7, 2023, prompted by Shoebridge’s FOI request and prodding from Michael West Media, gave little detail.

A Canberra bureaucrat in finance asked an official associated with or attached to the Future Fund (both names are redacted) to clarify the status of Elbit Systems in terms of the exclusion list.

The reply (see below) notes the role of unnamed “expert third party service providers” who supposedly keep an eye on company activities and provide research upon which a decision is made by the board every six months.


Part of the redacted response from a Canberra bureaucrat to queries about Elbit Systems. Image: Green Left

Elbit had been previously excluded as an investment option “in relation to its involvement in cluster munitions following its acquisition of IMI [Systems]”.

IMI, rather than Elbit, was the spoiling consideration, given its role in producing technology that violates the Convention on Cluster Munitions.

As of April last year, Elbit was “no longer excluded by the portfolio. This reflects the updated research of our expert research providers”.

The response does not give the exact details of the research. Banal talking points and information stifling platitudes are given instead.

The board had “a long-standing policy on portfolio exclusions and a robust process to implement” them. The policy was reviewed twice a year, buttressed by “expert third party research”.

Recent media reporting, it said, relied on an “outdated exclusions” list (of 2021). The board did not invest in those entities on the exclusions list.

For the media establishment, this response would have more than sufficed.

Michael West noted in May that efforts to penetrate the veil of inscrutability had so far come to naught.

The Future Fund and its Board of Guardians had persisted in their refusal to respond to inquiries.

“Since our last media request for comment, Israel has ramped up its war crimes in Gaza and the West Bank.”

Given various interim orders by the International Court of Justice warning Israel of a real risk of committing genocide, even as it ponders South Africa’s application to make that finding, what are those expert researchers up to?

[Binoy Kampmark currently lectures at RMIT University.]

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