HESTA divests from Transfield Services

August 28, 2015
Earlier this year, HESTA Divest was launched to coordinate opposition to HESTA’s links to the detention industry.

Pressure from activists for super funds to divest from Transfield Services, the biggest contractor in the Australian immigration detention industry, is increasingly bearing fruit.

HESTA, the industry superannuation fund for health and community services workers — at $32 billion one of Australia’s largest super funds — sold its 3.5% stake, worth $23 million, in Transfield Services on August 18.

On August 25 NGS Super, the industry superannuation fund for private school teachers, announced it would sell its $5.5 million stake in Transfield “on moral grounds”.

It has also emerged that UniSuper, a $50 billion fund, which had invested in Transfield “divested itself of this holding for commercial reasons in late 2014”. Commercial super funds First State and Christian Super have also agreed to divest from Transfield.

HESTA said that the risks associated with Transfield Services, the company that operates the federal government's detention centres on Manus Island and Nauru, were too high.

HESTA chief executive Debby Blakey said: "A substantial body of evidence is available pointing to the negative impacts of prolonged mandatory detention of asylum seekers. There is also a significant quantum of evidence that there have been numerous sexual and physical assaults in the detention centres operated by Transfield Services".

The divestment by HESTA and others demonstrates the powerful ability of boycott and divestment tactics to disrupt the economy of the detention industry.

Last year’s boycott campaign to end Transfield’s sponsorship of the Sydney Biennale drew attention to the company’s detention contracts on Nauru and Manus Island. By mid-March, a week after the Biennale announced it was cutting its ties to Transfield, the national executive of the Australian Services Union (ASU) adopted a resolution calling for HESTA to divest from Transfield Services.

Earlier this year, HESTA Divest was launched to coordinate opposition to HESTA’s links to the detention industry. The campaign team, comprising health and community sector workers and refugee advocates, came together through the work of Cross Border Operational Matters, the collective that organised the Biennale boycott.

HESTA Divest played a key role in highlighting that super funds already have policies to screen out industries such as tobacco, coalmining, gambling — and now immigration detention. HESTA Divest encouraged many fund and union members to contact the HESTA board to express their strong opposition to investment in detention services.

In June, the Australian Nursing and Midwifery Federation (Victorian Branch) Delegates’ Conference passed a motion requesting their union branch to lobby HESTA and First State Super to divest from organisations “whose business interests directly or indirectly breach the human rights of those seeking asylum”.

HESTA’s and NGS’s divestment has also provoked other super funds to review the governance risks associated with investment in Transfield. Cbus and REST Industry Super have announced they are reviewing their investment in Transfield.

With the introduction of the Border Force Act and the potential passage of the Use of Force Bill — also known as the Kill Bill — the success of the Biennale boycott and HESTA Divest campaign points to a possible strategy for ending detention by a grassroots movement.

Pressure on super funds to divest from detention contractors has never been higher, and a sustained public campaign can ensure super funds break links to the detention industry.

No doubt that possibility is behind the federal government’s proposal to introduce legislation requiring all super fund boards to have one third independent trustees, including an independent chair which would stack the board against divestments. At present many industry and corporate funds operate with equal numbers of union and company representatives leaving them more open to political persuasion.

Boycott is the other arm of the campaign. Companies such as Serco, International Health and Medical Services, Wilson’s Security and Decmil also profit from detention and have businesses in the wider community. Decmil, for example, sponsors the Fremantle Dockers.

These companies only service the detention camps because it is profitable for them. Coordinated boycott and divestment tactics in Australia have the potential to reduce their profits in Australia such that their detention centre operation is unviable. A sustained campaign along these lines has the potential to render the whole detention system inoperable.

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