GSIS, SSS urged to adopt values-based investment scheme

The country’s largest labor group yesterday dared the Government Service Insurance System (GSIS) and the Social Security System (SSS) to adopt a value-based investing scheme.

The Trade Union Congress of the Philippines (TUCP) said the values-based investing system will guide fund managers in keeping the hard-earned contribution of workers secure and profitable.

“Values-based approach would consciously discourage if not prevent the GSIS and the SSS from investing in multinational corporations that directly or indirectly exploit child labor, or in companies with poor track records in husbanding the environment, or in firms whose products tend to heighten public health risks,” TUCP secretary general and former Sen. Ernesto Herrera said.

In the past, Herrera said, a number of multinational corporations, mostly apparel makers, had been linked to the exploitation of under-aged workers.

A number of their sub-contractors in the Philippines, China, India, Pakistan, Bangladesh, Vietnam and Central America were found unlawfully employing child workers, or engaging in abusive labor practices, including the detention of workers for long hours to comply with strict production quota deadlines, he noted.

The GSIS earlier reported common stock investments in New York-based Philip Morris International Inc., London-based British American Tobacco Inc., North Carolina-based Reynolds American Inc. and Connecticut-based UST Inc. – four of the largest global producers of cigarettes and other tobacco products.

The investments form part of the GSIS’s P4.13 billion worth of exposure in global equities or the common stocks of 123 publicly traded foreign, mostly multinational, firms.

The GSIS’s investment in global equities accounts for 15 percent of its P26.54-billion ($553 million at P48:$1) Global Investment Program (GIP) portfolio that is being managed by France’s Credit Agricole Asset Management Ltd. and The Netherlands’ ING Investment Management.

The GSIS previously said it intends to raise to $1 billion the amount invested in its GIP. The SSS also earlier said it would stash abroad up to 7.5 percent of its investment funds.

Herrera explained that a fund manager can not go wrong with a values-based approach to investing.

“In fact, there are hundreds of global fund managers, including public pension fund managers, that run highly successful, values-based investment programs,” Herrera pointed out.

“This is not to say that the GSIS or the SSS should not invest in lucrative mining companies. Our point is that if they must invest in mining companies, then they should invest only in firms with proven track records in safekeeping and restoring the environment around their concession areas,” Herrera clarified.