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© Copyright 2000 Rogers Media. The following article first appeared in the July 2000 edition of
BENEFITS CANADA magazine.
Ethics 101
Some Ontario teachers want their pension fund out of Talisman Energy. They could use an ethics
lesson.
The Ontario Teachers' Pension Plan Board (OTPPB) has been targeted by an international lobbying effort
aimed at pressuring pension funds to divest from civil war-torn Sudan. OTPPB's investment in Talisman
Energy Inc., a Calgary-based oil and gas firm operating in the African country, has also rekindled an
ethical investing debate with the Ontario Teachers' Federation (OTF), an umbrella group representing four
teaching federations.
"The executive of OTF decided that they could not sit by and, as teachers of Ontario, be part of that kind
of [investment]," says Barbara Sargent, OTF president in Toronto. She insists OTF's position is not
influenced by any lobby group.
That may be. But e-mails obtained by benefits canada show Sargent and her organization have been pressured
by at least one activist--Eric Reeves, a U.S. university professor prominent in the Sudan divestment lobby.
On May 23, Reeves e-mailed an open letter calling on Sargent and OTF to act. It went to media, government
and non-government organizations.
Less than a week later, OTF's executive sent a divestment motion to the four directors it has appointed to
the nine-person pension board. A board vote was scheduled at press time.
This is not the first time this issue has arisen at OTPPB (for one retired teacher's perspective, see the
Viewpoint at benefitscanada.com/Content/1999/07-99/ben079906.html).
"This is something we've been talking to the pension plan board about for a couple of years," says Sargent.
"It's a broader issue--ethical investing and good labour practices too."
OTPPB spokesperson Lee Fullerton says OTF's demands are unworkable: "If there was an ethical screen in this
fund, what would it be? What would reflect the values of all teachers?"
OTPPB is mandated to invest passively for the most part, so it holds Talisman as a piece of its position in
the Toronto Stock Exchange 300 composite index. It also holds the stock in its active portfolio because it
views Talisman as undervalued.
Ethical investing may be viable in an individual portfolio. But OTPPB is charged with the responsibility of
investing in the best interests of its membership. For the board to play politics (as some U.S. pension
funds have), would be to shirk its fiduciary responsibility to plan members.
Sargent, who admits she "doesn't have an investment background," doesn't accept this. She has heard from
about one teacher a day since last fall by her count. OTF's affiliate organizations are getting calls too.
Let's say OTF has received 250 calls. Double that number to account for the affiliates, and you get about
500 angry teachers. OTF's Web site boasts a membership of 127,457.
Regardless, Fullerton says every teacher in Ontario could march into board president and chief executive
officer Claude Lamoureux's office and demand the fund divest from Talisman. It still wouldn't happen.
"As trustees, we don't feel that we would have the right to divest," says Fullerton. "Financially, it would
not be in their [members'] best interest."
Sounds pretty ethical to me.
--Kevin Press
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