NZ Superannuation Fund Chief Executive Adrian Orr said today that the Fund had reviewed its holding in Israel Chemicals and had not found grounds for exclusion.

There have been calls for the Fund to divest its shareholding in the company, which makes a product called white phosphorus.

White phosphorus has many beneficial uses. It is also has legal, and widespread, military use as a smoke screen. However, its use as a weapon against civilians is illegal.

Israel Chemicals is a supplier of white phosphorus to the United States Defence Force, and to many commercial customers. The United States supplies arms to the Israel Defence Force.

In 2013, Israel said it would find alternatives to white phosphorus, following condemnation of its use on civilians during the 2008-09 Gaza conflict.

“We have no evidence that Israel Chemicals' product - or any white phosphorus - has been used against civilians in the recent Gaza conflict,” Mr Orr said. “Our analysis suggests Israel Chemicals operates within national and international laws, and conventions NZ has signed.”

Mr Orr said the Fund would reassess if evidence emerged to the contrary. “We continue to follow the United Nations investigation into this distressing conflict.”

Addressing suggestions that the Fund should divest from all armaments companies, Mr Orr said Fund divestment decisions were based on Government and international policy regarding the sector.

“We take our lead from national and international laws, conventions to which the NZ Government is a signatory, and significant policy positions of the NZ Government. We have excluded companies involved in weapons banned by conventions which the NZ Government has signed, such as cluster munitions and landmines.”

“Acting consistently with these principles is the basis on which we fulfil our obligation to avoid prejudice to NZ’s reputation as a responsible member of the world community. It is not our role to make Government policy.”

The Fund has a passive $900,000 investment in Israel Chemicals, one of more than 6,000 global equity stocks in its portfolio.