One of Australia’s largest super funds, Cbus, will review its investment policy after the construction union urged it to divest from companies supplying Israel with weapons and military technology.
Guardian Australia can reveal that the fund’s investment committee will meet next week to consider the concerns raised by the CFMEU, which is one of the sponsors of Cbus and appoints a minority of the directors on its board.
The CFMEU has been in dialogue with Cbus about the matter, with the union arguing “industry super funds should not be funding genocide”.
The CFMEU, which is affiliated with the Labor party, has also called on the ALP government to stop allowing parts for F-35 fighter jets to be sent to Israel, insisting that Australia has obligations to prevent breaches of international law.
Israel has faced mounting international pressure over its military operations in Gaza, especially as it prepares for a ground offensive into the southern city of Rafah and as the US president, Joe Biden, threatens to delay further arms shipments.
The Israeli government maintains its military operations are a legitimate response to Hamas’s 7 October attacks and has dismissed allegations it is committing genocide against Palestinians in Gaza, saying the suggestion is “false” and “outrageous”.
The international court of justice has yet to make a substantive ruling on the genocide allegations, but said in an interim ruling in January the claims were “plausible” and ordered Israel to take all steps to prevent genocidal acts and incitement.
The CFMEU is calling for all Australian industry super funds, which account for $1.3tn of retirement savings, to divest of investments in companies alleged to be enabling or profiting from the war in Gaza.
The CFMEU’s national secretary, Zach Smith, began the dialogue with Cbus by formally requesting a report on its investments. The union then identified several investments that the CFMEU said were of concern.
“We’ve told Cbus in no uncertain terms it must urgently divest of all shares in companies like Lockheed Martin and Raytheon/RTX,” Smith told Guardian Australia.
The union’s campaign is directed at Australian superannuation funds including Cbus, rather than the individual companies, but Lockheed Martin has said it is “proud of the significant role it has fulfilled in the security of the state of Israel”.
Lockheed Martin, a major defence contractor headquartered in the US, has supplied the Israeli military with F-35 fighter jets, rockets and radar systems.
RTX Corporation, a US-headquartered multinational company previously known as Raytheon, has also responded to concerns from some of its shareholders about its sale of weapons to Israel.
RTX said the company was committed to complying “with the laws of the US and all the countries where we do business” and all exports of military equipment was “subject to an exacting US government review and approval process”.
A spokesperson for Cbus Super said the fund “acknowledges the community concern over the conflict and loss of life in Gaza and Israel”.
It said the investments identified by the CFMEU “equate to approximately 0.01% of our total funds under management”.
“However, we understand that even a small holding in the current climate may cause concern,” the Cbus spokesperson told Guardian Australia.
Cbus already excludes investments in companies directly involved in certain controversial weapon manufacturing such as cluster munitions, biological and chemical weapons, anti-personnel mines, depleted uranium, incendiary and white phosphorus weapons where involvement relates to core weapons components.
It is understood Cbus has not historically excluded conventional weapons, on the basis that many nations – including Australia – rely on investment in conventional defence assets for national security.
Cbus confirmed it was now reviewing the policy to ensure it was “responsive to our members’ concerns”.
The CFMEU sponsors three of the six union-sponsored directors on the Cbus board, where there are also six directors appointed by employer organisations and two independent board members.
Cbus is chaired by Wayne Swan, the former federal treasurer and current Labor party president.
Smith also called on the Australian government to “immediately ban any military cooperation with Israel”.
The Australian government has said it has not approved the export of any weapons to Israel for at least the past five years, but defence officials confirmed they did not classify components – such as parts for F-35 aircraft – as weapons.
On Friday, the Australian Greens will call on the government to expel the Israeli ambassador, Amir Maimon, “until the state of Israel abides by the orders of the international court of justice” including allowing the unrestricted flow of aid.
The prime minister, Anthony Albanese, said on Thursday that his government had reiterated to Israel “our opposition [to] a ground invasion in Rafah because we’re concerned about the civilian population there”.
