Four Things You Should Know About #HESTAdivest #NauruInquiry #Transfield #UniSuper

On August 17th, Transfield Services (TSE) issued a statement to the Australian Stock Exchange (ASX). This statement was not a media release but a compliance report in line with stipulations of the Corporations Act and ASX governance rules.

On August 18th, the sixth-largest superannuation fund in Australia (HESTA) announced that it was divesting from Transfield Services. This follows similar announcements by at least two smaller funds in the previous two years.

Below you will find:

  1. a brief note on the history of HESTA’s holdings and divestment;
  2. information on investment fund managers;
  3. an explanatory note on the significance of Transfield Services’s compliance report to the Australian Stock Exchange and the Select Committee on the Recent Allegations relating to Conditions and Circumstances at the Regional Processing Centre in Nauru.
  4. a note on Transfield Service’s Chair’s efforts (supported in the wings by the IPA and the Assistant Treasurer, Josh Frydenberg) to derail the arguments for divestment from the detention industry into patently irrelevant arguments about industry funds.


HESTA became a major shareholder after the Belgiorno-Nettis family divested its shareholdings in the wake of the boycott of the 19th Biennale of Sydney over its sponsorship by Transfield.

While HESTA had since dropped below the substantial shareholder threshold of 5%, HESTA took the step of divesting a remaining block of $23 million from Transfield Services completely this week. According to HESTA:

human rights abuses inside the offshore detention camps exposed the company to a heightened risk of future litigation that could harm its long term share price performance. [And there is] a substantial body of evidence pointing to the negative impacts of prolonged mandatory detention of asylum seekers [and evidence of] numerous sexual and physical assaults in the detention centres.

Unlike most other superannuation funds which have some level of investment in companies involved in the detention industry, HESTA was a substantial shareholder of Transfield Services. This is why it’s divestment from this one company is an immense win for the divestment campaign.


Allan Gray and Argo Investments, both of which have significant stakes in Transfield Services, have recently made public comment advising superannuation funds against divestment and to continue to “engage” with (ie, invest in) the company.

Allan Gray is Transfield Service’s largest shareholder (with a current stake of around $100 million in the company). It is also the second-largest shareholder of Fairfax Media (which owns the Financial Review, the Age and Sydney Morning Herald). Allan Gray is also contracted to manage the investments of a range of superannuation funds, including UniSuper.

Argo Investments is one of the top ten investors in Transfield. Ian Martin is the Chair of Argo Investments. Ian Martin is also the Chair of UniSuper’s Investment Committee, the committee that is tasked with appointing and monitoring investment fund managers and determining UniSuper’s investment policy. Argo also has investments in Toll Holdings, another recipient of millions of dollars of detention contracts. After ongoing questioning from members, UniSuper recently stated that they “no longer” held investments in Transfield—there is however ambiguity as to the significance, timing and implications of this statement and, in addition, regarding the extent of UniSuper’s ongoing investments in Serco and Toll Holdings. Is this statement a matter of policy or is the observation of a random occurrence? UniSuper’s reluctance to answer members’ queries with transparency and without ambiguity is a matter of serious concern.

Download the UniSuper Divestment brochure here.


The statement consists of a covering letter to the ASX’s Listings’ Compliance Manager, and an attached “Media Release” titled “Transfield Services sets the record straight.”

While it is referred to as a ‘media release,’ it was issued to the ASX under corporate governance rules laid out in the Corporations Act, and signed off by the EGM Compliance and Group Secretary.

That is, the statement is required as a matter of compliance with the law. Companies are required by law to disclose information that is relevant to current and prospective shareholders so that the financial markets can make an informed decision about whether to invest in the company or not.

Regular disclosure of accurate information is a condition of trading on the stock exchange. Issuing misleading or false information carries penalties, from fines to jail terms.

The statement was issued in the wake of Transfield Services management’s repeated appearances before the Senate Inquiry into the Nauru detention centre. The Senate also requires that testimony before its committees is neither false nor misleading.

All of this is why the statement’s focus is on denying “allegations of misleading the Senate Select Committee.” There are arguments over whether Transfield Services gave false or misleading testimony to the Senate Inquiry. Significant elements of this testimony have been contradicted by other witnesses to the Senate Inquiry.


The Chair of Transfield, Diane Smith-Gander, responded to HESTA’s divestment by attempting to shift the focus from Transfield’s performance—in both the sharemarket and on governance—to a debate about industry funds.

“Industry funds” were established with the introduction of compulsory, private superannuation; are often sector-based funds (eg, health sector and HESTA); and have union representation on their Boards.

They are subject to guidelines that stipulate that investment decisions should be based on maximising members’ returns on their savings, and have recourse to instruments such Environmental and Social Governance guidelines that makes it possible to screen out a particular industry (such as tobacco).

While there are various views about industry funds, privatising pensions and compulsory superannuation, they are tangential if not downright irrelevant to the simple fact that those funds that continue to invest in the detention industry are failing both of the above criteria.

The real question is not whether they should divest, but why they have not already done so.

Four Things You Should Know About #HESTAdivest #NauruInquiry #Transfield #UniSuper

3 thoughts on “Four Things You Should Know About #HESTAdivest #NauruInquiry #Transfield #UniSuper


Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s