Amnesty NZ says a company Kiwi Wealth invests in was the manufacturer of a laser-guided bomb used in June 2019 in a Saudi and Emirati-led air strike on a home in Yemen, killing six civilians including three children.
"We would be appalled if Kiwi Wealth were in any way contributing to human rights violations through their activities," Amnesty NZ's campaigns director Lisa Woods told 1 NEWS. "It would be repulsive for any company."
Kiwi Wealth, the KiwiSaver scheme distributed by Kiwibank, is reconsidering its decision to continue its investment in Raytheon Technologies, which has supplied munitions to Saudi Arabia while it fuels a humanitarian crisis in Yemen.
Earlier this week, both Green Party leaders announced they would be divesting their money from Kiwi Wealth after it decided to keep investing in Raytheon Technologies, and called for broader reform to ensure financial institutions invest ethically.
It comes as ANZ has pulled its investment in three companies with links to the Saudi military and the Yemen War, which included Raytheon Technologies.
The UN have said that there are five million people in Yemen "one step away from famine", with more than 230,000 Yemenis thought to have died in the war. A UN group of experts on Yemen also said there were "no clean hands" within the warring parties, urging outside states to cease transferring arms to the parties at war.
Since the decision to continue its investment, Dame Paula Rebstock, chair of the company that owns Kiwi Wealth and Kiwibank, told Parliament's select committee this week that Kiwi Wealth was reviewing the latest research on Raytheon.
"It does look like there are some developments, both positive and potentially negative," she said. "It is too early to say what the result of that would be in respect to their existing criteria."
Kiwi Wealth is also looking "more broadly" at the criteria it uses in deciding to exclude companies, Dame Paula said.
In a statement, Kiwi Wealth said it was "considering whether any changes to Kiwi Wealth’s exclusion criteria are appropriate, with a specific focus on weapons" and that was expected to take a number of months.
"This will involve research, current customer surveying and reviews of previous surveys, and analysis of any wider impact of further actions if exclusion criteria do change."
Last week, when Kiwi Wealth decided not to divest from Raytheon, it said: "While we do have clear and consistent exclusions, in our experience, reactively excluding companies or whole industries from investment portfolios on the basis of market sentiment or trends in the moment is not a particularly powerful tool or a strong driver of actual change."
It then tweeted on Tuesday, the day after the Green Party leaders divested from Kiwi Wealth, that "given the recent news about Raytheon and their operations in Saudi Arabia/Yemen we are currently undertaking a review of the latest ESG (Environmental/Societal/Governance) research to see if new developments will qualify it for exclusion under our existing criteria".
Amnesty NZ's campaigns director Lisa Woods told 1 NEWS Raytheon’s products "have been used to commit human rights violations in Yemen so there is clearly a concern there".
"Precision guided munition was used in an air strike in a residential home in Yemen killing six civilians including three children," Woods said. "This munition was manufactured by Raytheon.
"We would be appalled if Kiwi Wealth were in any way contributing to human rights violations through their activities. It would be repulsive for any company.
"New Zealanders expect our organisations, private and public, to be human rights respecting. The people overseas facing dire human rights situations deserve better, companies must be carrying out that due diligence.
"The big question for us is whether they’ve done their due diligence to understand whether or not what they’re doing is causing or contributing to human rights violations."
Dame Paula told the select committe Kiwi Wealth used the laws of Parliament to guide it on what is considered appropriate in the New Zealand context to invest ethically.
"I suspect while they are reviewing that it will continue to be their primary guide over what represents an appropriate investment framework."
Kiwibank, who distributes and advertises the scheme on its website, told 1 NEWS it was working constructively with Kiwi Wealth on the matter, when asked if it was comfortable with the continued investment in Raytheon.
"Kiwi Wealth has informed us they are currently reviewing ESG research on Raytheon Technologies and considering whether any changes to its exclusion criteria are appropriate in light of recent developments."
Barry Coates, former Green MP and founder and CEO of Mindful Money, a charity website that shows consumers all the companies their KiwiSavers are investing in, said broader reform around KiwiSaver was "absolutely" needed.
He said people generally found it impossible to see where their funds were going, with many banks or schemes only listing the names of companies.
"Most people find it really hard to know which are weapons producers," Coates said.
In addition, many did not list the indirect investments, with many fund managers seeing a significant amount invested in other funds.
Coates said from the KiwiSavers listed on Mindful Money, 52 were investing in Raytheon.
On Kiwi Wealth's decision to continue investing in Raytheon Technologies, Coates said, in general, the industry was very reluctant to make exclusions from portfolios so it can spread its investments as wide as possible.
"The argument they are going to get lower returns or a higher risk by excluding weapons isn't a very good answer," he said. "Returns of investing ethnically have been sown as high if not higher, with lower risk, while not sacrificing a financial return."
Coates said many New Zealanders wanted their retirement or first house savings to be invested ethically and that broader reform around KiwiSavers was "absolutely" needed.
"I believe that, particularly for a Government regulated scheme where significant public funding goes in, the Government should not only ban investment in controversial weapons for default funds, but there is a strong case across the sector as well.
"It's a little bit different in terms of other weapons producers and military weapons, but there is a sharp line to be drawn around controversial weapons and a sharp line where those weapons in human rights abuses."
Commerce Minister David Clark said he wanted to see the public able to make informed decisions about their KiwiSaver.
"The Government has recently implemented a set of responsible banking rules for default KiwiSaver providers, which require divestment from fossil fuels and illegal weapons, among other things. New default providers will also be required to publish on their websites their responsible investment practices, thereby increasing transparency more generally."
New Zealand's involvement in the conflict has been put under pressure in the last month - with 1 NEWS exposing Air NZ's dealings with the Saudi military, while Stuff revealed ANZ investments in three companies, including Raytheon, that sell weapons or munitions to the Saudi military, which ANZ has since divested from.
The New Zealand Super Fund also was found to have tens of millions of dollars invested in the same three companies. RNZ also reported the Ministry of Foreign Affairs approved permits for the export of military equipment in 2016 and 2018 to Saudi Arabia.