The Santiago Principes, also known as the Generally Accepted Principles and Practices or GAPP, represent an important step forward in the ongoing debate over the international legitimacy of SWFs. Indeed, both the process of creating the Principles as well as the Principles themselves proved important in attenuating suspicions and fostering dialogue among sponsor countries and target countries.
But it’s not all rosy. Many have complained that the Santiago Principles didn’t go far enough. After all, they are a voluntary set of guidelines with no reporting or compliance requirements. Many of the people I’ve spoken to feel this is a big weakness; the sincere hope is that the new International Forum will add some teeth to GAPP.
And yet, not all SWFs are waiting around to see what comes out of the Forum. For example, the New Zealand Superannuation Fund has just published a detailed list of responses to the Santiago Principles. The seven page document isn’t very detailed, but it is fascinating. At a glance, you can see how the NZSF stacks up to the various Principles.
NZSF is already one of the best governed SWFs out there, so its willingness to respond to GAPP is not all that surprising. Nonetheless, I still think this is a big step forward; this report may eventually serve as the model for a generic compliance procedure for GAPP. Some additional details would be welcomed, but this is a productive start.
My only remaining question: Who’s next? Ireland? Australia? Or how about China? Anybody? Anybody at all? Bueller?
Can anyone tell me the difference between Austrailian Superannuation and NZ Superannuation?