DISINVESTMENT from Caterpillar Inc, and other companies "profiting from the illegal occupation" of Palestinian territories by Israel, was the subject of a motion carried by the Synod when it debated ethical investment on Monday afternoon.

The task of the Ethical Investment Advisory Group (EIAG), said John Reynolds, its chairman, was to develop and co-ordinate the ethical-investment policy for the three church investing bodies: the Church Commissioners, the CBF Funds, and the Pensions Board. It had theological understanding at the centre of its work, and sought to promote high standards of corporate behaviour. A key part of the EIAG's role was to screen those companies where investment must be inimical to the Church's mission.

Although the EIAG had a reputation for "banning" investments, in most cases it was keen to engage in dialogue, which many companies welcomed.

Collectively, the Church's investing bodies were, he believed, the UK's largest ethical investment fund. This gave the Church the unparalleled ability to set the agenda.

Aiden Hargreaves-Smith (London) asked what advice the EIAG had given the Church Commissioners in respect of their holdings in Anglo-Dutch Shell, believed to be more than £65 million. Profits of the company had exceeded £13 billion in 2003.

Canon Dr Chris Sugden (Oxford) commended close contacts with bishops and Churches in the regions affected by these ethical-investment bodies.

The Archdeacon of Worcester, the Ven. Joy Tetley, urged the EIAG to consider ethical clothing.

The Bishop of London, the Rt Revd Richard Chartres, urged the group to go further in seeking out and commanding investment vehicles that corresponded to the aspirations of a faith community. Six per cent of investment capacity in the world was in the hands of religious bodies. He suggested that the EIAG should look at renewable energy, and at environmental areas such as reforestation.

The Archdeacon of Newark, the Ven. Nigel Peyton, suggested that the group might look at the financial-services industry.

Mark Russell (Archbishops' Council) argued that investment should protect vulnerable people, and he encouraged the EIAG to look again at Caterpillar Inc. "Fifty-three tons of metal" heading towards a Palestinian house was a weapon.

The Synod took note of the report.

It went on to debate a following motion, introduced by Keith Malcouronne (Guildford). Caterpillar bulldozers had been used by the Israeli military since 1967, but with "increasingly ruthless and devastating effect". He also said that the EIAG should "keep watch" elsewhere, where Caterpillar machinery had been used in the destruction of "illegal" homes in Zimbabwe last year.

Dr John Dinnen (Hereford), a Northern Irishman, said that he was "attuned to conflict", and that the bulldozers were "forms of weapons".

The Bishop of Chelmsford, the Rt Revd John Gladwin, said that the problem was not with Caterpillar, but with the government of Israel: it was they who were demolishing houses. "We must tell our political leaders that their prevarication about Israel is the reason why houses continue to be demolished."

The Bishop of St Albans, the Rt Revd Christopher Herbert, chairman of the Council of Christians and Jews, said that, because the following motion did not mention the Jewish perspective, he didn't think it as well balanced as it should be.

Nevertheless, the Synod carried the motion:
That this Synod:

(a) heed the call from our sister Church, the Episcopal Church in Jerusalem & the Middle East, for morally responsible investment in the Palestinian occupied territories and, in particular, to disinvest from companies profiting from the illegal occupation, such as Caterpillar Inc, until they change their policies;
(b) encourage the Ethical Investment Advisory Group to follow up the consultation referred to in its report (GS 1604) with intensive discussions from Caterpillar Inc, with a view to withdrawing from supplying or maintaining either equipment or parts for use by the state of Israel in demolishing Palestinian homes, etc;
(c) in the light of the urgency of the situation, and the increased support needed by Palestinian Christians, urge members of the EIAG to actively engage with monitoring the effects of Caterpillar Inc's machinery in the Palestinian occupied territories through visiting the Episcopal Church in Jerusalem & the Middle East to learn of their concerns first-hand, and to see recent house demolitions;
(d) urge the EIAG to give weight to the illegality under international law of the activities in which Caterpillar Inc's equipment is involved; and
(e) urge the EIAG to respond to the monitoring visit and the further discussions with Caterpillar Inc by updating its recommendations in the light of these.