Controversy A/HRC/RES/42/25

11,854 deaths to begin with

Let’s get straight to the facts: official Venezuelan government statistics show that 1,569 people were killed by law enforcement officers between the 1st of January and the 19th of May this year. This figure adds up to a terrible toll: 5,287 people died during police operations in 2018 and 4,998 in 2017.

The Office of the United Nations High Commissioner for Human Rights does not hesitate in describing these killings as “assassinations”, which the Venezuelan government is trying to justify as alleged “resistance to authority”. For their part, NGOs denounce “extrajudicial executions”, which are much higher than the official figures.

On the 27th of September, the UN Human Rights Council decided to set up a one-year fact-finding mission. The mission’s purpose is to establish the facts and shed light on human rights violations in Venezuela. The resolution was adopted under the reference A/HRC/RES/42/25, which explains the cryptic title of this communiqué. The full text is available online and deserves careful reading.

An ethical issue

Any management company likely to hold bonds issued by the Venezuelan government – or public companies under its control – must position itself accordingly. It is not just a matter of improving the average rating of portfolios or discussing models, scales and weightings. The subject is not “ESG” but ethical.

Our investors have asked us about Venezuela: our very international management leads us to build broadly diversified portfolios containing Latin American allocations. Our product range includes a term fund investing mainly in emerging markets.

We have therefore launched a complete review of the positions held within Anaxis’s funds. This review allows us to communicate our investors’ concerns regarding our portfolio exposure to Venezuela transparently and accurately.

It has also prompted us to implement additional exclusionary measures to avoid running the moral hazard of contributing to the financing of an authoritarian government or the personal enrichment of certain local politicians.

A tragic situation

First, it is essential to clarify the situation. On the 4th of July this year, High Commissioner Michelle Bachelet presented a report on Venezuela’s situation and gave an account of the investigations carried out by her services. The official United Nations website states the following:

The Office of the High Commissioner notes that this situation is not unrelated to a “strategy” implemented over the last ten years and especially since 2016. A policy “aimed at neutralizing, repressing and criminalizing political opponents and critics of the government.” A series of laws, policies and practices have restricted democratic space, dismantled institutional checks and balances, and unleashed severe violation patterns.

This new document, covering the period from January 2018 to May 2019, is based on 558 interviews with victims and witnesses of human rights violations in Venezuela and eight other countries. The report also notes that as of the 31st of May 2019, 793 people, including 58 women, were arbitrarily deprived of their liberty. Of these, nearly 22 deputies of the National Assembly, including its president, were deprived of parliamentary immunity.

While welcoming the recent release of 62 political prisoners, the High Commissioner called on the authorities to release all other persons detained or deprived of their liberty to peacefully exercise their human rights. […]

“Pro-government armed civilian groups, also known as colectivos, have contributed to the deterioration of the situation by exercising social control and helping to suppress demonstrations,” the Office said. The OHCHR documented 66 deaths during demonstrations between January and May 2019, 52 of which were attributed to government law enforcements or colectivos.

The Venezuelan people are living in a tragic situation of violations of constitutional law, media censorship, intimidation, abuses by armed militias, arbitrary detention, torture and extrajudicial executions. In particular, the Special Forces (FAES) terrorise the population, as confirmed by investigations by the NGO Human Rights Watch.

Venezuelans are fleeing a country that has become unliveable. Walter Stevens, the European Union’s ambassador to the UN in Geneva, believes that Venezuela is currently experiencing “the fastest refugee and migrant crisis in Latin American history, at least in recent history” and predicts that the exodus could reach 5 million people, a figure that compares with the 31.7 million inhabitants of the Bolivarian Republic of Venezuela at the beginning of 2018. The United Nations Refugee Agency (UNHCR) and the International Organization for Migration (IOM) confirm that this is one of the world’s most severe displacement crises.

Furthermore, the Prosecutor of the International Criminal Court (ICC), Fatou Bensouda, decided in February 2018 to open a preliminary examination of the situation in the country and to investigate the crimes that have been committed in Venezuela since 12 February 2014, the date of the repression of a significant protest movement born within the universities.

For its part, the European Union “considers that the presidential elections held in Venezuela in May 2018 were neither free, fair, credible nor democratically legitimate and that the country urgently needs a government that truly represents the will of the Venezuelan people”. The European Union has implemented targeted sanctions since November 2017 “to promote change and the search for common democratic solutions”. The sanctions take the form of an “embargo on arms and equipment intended for internal repression”, a “ban on entering EU territory” and an “assets freeze against 25 persons holding official positions and responsible for human rights violations and attacks on democracy and the rule of law in Venezuela”.

Seven of the 25 criminals targeted by European sanctions were added to the list on the 27th of September  following the death under torture of Lieutenant Commander Rafael Acosta Arevalo [9]. They are “members of the Venezuelan security and intelligence forces”.

The position of Anaxis

Sensitive to the tragic situation in Venezuela, Anaxis has decided to exclude from its portfolios any investment in Venezuelan sovereign bonds and any investment in companies owned or controlled, even indirectly, by the Venezuelan State. The exclusion extends to local government issues, derivatives and companies whose beneficial owners are Venezuelan politicians or closely related persons.

An in-depth review of our portfolios has been carried out to ensure the effectiveness of this measure, in particular in the case of the Anaxis Bond Opportunity EM 2020 fund, which invests mainly in emerging markets and has, at the date of this press release, an allocation of 18.3% to Latin American countries.

We reviewed the following for each of the positions held in our portfolios:

  • The nationality of the issuer,
  • The location of its head office,
  • The geographical breakdown of its turnover,
  • The law applicable to emissions,
  • The nationality of the group’s holding company and related companies,
  • The composition of the shareholding and the existence of control,
  • Identifiable beneficial owners.

We can confirm that Anaxis’s portfolios did not contain any exposure to Venezuela. Therefore, it was not necessary to dispose of any securities to align our funds’ composition with our policy of targeted exclusion of Venezuelan government bond issues and securities issued by companies whose activities could benefit Venezuelan political leaders.

More generally, although the private sector is not excluded as such, we have not identified any position in any issuer domiciled in Venezuela, controlled by a Venezuelan entity, or carrying out the majority of its activities in that country.


This press release is also an opportunity to look back on some personal memories. Before becoming President of Anaxis Asset Management, Pierre Giai-Levra attended all the United Nations Sub-Commission sessions on Prevention of Discrimination and Protection of Minorities at its 46th session held in Geneva from the 1st to 26th of August 1994. Mr Giai-Levra was able to hear the reports of the Special Rapporteurs and testimonies from NGOs and the pre-voting debates on resolutions and discussions on recommendations to the Commission on Human Rights.

The work of the United Nations in the field of human rights has attracted legitimate criticism. The resolutions do not mask the tragic impotence of the multilateral body. They have not prevented many crimes from being committed. That said, in the 1990s, the Sub-Commission initiated new debates on genocide and drew attention to Bosnia and Herzegovina and Burundi. It was also responsible for progress on the definition and prohibition of weapons of mass destruction.

Additionally, in 1994, stickers depicting anti-personnel mines were put up in the institution’s lobby to raise awareness among officials and their visitors of this severe humanitarian problem. The Oslo Treaty in 1997 followed and the transposition into French law in 1998.

No ethics without commitment

Of course, the voting of Venezuela onto the Human Rights Council on the 17th of October appears to be a sinister paradox which could lead to discouragement. This country, a previous member of the Council in the recent past, will sit alongside other authoritarian states such as Mauritania, Libya, and Sudan. There can be no mistaking the objectives of these regimes. It is not in any way “to promote and protect human rights”, in the words of the Council’s difficult mission. Moreover, the Council is significantly weakened by the withdrawal of the United States, announced on the 19th of June 2018, so its legitimacy could be questioned.

However, despite attempts by some states to block the Human Rights Council’s work by using their representatives on the Council to thwart its work, investigations are progressing, reports are being published, recommendations are being made, and projects are being discussed.

The Council continues its investigations into human rights violations in Venezuela, but also in Syria, Yemen, Burundi, Burma and South Sudan. It establishes precise facts, gathers evidence, and collects testimonies. States must be accountable for their political choices and NGOs benefit from relaying their actions in favour of a more humane world.

No one can now ignore the political and humanitarian situation in Venezuela. It is up to us, as investors and managers, to take a stand on this subject. The extreme violence of this regime’s crimes reveal the need to give our allocation choices a genuinely ethical dimension. When it comes to murder, torture and violations of fundamental rights, a subtle extra-financial rating process is no longer relevant. A clear commitment must be publicly affirmed and this is the motivation for this press release.