Ms O'Neil, who is an alternate board member on the nation's largest fund, AustralianSuper, doubled down on the ACTU's demand that industry funds intervene in an industrial dispute with mining company BHP.

'We have outperformed the banks'

She also emphasised the influence of unions on the boards of industry funds.

"We built the success of the system on the back of our [equal representation] model and we have outperformed the banks," she said.

"Workers and employers coming together for the common good of all is a model to be proud of, not one to break to help the executive of big banks meet their bonus targets."

Industry funds have benefited from compulsory super being siphoned into them by default arrangements under industrial awards.

But they have also achieved superior investment returns, thanks largely to the purchase of unlisted assets, and benefited from the outflow of members from scandal-plagued bank-owned funds.

Ms O'Neil said super funds should treat poor employment conditions as an investment risk, just like tobacco and carbon emissions.


"Companies take stands on workers' rights all the time: sometimes seeking to improve them, often seeking to undermine them.

"These are overt risks to the capital of workers and should be part of our considerations when making investment decisions."

Seeking active support

With Labor on the cusp of forming government, the ACTU has called for a $43 a week increase in the minimum wage – a pay rise of 6 per cent – as the first step of a two-year push to create a "living wage".

Ms O'Neil drew a direct link between the current wage environment and the incomes of working people in retirement.

"If working people's jobs are insecure so too are their incomes," she said. "If working people's living standards are dropping so to will their retirement savings."

Last month Ms O'Neil wrote to 30 industry funds to seek their "active support" in dealing with alleged human rights and social governance failures by BHP.

She wanted them to seek urgent meetings with BHP to convince the company to reverse its decision to terminate vessel management and crewing arrangements for two ships that carry iron ore from WA to Bluescope's Port Kembla steelworks in Newcastle.


The ACTU claims that ending the shipping arrangement will cause up to 80 domestic seafarers to be replaced by foreigners, which would constitute a breach of human rights obligations and be an affront to the "intent" of Australian shipping laws.

The non-profit, or "profit to member", super sector is worth $1.4 trillion and includes industry, public sector and corporate funds.

These funds share a governance model whereby unions are responsible for appointing about half of the board members and employer groups the other half. Of the $1.4 trillion, industry funds have the greatest share of assets at $629.6 billion at the end of 2018, according to Australian Prudential Regulation Authority figures.

The self-managed super segment was worth $726.5 billion at the end of 2018, although Rice Warner projections are for industry funds to move ahead in 2020.

'Super funds do not operate in a bubble'

The Australian Institute of Superannuation Trustees, which represents non-profit funds, said the role of trustees was to understand and assess material environmental, social and governance risks and how these might affect returns.

"Super funds do not operate in a bubble and advocacy groups will always be bringing issues to them to consider for action," chief executive Eva Scheerlinck said.

"[Members of AIST] have proven themselves to take an active approach to ownership and have used their collective power to influence company policies and behaviours in the companies they invest in.


"They have proven over the long term that they do this responsibly and arguably this has contributed to [their] out-performance."

Ms Scheerlinck said union-appointed and employer-appointed directors sat in equal numbers around the boardroom table.

"This ensures that no one group dominates the board decisions and on the very rare occasions where decisions require a vote, at least two-thirds of board directors must support the decision for it to be acted upon," she said.

Super money 'new way of ensuring fairness'

Ms O'Neil rejected claims that she was behaving as an activist trustee.

"I call it acting in the members interest," she said, adding that the business elite was "afraid".

"Afraid working people might realise that with more funds under management than the big four banks they have a new way of ensuring fairness," she said.

"Afraid that working people might understand that as a part owner in the company, through their superannuation fund, they can get together with other owners of the company and ask questions."


Super funds have a legal obligation to act only in the best interests of members and for the sole purpose of providing income in retirement.

Ms O'Neil will be criticised for stepping beyond those boundaries to use super funds as weapons to prosecute the ACTU's agenda.

"We should not simply follow the law, we should – as we do with the technical financial elements of our system – seek to lead in ways that will deliver better overall retirement outcomes for working people in this country," she said.

"Our funds have led the way in showing that there is a detrimental link between the retirement outcomes of workers and the financial success of tobacco.

"On issues such as land mines, internment camps and environmental exploitation there is an undeniable risk to the retirement outcomes of working people.

"Our funds have made decisions about those risks. So it is with major companies, in which we invest, choosing to undermine local worker rights while simultaneously exploiting foreign workers."