THE state is to cease investing pension funds in companies who produce weapons and who operate in countries with controversial regimes following previous revelations in the Sunday Tribune.

According to the non-government organisation (NGO) Progressio Ireland, finance minister Brian Lenihan has confirmed that he is committed to the introduction of an interdepartmental committee on ethical guidelines for investment by the National Pension Reserve Fund (NPRF).

It had previously come under fire for putting money in a number of companies who had a presence in Zimbabwe and, in some cases, a role in propping up the corrupt administration of President Robert Mugabe.

Lenihan's commitment came on the same day that legis­lation was presented to the Dáil which would allow the use of the fund for the re­capitalisation of Irish banks.

Progressio Ireland has described the timed announcement as ironic, given that "the need for the legislation is due in part to the banks' lack of ethics".

"None the less this is a highly significant and very welcome announcement. At last the NPRF will soon cease investing in companies that contravene basic human rights, trade in war and destroy the environment," said the group's advocacy officer Emmet Bergin.

Last year, the Sunday Tribune revealed that the NPRF invested around €575m in a range of companies with significant operations and interests in Zimbabwe.