Activists call for a ban on financial investments in producers of cluster munitions
"Worldwide Investments in Cluster Munitions; a shared responsibility"
By Samantha Bolton, Filip Polfliet, and Helma Maas | Brussels, May 25 2011
Worldwide, 166 private
and public financial institutions continue to invest 39 billion USD in
producers of cluster munitions, which like landmines, are banned under
international law. Although some EU countries like Belgium,
Ireland and Luxembourg
are taking the lead in passing legislation that bans investment, many
countries and financial institutions are lagging behind. These are some of
the key findings in the report "Worldwide Investments in Cluster Munitions; a
shared responsibility", issued today by IKV Pax Christi (the Netherlands) and Netwerk Vlaanderen (Belgium)
, both members of the Cluster Munition Coalition (CMC). Survivors and
activists are calling on the European Union and countries around the world to
legislate against these explosive investments. The full report, key findings and tools for campaigners can be found here The European Union
should take the lead. "Cluster bombs are banned under international law by 108 countries. Leading
banks in Europe like Deutsche Bank and the Royal Bank of Scotland should not be investing
millions in producers of these illegal weapons", said Roos Boer, report
author. "We are calling on EU member states and countries around the world to
legislate against these explosive investments", she added.
The report shows that since May 1, 2008, 166 financial institutions continue
to invest US$ 39 billion in eight cluster munition producers included in the
report. This includes:
Providing loans for
at least US$1.5 billion
banking services worth at least US$6.3 billion
Owning or managing shares
and bonds for at least US$30.9 billion
The report found that twenty six financial institutions from EU Member states
are still investing over three billion USD (3,008.8 million USD) in cluster
munitions producers. European Parliament resolutions in 2005, 2007 and 2008
called upon member states to disinvest from cluster munitions but so far just
3 countries have passed laws banning investments. More EU countries need to
The report categorizes retail banks, investment banks, asset management
companies and private and public pensions into a "Hall of Shame"
and a "Hall of Fame" based on their investment practices and
policies and looks at legislative initiatives to prohibit investment in
Hall of Shame in 2011 -
Top 5 investors in producers of cluster munitions in millions:
services: JP Morgan Chase (USA)
US$639.4; Bank of America (USA) US$476.3; Goldman Sachs (USA) US$426.9;
Citigroup (USA) US$347.3; Changjiang Securities (China) US$264.3 -
TOTAL US$2,154.2 million
Sberbank (Russia) US$320; Korea Development Bank (S-Korea) US$128.5;
Bank of America (USA) US$100; Royal Bank of Scotland (UK) and US based
SunTrust Bank, US Bank and Wells Fargo Bank, all at US$80; Mitsubishi
UFJ Financial Group (Japan) US$75 - TOTAL US$943.5 million
Asset management: State Street
Capital Group (USA) US$4,593; Temasek Holdings (Singapore) US$3,920.7;
BlackRock (USA) US$1,816.3; MFS Investment Management (USA) US$1,469.8;
TOTAL US$17,315.4 million
Leading European banks listed in the Hall of Shame include the Royal Bank of
Scotland (UK), Deutsche Bank (Germany),
Société Générale (France)
and Intesa Sanpaolo (Italy).
The Hall of Fame includes: 23 financial institutions with strong policies, including five government
managed pension funds from Norway, Ireland, New Zealand and Sweden, ethical
banks ASN Bank (the Netherlands), Banca Etica (Italy) and Triodos Bank (the
Netherlands) and private financial institutions such as Storebrand Group
(Norway), ATP (Denmark), ABP (the Netherlands) and Folksam (Sweden). These
are all financial institutions from countries that have signed the Convention
on Cluster Munitions (CCM). All but one are from EU member countries.
The runners-up category, which lists financial institutions that took steps
to ban investments in cluster munitions producers but need to strengthen
their disinvestment policy, shows a similar picture: 22 out of the 24
financial institutions listed as a runner-up are from EU member countries.
« It is clear that when EU member states show leadership and legislate
against investments in cluster bombs producers, that it has a positive
impact », said Esther Vandenbroucke, of Netwerk Vlaanderen and one of the
report authors, "There is clearly still too much money flowing from EU member
states to producers of these deadly weapons."
Campaigners around the world are using this report and taking action to push
countries and financial institutions to stop these explosive and deadly
investments. For further information please call:
1.ON THE CONVENTION ON CLUSTER
MUNITIONS On August 1st, 2010, the Convention on Cluster Munitions entered into force
and became binding under international law. As of May 2011, 108 countries had
signed the Convention and 57 had ratified. As of May 2011, 20/27 EU member
countries had signed the convention.
The Convention bans
the use, production, stockpiling and transfer of cluster munitions. The
CMC and an increasing number of countries interpret the prohibition on
assistance of the production/development of cluster munitions as
described in Article 1(1)c as a ban on investments.
Three EU states have
adopted legislation to ban investments: Belgium,
Ireland and Luxembourg.
Several EU member states, like the UK,
France, Germany, Italy
and the Netherlands,
are debating on whether disinvestment from these banned weapons should
be banned by law or not. That several financial institutions from
these countries are listed in the Hall of Shame, should encourage these
states to ban all investments by law.
The report shows
that 128 /166 financial institutions investing in cluster munitions are
from countries that have not yet joined the Convention on Cluster
Munitions (including the China Russia, Singapore,
South Korea, Taiwan and the US). The remaining 38
financial institutions are from nine states which have joined the
Canada, France, Germany,
Italy, Japan, Switzerland,
the Netherlands and
the United Kingdom)
but that have not passed legislation that bans investment in producing
resolutions in 2005, 2007 and 2008 all call for disinvestment from these
20 out of 27 EU
member states have signed the Convention on Cluster Munitions. 7 EU
states have not yet joined the Convention on Cluster Munitions.
15 of these 20 EU
signatory states have already ratified the Convention. The remaining 5 did not ratify yet.
3 out of the 4
states worldwide that have legislation that bans investments in cluster
munition producers are from the EU (Belgium,
44 of the 47
financial institutions that are commended for their disinvestment policy
in the report are from the EU.
institutions from EU member states are still investing in cluster
munitions (from France,
Germany, Italy, the Netherlands
and the United
Kingdom). The total investments by
these 26 financial institutions from EU member states is 3 billion.
The EU has shown
good progress to ban investment but more needs to follow through. All EU
states should adopt legislation to ban investments in cluster munitions
3. ON THE EP RESOLUTIONS The Resolution on a Mine-Free World on 7 July 2005 explicitly addresses the
role of financial institutions. It "calls on the EU and its Member States to
prohibit through appropriate legislation financial institutions under their
jurisdiction or control from investing directly or indirectly in companies
involved in production, stockpiling or transfers of anti-personnel mines and
other related controversial weapon systems such as cluster sub-munitions."
In October 2007, this call was repeated in the European Parliament's
Resolution Towards A Global Treaty To Ban All Cluster Munitions. This
resolution calls for "an immediate moratorium on using, investing in,
stockpiling, producing, transferring or exporting cluster munitions,
including air-dropped cluster munitions and sub-munitions delivered by
missiles, rockets, and artillery projectiles, until a binding international
treaty has been negotiated on the banning of the production, stockpiling,
export and use of these weapons."
In November 2008 the Resolution on the Convention on Cluster Munitions, was
adopted. The resolution calls upon EU Member states to "sign, ratify and
implement the treaty at the earliest opportunity", and calls on states "not
to use, invest in, stockpile, produce, transfer or export cluster munitions
until the Convention on Cluster Munitions has entered into force;"
The most recent resolution on cluster munitions was adopted in July 2010 to
welcome the Convention's entry into force on 1 August 2010 and called upon EU
Member states to sign the Convention on Cluster Munitions "as a matter of
urgency before the end of 2010" . To date, the following EU countries have not signed the Convention: Estonia, Finland,
Greece, Latvia, Poland,
Romania and Slovakia.
LIBYA UPDATE Cluster munitions still pose a serious threat to humanity. In mid- April this
year, loyal Kadhaffi government troops fired cluster munitions in residential
areas in the Libyan city of Misrata, putting civilians at great risk. The
MAT-120 type cluster munitions used during the attack were produced in 2007
by the Spanish company Instalaza SA. At the time of production and sale of
these cluster munitions to Libya,
several European banks had outstanding loans to Instalaza: Deutsche Bank (Germany), Barclays (UK)
and 8 Spanish banks (Cajalón (Grupo Caja Rural), Caja España, Caja
Mediterráneo, Bankinter, Ibercaja, Banco Popular, Sabadell and La Caixa.)
Thanks to the Spanish government banning cluster munitions in July 2008,
Instalaza halted their production. However, production of cluster munitions
still goes on in countries that have not signed up to the CCM yet.
Governments should make sure no investments are made into those companies by
not only forbidding production but also forbidding investments in producers
of cluster munitions elsewhere. ________________________________
The research on financial investments and producers of cluster munitions was
executed by Profundo.