UK Government remains silent on cluster bomb investments as new report shows UK banks still investing hundreds of millions in cluster bomb producers.
London, 14th June 2012. Despite policy changes from several major UK banks in the last twelve months, financial institutions in the UK are continuing to invest hundreds of millions of pounds in companies producing illegal cluster munitions, according to a new report released today.
The report ‘Worldwide Investments in Cluster Munitions: A Shared Responsibility’, by Cluster Munition Coalition members IKV Pax Christi and FairFin, identifies137 financial institutions worldwide that have invested more than $43 billion in producers of cluster munitions since 2009 [1].
The report shows that nine UK-based financial institutions, including Barclays, Aberdeen Investment Management, and Invesco, continue to hold major investments in companies that produce cluster munitions [2]. Thanks to pressure from UK campaigners, several of the worst offenders identified in 2011, including the Royal Bank of Scotland (RBS) and Lloyds, have recently introduced policies banning a range of investments in cluster bomb producers [3]. However, no UK institution has so far done enough to qualify for the report’s ‘Hall of Fame’ listing institutions that have ended all investments in cluster munitions producers.
“Allowing UK banks to invest in cluster bomb producers is comparable to producing these illegal weapons ourselves. This is against the spirit of the Convention on Cluster Munitions which prohibits any form of assistance in the production of these weapons”, said Beatrice Cami, spokesperson for Handicap International UK.
The Convention on Cluster Munitions entered into force in August 2010, making it illegal for State signatories, including the UK, to use, produce, stockpile, or transfer cluster munitions, or to assist any other party to engage in these activities [4]. Handicap International believes that financial investment in the production of cluster munitions is a form of assistance, and is calling on States to ban all investments in the production and trade of cluster munitions.
In 2009, the UK government stated its intention to put a stop to all investments in cluster munitions, reserving the right to legislate further if necessary [5]. However, the Foreign Office now sees indirect investments as a matter for individual institutions to consider under their own investment charters [6]. The government has appeared unwilling to clearly state its support for the work of banks and NGOs towards ending these lethal investments. Campaigners are now questioning the UK’s commitment to tackling the issue.
“However cluster bombs are funded, their impact is the same: they kill and maim innocent men, women and children, with civilians representing a staggering 98% of recorded casualties. Direct investment in cluster bomb production is already illegal under UK law, so how is it acceptable to hold shares in companies that produce these vicious weapons?”, said Beatrice Cami.
Millions of unexploded cluster bombs are still on the ground, claiming the lives and limbs of civilians and devastating communities in some of the poorest countries in the world. Every day, Handicap International teams on the ground in countries like Lebanon and Afghanistan witness the terrible impact of these weapons, and meet victims who are often unable to access the support they need to rebuild their lives.
“Through its silence on cluster bomb investments, the UK government is in danger of failing in its commitment to the victims of these inhumane weapons, despite the progress made in other areas. Our campaigners are calling on the Foreign Office to issue a statement supporting the positive steps taken by some UK banks to disinvest and encouraging more institutions to follow suit”, said Beatrice Cami.
Some countries, including Belgium, Ireland, Italy, Luxembourg and New Zealand, have taken the lead by passing national legislation banning investments in cluster munitions. Many leading banks are also changing their policies to reflect the growing international rejection of cluster munitions. The UK government appears increasingly out of step with moves to end all forms of financing of cluster munitions.
“Most of the world has banned cluster bombs because of the severe and long-lasting impact they have, but even some countries that have joined the Convention are still allowing money to be invested in their production. The only way to prevent this is to explicitly legislate against it,” said Laura Cheeseman, Director of the Cluster Munition Coalition.
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Footnotes
[1] The report ‘Worldwide Investments in Cluster Munitions: A Shared Responsibility’ by IKV Pax Christi and FairFin will be available from 14th June 2012, 11.00 Central European Time (CET) at: http://www.ikvpaxchristi.nl/stopexplosiveinvestments and http://www.fairfin.be/en/clustermunitions
[2] UK financial institutions listed in the ‘Hall of Shame’:
The Hall of Shame contains a global list of financial institutions that still invest in cluster munitions producers. The nine UK based financial institutions listed in the 2012 ‘Hall of Shame’ as providing some form of financial services to one or more of the eight companies are: Aberdeen Asset Management, Barclays, Invesco, Lloyds, Old Mutual, Prudential, Royal Bank of Scotland, Schroder Investment Management and Veritas Asset Management.
The eight cluster munition producers named in the report are: Alliant TechSystems (US), Hanwha (Republic of Korea), Lockheed Martin (US), Norinco (China), Poongsan (Republic of Korea), Singapore Technologies Engineering (Singapore), Splav (Russia), and Textron (US).
[3] UK financial institutions listed as ‘Runners-up’:
The runners-up list includes financial institutions that have implemented an investment policy on cluster munitions that shows certain shortcomings. Three UK financial institutions have joined the 2012 runners-up list, having published disinvestment policies: Royal Bank of Scotland, Lloyds Banking Group and Aviva. Two UK institutions already in the runners-up list are also commended for having substantially strengthened their policies: Co-operative Financial Services and HSBC. However, so far no UK institution has met the criteria for inclusion in the ‘Hall of Fame’.
[4] About the Convention on Cluster Munitions:
The Convention on Cluster Munitions bans the use, production, stockpiling and transfer of cluster munitions and requires countries to clear affected areas within 10 years and destroy stockpiles of the weapon within eight. The Convention includes ground-breaking provisions requiring assistance to victims and affected communities. The Convention entered into force as binding international law on 1 August 2010. The list of the 111 countries that have signed the Convention on Cluster Munitions can be found at www.stopclustermunitions.org/treatystatus
The full text of the Convention on Cluster Munitions can be found at: http://www.stopclustermunitions.org/the-solution/the-treaty/
[5] Written Ministerial Statement, 7th December 2009, ‘The Financing of Cluster Munitions Production’. The full text can be found at: http://www.stopexplosiveinvestments.org/uploads/pdf/UK%20Ministerial%20statement.pdf
[6] Letter from Foreign Office to supporters of Handicap International UK campaign (including Soroptimist International members), 17th April 2012. http://owl.li/bzxKa
Further notes
About the Cluster Munition Coalition (CMC): The CMC is an international coalition of around 350 NGOs working in some 90 countries. The CMC facilitates NGO efforts worldwide to educate governments, the public and the media about the problems of cluster munitions and to urge universalisation and full implementation of the Convention on Cluster Munitions. http://www.stopclustermunitions.org
The CMC’s ‘Stop Explosive Investments’ campaign: http://www.stopexplosiveinvestments.org
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About Handicap International
Co-winner of the Nobel Peace Prize, Handicap International is an international aid organisation working in situations of poverty and exclusion, conflict and disaster. Our activities include clearing landmines and unexploded ordnance, preventing mine-related accidents through education, assisting survivors with rehabilitation and inclusion and advocating for the universal recognition of the rights of people with disabilities. Handicap International is a co-founder of the International Campaign to Ban Landmines and the Cluster Munition Coalition.
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