Still no End to Worldwide Investments in Cluster Munitions

Activists call on financial institutions and governments to ban explosive investments

Berlin, June 14, 2012 – Today, the two nongovernmental organisations IKV Pax Christi (Netherlands) and FairFin (Belgium) have presented a study on investments in internationally condemned weapons titled “Worldwide Investments in Cluster Munitions; a shared responsibility”.

Worldwide, 137 private and public financial institutions continue to invest almost US$43 billion into producers of banned cluster munitions. Leading financial investors and loan providers include: Citigroup, JP Morgan Chase, Goldman Sachs, Deutsche Bank and China Merchants Bank. The detail and extent of global explosive investments is shown in the 2012 report: “Worldwide Investments in Cluster Munitions; a shared responsibility”. The report by IKV Pax Christi (the Netherlands) and FairFin (Belgium), was released today in Berlin, to put pressure on Germany and other governments to legislate against these kinds of explosive investments.

Like landmines, cluster munitions are banned under international law because they kill indiscriminately. The report looks at financial investments into a short list of companies known for production of cluster munitions. These include: Alliant Techsystems (USA), Hanwha (South Korea), Lockheed Martin (USA), Norinco (China), Poongsan (South Korea), Singapore Technologies Engineering (Singapore), Splav (Russia), and Textron (USA).

Although many states and financial institutions have spoken out against these investments, the worldwide study shows that in the last three years financial institutions:

  • provided loans for a total of at least US$4.1 billion;
  • provided investment banking services worth a total of at least US$8.1 billion; and
  • owned or managed shares and bonds for at least US$30.4 billion.

“After all the financial scandals, crisis and promises to act in a more responsible and transparent way, it is a disgrace that financial institutions continue to invest in banned weapons,” said Roos Boer, co-author of the report for IKV Pax Christi (the Netherlands). “Investing in banned weapons is ethically unacceptable and it is time for governments and banks to ban these explosive investments,” she added.

The majority of the financial institutions that invest in cluster munition producers is from countries that have not yet joined the international treaty which bans cluster bombs. Also of concern, the report demonstrates that there are still 27 financial institutions from countries which have joined the convention that still invest in cluster munition producers.

As well as a “Hall of Shame”, the report also includes examples of good company and national practice. In the “Hall of Fame” and “runners-up” category, 56 financial institutions are credited for disinvesting from cluster munition producers.

We encourage you to read report on “Worldwide Investments in Cluster Munitions: A shared Responsibility”.