Press Release: Four years of cluster munitions: Use forbidden! investment allowed?

On the occasion of the 4th anniversary of the coming into force of the Convention on Cluster Munitions (August 1) the Cluster Munitions Coalition is continuing to ask the international community to join the prohibition movement, ratify the contract and implement it thoroughly.

There are currently 113 states that have signed the agreement, 29 are yet to ratify it. Russia, China and the US are still non-signatory states although they are officially known to be the most widely engaged users and producers of cluster munitions. Besides the previous three, there are currently 81 other states that have not joined the Convention on Cluster Munitions. Cluster munitions have most recently been used in Syria to devastating effect.

The convention on one hand prohibits any dealings and trading of cluster munitions, this includes manufacturing, use and trade. On the other hand, the banning of investments in weapon manufacturers or rather their funding remains a controversial topic. Certain states have already taken legal action and prohibited such investments; some of these are for example Italy, Luxemburg, Switzerland, the Netherlands and Belgium. The German Federal Government up to this date does not consider the investments in cluster munitions as a breach against the Convention on Cluster Munitions.

Internationally at least 139 financial institutions have business relations to the six remaining cluster munitions manufacturers which add up to around $24 billion, although cluster munitions have been prohibited in international law. These manufacturers are located in states such as China, South Korea and the US according to a study from the Dutch NGO PAX.

The majority of investors are from countries, which have not joined the international prohibition contract for cluster munitions. 22 investors, according to the study, come from six countries that have signed the “Oslo-Convention” to ban cluster munitions. Those include financial service providers from Germany, England and France. “All states, that have joined the Cluster Munitions Ban Treaty must implement an investment prohibition within the framework of their national prohibition laws, that also applies to Germany,” says Thomas Küchenmeister, from Facing Finance eV, a German affiliate of the Cluster Munitions Coalition. He is especially referring to Article 1c of the Treaty, which forbids all state parties to be in involved in manufacturing.

German investors who within the framework of their asset management, directly still invest in cluster munitions manufacturers, or give credits to these, are the Deutsche Bank ($176 million) and Allianz ($160 million). Commerzbank and Deka also belong to the financial institutions that currently, if also just on a small scale, hold shares of cluster munitions manufacturers.