Press Release: International ban on cluster munitions reaches the financial world

 

NGO report identifies continuing financial ties with cluster munition producers amounting to $27 billion – German banks in retreat

(Berlin, 27.11.14) Worldwide there are still 151 financial institutions with relationships to the seven remaining producers of prohibited cluster munitions, worth $27 billion. The majority of financial institutions are located in countries that have refused to sign the treaty on the prohibition of cluster munitions. The Dutch NGO PAX in its new report, “Worldwide Investments in Cluster Munitions: a shared responsibility”, acknowledged this. In June 2012, PAX found business relationships in this area amounting to a sum of $43 billion.

“Fortunately business relations with cluster munitions producers are decreasing, although an all-clear cannot be given. As long as payday loans are still accessible to these producers, their weapons will continue killing people, as can be seen in Syria and the Ukraine”, said Thomas Küchenmeister from Facing Finance, a German member organisation of the Cluster Munition Coalition.

The withdrawal of German financial institutions from this type of internationally prohibited weapons, stands out positively. According to Barbara Happe from Urgewald, the efforts of German civil society are bearing fruit and have led to a change in direction of German financial institutions. Compared to figures in 2011, where business relationships were worth around $1 billion, the current report states that investments decreased to $190 million this year. Two German financial institutions were identified, which, within the framework of asset management, invested in the name of their clients or are invested in the cluster munition industry through index products: Allianz SE ($132 million) and Deutsche Bank ($39 million).

To avoid business with cluster munition producers, NGOs have for years been demanding a prohibition on supporting producers of weapons violating international law – already in place in nine countries. So far, the financial industry favours self-regulation. 76 out of the 151 financial institutions investigated worldwide made a declaration on this issue, although this was vague and inconsistent.

“Germany has to create legal certainty regarding the support of illegal weapon producers and to add an unambiguous prohibition on investing and funding to paragraph 18a (cluster munition, anti-personnel landmines) and 19 (nuclear weapons) of the Military Weapons Control Act” demands Thomas Küchenmeister from Facing Finance.Barbara Happe sums up that only through this measure can this devastating business be prevented.

Furthermore, Facing Finance and Urgewald are calling on financial institutions to take this opportunity to investigate their armament activities in general and to withdraw completely from businesses with illegal weapons (e.g. nuclear weapons, fully automated weapon systems)

The NGO report can be downloaded here 

For further inquiries please contact

Thomas Küchenmeister, Managing Director FACING FINANCE e.V.,

0175-49 64 082

Dr. Barbara Happe, Bankenreferentin (English word for this?) urgewald e.V., 0172-68 14 474