Funding of banned cluster bombs – Global explosive investments still rising
While 119 nations have joined the 2008 Convention on Cluster Munitions to rid the world of cluster munitions, in the past four years, 166 financial institutions invested US$31 billion in companies that produce cluster munitions, an increase from $28 billion in 2016.
According to a new report analysing global investments in cluster munitions - Worldwide Investments in Cluster Munitions: a shared responsibility published in May 2017 by PAX - the huge sums were invested in just six companies that continue to produce cluster munitions. Two of these companies are located in China (China Aerospace Science and Industry and Norinco), two in South Korea (Hanwha and Poongsan) and two in the U.S. (Orbital ATK and Textron).
“Cluster bombs are banned for a clear reason, because they disproportionately harm civilians, as is the case with the ongoing use of cluster munitions by Syrian and Russian forces in Syria and by the Saudi-led coalition in Yemen. That is why no banks or financial institutions should put a penny in companies that produce these illegal and harmful weapons, and no company or country should produce cluster munitions,” said Firoz Alizada, Campaigns and Communications Manager at the Cluster Munition Coalition.
Forty-two financial institutions in 11 countries have enacted policies ending all investments in cluster munition producers. Furthermore, 46 financial institutions in 14 countries have taken steps to prohibit investments in companies producing the weapons, however, they must fix loopholes in their policies to put an end to all investments in producers of cluster bombs.
The 166 financial institutions still investing in cluster munitions are in fourteen countries. The vast majority of the financial institutions (151) are from countries that have not joined the Convention on Cluster Munitions. Of these, 85 are from the United States, 30 from China and 27 from South Korea. However, 15 financial institutions that have invested in producers of cluster munitions are from countries that have joined the convention: Canada, France, Germany, Japan, Spain, Switzerland and the United Kingdom. The number of investors in these countries has decreased from 20 in 2016 to 15 in 2017. To fulfill their convention obligations, States Parties to the convention must take action to prohibit investments by all financial institutions.
In strengthening the norm against cluster munitions, ten countries have enacted national legislation banning investments in cluster munitions. In addition, 28 countries have expressed the view that investments in the production of cluster munitions are prohibited.
2017 Explosive Investments / Hall of Shame:
The 10 largest investors in cluster munitions identified in the report are:
- T. Rowe Price (1.8B),
- Vanguard (1.7B)
- JPMorgan Chase (1.3B)
- Black Rock (1.25B)
- Bank of America (1.1B)
- Textron Pension Fund (1B)
- Mitsubishi UFJ Financial (914M),
- China Construction Bank (903M)
- Wells Fargo (871M)
- Capital Group (848M).