Legislation banning investments in cluster munitions provides guidance and direction for financial institutions. This is the core finding of PAX’s latest case study on banning investments in cluster munitions producers. The report, published today, shows that it is not only possible to install disinvestment legislation, but that financial institutions largely think such a ban is a good idea. In the Netherlands, disinvestment legislation has provided clarity and guidance to the financial sector.
PAX has presented its latest report on banning investments in cluster munitions in Dubrovnik today, where States Parties to the Convention on Cluster Munitions (CCM) and campaigners from all over the world have gathered for the convention’s First Review Conference.
PAX’ report looks at the implications and impact of the Dutch prohibition on direct and demonstrable investments in cluster munitions producers. It presents the views of several Dutch financial institutions and other stakeholders on and experience with the disinvestment ban. The report highlights both the perceived positive and negative effects on the ban and, in conclusion, holds that it is not only possible to install disinvestment legislation, but that financial institutions largely agree that such a ban is a positive development.
The report was presented to states today at a side event on disinvestment organised by the Cluster Munition Coalition (CMC) and PAX. The CMC spoke about the international Stop Explosive Investments campaign. PAX presented the new report as well as the findings from the 2014 report ‘Worldwide Investments in Cluster Munitions; a shared responsibility’. This report lists investments in cluster munitions producers as well as examples of states and financial institutions that ban investments in cluster munitions producers.
Action against investments
More and more states are taking action against investments in cluster munitions. Spain recently adopted legislation saying that “[…] it is forbidden to finance or to advertise this type of weapons […] by any means.” With the addition of Spain, there are currently ten states that have put in place disinvestment legislation. Additionally, 27 states consider investments in cluster munitions prohibited under the convention.
National disinvestment legislation
PAX hopes that the report presented today will inspire other states to install national disinvestment legislation of their own. Although the Dutch law on direct and demonstrable investments contains exceptions that weaken the law, it does contain strong elements. The experience with the Dutch law could offer useful insights and lessons on banning investments in cluster munitions producers.
See also our project pages Cluster munitions and Stop explosive investments.