The global treaty banning cluster munitions is having a major impact on limiting investments in these weapons.
This is one of the conclusions of the Worldwide Investments in Cluster Munitions report released by PAX and the Cluster Munition Coalition today.
There is a lot of good news in the report. Two arms manufacturers have fully ended the production and delivery of cluster munitions and have been removed from the list of producers. Closely related is a dramatic drop in investments in cluster munitions producers worldwide from US $31 billion in the 2017 report to $9 billion in this 2018 update. Also, an increasing numbers of banks and other financial institutions as well as states are taking action to end money going to cluster munitions producers.
“States increasingly understand that investing in cluster munitions contributes to the continued production of those weapons. At a time when cluster munition use has reappeared in the conflicts in Syria and Yemen, it is more critical than ever to end investments in these internationally banned weapons,” said Michel Uiterwaal, project lead on cluster munitions at PAX and co-author of the report.
Continued production cause for concern
Still, there are seven companies in the report involved in the production and development of cluster munitions, three of them new on the list. The report lists 88 financial institutions that still invest in cluster munition producers. Together, they invested a total of US $9 billion in the seven cluster munitions producers identified. This is a decrease from US $31 billion in investments listed in the previous report, due mainly to the fact that two major US based companies that were listed as cluster munition producers in earlier years have since ended their production and delivery. This is an important positive development especially for the US, which has yet to join the international treaty prohibiting cluster munitions ten years after it first opened for signature. However, the fact that three of the seven producers in the 2018 report are new additions to the producers list, shows the importance of continued attention to the issue.
New producers
“The dramatic drop in both the number of investors as well as the total amount invested compared to the previous report shows how institutions globally are rejecting cluster munition production. Still, we need to focus on the emergence of new producers as well as the continued investments in cluster munitions worldwide,” said Hector Guerra, director of the Cluster Munition Coalition.
PAX divestment campaign proves effective
In 2009, PAX published a first report on the companies that produced cluster munitions and the financial institutions (including banks, insurance companies and pension funds) that invested in those companies. Since then, much has changed. It has become common for financial institutions to exclude producers of cluster munitions from their investments, because investing in such a company contributes to the production of prohibited weapons.
The report released today shows good examples of 110 financial institutions from around the world that have policies in place to not invest in cluster munition producers, a significant increase of 22 from the previous report. This shows how widespread the rejection of cluster munition producers has become in the financial sector. This is having an impact on the producers, which is evidenced by the fact that since 2009, 5 companies have stated they would stop the production of cluster munitions. Most recently, the American companies Orbital ATK and Textron announced they would no longer produce cluster munitions. Orbital ATK later published a report explicitly mentioning pressure from the financial sector, especially in Europe, on companies producing cluster munitions.
More states stepping up
A growing group of states is also stepping up to their responsibility. The PAX report shows that eight more countries have stated they consider investments in cluster munitions to be prohibited under the Convention on Cluster Munitions, or that have adopted national legislation prohibiting these investments. The total number of countries that have taken such steps is now at 46.
“It is clear from this latest report that civil society activism and clear guidelines set by governments have played a key role in global divestment from cluster munitions producers,” Uiterwaal added.