Some 88 financial institutions, including the Ticino firm Lemanik, invested $9 billion (CHF9 billion) in seven producers of banned cluster bombs this year, a new report has revealed. This represents a major downward trend compared to last year.This content was published on December 3, 2018 - 12:23
According to the Worldwide Investments in Cluster Munitions report for 2018, the global ban on cluster munitions is having an “extraordinary impact” on limiting investments in cluster munitions.
The overall number of financial institutions that fund the banned munitions fell from 166 in 2017 to 88 this year, said the report by the Dutch NGO Pax, which was released on Monday by the Geneva-based Cluster Munition Coalition. The global level of financial investment fell from $31 billion to $9 billion.
The authors said this was partly due to halt in production and delivery of cluster munitions by two major US-based manufacturers, Textron and Orbital ATK.
Ten years after the international ban on cluster munitions was signed in Oslo, Norway, the Convention on Cluster Munitions has been “overwhelmingly successful”, the report added.
It said that there had been a marked increase in the number of financial institutions explicitly excluding investments in cluster munitions producers - now at 110. There has also been a significant rise in the number of states taking steps to prohibit investments in cluster munitions from 38 to 46.
Nonetheless, the report identified seven companies based in four countries that continue to produce the deadly munitions. These include four existing firms - China Aerospace Science and Industry (China), Hanwha (South Korea), Norinco (China) and Poongsan (South Korea) – and three newcomers - Avibras (Brazil), Bharat Dynamics Limited (India) and LIG Nex1 (South Korea).
For purportedly investing $1.5 million in Poongsan, the Ticino institution Lemanik was put on the report’s “Hall of Shame” – a list of banks, pension funds and other financial institutions that have invested in cluster munitions producers since June 2012. Credit Suisse dropped out of the listing in 2017.
Elsewhere, the Alternative Bank Schweiz became the first Swiss financial institution to be added to the report’s “Hall of Fame” – a list of 48 financial institutions from 13 countries with comprehensive ethical policies that aim to exclude any financing of armaments companies or defence providers.
The report ranked Swiss banks UBS and Vontobel as so-called “Runner’s Up” for reportedly small investments.
“To gain a place in the Hall of Fame, UBS should extend its policy to all actively managed funds, as well as its passively managed funds and all externally managed assets,” the authors wrote.
It added: “Vontobel should expand the scope of its policy to cover all products, including its passively managed funds and the assets managed for clients.”
Switzerland ratified the cluster munitions ban treaty in July 2012, four years after it was launched, after a lengthy national consultation process. It has been focusing on destroying a large stock of 201,895 cluster munitions, comprising four different types, built up between 1988 and 2004. It is expected to complete destruction of its stockpiles by the end of 2018.
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