US, Euro banks criticised over cluster bombs


At least 146 financial institutions, including big name banks in the United States and Europe, are providing funding and services for producers of cluster bombs, a report said.

The support, estimated currently at a total of $43 billion to seven manufacturers, was continuing in violation of the spirit of an international convention aimed at total elimination of the controversial weapon, the report said.

Produced by the Netherlands-based Profundo consultancy and a grouping of non-governmental organisations (NGOs), it urged governments in the 105 countries who have so far signed the 2008 pact to move to ban investment in the 7 companies.
“It is time for all financial institutions to stop the flow of funds to companies that produce cluster bombs,” Thomas Nash of the Cluster Munition Coalition (CMC) told a Geneva news conference launching the report.
“Producers still have no problem in financing their activities, and many financial institutions seem to have no qualms about financing these producers,” the report said.

Researchers for the study said their findings were based on publicly available information like that supplied by stock exchanges and financial databases.

The report, updating an earlier study issued in London last October, named Bank of America, Goldman Sachs, Citigroup and Deutsche Bank as major providers of services and loans to the seven.

Others were HSBC, Calyon, the corporate and investment banking arm of French bank Credit Agricole and British-based Barclays.

Citigroup spokesman Adam Castellani declined to comment. There was no immediate comment from the other banks. But when the earlier study was released Barclays said in London it took into account the likely use of equipment when providing financial services to arms manufacturers.

Its investment policy explicitly prohibited financing trade in landmines — also banned under an international pact — and cluster bombs, it said.

Among the seven makers of the weapon and components named in the report were diversified manufacturer Textron, aerospace and defence group Alliant Techsystems and defence contractor Lockheed Martin, all US based.

Textron said it was in contact with NGOs and nations involved in the Convention on Cluster Munitions on ways to limit the danger of hazardous unexploded ordnance. It said its system ensured 99 percent reliability of its ordnance.

Lockheed Martin, the Pentagon’s top supplier by sales, said it did not produce anti-personnel submunitions. It would cease supplying delivery vehicles for submunitions before the Convention on Cluster Munitions’ transitional period concluded.

Oslo convention

The study did not suggest funds went directly to making cluster bombs — blamed by campaigners for killing and maiming tens of thousands of people mainly in poor countries years after they have been used in conflicts.
“But by investing in a company whose production line includes these weapons you are in effect helping to make them,” said one of the report’s authors, Roos Boer.

The bombs, first used in World War Two, open in mid-air above a target zone and scatter hundreds of bomblets over a wide area. Many fail to detonate and lie dormant, often in farming areas, until exploding when disturbed.

The Oslo convention, under which signatories pledge to ban production, stockpiling and use of cluster weapons, goes into force in August. Most European and many Asian, African and Latin American countries have signed.

But the United States, which says it plans to ban the weapon from 2018, Russia, China, and Israel which the United Nations says made heavy use of it during its war in southern Lebanon in 2006 have so far stood aloof.