The Convention on Cluster Munitions bans the use, production, stockpiling and transfer of cluster bombs. It also prohibits all countries that have joined the Convention to assist anyone in any activity banned under the Convention, such as the production of cluster bombs. So far, more than 100 countries have joined the Convention.
Although countries that have joined the Convention must stop producing cluster bombs, these weapons are still being produced in some countries that have not yet banned them.
Investing in cluster bomb production
Some banks and other financial institutions in or from countries that have joined the Convention continue to fund the production of cluster bombs by investing in corporations that manufacture them elsewhere. This undermines the commitment that these countries have made to ban these deadly weapons and runs counter to their obligations under international law.
Although the Convention does not explicitly ban investments in cluster munition producers, Article 1(c) bans "assistance" in the production of cluster munitions, stating that: "Each State Party undertakes never under any circumstances to assist, encourage or induce anyone to engage in any activity prohibited to a State Party under this Convention”. So far, several countries have interpreted "assistance" to include investments in companies producing cluster munitions.
Financing and investing are active choices, based on a clear assessment of a company and its plans. Investing in a cluster munition producer therefore is a choice to support the production of weapons that cause unacceptable harm and undermines the commitment that the majority of the world’s governments have made to ban cluster munitions by joining the Convention.
Handicap International and the CMC are calling on all States to ban all investment in the production and trade of cluster munitions.
What is the situation in the UK?
The Convention on Cluster Munitions entered into force for the UK on 1st November 2010. The Convention's prohibitions are implemented in UK law through the Cluster Munitions (Prohibitions) Act 2010. The Act makes it illegal for UK citizens to manufacture, use or transfer cluster munitions in the UK or anywhere else in the world.
When the Bill that led to the law was passing through Parliament, questions were raised during debates in both Houses about whether the financing of cluster munition production was prohibited under the legislation. The text of the Act does not explicitly include a prohibition on investment in, or provision of financial services to, companies involved in the production of cluster munitions.
In response to parliamentary questions the Government issued a Ministerial Statement on 7th December 2009 confirming that “under the current provisions of the Bill, which have been modelled upon the definitions and requirements of the convention, the direct financing of cluster munitions would be prohibited. The provision of funds directly contributing to the manufacture of these weapons would therefore become illegal.”
Currently, the UK legislation does not prohibit indirect financing of cluster munitions. But the previous government indicated that it would take action. It stated its intention to work with the financial sector, NGOs and other interested parties, to promote a code of conduct to prevent indirect financing, and stated that, if necessary, it would initiate legislation. However, the Coalition government has so far taken no action on the issue.
About the campaign
To help monitor and curtail the flow of funds to corporations that still manufacture cluster munitions, the Cluster Munition Coalition set up the Stop Explosive Investments campaign. The campaign aims to:
- raise public awareness about the financial institutions investing in cluster munition production,
- encourage financial institutions to articulate clearer guidelines on ethical investment with respect to cluster munitions,
- urge governments to adopt legislation banning investment in cluster munitions.
