Blood money: 7 UK firms finance globally banned cluster bombs28/11/2014 00:24
Since 2011, 151 financial institutions worldwide have invested £17 billion in firms that produce deadly cluster bombs, which are banned under international law. Seven of these financial institutions are British.
A report entitled ‘Worldwide Investments in Cluster Munitions’ conducted by Dutch peace and security NGO PAX reveals the sheer scale of British and global investment in companies producing these outlawed weapons.
The deadly arsenal have been deployed in Syria and Ukraine in recent times, and continue to cause casualties in Laos half a century after they were dropped on civilians.
PAX’s damning research, published on Thursday, provides a lengthy list of financial firms that invested in or provided financial services to cluster munition producers between June 2011 and September 2014. An array of British investment, insurance and asset management companies feature in the lineup.
Cluster bombs are banned under international law because they are indiscriminate, and fail to differentiate between civilians and combatants. When detonated, they often leave dangerous unexploded materials, which can maim and kill innocent civilians decades after they hit the ground.
While most states deem the use of cluster bombs unacceptable because of the acute humanitarian risks they pose, the weapons continue to be produced in China, Russia and America.
Signed by 115 states, the 2008 Oslo Convention on Cluster Munitions (CCM) was created to address the weapon’s grotesque impact on civilian populations. The treaty prohibits the use, production, transit and stockpiling of these violent armaments.
Embedded in the legislation, however, is a loophole that makes it legal to invest in firms that produce the internationally banned weapons. This form of indirect investment is rife in Britain, Europe, America and elsewhere. Loans issued by financial firms to companies implicated in cluster munitions manufacture doubled from £1.4 billion in 2013 to £2.8 billion in 2014.
British blood money
Under UK legislation, it’s illegal to directly finance cluster bombs. But British law does not prohibit indirect financing of these weapons. So investing in and providing financial services to firms implicated in the manufacture of cluster munitions is legal in the UK.
In total, seven British financial institutions invest in companies that engage in the manufacture or development of these deadly bombs.
UK investment management group, Aberdeen Asset Management, has shares in Singapore Technologies Engineering – a company involved in the manufacture of the weapons. Fidelity Worldwide Investment, headquartered in the British tax haven of Bermuda, holds bonds in the same Singaporean arms company.
And British fund management firm, Invesco, holds shares in American arms company Textron – also implicated in the manufacture of cluster munitions. Like Fidelity Worldwide Investment, Aberdeen Asset Management’s headquarters are in located Bermuda.