- The Washington Times - Sunday, May 20, 2007

GENEVA

Targeted policies by Norway against investments in cluster-munitions companies and a new law in Belgium that prohibits financial institutions from offering credit or services to cluster-munition manufacturers are expected to bring similar steps by more governments and corporations, arms-control diplomats and specialists say.

These efforts are likely to gather momentum in Canada, the Netherlands, and other countries as advocacy groups intensify efforts to end the use of such weapons, most of whose victims for years after the cessation of hostilities are overwhelmingly civilians, studies show.

Cluster munitions are shells that are designed to come apart near ground level and disperse many smaller “bomblets” over a large area. Usually they are dropped by planes, and most often are intended for use against enemy infantry.

“Civilians are almost the sole victims of cluster munitions [and account for] 98 percent of casualties,” said a report issued Wednesday by Handicap International (HI), an advocacy group that examined the effect of such weapons in 25 countries and regions.

The report by HI, co-recipient of 1997 Nobel Peace Prize, estimated that casualties from cluster munitions were as high as 4,132 in Afghanistan; 2,989 in Iraq; 587 in Lebanon as of last month; and 4,000 in Laos, where 52.9 million cluster bomblets expended there by U.S. and allied forces during the Vietnam War fell near villages.

Altogether, Handicap International estimates that more than 440 million cluster bomblets have been used in the past 42 years and believes the number of casualties worldwide could be as high as 100,000. HI also says 400 million people living in affected areas are at risk from unexploded cluster bomblets.

Global effort

Officials from 70 countries are to meet Wednesday through Friday in Lima, Peru, to advance international talks begun three months ago in Oslo to try to draft a global treaty next year banning certain cluster munitions that cause unacceptable harm to civilians.

The Lima talks are intended to increase the momentum and define what a future treaty should contain, which cluster munitions to prohibit and how to prevent further proliferation, and to create a framework of how to provide aid to victims, clear contaminated land and destroy stockpiles, said Norwegian Ambassador Steffen Kongstad.

Patricia Lewis, a British nuclear physicist and arms-control specialists who heads the U.N. Institute for Disarmament Research (UNIDIR), told reporters that the process begun in Norway “is raising the standard for international negotiations.”

She said the talks on cluster munitions and other recent arms-control initiatives, are putting the spotlight “on the moral and humanitarian aspects of their use.”

U.N. Secretary-General Ban Ki Moon, like his predecessor, Kofi Annan, and United Nations humanitarian agencies support the Oslo process to conclude a treaty on cluster munitions, according to U.N. diplomats.

“We hope [the diplomatic efforts] lead to a strong treaty to ban cluster munitions,” said Stan Brabant, chief for international policy at Handicap International.

The United States does not favor a new treaty but seeks technical improvements to enhance the accuracy of the weapons — which is opposed by some other major powers such as China, because of cost — and recognizes the humanitarian problems caused by use of cluster munitions, arms control, analysts said.

The U.S. is the largest contributor of funds for mine clearance.

John Borrie, a U.N. arms-control specialist, said that in the recent conflict in Lebanon, 90 percent of the victims of cluster munitions — used on a large scale by Israeli forces, but also by militant group Hezbollah — were civilians.

Mr. Borrie said such weapons have two hazards: At the time of use, it is difficult to target them accurately, and when used near civilian areas, it is difficult to avoid hitting bystanders.

The high failure rate of cluster munitions — between 10 percent and 30 percent — make them deadly for decades after hostilities have ceased. In Lebanon, the recent “dud rate” averaged 25 percent, Mr. Borrie said.

Follow the money

New trends favoring ethical investment guidelines, good governance and corporate social responsibility also put the focus on the role of companies and financial institutions involved in cluster munitions — directly or indirectly — and are expected to add momentum to the global initiative to ban cluster munitions.

In the process, it is likely to see a proliferation in the drawing up of blacklists of companies and financial intuitions involved and calls by concerned groups for targeted divestment initiatives by both private and public institutions such as pension funds.

Norway’s huge government (formerly petroleum) pension fund — with about $300 billion in assets and with equity investment in more than 3,500 companies — has spearheaded the divestment campaigns by pulling out from companies engaged in the manufacture of components for cluster bombs, which it deems inhumane weapons.

In 2005, the fund’s advisory council on ethics advised the exclusion from the fund of General Dynamics Corp., Lockheed Martin Corp, Raytheon Co, and the French group Thales SA on ethical grounds. In 2006, the advisory board also excluded the South Korean company Poongsan Corp.

In an even more forceful step, the Belgian Parliament on March 1 prohibited investment in the production, use and stockpiling of cluster munitions and anti-personnel mines, thus becoming the first country in the world to prevent banks and investment funds operating in Belgium from offering credit to producers of the prohibited munitions.

The law, which also prohibits the purchase of shares and bonds issued by these companies, foresees the drawing up of a “blacklist” of cluster munitions companies. Moreover, a study titled “Explosive Investments” by Belgian advocacy group Netwerk Vlaanderen (NV) has listed 68 financial institutions in 13 countries found to have played a role in financing $12.6 billion in credit facilities from 2004 to 2007 for six cluster-munition producers, including Thales, Lockheed Martin and Raytheon.

Banks that have participated in such financing include Credit Suisse First Boston, Morgan Stanley, Citigroup, Bank of America, Deutsche Bank, Sumitomo-Mitsui Bank, BNP Paribas, Barclays and Bank of Nova Scotia, it said.

The study said the public and affected communities “are increasingly realizing that the blind allocation of capital resources to this kind of company lends legitimacy to these companies and their continuing production of cluster munitions.”

“A strong signal by the financial community that investing in cluster munitions is no longer meeting their ethical standards, would make a big difference,” the Belgian report said.

However, NV analysts note, some mainstream financial institutions have also decided to refused to invest in companies involved with cluster munitions. They include the British Co-op Bank, with more than $23.5 billion under management, which excludes investments in cluster munitions; ASN Bank in the Netherlands, with more than $4 billion in managed assets; and KBC, the Belgium-based insurance group with nearly $265 billion under management.

Other major financial groups and pension funds in Europe and North America are also revising their investment policies, analysts say.

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