Since the spring of 2006, Belgium is the first land to introduce a ban on cluster munitions. Despite this, the bank groups AXA, Dexia, Fortis and ING invest in cluster munitions. This has been revealed on September 14th in a new report ‘Explosive portfolios’ published by Netwerk Vlaanderen. Although pressure from the campaign ‘My Money. Clear Conscience?’ forced four bank groups to announce their withdraw from investments in cluster munitions, it is apparent that only KBC has completely ended its investments. Meanwhile this summer Israeli use of cluster munitions in Lebanon has been the starting shot for a new humanitarian disaster.

Netwerk Vlaanderen has researched the financial links between five bank groups (AXA, Dexia, Fortis, ING and KBC) and thirteen producers of cluster munitions. The report reveals that these banks invest more than six billion dollars in these companies. The French company Thales, the US company Raytheon, the Korean Poongsan, and the European EADS are examples of companies that are involved in cluster munitions. The report shows that the defence policy of Dexia, Fortis and ING is not satisfactory. These three companies announced in 2005 that they would end their direct investments in, and financing of, cluster munitions. Their investment funds, including some available in Belgium, allow their customers to continue investing in these weapons. Despite the new policies, the investments of Fortis and ING in some cluster munitions producers have even increased. In July 2005, Fortis and ING already called into question the believability of their new policy, by giving direct financing to EADS, a European cluster bomb producer. If ethics stand in the way of important deals with big clients, the banks are able to use convenient loopholes in their policy. AXA continues to be the only bank group that has not introduced any restriction regarding cluster munitions. AXA invests more than 5.5 billion dollars in the investigated producers.

The good news comes from the bank group KBC. This is the only bank group to have completely withdrawn from cluster munitions. KBC has already placed nineteen producers of cluster munitions on a black list. The policy of KBC is also ahead of the other banks concerning the transparency and controllability of the policy.

Government must act

The report shows that self-regulation is not enough to halt the flow of money to cluster munition producers. Netwerk Vlaanderen calls on the government to take initiative. Now that Belgium has a ban on cluster munitions, a legal ban on the investment in cluster munitions is an important next step. The controllability of the ethical promises made by the banks must also be enforced. Public bodies can also give a good example by ending their own saving and investments in cluster munitions.