Expatica news

Credit Suisse in cluster bomb investors ‘Hall of Shame’

Over 150 financial institutions including Credit Suisse invested $28 billion (CHF26.8 billion) in companies that produce cluster bombs despite an international ban,according to a new reportby the Netherlands-based peace organization PAX.

The 2016 “Worldwide Investments in Cluster Munitions: a shared responsibility” report includes a “Hall of Shame” – a list of 158 banks, pension funds and other financial institutions that have invested in cluster munitions producers since June 2012.

Cluster bombs were banned under international law by the Convention on Cluster Munitions, a 2008 Oslo treaty which was signed by more than 100 countries. The convention was the result of a years-long campaign against the weapons, which kill indiscriminately.

Most financial institutions in the 2016 report are from countries that have not signed the convention, including the US (74), China (29) and South Korea (26). But 20 institutions that have invested in cluster munitions producers are from signatory countries: Canada, France, Germany, Japan, Spain, the United Kingdom and Switzerland, which adopted relevant legislation in 2012.

These institutions include Swiss bank Credit Suisse, which is accused of investing $8 million in an American firm, Orbital ATK, which appears on a list of cluster munitions producers.

Credit Suisse’s Controversial Weapons Policy states that the bank “will not enter into business relationships with producers of anti-personnel mines and cluster munitions and has terminated any existing business activities with such companies.”

PAX says their policy applies to all commercial banking, investment banking and asset management activities, except for passively managed funds such as funds that follow an index. Furthermore, clients can request to invest in cluster munitions companies via execution-only services. The policy does not apply to Credit Suisse’s external asset managers.

“Runner’s Up”

The report ranks Swiss banks UBS and Vontobel as so-called “Runner’s Up”.

UBS amended its policy to end the direct or indirect financing of controversial weapons. This follows Switzerland joining the Convention on Cluster Munitions in 2012 and subsequent changes made to the Swiss Federal Act on War Materials.

PAX says UBS’s cluster munitions policy applies to its commercial and investment banking activities, and to its actively managed retail and institutional funds, discretionary mandates and UBS-branded third-party managed funds. But third-party labelled funds and passively managed funds do not fall within scope of the policy.

According to PAX, Vontobel clients can still ask Vontobel to invest in cluster munitions companies on their behalf.

“Although these financial institutions have a policy to exclude investments in cluster munitions producers, these all make certain exceptions,” it states.