Worldwide investments in CLUSTER MUNITIONS

2.3 Countries’ Best Practices
2.3.0 Introduction and Methodology
Based on the results of research in this report, and the research from other NGOs, we can conclude that
self-regulation in the financial industry does not necessarily lead to strong results. Even though a growing
group of financial institutions has decided to disinvest from cluster munitions producers, the effects of
their decisions are far from even. Furthermore, many financial institutions do not appear to feel a great
need to shoulder moral responsibility at all.
While investment in arms and cluster munitions may have become an important topic in international
financial institutions’ social responsibility divisions, many financial institutions still seem to seek for
guidance from their governments on this issue. Stringent international regulation and legislation will
be needed to stem the flow of capital to cluster munitions producers.
Unfortunately, there seems to be no tradition of legislated restrictions on investment. While financial
institutions often argue that governments, not financial institutions, should decide whether investments
in certain sectors should be forbidden, governments argue that financial institutions will have to set their
own standards for socially responsible investment.
Governments can and should, of course, lead the way by providing good examples. The Dubrovnik Action
Plan that was adopted by States Parties during the First Review Conference on the Convention on Cluster
Munitions stipulates that “states may wish to consider enacting national legislation prohibiting investments
in producers of cluster munitions.” 641 Governments cannot afford to maintain double standards by opposing
the use of cluster munitions, while continuing to allow investment in cluster munitions producers. Any
governmental effort to oppose the misery that cluster munitions cause should include efforts to dry up
the supply capital that funds the companies that produce cluster munitions.
Recent years have witnessed a growing group of legislative measures to ban investment in cluster munitions.
Some countries addressed the investment issue as part of the Convention on Cluster Munitions ratification
measures; others issued separate laws to prohibit investments. We welcome this trend and call upon other
states to follow suit.
• Research
To be considered as a country banning investments in cluster munitions, a country must either have stated
officially that investments in cluster munitions are or can be seen as prohibited by Convention on Cluster
Munitions, or have proposed or passed legislation banning investments. Legislative proposals need not be
comprehensive, but they should meet the following criteria:
– The proposed law should be discussed in parliament or another body with power to issue legislation.
– The proposed law should contain an explicit ban on investment in cluster munitions.
The research findings are divided into three categories. Firstly, we look at states that have adopted national
legislation that bans (types of) investment in cluster munitions. After that we look at states that have not
incorporated disinvestment in national legislation yet, but that made interpretive statements that reflect
the view that forms of investment are or can be seen as prohibited under the CCM. Thirdly, we look at states
in which parliamentary action is ongoing, or where legislative proposals have been tabled, but no
legislation is in place just yet.
In what follows we first describe the national legislation that ten states have adopted to prohibit various
forms of investment in cluster munitions.
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