British high street banks, including the publicly owned Royal Bank of Scotland, are profiting from the manufacture of cluster bombs for which 98% cent of the victims are civilians.

The Royal Bank of Scotland (RBS) and other UK high street banks - including Barclays and Lloyds - are continuing to make financial investments in companies that produce cluster munitions despite a government ban on the production of the weapons, warned Amnesty International and the Cluster Munition Coalition today (16 August 2011).

In March the UK passed a new law banning the production, use and trade of cluster munitions, yet RBS, which is majority-owned by the UK government, recently agreed a US$80 million (£49 million) loan to US companies that produce cluster munitions or their components.

Meanwhile, a new YouGov opinion poll commissioned by Amnesty found that nearly eight out of ten people in Britain (78%) said RBS should not be allowed to provide loans to cluster-munitions producing companies. 

In the poll more than one in three (35%) thought that investment in companies which produce cluster bombs was just as damaging to the reputation of high street banks as its bonus culture and the effect it had on the global economy. Meanwhile, more than two out of three (67%) said they would support a law to ban any investment in companies that produce cluster bombs.

Last August an international treaty banning the use, production, stockpiling and transfer of cluster munitions (the Convention on Cluster Munitions 2008) entered into force. It has the support of 109 countries, including the UK.

Amnesty International UK Arms Programme Director Oliver Sprague said:

“High street banks like Royal Bank of Scotland are making a mockery of UK law by shamefully investing in companies that make weapons the UK government and 108 other countries have clearly and quite rightly banned.

“RBS also appears to be completely out of step with the wishes of its customers given the findings from our new opinion poll.

“Cluster bombs are deadly and indiscriminate, causing devastation to civilians. They continue to kill years after wars have ended, as they frequently fail to go off when initially fused.

“Given the UK government’s clear decision to ban cluster munitions, no UK financial institutions should be assisting their production.”

As part of its campaign for banks to disinvest in cluster munition-producing companies Amnesty is screening a new film by acclaimed film-maker Chris Atkins on its “Amnesty TV” channel (www.amnestytv.co.uk) from Tuesday (16 Aug).

In the film, Booming Business, Atkins, the director of Taking Liberties and Starsuckers, attempts to confront directors from RBS and other banks about the horrific effects of their investments. It also includes his visit to Laos - the country worst affected by cluster bombs - where he met people from communities where numerous people have been killed or injured by the weapons.

Chris Atkins said:

“While filming in Laos I saw the appalling consequences of cluster munitions, and met the communities devastated by unexploded cluster munitions bomblets decades after they were deployed.

“It’s absolutely sickening that British high street banks are profiting from the manufacture of devices for which 98% cent of the victims are civilians. RBS in particular has to be shamed into ceasing any trading with arms companies that make cluster munitions, given its public ownership.”

Cluster Munition Coalition Director Laura Cheeseman said:

“The UK - and other countries that have already signed the ban treaty - should pass strong national legislation to make sure they are not contributing to the production of weapons that they have outlawed. The treaty bans any assistance with prohibited acts - financing is clearly a means of assisting with the production and possible use of these weapons.”

Other banks and financial institutions including Barclays, Lloyds, HSBC, Aviva and Prudential currently invest in US-based companies involved in the production of cluster munitions, including Alliant Techsystems, Lockheed Martin and Textron. These financial investments range from the provision of loans and banking services, underwriting or owning shares and bonds, or related asset management services. 

Oliver Sprague added:

“The UK government was right to outlaw the production and use of these weapons but it must act on previous commitments to close the loopholes that allow UK banks to continue to finance cluster munitions-producing companies. Otherwise, it runs the risk of its own law becoming a sham.”

Demonstrate Tuesday 13 September 2011. Details...