Belgium bans investments in cluster bomb makers

Fri Mar 2, 2007 11:42am EST

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BRUSSELS, March 2 (Reuters) - Belgium became the first country to make it a crime to invest in companies that make cluster bombs, said the author of a law passed on Thursday.

"The financial groups which invest in or finance (cluster bomb manufacturers) will be outlawed," Socialist Senator Philippe Mahoux told Reuters on Friday.

This move followed a pledge in Oslo last week by 46 countries to work for a treaty next year to ban the bombs, which have killed thousands of civilians around the world.

Belgium's law, approved by the upper house, specified that a list of manufacturers would be published by parliament, Mahoux said. It would prohibit banks from offering credit to cluster bomb makers and from owning shares or bonds in these companies.

Designed to attack troops and vehicles spread over a wide area, cluster bombs are released over targets from a larger shell fired from jets or artillery, hundreds at a time, often with dozens failing to explode.

Used in conflicts from Vietnam to Iraq, the bombs can remain lethal for decades after combat ends, experts say. Small and hard to see, they are often set off accidentally by civilians.

Belgian banking group KBC KBKRt.BR has already established a blacklist of weapons manufacturers which it believes make cluster bombs or mines and excluded them from all investments.

Fortis FOR.BR, another Belgian banking group, said it stopped investing in firms that produced the weapons in 2005.

Companies listed by KBC denied they produced cluster bombs -- which are not illegal everywhere in the world -- or were unavailable to comment.

Banks in Australia, the European Union, Switzerland and the United States provided more than $12 billion in finance for the six main Western producers of the weapons from 2004 to 2007, according to a Brussels-based campaigner for ethical investment.