October 29, 2009 / 6:46 PM / 8 years ago

Top banks fund cluster bombs as ban nears - report

By Olesya Dmitracova

LONDON, Oct 29 (Reuters) - Leading banks have funded cluster bomb-makers to the tune of $5 billion in the past two years despite an international accord to ban the weapons, a study said on Thursday.

The report by Profundo consultancy and several NGOs said the banks loaned money to companies whose products include cluster bombs or their components. The manufacturers could use the money for any of their production lines.

The top five loan providers were Bank of America (BAC.N), Citigroup (C.N), JP Morgan (JPM.N), Barclays (BARC.L) and Goldman Sachs (GS.N), the study said on Thursday.

The researchers used publicly available information, such as that supplied by stock exchanges and financial databases, to produce their study.

"Our policy...explicitly prohibits financing trade in landmines, cluster bombs or any equipment designed to be used as an instrument of torture," Barclays said in a statement.

Asked to clarify, a Barclays’ spokeswoman declined further comment.

Bank of America and JP Morgan declined to comment while Citigroup and Goldman Sachs also had no immediate comment.

Cluster bombs, which open in mid-air and scatter a multitude of bomblets over a wide area, have killed and maimed tens of thousands of civilians, campaigners say.

Nations agreed to outlaw cluster bombs in May 2008. The resulting convention will come into force when 30 countries have ratified it -- 23 have already done so. Neither the United States nor Britain, where the top five loan providers are based, have yet ratified the treaty.

The Convention on Cluster Munitions includes a ban on assisting anyone to make the bombs.

"We feel very strongly that assistance in production means investment. If you invest in a company, you’re considered to assist the production of these (bombs)," Roos Boer, one of the report’s authors, said during the launch of the study.

"Financial institutions should develop policies that exclude all financial links with companies involved in producing cluster munitions," the report said.

"Policies should not be narrowed to refusing project financing for cluster munitions."

The report also called on governments to draw up clear legislation to prohibit investment in cluster bombs and to provide guidelines for financial institutions.

(Editing by Angus MacSwan)

(For more news on humanitarian issues please visit www.alertnet.org; email Alertnetnewsdesk@reuters.com)



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