Disarming the banks

IssueFebruary 2006
Feature by Christophe Scheire, Inez Louwagie

Since October 2003, the bank-watch organisation Netwerk Vlaanderen, and the peace organisations Vrede, Forum voor Vredesactue and For Mother Earth, have been running a campaign against Belgian bank groups' investments in weapons. Under pressure from the campaign “My Money. Clear Conscience” (see PN2458), four large bank groups have since scaled down their investments in weapon producers.

At a political level, Belgium is also the first country to forbid investment funds investing in producers of anti-personnel mines. During the summer of 2005 Netwerk Vlaanderen published a report - Banks Disarm(ed) - on the campaign's progress.

Scrapping investments

Following in the footsteps of bank groups KBC (2004) and ING (March 2005), Dexia and Fortis are the latest bank groups to develop new policies on investments in the arms trade.

Fortis has decided to no longer directly invest in producers of anti-personnel mines, biological and chemical weapons, nuclear weapons and cluster munitions.

Dexia goes even further by excluding the majority of the weapons industry. Not only the most controversial weapons, but also weapon systems including fighter planes, conventional munitions, submarines and munitions factories will no longer be financed by Dexia.

ING had already announced in March 2005 that it was withdrawing from a number of controversial weapon systems: anti-personnel mines, biological and chemical weapons, cluster munitions, nuclear weapons and depleted uranium weapons.

For all three of these banks the policy is only valid for their own financing and direct investments. Investment funds, which the bank offers for sale to customers, continue to invest in these very controversial weapons. For the peace-loving investor there is still no reason to be content.

In contrast, KBC group has produced a more consistent policy. Producers of weapons systems that KBC believes to be unacceptable are excluded from all of KBC's products. KBC investment funds are also therefore no longer investing in anti-personnel mines, cluster munitions, depleted uranium weapons and biological and chemical weapons.

Only AXA has shown little or no movement. At an international level, AXA does not even exclude investments in anti-personnel mines. AXA Belgium has withdrawn from investment in Singapore Technologies Engineering, a Singaporean company that produces anti-personnel mines amongst other items. In this way, AXA Belgium is simply conforming to Belgian law.

But on an international level AXA is still a heavy investor in anti-personnel mine producers. In October 2005, Netwerk Vlaanderen revealed in a new report that AXA is investing heavily in Textron and ATK. These two companies are developing and will be producing the new anti-personnel mines for the US Army. AXA's investments in Textron account for no less than 28.84% of the shares in the company. The AXA shares in ATK and Textron are worth more than US$2.7 billion.

Work still to be done

Netwerk Vlaanderen and the peace organisations involved in the campaign are happy with the first results of the campaign. However, there are still many challenges to be faced.

None of the banks has fully withdrawn from the arms industry - and while they have understood that openness about their policies is important, complete transparency is needed to be able to control their implementation.

At a political level, the ban on investments in anti-personnel mines could certainly be extended to cover all forms of investment and financing. A Bill has been proposed on this matter in the Belgian Senate. There is still a lot of work to be done at a political level on the drawing up of transparency norms for financial institutions.

Call for similar campaigns

Strengthened by the results of the campaign so far, Netwerk Vlaanderen, Vrede, Forum voor Vredesactie, and For Mother Earth, are calling on peace movements, humanitarian organisations, bank watchers, and other campaigns worldwide, to bring similar pressure against banks to end their investments in the weapons industry.