UPDATE 1-U.S., Euro banks criticised over cluster bombs

* Report says 7 producers getting $43 bln

* Lists 146 financial institutions involved

* Many from countries backing global cluster bomb ban

(Adds Lockheed Martin response)

By Robert Evans

GENEVA, April 14 (BestGrowthStock) – At least 146 financial
institutions, including big name banks in the United States and
Europe, are providing funding and services for producers of
cluster bombs, a report said on Wednesday.

The support, estimated currently at a total of $43 billion
to seven manufacturers, was continuing in violation of the
spirit of an international convention aimed at total elimination
of the controversial weapon, the report said.

Produced by the Netherlands-based Profundo consultancy and a
grouping of non-governmental organisations (NGOs), it urged
governments in the 105 countries who have so far signed the 2008
pact to move to ban investment in the 7 companies.

“It is time for all financial institutions to stop the flow
of funds to companies that produce cluster bombs,” Thomas Nash
of the Cluster Munition Coalition (CMC) told a Geneva news
conference launching the report.

“Producers still have no problem in financing their
activities, and many financial institutions seem to have no
qualms about financing these producers,” the report said.

Researchers for the study said their findings were based on
publicly available information like that supplied by stock
exchanges and financial databases.

The report, updating an earlier study issued in London last
October [nLT459510], named Bank of America (BAC.N: ), Goldman
Sachs (GS.N: ), Citigroup (C.N: ) and Deutsche Bank (DBKGn.DE: ) as
major providers of services and loans to the seven.

Others were HSBC (HSBA.L: ), Calyon, the corporate and
investment banking arm of French bank Credit Agricole (CAGR.PA: ),
and British-based Barclays (BARC.L: ).

Citigroup spokesman Adam Castellani declined to comment.
There was no immediate comment from the other banks. But when
the earlier study was released Barclays said in London it took
into account the likely use of equipment when providing
financial services to arms manufacturers.

Its investment policy explicitly prohibited financing trade
in landmines — also banned under an international pact — and
cluster bombs, it said.

Among the seven makers of the weapon and components named in
the report were diversified manufacturer Textron (TXT.N: ),
aerospace and defence group Alliant Techsystems (ATK.N: ), and
defence contractor Lockheed Martin (LMT.N: ), all U.S. based.

Textron said it was in contact with NGOs and nations
involved in the Convention on Cluster Munitions on ways to limit
the danger of hazardous unexploded ordnance. It said its system
ensured 99 percent reliability of its ordnance.

Lockheed Martin, the Pentagon’s top supplier by sales, said
it did not produce anti-personnel submunitions. It would cease
supplying delivery vehicles for submunitions before the
Convention on Cluster Munitions’ transitional period concluded.


The study did not suggest funds went directly to making
cluster bombs — blamed by campaigners for killing and maiming
tens of thousands of people mainly in poor countries years after
they have been used in conflicts.

“But by investing in a company whose production line
includes these weapons you are in effect helping to make them,”
said one of the report’s authors, Roos Boer.

The bombs, first used in World War Two, open in mid-air
above a target zone and scatter hundreds of bomblets over a wide
area. Many fail to detonate and lie dormant, often in farming
areas, until exploding when disturbed.

The Oslo convention, under which signatories pledge to ban
production, stockpiling and use of cluster weapons, goes into
force in August [ID:nN16248603]. Most European and many Asian,
African and Latin American countries have signed.

But the United States, which says it plans to ban the weapon
from 2018, Russia, China, and Israel — which the United Nations
says made heavy use of it during its war in southern Lebanon in
2006 — have so far stood aloof.

Investment Research

(For full report go to http://link.reuters.com/cyf77j )
(Editing by Jonathan Lynn and Ralph Boulton)

UPDATE 1-U.S., Euro banks criticised over cluster bombs