On May 28, 111 governments – including all the Nordic countries – adopted a new convention banning cluster munitions. This breakthrough took place at the end of two weeks of negotiations at the Diplomatic Conference on Cluster Munitions in Dublin, Ireland. The conference was the final event of a process initiated in late 2006 by the Norwegian Government, the Oslo Process on Cluster Munitions. The convention will be opened for state signatures in early December 2008 in Oslo.

The Oslo process was launched in response to the slow diplomatic progress made with the Inhumane Weapons Convention or Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons which may be Deemed to be Excessively Injurious or to have Indiscriminate Effects (CCW).

While the humanitarian problems caused by the use of cluster munitions have been well known to the public since the 1970s and restrictions of their use have been on the agenda of international arms control and disarmament negotiations, diplomatic negotiations have proceeded slowly. Within the framework of the CCW, government representatives and military experts have been discussing the relevance of existing international humanitarian law for addressing the problems caused by the use of cluster munitions and the possibility of introducing a new legal instrument at periodic meetings in Geneva over several years.

At the same time, public interest in the issue has grown rapidly since mid-2006, after evidence emerged about the humanitarian problems caused by Israeli cluster munitions in Southern Lebanon, and led, on the one hand, to the Oslo process and, on the other, to increased pressure on investors who have become key targets of international NGO and media campaigns seeking to bring about an international ban of cluster munitions.

Under article 1 of the recently adopted Convention on Cluster Munitions, state parties will “undertake(s) never under any circumstances to: (a) use cluster munitions; (b) develop, produce, otherwise acquire, stockpile, retain or transfer to anyone, directly or indirectly, cluster munitions; (c) assist, encourage or induce anyone to engage in any activity prohibited to a state party under this convention”.

There is strong support among well reputed international NGOs in the field of human rights and disarmament for an interpretation of the prohibition to ‘assist’ in article 1(c) to include a prohibition to invest in companies producing cluster munitions. A small and decreasing number of publicly listed companies globally are involved in cluster munitions as defined in the convention. These are commonly leading national producers of military equipment. As key producing countries, the US, China, Russia, Israel, Pakistan and India have not joined the Oslo process. Investors in countries that have joined the process and will sign the convention, will address the issue within the framework of their responsible investment policies – unless legally binding measures on a national level will prohibit such investments.

In early 2007, Belgium adopted a unique law that explicitly prohibits the financing of the production, use and possession of anti-personnel mines and cluster munitions. So far, however, the government has failed to see to the implementation of the law. The government was to publish a list of companies subject to the Belgian financing ban by early 2008. In the meantime, Belgian investors, co-ordinated through the Belgian Asset Managers Association (BEAMA), have nevertheless divested from companies involved in cluster munitions.

Already in 2004, the Belgian Bank KBC introduced a new negative investment criteria concerning “companies that manufacture or trade in weapons that are not prohibited by law, but are internationally recognised as having led to disproportionate suffering among civilians in the last 50 years”, including cluster munitions. KBC’s example was followed by other banks, such as ING, Dexia and Fortis.

In mid-2005 the Council on Ethics for the Norwegian Government Pension Fund issued its first divestment recommendations for companies involved in cluster munitions – pursuant to the Ethical Guidelines for the Government Pension Fund, Global – which include a negative investment criteria for companies that either themselves, or through entities they control, produce weapons that through normal use may violate fundamental humanitarian principles.

Along the track of the Oslo Process, the Guardians of New Zealand Superannuation announced in April 2008, immediately following the Wellington conference on cluster munitions, their decision to “exclude from the Fund companies that remain involved in the manufacture of cluster munitions”, and in March 2008 the Irish National Pension Reserve Fund announced plans to withdraw e27m of investment from six companies involved in the production of cluster munitions, just two months ahead of the Dublin conference.

On June 4, Sweden’s National Pension Fund AP7 announced that it will sell all its holdings in companies involved in cluster munitions and nuclear weapons. In an opinion piece in Swedish daily Dagens Nyheter, AP7’s chief executive, Richard Grottheim, and the chair of the Swedish Peace and Arbitration Society, noted that the Swedish government's policy on cluster munitions should support a decision to exclude investments in businesses that develop cluster munitions.

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