Published on May 5th, 2014 | by Susi Snyder0
Don’t Bank on the Bomb- Bank on a Ban
Nuclear armed states are planning to spend billions over the next decade in modernising their arsenals. This funding comes mostly from taxpayers in those countries, but some of the companies hired to produce and maintain these weapons of terror also receive funds from private financial institutions. In the 2013 Don’t Bank on the Bomb report, PAX found that 298 financial institutions provide $314 billion towards 27 nuclear weapons producing companies.
Divestment campaigns are currently taking place in several countries around the world. These campaigns target the financial sector, and encourage divestment from nuclear weapons producers as well as the establishment of policies prohibiting investment. In addition to efforts on the part of the financial sector, governments have the opportunity to expand on their efforts to eliminate nuclear weapons and prevent their modernisation.
While the NPT specifically obliges Non-Nuclear Weapons States “not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices; and not to seek or receive any assistance in the manufacture of nuclear weapons or other nuclear explosive devices.” (Article II). It does not put this limitation on assisting the arsenals of nuclear weapons states. However, many of the countries that are part of nuclear weapons free zone agreements have additional binding obligations not “to assist or encourage” the development or manufacture of nuclear weapons inside or outside the zone.
For example, in the Rarotonga (South Pacific Nuclear Free Zone) Treaty, states agree “not to take any action to assist or encourage the manufacture or acquisition of any nuclear explosive device by any State.” (Article 3c). This puts Australian financial institutions, known to be investing over $2 billion in nuclear weapons producers, in a legally complicated situation. No other financial institutions with headquarters in the zone were found to be investing. This puts the Australian government in a tricky situation, as they are in questionable compliance with their agreements.
There is a growing move to develop national legislation restricting or prohibiting investment in inhumane or indiscriminate weapons. Nine states have national legislation that explicitly outlaws any investment in cluster munitions producers, and many financial institutions have taken it upon themselves to restrict or prohibit investment in all inhumane weapons. National legislation is a useful tool, and is a future compliment to new international law outlawing nuclear weapons.
Numerous financial institutions, especially in countries that are not nuclear armed, are seeking to implement policies to prevent this type of investment. This contributes to the growing stigmatisation of nuclear weapons around the world. Governments cannot afford to maintain double standards by opposing the use of nuclear weapons, while continuing to allow or even be directly involved in investing in nuclear weapon producers.
Governments have an opportunity to restrict any assistance to the research, development, testing, production, stockpiling, etc of nuclear weapons. They can do this through political commitments in the NPT process itself, or, through a legal obligation contained in a new legal instrument, like a treaty banning nuclear weapons.
PAX held a side event on divestment during the NPT PrepCom, to read the event report, see here.