Axa, the giant French insurance company, is withdrawing group assets invested in companies that produce cluster bombs and says it will discuss its decision with third-party investment clients who may want to do the same. It is believed to be the largest financial services group to announce a boycott of cluster bomb producers, although banks including KBC in Belgium, the Co-operative Bank in the UK and Storebrand, the Norwegian insurer, have made similar divestments. The French insurer said the boycott reflected growing concern that production of certain unexploded cluster bombs, which have killed and maimed civilians in war zones, could be challenged in court and judged to be against international law. Axa said: “While no international convention banning cluster bombs is yet in place, the Axa Group acknowledges that there is an emerging international consensus around the banishment of certain types of cluster bombs.”
In April 2006, the French insurer sold investments in companies producing or selling anti-personnel mines and said it had developing a research process for identifying such companies.
The insurer said it was working with non-governmentalorganisations, Handicap International and Amnesty International, to identify companies involved with cluster bombs.
The decision by Axa reflects growing concern among investors about links to cluster bomb manufacturers. Axa’s subsidiary, Axa Investment Managers, runs €550bn ($753bn) in assets for external clients.
Earlier this month, Responsible Investor revealed that Hermes, the £70bn (€103bn) UK fund manager, was lobbying BAE Systems in the UK and France’s EADS to ensure neither was involved in the manufacture of cluster bombs that may not explode on release. Hermes said pension clients had voiced concerns about the reputation risk to their investments.
Dutch pension giants ABP and PGGM recently announced they would stop investing in companies making landmines after coming under fire in a Dutch current affairs programme that prompted thousands of complaints from pension scheme members. PGGM also said it would divest from cluster bomb manufacturers. The €237bn Norwegian Government Pension Fund last year excluded Poongsan Corporation in South Korea
from its investment portfolio for producing cluster bombs. It has also ordered a regular quarterly review of investments to examine links with the production of armaments including cluster bombs and landmines.
Organisations including the Red Cross, the Cluster Munition Coalition and the United Nations, have attacked cluster bomb production because of the high proportion of civilians they kill in conflict zones.
Non governmental organisations argue that the failure to discriminate between civilians and combatants in war zones is a violation of international humanitarian law andthat cluster bombs should be banned via international convention such as the Ottawa Convention on anti-personnel landmines that came into force in 1999.
The Oslo Process, launched in February 2007, was the start of government discussions to this end. Difficulties related to the technical definition of cluster bombs were raised at the second conference, which ended in May 2007. Governments that took part in the conferences promised to devise a treaty to prohibit cluster bombs “that cause unacceptable harm to civilians” before the end of 2008.