Banks tied to cluster bombs named [with Australian, Dutch, Belgian and Korean banks providing funds to companies that make cluster bombs]

Thursday, 26 May 2011
Thomas Miller

Photo by: stephane de greef/landmine and cluster munition monitor

An armed M46-type cluster submunition lies on the ground near homes in Sen Chey village in Preah Vihear province in April.

Phnom Penh Post

Two banks with operations in Cambodia have been linked to companies that produce cluster bombs, as humanitarian groups said yesterday that clearing dangerous remnants of the internationally-condemned weapons from Preah Vihear could take as long as a year.

According to a report released yesterday by two European groups – Netherlands-based IKV Pax Christi and Belgium-based Netwerk Vlaanderen – Australian bank ANZ and South Korean bank Kookmin provide financial support to companies involved in the production of the controversial weapons, which have been banned under a treaty signed by more than 100 countries.

Based on an analysis of publicly available company documents, the groups said ANZ has underwritten bond issues for Lockheed Martin, while Kookmin has underwritten bond issues for Hanwha Corporation and retains ownership or management of shares in Poongsan. Lockheed Martin, Hanwha and Poongsan are among eight corporations the report said produce cluster munitions or their component parts.

Denise Coughlan, director of Jesuit Services, said yesterday that the report was meant “to encourage governments and financial institutions to do all they can so that investments in cluster munitions are not made”.

“The success for us is not to be naming companies. The success for us is that cluster munitions stop being produced, and that means they can’t get backing from financial institutions.”

In response to pressure from activists over the issue, ANZ revised internal policies in October last year. But Esther Vandenbroucke, co-author of the report, said from Brussels yesterday that the policy “doesn’t go far enough”.

The bank stated last year that it “will not be involved with direct financing or contract bonding related to the sale or manufacturing of controversial weapons (specifically cluster munitions and anti-personnel land mines)”.

ANZ said it would inform companies identified as producers of cluster munitions or their components of the new policy and seek assurances from those companies that they are either not involved in the production of the weapons “or are in the process of winding down these production lines within a reasonable timeframe”.

The bank, however, “does not unequivocally say that it will stop dealing with a company that does not abandon this production”, the NGO report states, calling on ANZ to “exclude producers of cluster munitions from all its financing”.

ANZ Royal in Cambodia has “zero involvement” in financing for Lockheed Martin, CEO Stephen Higgins said in an email yesterday, adding that he could not speak for parent company ANZ. A spokesman in Melbourne could not be reached after work hours.

Jang Ki-Sung, CEO and president of Kookmin Bank in Cambodia, said yesterday that he could not speak for the South Korea-based institution.

Meanwhile, demining groups said it would take between six months and one year to clear cluster munitions from fighting between Cambodia and Thailand near Preah Vihear temple in early February.

Cluster munitions are shells that contain numerous explosive submunitions, or bomblets. The shells are designed to split open before contact, dispersing bomlets across a wide area. One artillery shell affects a roughly 70 metre-by-120 metre area.

Jan Erik Stoa, a programme manager for mine action at Norwegian People’s Aid went on a two-day surveying mission to Preah Vihear at the beginning of April. He estimated yesterday that “at least 100” cluster munitions shells had been launched by Thailand into 13 areas in Cambodian territory covering approximately 1.5 to 2 million square metres.

According to evidence from the area, the bomblets failed at a rate of about 20 percent – about double the usual rate, Stoa said.

Between 5,000 and 10,000 people in four different villages have been directly affected, “meaning they will have small submunitions in between their houses, which of course is dangerous for people living there”, Stoa said.