2012 Don't Bank on the Bomb Full Report

Published by the International Campaign to Abolish Nuclear Weapons. Financial research by Profundo. This publication may be reproduced in whole or in part, provided that the International Campaign to Abolish Nuclear Weapons and Profundo are acknowledged as the source. March 2012 Contact: [email protected] PRINCIPAL AUTHORS Jan Willem van Gelder Petra Spaargaren Tim Wright CONTRIBUTORS Setsuko Thurlow, Tilman Ruff, John Burroughs, Ray Acheson, Brendan Thomas-Noone, Kelle Louallier, Simon O’Connor, Alyn Ware, Aaron Tovish, Jonathan Frerichs, Helen Caldicott, Roos Boer, Nicola Boyle, Keerththana Jeyakandan, Pia A. Gaarder, Magnus Løvold, Lily Gardener, Jennifer Gerrand, Dianne Street, Jianwen Hu DESIGN Cam Suttie, Mark Carter, Tim Wright FUNDERS Dara Foundation, Australia ICAN Norge, Norway Nei til Atomvåpen, Norway Norske Leger mot Atomvåpen, Norway Acronym Institute, United Kingdom ABOUT ICAN The International Campaign to Abolish Nuclear Weapons is a global grassroots movement advocating for a treaty to eliminate nuclear weapons. With partner organizations in 60 countries, we provide a voice to the overwhelming majority of people globally who support nuclear abolition. www.icanw.org ABOUT PROFUNDO Profundo is an economic research consultancy analysing commodity chains, financial institutions and corporate social responsibility issues. It works predominantly for environmental, human rights and development organizations in the Netherlands and abroad. www.profundo.nl The authors have made their best efforts to ensure that the information contained in this report is accurate. However, it is possible that, given the large volume of data contained herein, errors may have been made. We would be grateful if readers informed us of any such errors by email: [email protected]. Contents Foreword 4 By Desmond Tutu 1 Introduction 5 Challenging the Nuclear Weapons Industry 2 Why Divest 21 The Humanitarian, Legal and Environmental Cases 3 Nuclear Forces 31 An Overview of Nuclear Weapons Modernization 4 Producers 43 Companies Involved in Nuclear Weapons Work 5 Investments 55 The Financing of Nuclear Weapons Producers 6 Policies 107 What Banks Say about Financing Nuclear Weapons 7 Take Action 113 How to Challenge Nuclear Weapons Investments 8 Financial Institutions 121 Companies Financing Nuclear Weapons Producers Endnotes 168 Appendices 174 Appendix I: List of Boxes Appendix II: Company Contact Details Appendix III: Frequently Asked Questions Foreword uclear weapons are an obscenity. They are the very antithesis of Nhumanity, of goodness in this world. What security do they help establish? What kind of world community are we actually seeking to build when nations possess and threaten to use arms that can wipe all of humankind off the globe in an instant? Unimaginative leaders continue to believe that The imperative to take immediate, united action for eliminating this ultimate menace is impossible – a nuclear abolition could not be clearer. This splendid hopeless, utopian goal. But how often have we heard and timely report, Don’t Bank on the Bomb, will help politicians say “this will never happen over my dead people everywhere make their contribution, however body”, and then it happens because people rise up small, to this vital campaign for a safer world. It’s each and take action to make it happen? Politicians should little contribution put together that will ultimately lead have learned by now never to say never! to the abolition of nuclear weapons – not any single That is not to suggest that the struggle for a momentous event or decision by governments. nuclear-weapon-free world will be easily won. Like Banks and other financial institutions should be any battle waged against a deeply entrenched system, called upon to do the right thing and assist, rather it will take patience and perseverance. We won’t see than impede, efforts to eliminate the threat of success overnight. But we really must approach the radioactive incineration by divesting from the immoral challenge with urgency, for despite the end of the nuclear arms industry. In the long struggle to end cold war, the world remains just a hair’s-breadth from racial segregation in South Africa, our freedom was nuclear catastrophe, and every moment is crucial. won with the help of concerned individuals around It distresses me greatly that the nuclear-armed the world who pressured their leaders and corporate nations have failed to live up to their disarmament actors to stop funding the racist regime. commitments, choosing instead to continue To those who invested in our country, we said: you squandering billions of dollars on these awful bombs. are doing us no favour, you are buttressing one of It is an outrageous theft of public resources – at a the most vicious systems. Divestment was vital in the time when there are people who go hungry, when campaign to end apartheid in South Africa. Today, children are dying because they have no clean water, the same tactic can – and must – be employed to when diseases run rampant, when we have the challenge man’s most evil creation: the nuclear bomb. wherewithal to eradicate all these dreadful scourges. No one should be profiting from this terrible industry We keep admitting that the globe is shrinking, of death, which threatens us all. that we are one another’s keeper, as it were. Yet, we tolerate – through our collective inaction – the existence of tens of thousands of nuclear weapons capable of blowing the whole world into smithereens. Desmond Tutu How can this be? Are we not all brothers and sisters NOBEL PEACE PRIZE LAUREATE on this small globe of ours? Cape Town, South Africa, March 2012 4 Chapter 1 Introduction Challenging the Nuclear Weapons Industry ach year, the nine nuclear-armed nations spend a combined total of more than US$100 billion on their nuclear forces – assembling new warheads, modernizing old Eones, and building ballistic missiles, bombers and submarines to launch them. Much of this work is being carried out by private companies. How can we stop it? Don’t Bank on the Bomb is the first major global report Chapters on the financing of companies that manufacture, 1 Introduction: Chapter 1 summarizes nuclear modernize and maintain nuclear weapons and their weapons investments globally, and outlines the delivery vehicles. It identifies more than 300 banks, methodology used in this study. insurance companies, pension funds and asset 2 Why Divest: Chapter 2 shows why financial managers from 30 countries that invest significantly in institutions should divest on humanitarian, 20 major nuclear weapons producers. With the legal and environmental grounds. information and arguments contained in this report, 3 Nuclear Forces: Chapter 3 examines the concerned citizens can put pressure on these and nuclear weapons spending and modernization other financial institutions around the world to end programmes of the nuclear-armed nations. their support for the nuclear weapons industry. 4 Producers: Chapter 4 profiles 20 companies that By lending money to nuclear weapons companies, manufacture nuclear weapons and the missiles, and purchasing their shares and bonds, banks and submarines and bombers that launch them. other financial institutions are indirectly facilitating 5 Investments: Chapter 5 shows which financial the build-up and modernization of nuclear forces, institutions are investing in these companies – thereby heightening the risk that one day these through shares, bonds and bank loans. ultimate weapons of terror will be used again – 6 Policies: Chapter 6 looks at the policies of 14 with catastrophic humanitarian and environmental mainstream institutions in nine countries on consequences. Divestment from nuclear weapons investing in nuclear weapons companies. companies is an effective way for the corporate world 7 Take Action: Chapter 7 offers suggestions for to advance the goal of nuclear abolition. encouraging financial institutions to divest, and for undertaking further research. United Action for Divestment 8 Financial Institutions: Chapter 8 profiles each A coordinated global campaign for nuclear weapons of the 322 financial institutions identified as divestment is urgently needed. It can help put a investing in nuclear weapons companies. halt to modernization programmes, strengthen the international norm against nuclear weapons, and build momentum towards negotiations on a universal nuclear weapons ban. Some financial institutions, including government funds, have already opted to exclude nuclear weapons companies from their investment portfolios. Others must now follow suit. 5 DON’T BANK ON THE BOMB Scope of Research BOYCOTTING This report focuses on investments since July 2008 Boycotting is a method of protest that targets in a selection of 20 companies most heavily involved unethical companies directly. A well-known example in modernizing and maintaining nuclear warheads, of a nuclear weapons boycott is the campaign as well as developing the missiles, submarines and initiated in the 1980s by Infact (now Corporate bombers intended to launch them. The companies Accountability International) against General Electric. are based in the United States, the United Kingdom, GE had played a major role in nuclear weapons France, India, the Netherlands and Italy. Chapter production since the Manhattan Project. The boycott 4 provides details of the involvement of these resulted in significant financial losses for the company companies in nuclear weapons production. and damage to its brand. Ultimately, it was compelled it to end its involvement

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