May 2011 update Worldwide investments in CLUSTER MUNITIONS a shared responsibility

May 2011 Utrecht, April 2011. IKV Pax Christi and Netwerk Vlaanderen have strived to achieve the highest level of accuracy in our reporting. However, at this point, there is still a marked lack of official information available in the public domain about the use, production, transfer, and stockpiling of cluster munitions, as well as about investments in companies that produce cluster munitions. The information in this report therefore reflects official information available in the public domain known to IKV Pax Christi and Netwerk Vlaanderen. We welcome comments, clarifications, and corrections from governments, companies, financial institutions and others, in the spirit of dialogue, and in the common search for accurate and reliable information on an important subject. If you believe you have found an inaccuracy in our report or if you can provide additional information, please contact us.

Authors: Roos Boer (IKV Pax Christi, the ) Esther Vandenbroucke (Netwerk Vlaanderen, )

Research by: Roos Boer, IKV Pax Christi (the Netherlands) Jan Willem Van Gelder, Profundo (the Netherlands) Esther Vandenbroucke, Netwerk Vlaanderen (Belgium)

With thanks to: Adessium Foundation, Werner Anderson, , Andrea Baranes, Kimberly Brown, Laura Cheeseman, Anna Ek, Aymeric Elluin, Paul Hannon, Barbara Happe, Katherine Harrison, Mark Hiznay, Nancy Ingram, Atle Karlsen, Thomas Küchenmeister, Marion Libertucci, Suzanne Oosterwijk, Christophe Scheire, Thoummy Silamphan, Shannon Sommerauer, Frank Slijper, Oliver Spraque, Miriam Struyk, Junko Utsumi, Paul Vermeulen, Luc Weyn, Jora Wolterink, Khaled Yahmout, Mark Zirnsak and all financial institutions’ representatives who provided answers to our questions about their policy.

Editor Ms. C. Romanik

A publication by: IKV Pax Christi, the Netherlands and Netwerk Vlaanderen, Belgium

Responsible Publisher: Kristien Vermeersch, Netwerk Vlaanderen vzw, Vooruitgangstraat 333 b9, 1030 Brussels, Belgium

Lay out Hilje Oosterbaan Martinius

Cover photograph: , 15 October 2008. Destruction of MLRS Multiple Launch Rocket System at Nammo Buch, Germany. © Werner Anderson www.werneranderson.no

For additional information please contact [email protected]. IKV Pax Christi (the Netherlands) and Netwerk Vlaanderen (Belgium) published the first report on “Worldwide Investments in Cluster Munitions: a Shared Responsibility” in October 2009. It was a state-of-the-art report on financial institutions’ investment in companies that develop or produce cluster munitions, on financial institutions disinvesting from producers of cluster munitions and on legislative measures to prohibit investment in cluster munitions. An update of the report appeared in April 2010. This edition, dated May 2011, updates the earlier reports.

1 STATE-OF-THE-ART REPORT:

Contents

Executive Summary, Recommendations, Methodology and Summary Tables...... 8

Introduction...... 28

Investing in Cluster Munitions: What’s at Stake?...... 28

Cluster Munitions and the Process...... 28

Financial Institutions’ Power and Responsibility...... 29

Our Research...... 30

Chapter 1 Hall of Shame: Financial Involvement and Investments...... 31

1.1 Red Flag List of Cluster Munitions Producers...... 31

1.1.0 Introduction and Methodology...... 31

1.1.1 Alliant Techsystems ()...... 33

1.1.2 Hanwha ()...... 34

1.1.3 Lockheed Martin (United States)...... 35

1.1.4 ()...... 37

1.1.5 Poongsan (South Korea)...... 37

1.1.6 Technologies Engineering (Singapore)...... 38

1.1.7 Splav State Research and Production Enterprise ()...... 38

1.1.8 Textron (United States)...... 39

1.1.9 Former cluster munitions producer no longer on our red flag list:

L-3 Communications (United States)...... 40

1.2 The Investments...... 41

1.2.0 Introduction and Methodology...... 41

1.2.1 Aberdeen Asset Management ()...... 43

1.2.2 Acadian Asset Management (United States)...... 43

1.2.3 AEGON Group (The Netherlands)...... 43

1.2.4 Agricultural of China (China)...... 43

1.2.5 AIG (United States)...... 44

1.2.6 Allianz (Germany)...... 44

1.2.7 Alyeska Investment Group (United States)...... 44

1.2.8 Allstate Corporation (United States)...... 45

1.2.9 American Century Investments (United States)...... 45

1.2.10 ANZ Bank (Australia)...... 45

1.2.11 Aviva (United Kingdom)...... 45

1.2.12 AXA ()...... 45

1.2.13 (United States)...... 45

1.2.14 Bank of Beijing (China)...... 46

1.2.15 (China)...... 46

1.2.16 Bank of Communications (China)...... 47

1.2.17 Bank of New York Mellon (United States)...... 47

1.2.18 Bank of Shanghai (China)...... 48

1.2.19 (United Kingdom)...... 48

1.2.20 Baring Asset Management (United Kingdom)...... 48

1.2.21 Batterymarch Financial Management (United States)...... 48

1.2.22 BB&T Corporation (United States)...... 49

1.2.23 BlackRock (United States)...... 49

2 1.2.24 BNP Paribas (France)...... 49

1.2.25 Bookook Securities (South Korea)...... 50

1.2.26 Calamos Holdings (United States)...... 50

1.2.27 Capital Group (United States)...... 50

1.2.28 Creek (United States)...... 50

1.2.29 Chang Hwa Commercial Bank ()...... 51

1.2.30 Cheonan Bukil Education Foundation (South Korea)...... 51

1.2.31 Changjiang Securities (China)...... 51

1.2.32 China Construction Bank (China)...... 51

1.2.33 China Development Bank (China)...... 51

1.2.34 China Everbright Bank (China)...... 52

1.2.35 China Merchants Group (China)...... 52

1.2.36 China Mincheng Banking Corporation (China)...... 53

1.2.37 China Securities (China)...... 53

1.2.38 Group (United States)...... 53

1.2.39 (United States)...... 54

1.2.40 of Australia (Australia)...... 54

1.2.41 Crédit Agricole (France)...... 54

1.2.42 ()...... 54

1.2.43 Daishin Group (South Korea)...... 55

1.2.44 D.E. Shaw Group (United States)...... 55

1.2.45 Daewoo Securities (South Korea)...... 55

1.2.46 Daiwa Asset Management ()...... 55

1.2.47 Davis Selected Advisers (United States)...... 55

1.2.48 (Germany)...... 56

1.2.49 Dimensional Fund Advisors (United States)...... 56

1.2.50 DJE Kapital (Germany)...... 56

1.2.51 Dongbu Securities (South Korea)...... 56

1.2.52 Dreman Value Management (United States)...... 57

1.2.53 Essence Securities (China)...... 57

1.2.54 Eugene Investment & Securities (South Korea)...... 57

1.2.55 Export Import Bank of Korea (South Korea)...... 57

1.2.56 Fidelity Group (United States)...... 57

1.2.57 Fiduciary Management (United States)...... 58

1.2.58 First Eagle Investment Management (United States)...... 58

1.2.59 First Financial Holding Corporation (Taiwan)...... 58

1.2.60 Franklin Templeton (United States)...... 58

1.2.61 General Electric (United States)...... 58

1.2.62 (United States)...... 59

1.2.63 Great Eastern Holdings (Singapore)...... 59

1.2.64 Grantham, Mayo, Van Otterloo & Co. (United States)...... 60

1.2.65 Guotai Junan Securities (China)...... 60

1.2.66 Haitong Securities (China)...... 60

1.2.67 Hanyang Securities (South Korea)...... 60

1.2.68 Hanwha Securities (South Korea)...... 60

1.2.69 Hartford Financial Services Group (United States)...... 61

1.2.70 Helaba (Germany)...... 61

1.2.71 Henderson Global Investors (United Kingdom)...... 61

1.2.72 HI Investment & Securities (South Korea)...... 62

1.2.73 HMC Investment Bank (South Korea)...... 62

1.2.74 Hotchkis and Wiley Capital Management (United States)...... 62

1.2.75 HSBC (United Kingdom)...... 62

1.2.76 Hua Nan Financial Holdings (Taiwan)...... 63

3 1.2.77 Industrial Bank (China)...... 63

1.2.78 Intesa Sanpaolo (Italy)...... 63

1.2.79 Invesco (United Kingdom)...... 63

1.2.80 Italmobiliare (Italy)...... 63

1.2.81 JP Morgan Chase (United States)...... 64

1.2.82 Keybank (United States)...... 64

1.2.83 Killen Group (United States)...... 65

1.2.84 Knightsbridge Asset Management (United States)...... 65

1.2.85 Kookmin Bank (South Korea)...... 65

1.2.86 Korea Development Bank (South Korea)...... 66

1.2.87 Korea Investment Holdings (South Korea)...... 67

1.2.88 KTB Asset Management (South Korea)...... 67

1.2.89 Liberty Mutual (United States)...... 67

1.2.90 Lincoln National Corporation (United States)...... 68

1.2.91 Lloyds Banking (United Kingdom)...... 68

1.2.92 Loews Corporation (United States)...... 68

1.2.93 Lord, Abbett & Co. (United States)...... 68

1.2.94 Manulife Financial (Canada)...... 68

1.2.95 Massachusetts Finance Group (United States)...... 68

1.2.96 Massachusetts Mutual (United States)...... 69

1.2.97 Matthews International Capital Management (United States)...... 69

1.2.98 Mellon Capital Management (United States)...... 69

1.2.99 Meritz Securities (South Korea)...... 69

1.2.100 Metropolitan Life Insurance (United States)...... 69

1.2.101 MFS Investment Management (United States)...... 70

1.2.102 Midas Asset Management (South Korea)...... 70

1.2.103 Minsheng Securities (China)...... 70

1.2.104 Mirae Asset Securities (South Korea)...... 70

1.2.105 Mitsubishi UFJ Financial Group (Japan)...... 70

1.2.106 Mizuho Bank (Japan)...... 71

1.2.107 (United States)...... 71

1.2.108 National Agricultural Cooperative Federation (South Korea)...... 72

1.2.109 National Pension Service (South Korea)...... 72

1.2.110 Natixis (France)...... 72

1.2.111 Neuberger Berman (United States)...... 72

1.2.112 New Jersey Department of Treasury (United States)...... 72

1.2.113 New York Life (United States)...... 73

1.2.114 Newton Investment Management (United Kingdom)...... 73

1.2.115 Nomura (Japan)...... 73

1.2.116 Northern Trust (United States)...... 73

1.2.117 Northwestern Mutual (United States)...... 73

1.2.118 Nuveen Investments (United States)...... 73

1.2.119 Och-Ziff Capital Management (United States)...... 74

1.2.120 Oaktree Capital Management (United States)...... 74

1.2.121 People’s United Financial (United States)...... 74

1.2.122 Pioneer Investments (United States)...... 74

1.2.123 PNC Financial Services Group (United States)...... 74

1.2.124 Principal Financial Group (United States)...... 74

1.2.125 Prudential (United Kingdom)...... 75

1.2.126 Prudential Insurance (United States)...... 75

1.2.127 Putnam Investment Management (United States)...... 75

1.2.128 Rabobank (The Netherlands)...... 75

1.2.129 (Canada)...... 75

4 1.2.130 (United Kingdom)...... 76

1.2.131 SAC Capital Advisors (United States)...... 76

1.2.132 Samsung Group (South Korea)...... 77

1.2.133 Sberbank (Russia)...... 77

1.2.134 Scepter Holdings (United States)...... 77

1.2.135 Shanghai Pudong Development Bank (China)...... 77

1.2.136 Shinhan Bank (South Korea)...... 78

1.2.137 Shinyoung Securities (South Korea)...... 78

1.2.138 Sinolink Securities (China)...... 78

1.2.139 SK Securities (South Korea)...... 78

1.2.140 Société Générale (France)...... 79

1.2.141 State Farm (United States)...... 79

1.2.142 State Street (United States)...... 79

1.2.143 Sumitomo Trust & Banking (Japan)...... 80

1.2.144 Sun Life Financial Services (Canada)...... 80

1.2.145 SunTrust Bank (United States)...... 80

1.2.146 Symetra Life Insurance (United States)...... 80

1.2.147 T. Rowe Price Group (United States)...... 80

1.2.148 Teachers Insurance & Annuity Association (TIAA-CREF) (United States)...... 81

1.2.149 Temasek Holdings (Singapore)...... 81

1.2.150 Tenor Capital (United States)...... 81

1.2.151 Tong Yang Securities (South Korea)...... 81

1.2.152 UBS (Switzerland)...... 82

1.2.153 United Overseas Bank (Singapore)...... 82

1.2.154 Universal Investment Gesellschaft (Germany)...... 82

1.2.155 US Bank (United States)...... 83

1.2.156 Vanguard Group (United States)...... 83

1.2.157 Veritas Asset Management (United Kingdom)...... 83

1.2.158 Management Company (United States)...... 84

1.2.159 Bank (United States)...... 84

1.2.160 Western Securities (China)...... 84

1.2.161 Westwood Holdings Group (United States)...... 85

1.2.162 Woori Investment & Securities (South Korea)...... 85

1.2.163 Xian International Trust & Investment (China)...... 85

1.2.164 Yuanta Financial Holdings (Taiwan)...... 85

Chapter 2 FOCUS: Public Pension Funds and Sovereign Wealth Funds...... 86

2.1.0 Introduction and Methodology...... 86

2.1.1 Abu Dhabi Investment Authority ()...... 87

2.1.2 Alaska Permanent Fund Corporation (United States)...... 88

2.1.3 Alberta’s Heritage Fund (Canada)...... 88

2.1.4 Caixa de Previdencia dos Funcionarios do Banco do Brasil ()...... 88

2.1.5 California Public Employees’ Retirement System (CalPERS) (United States)...... 88

2.1.6 Libyan Investment Authority ()...... 89

2.1.7 National Pension Service (South Korea)...... 89

2.1.8 Quebec Pension Plan (Canada)...... 89

2.1.9 SAMA Foreign Holdings ()...... 89

2.1.10 SAFE Investment Company (China)...... 90

2.1.11 Strategic Investment Fund (France)...... 90

2.1.12 Swiss Federal Social Security Fund (Switzerland)...... 90

5 Chapter 3 Disinvesting from Cluster Munitions Producers...... 91

3.1 Hall of Fame: Financial institutions pioneering in disinvestment...... 91

3.1.0 Introduction and Methodology...... 91

ETHICAL ...... 93

3.1.1 ASN Bank (the Netherlands)...... 93

3.1.2 Banca Etica (Italy)...... 93

3.1.3 Triodos Bank (the Netherlands)...... 93

GOVERNMENT-MANAGED PENSION FUNDS...... 94

3.1.4 National Pensions Reserve Fund