June 2016 update Worldwide investments in CLUSTER MUNITIONS a shared responsibility June 2016 Utrecht, June 2016 PAX has 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 PAX. 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 (PAX) Hester Brink (Profundo) Suzanne Oosterwijk (PAX) Michel Riemersma (Profundo) Research by Maaike Beenes (PAX) Roos Boer (PAX) Hester Brink (Profundo) Anniek Herder (Profundo) Hassel Kroes (Profundo) Barbara Kuepper (Profundo) Suzanne Oosterwijk (PAX) Michel Riemersma (Profundo) Frank Slijper (PAX) With thanks to Firoz Alizada, Werner Anderson, Laura Boillot, Stan Brabant, Jordi Calvo Rufanges, Amelie Chayer, Cyrielle Chibaeff, Bonnie Docherty, Jan Willem van Gelder, Paul Hannon, Barbara Happe, Katherine Harrison, Mark Hiznay, Erin Hunt, Wouter Kolk, Thomas Küchenmeister, Martin Lagneau, Marion Libertucci, Gro Nystuen, Alma Al Osta, Giuseppe Schiavello, Christophe Schreire, Petra Schroeter, Sigrid Rausing Trust, Susi Snyder, Miriam Struyk, Esther Vanderbroucke, Mary Wareham, Luc Weyn, Joeri de Wilde, Ward Warmerdam, Wilbert van der Zeijden, and all the representatives of the financial institutions who provided answers to our questions about their policy. Editor Isobel Mackie A publication by PAX, the Netherlands Lay out Helma Bovens (Studio het Mes) Cover photograph Germany, 15 October 2008 DM1348/155 mm artillery delivered cluster munitions. © Werner Anderson www.werneranderson.no For additional information please contact [email protected]. PAX (formerly IKV Pax Christi, the Netherlands) and FairFin (formerly 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 states banning investments in cluster munitions. Updates of the report appeared in April 2010, May 2011, June 2012, December 2013 and November 2014. This edition by PAX, dated June 2016, updates the earlier reports. STATE-OF-THE-ART REPORT Contents Executive Summary, Recommendations and Methodology 10 Summary Tables 21 Introduction 33 Investing in Cluster Munitions: What’s at Stake? 33 Cluster Munitions and the Oslo Process 33 Financial Institutions’ Power and Responsibility 34 Our Research 35 Chapter 1 Hall of Shame: Financial Involvement and Investments 36 1.1 Red Flag List of Cluster Munitions Producers 36 1.1.0 Introduction and Methodology 36 1.1.1 China Aerospace Science and Industry (China) 38 1.1.2 China Aerospace Science and Technology (China) 38 1.1.3 Hanwha (South Korea) 39 1.1.4 Norinco (China) 40 1.1.5 Orbital ATK (United States) 40 1.1.6 Poongsan (South Korea) 42 1.1.7 Textron (United States) 42 1.1.8 Companies no longer on our red flag list 44 1.2 The Investments 45 1.2.0 Introduction and Methodology 45 1.2.1 Affiliated Managers Group (United States) 48 1.2.2 Agricultural Bank of China (China) 48 1.2.3 Allianz (Germany) 49 1.2.4 Alyeska Investment Group (United States) 49 1.2.5 Amalgamated Bank of Chicago (United States) 50 1.2.6 American International Group (AIG) (United States) 50 1.2.7 American United Mutual Insurance (United States) 50 1.2.8 AQR Capital Management (United States) 51 1.2.9 Artisan Partners (United States) 51 1.2.10 Associated Banc-Corp (United States) 51 1.2.11 Bailard (United States) 52 1.2.12 Banco de Sabadell (Spain) 52 1.2.13 BancPlus (United States) 53 1.2.14 Bank Hapoalim (Israel) 53 1.2.15 Bank of America (United States) 54 1.2.16 Bank of Beijing (China) 55 1.2.17 Bank of China (China) 56 1.2.18 Bank of Communications (China) 57 1.2.19 Bank of East Asia (China) 58 1.2.20 Bank of Nanjing (China) 58 1.2.21 Bank of New York Mellon (United States) 59 1.2.22 Banner Bank (United States) 60 1.2.23 Barclays (United Kingdom) 60 2 1.2.24 BB&T (United States) 61 1.2.25 Beijing Capital Group (China) 61 1.2.26 BlackRock (United States) 62 1.2.27 BPCE Group (France) 62 1.2.28 California First National Bancorp (United States) 63 1.2.29 Carlyle Group (United States) 63 1.2.30 Cascade Bancorp (United States) 64 1.2.31 Causeway Capital Management (United States) 64 1.2.32 Central Pacific Financial Corporation (United States) 65 1.2.33 Cheonanbukil Foundation School (South Korea) 65 1.2.34 China Construction Bank (China) 66 1.2.35 China Development Bank (China) 67 1.2.36 China Everbright Group (China) 67 1.2.37 China Guangfa Bank (China) 68 1.2.38 China Investment Securities (China) 69 1.2.39 China Life Insurance (China) 69 1.2.40 China Merchants Group (China) 70 1.2.41 China Minsheng Banking (China) 71 1.2.42 China Securities (China) 72 1.2.43 CI Financial (Canada) 72 1.2.44 CITIC (China) 73 1.2.45 Citigroup (United States) 73 1.2.46 CNO Financial Group (United States) 74 1.2.47 Comerica (United States) 75 1.2.48 Crédit Mutuel (France) 75 1.2.49 Credit Suisse (Switzerland) 76 1.2.50 The Dai-Ichi Life Insurance Company (Japan) 76 1.2.51 Daishin Securities (South Korea) 76 1.2.52 DBS (Singapore) 77 1.2.53 Deutsche Bank (Germany) 77 1.2.54 Dimensional Fund Advisors (United States) 78 1.2.55 Dongbu Group (South Korea) 78 1.2.56 Donghai Securities (China) 79 1.2.57 E Fund Management (China) 79 1.2.58 E.SUN Financial (Taiwan) 80 1.2.59 Eastern Bank (United States) 80 1.2.60 Eaton Vance (United States) 80 1.2.61 eBEST Investment & Securities (South Korea) 81 1.2.62 Eugene Investment & Securities (South Korea) 81 1.2.63 Evergrowing Bank (China) 82 1.2.64 Fidelity Investments (United States) 82 1.2.65 Fifth Third Bancorp (United States) 83 1.2.66 First Eagle Investment Management (United States) 84 1.2.67 First Niagara Financial (United States) 84 1.2.68 Franklin Resources (United States) 84 1.2.69 Fubon Group (Taiwan) 85 1.2.70 GGCP (United States) 85 1.2.71 GMO (United States) 86 1.2.72 Goldman Sachs (United States) 86 1.2.73 Guotai Junan Securities (China) 87 1.2.74 Hana Financial (South Korea) 88 1.2.75 Hanwha Group (South Korea) 88 1.2.76 Hanyang Securities (South Korea) 89 3 1.2.77 Hartford Financial Services (United States) 90 1.2.78 Hua Nan Financial (Taiwan) 90 1.2.79 Huatai Securities (China) 91 1.2.80 Hyundai Group (South Korea) 91 1.2.81 Hyundai Heavy Industries (South Korea) 92 1.2.82 Industrial and Commercial Bank of China (China) 93 1.2.83 Industrial Bank Company (China) 94 1.2.84 Invesco (United Kingdom) 94 1.2.85 JPMorgan Chase (United States) 95 1.2.86 KB Financial Group (South Korea) 97 1.2.87 KDB Financial Group (South Korea) 98 1.2.88 KeyCorp (United States) 98 1.2.89 Kiwoom Securities (South Korea) 99 1.2.90 Korea Investment Holdings (South Korea) 100 1.2.91 Kyobo AXA Investment Managers (South Korea) 101 1.2.92 Kyobo Life Insurance (South Korea) 101 1.2.93 Land Bank of Taiwan (Taiwan) 102 1.2.94 Legg Mason (United States) 102 1.2.95 LIG Group (South Korea) 103 1.2.96 Loews Corporation (United States) 103 1.2.97 The London Company of Virginia (United States) 104 1.2.98 Lord, Abbett & Co (United States) 104 1.2.99 Manulife Financial (Canada) 105 1.2.100 MassMutual Financial (United States) 105 1.2.101 Meritz Financial Group (South Korea) 106 1.2.102 MetLife (United States) 106 1.2.103 Midas International Asset Management (South Korea) 107 1.2.104 Mirae Asset Financial Group (South Korea) 107 1.2.105 Mitsubishi UFJ Financial (Japan) 108 1.2.106 Mizuho Financial (Japan) 109 1.2.107 Morgan Stanley (United States) 110 1.2.108 National Pension Service (South Korea) 111 1.2.109 Neuberger Berman (United States) 111 1.2.110 New York Life Insurance (United States) 111 1.2.111 New York State Common Retirement Fund (United States) 112 1.2.112 NongHyup Financial (South Korea) 112 1.2.113 Northern Trust (United States) 113 1.2.114 Northwestern Mutual Life Insurance (United States) 114 1.2.115 Old Mutual (United Kingdom) 114 1.2.116 Orix Corporation (Japan) 114 1.2.117 People’s Insurance Company of China (China) 115 1.2.118 People’s United Financial (United States) 115 1.2.119 Ping An Insurance Group (China) 116 1.2.120 Piper Jaffray (United States) 117 1.2.121 PNC Financial Services (United States) 117 1.2.122 Principal Financial Group (United States) 118 1.2.123 Prudential (United Kingdom) 119 1.2.124 Prudential Financial (United States) 119 1.2.125 Raymond James Financial (United States) 120 1.2.126 Regions Financial (United States) 120 1.2.127 Royal Bank of Canada (Canada) 121 1.2.128 Roystone Capital Management (United States) 122 1.2.129 Samsung Group (South Korea) 123 4 1.2.130 Sealand Securities (China) 124 1.2.131 Shanghai Pudong Development Bank (China) 124 1.2.132 Shenwan Hongyuan Group (China) 125 1.2.133 Shinhan Financial Group (South Korea) 126 1.2.134 Shinyoung Asset Management (South Korea) 126 1.2.135 Siemens (Germany) 127 1.2.136 SK Securities (South Korea) 127 1.2.137 State Bank of India (India) 128 1.2.138 State of Wisconsin Investment Board (United States) 128 1.2.139 State Street (United States) 129 1.2.140 Stifel Financial (United States) 129 1.2.141 Sumitomo Mitsui Financial (Japan) 129 1.2.142 Sun Life Financial (Canada) 131 1.2.143 SunTrust (United States) 131 1.2.144 Synovus Financial Corporation (United States) 133 1.2.145 T.