RBS stops lending to cluster bomb manufacturers
Royal Bank of Scotland, which is majority owned by the UK taxpayer, has stopped lending money to manufacturers of banned cluster bombs after pressure including a Channel 4 News investigation.
Cluster bombs were banned under an international convention in 2008, signed by the United Kingdom.
But until today, banks across the world – including Royal Bank of Scotland – continued to lend money to companies which manufacture parts for the outlawed weapons.
Now, after a campaign led by Amnesty International and an investigation by Channel 4 News, the state-owned bank has pledged to end its involvement with these companies.
The bank also said it would work with other banks and the UK Government to establish guidelines to stop other institutions from investing in cluster bomb-producing companies in the future.
Channel 4 News revealed that in October 2010 RBS was part of a banking syndicate which secured a $1bn five-year credit facility to US defence company Alliant Techsystems. The company’s products include parts for cluster bombs.
The deal was uncovered in a report by IKV Pax Christi, a Netherlands-based peace organisation, and Netwerk Vlaanderen from Belgium – members of the Cluster Munitions Coalition. It stated: “To invest in cluster bombs is to invest in the misery they cause.”
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Pressure on RBS
When Channel 4 News contacted RBS in June, the bank said its deals were in line with international standards.
But it has since received around 15,000 emails about its involvement with cluster munitions manufacturers, and on Wednesday sent the following email in reply.
“After discussions with various NGO groups we have identified some defence sector clients whose activities could be considered to be outside the spirit of the convention.
It just goes to show that the biggest of businesses have to listen when you make enough noise. Amnesty International
“As a result, we will be suspending all further services to any client where we cannot be certain that they are in compliance with our policy. We will seek to work with both the UK Government and NGO groups to create clarity on this issue, and encourage other banks to do the same.”
Amnesty International’s Arms Programme Director, Oliver Sprague, said: “The effects of cluster bombs are utterly horrific and so many RBS customers were outraged to find their bank was in any way involved in funding companies implicated in their production.
“The swift and immense reaction to our campaign has underscored the public revulsion at banks’ behaviour. A code of conduct which prevents any bank from investing in this way again, would obviously be the right move.
“It is a shame that it took this level of public outcry for a bank with such a high profile to decide to cease any involvement and investment in companies which produce these brutal, outlawed bombs…It just goes to show that the biggest of businesses have to listen when you make enough noise.”