Dutch banks drop US investor for lack of cluster munitions policy
17 March 2014
Dutch banks ABN Amro and Rabobank announced recently they will stop offering funds provided by Franklin Templeton Investments (US) because the US firm does not have a formal policy in place that bans investments in cluster munitions producers.
The positive announcement comes a little over a year since a ban on direct and demonstrable investments in cluster munitions companies came into effect in the Netherlands. The law prohibits Dutch banks and other financial institutions from investing in funds that are made up of 5% or more by companies involved in the production of cluster munitions.
Franklin Templeton has stated that its funds are not in violation with the Dutch law. However, a spokesperson of the company stated that the US asset manager does not have any formal restrictions on investments in cluster munitions producers and that it could not guarantee that its funds will always comply with the ban in the future. It is for this reason that the Dutch banks have decided to stop offering Franklin Templeton funds.
As a financial institution from the US, Franklin Templeton does not itself fall under the scope of the Dutch law. Yet, the move by the two Dutch banks shows that efforts to ban investments in cluster munitions producing companies extend globally in impact – helping towards the ultimate goal of an end to production of this indiscriminate weapon worldwide.
The positive move should serve as an example for other investors to put in place policies banning investments in cluster munitions producers to ensure no money flows towards companies involved in the production of this deadly weapon.
To date, nine countries have legislated against (forms of) investments in cluster munitions: Belgium, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, New Zealand, Samoa and Switzerland. Another 27 states have made interpretive statements that indicate that they consider investments in cluster munitions to be prohibited.
For more information about which financial institutions have (comprehensive) policies against investments in cluster munitions, see the 2013 ‘Worldwide Investments in Cluster Munitions; a shared responsibility’ report by PAX (formerly IKV Pax Christi, the Netherlands).
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