Cluster Bomb Ban Series

The Bank of Tokyo-Mitsubishi UFJ Ltd. and Sumitomo Mitsui Banking Corp. have banned lending and investment financing for the production of cluster bombs, the Mainichi has learned.

In light of the Oslo Declaration banning cluster bombs -- whose unexploded submunitions continue to kill and injure civilians long after conflicts have ended -- set to go into effect on Aug. 1, combined with the global spread of the notion of ethical spending and investment that originated in Europe and argues against the provision of funds for inhumane purposes, the two megabanks added identification of fund usage to their checklist of criteria that must be fulfilled in making investments and loans.

Sumitomo Mitsui said in a written reply to the Mainichi that it stipulates the production of cluster bombs as criteria to deny credit in accordance with the implementation of the treaty, and the Bank of Tokyo-MUFJ informed the Mainichi that the item was added to its list of criteria in February 2009. Meanwhile, Mizuho Corporate Bank Ltd. said that it would not reveal its list of criteria.

All three major Japanese banks declined to comment on individual transactions when asked about investments in cluster bomb producers in November 2009.

This past April, the same three banks were among the financial institutions blacklisted by Belgium-based NGO Netwerk Vlaanderen for investing in seven firms involved in the production of cluster munitions in the U.S., South Korea, and elsewhere.

While the Oslo treaty does not prohibit investment in cluster munitions producers, it also does not permit cooperation with or providing assistance to such producers. The latest moves by Sumitomo Mitsui and the Bank of Tokyo-MUFJ embody the spirit of the treaty.

In 2007, Belgium became the first country to establish a law banning investment in cluster bomb producers. The bylaws of the world's major financial institutions and investment funds, including the French insurance group AXA and Norway's Government Pension Fund, also prohibit investing in such companies. On the other hand, while the two big Japanese banks do not allow investment and loans to be used for the purpose of financing cluster bomb production, they do not prohibit investment in firms that produce such weapons.

"It's not enough, but it's still a step in the right direction," said Junko Utsumi, director of the NGO Japan Campaign to Ban Landmines. "We hope this trend will spread to other financial institutions."