Investment dilemma <ul><li>Financing the defence industry; a no-go area or perfectly legal?   </li></ul><ul><li>D.Schoemak...
Main questions: <ul><li>From a CSR perspective; should the financial sector exclude all types of investments in the Defenc...
Main answer: <ul><li>Financial companies should draft a policy with regard to the defence industry that  </li></ul><ul><li...
Outline of presentation <ul><li>Arms trade and why it is a CSR issue </li></ul><ul><li>International legislation; can comp...
1. Arms production: An overview <ul><li>-639 million small arms worldwide; At least 16 billion </li></ul><ul><li>units of ...
1. Arms trade; some results <ul><li>-Human Rights: Practically all human rights violations involve the misuse of arms. 500...
1. Arms trade: examples <ul><li>Sudan/Darfur:  </li></ul><ul><li>Shipments from Russia, China, others </li></ul><ul><li>Ne...
2.Legislation on arms trade <ul><li>Broad range of international legislation (including embargoes) on different types of a...
3. Drafting a csr policy on arms trade Factors to take into account <ul><li>-The industry is strongly globalized; export c...
3. Drafting a CSR policy based on exclusion <ul><li>Exclusion of companies based on type of arms: </li></ul><ul><ul><li>Co...
3. Drafting a CSR policy based on end-use <ul><li>elements to take into account when financing an arms producing company: ...
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Daan Schoemaker

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Daan Schoemaker

  1. 1. Investment dilemma <ul><li>Financing the defence industry; a no-go area or perfectly legal? </li></ul><ul><li>D.Schoemaker </li></ul><ul><li>Amnesty International Netherlands </li></ul><ul><li>TBLI november 2007 </li></ul>
  2. 2. Main questions: <ul><li>From a CSR perspective; should the financial sector exclude all types of investments in the Defence industry? </li></ul><ul><li>If not, what should be elements of an effective CSR policy with regard to the Defence industry? </li></ul>
  3. 3. Main answer: <ul><li>Financial companies should draft a policy with regard to the defence industry that </li></ul><ul><li>1) excludes any investment in controversial arms and </li></ul><ul><li>2) avoids any direct or indirect contribution to human rights violations. </li></ul>
  4. 4. Outline of presentation <ul><li>Arms trade and why it is a CSR issue </li></ul><ul><li>International legislation; can companies rely on states? </li></ul><ul><li>Defining a CSR policy on arms trade </li></ul>
  5. 5. 1. Arms production: An overview <ul><li>-639 million small arms worldwide; At least 16 billion </li></ul><ul><li>units of military ammunition were produced in 2001 alone –more than two military bullets for every man, woman, and child on the planet. </li></ul><ul><li>-2006: total amount of weapon sales of 1000 billion (15x amount of international aid). </li></ul><ul><li>-1135 arms producing companies in 98 countries. </li></ul><ul><li>-Strongly globalized sector; increasingly complex. </li></ul><ul><li>-The 5 largest arms producing companies account for approximately 22% of all production. </li></ul><ul><li>-There is a growing producers market in non-western countries as Israël, India, South Korea and others. </li></ul>
  6. 6. 1. Arms trade; some results <ul><li>-Human Rights: Practically all human rights violations involve the misuse of arms. 500;000 people killed by misuse of arms yearly. </li></ul><ul><li>-Conflict: Arms inflow contributes to violent conflict. </li></ul><ul><li>-Economic situation: An average $22 billion is spent on arms by countries in Asia, the Middle East, Latin America and Africa every year. This sum would have enabled those countries to put every child in school and to reduce child mortality by two thirds by 2015 (fulfilling two of the Millennium Development Goals). </li></ul>
  7. 7. 1. Arms trade: examples <ul><li>Sudan/Darfur: </li></ul><ul><li>Shipments from Russia, China, others </li></ul><ul><li>Nepal: </li></ul><ul><li>Shipments from Europe, India, others </li></ul><ul><li>Apache AH 64: </li></ul><ul><li>Produced by many countries; used in Occupied Territories, Egypt, Saudi Arabia </li></ul>
  8. 8. 2.Legislation on arms trade <ul><li>Broad range of international legislation (including embargoes) on different types of arms and arms trade but limited: </li></ul><ul><ul><li>-Non-binding; full of loopholes </li></ul></ul><ul><ul><li>-regional instead of international </li></ul></ul><ul><ul><li>-often lack of legislation at national levels </li></ul></ul><ul><li>Practically no reference to arms trade in existing CSR standards. </li></ul>
  9. 9. 3. Drafting a csr policy on arms trade Factors to take into account <ul><li>-The industry is strongly globalized; export controls by states are insufficient. </li></ul><ul><li>-Both legal and illegal trade leads to millions of human rights violations. </li></ul><ul><li>-Practically all arms are made through the involvement of tens of companies. </li></ul><ul><li>-In many companies arms production is relatively small in comparison to other products. </li></ul>
  10. 10. 3. Drafting a CSR policy based on exclusion <ul><li>Exclusion of companies based on type of arms: </li></ul><ul><ul><li>Companies producing (components of) controversial arms: clustermunition, landmines, chemical, biological, nuclear, depleted uranium..others </li></ul></ul><ul><ul><li>Companies which products go to embargoed destinations </li></ul></ul>
  11. 11. 3. Drafting a CSR policy based on end-use <ul><li>elements to take into account when financing an arms producing company: </li></ul><ul><ul><li>-Where do the arms end up?(information from NGO’s / media and company itself) </li></ul></ul><ul><ul><li>-is company aware of situation? </li></ul></ul><ul><ul><li>-What is the company’s policy on arms? </li></ul></ul><ul><ul><li>-Arms export legislation in country where company is based? </li></ul></ul><ul><ul><li>-Engagement / shareholder influence? </li></ul></ul><ul><ul><li>-Contractual conditions? </li></ul></ul><ul><ul><li>-exclusion in case of link with human rights violations! </li></ul></ul>

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