June 18, 2016

The CPP : BANKING ON CLUSTER BOMBS

BANKING ON CLUSTER BOMBS:

Richard Sanders, for the Coalition to Oppose the Arms Trade (COAT), June 17, 2016.

The CPP is  investing $6.8 Billion in 77 financial institutions that have
made US$18.7 Billion available to seven cluster-munitions manufacturers. 

By Richard Sanders, for the Coalition to Oppose the Arms Trade (COAT), June 17, 2016.
A June 16, 2016 report, called Worldwide Investments in Cluster Munitions: A Shared Responsibility by PAX (Netherlands), identifies seven cluster-munitions manufacturers: China Aerospace Science and Industry, China Aerospace Science and Technology, Norinco (China), Hanwha and Poongsan (South Korea), Orbital ATK and Textron (United States).
Under Harper's Conservative government, Canada signed the Convention on Cluster Munitions in 2008, ratified it in March 2015 and became a State Party to the convention on September 1, 2015. Although Canadian legislation does not prohibit investment in cluster munitions, Senator Suzanne Fortin-Duplessis said in the Senate in 2012 that “under the bill it is prohibited to assist, encourage or induce anyone to engage in any prohibited activity including knowingly and directly investing in the production of cluster munitions.” (PAX Report, p.209)
Appropriately then, the Canada Pension Plan (CPP) does not now invest in this particular kind of weapons industry.  (However, it does invest in nuclear weapons makersF-35 war plane contractors and dozens of companies that are among the world's largest weapons manufacturers.  Here are more tables on the CPP's investments in war-related companies.)

Although the CPP does not now invest in cluster-bomb manufacturers, it used to.  As recently as 2012, CPP investments included $231 million in cluster-munitions producers.

However, the CPP is still helping cluster manufacturers.  Current CPP investments (as of its most recent report, March 2016) do include Cdn$6.8 billion in 77 Financial Institutions that have financed the seven cluster-munitions manufacturers identified in PAX's latest report. These 77 Financial Institutions, that are now in the CPP portfolio, have made US$18.7 Billion available to the seven cluster bomb makers that are "red flagged" in PAX's June 16, 2016, report.

This latest PAX report identifies four Canadian Financial Institutions that have made $1.7 billion available to cluster-bomb makers since 2012, namely, CI Financial (US$70 million), Manulife Financial (US$336 million), the Royal Bank of Canada (US$1,048 million), and Sun Life Financial (US$254 million).The PAX report does not include any data on CPP investments in Financial Institutions tied to cluster-bomb makers.  Here is that data about 2016 CPP investments that is not included in the PAX report:
Financial Institution (FI) in the
"Hall of Shame" for
Cluster-Munition Bankers
 
CountryValue of CPP
investment
2016
 (1)
(in $Cdn
millions)
Value of FI
 investments
in Producers
of Cluster
Munitions
 (2)
(in $US millions)
Affiliated Managers Group IncUS17116
Agricultural Bank of China Ltd AChina14439
Allianz SEGermany13285
American International Group IncUS59052
Banco de Sabadell SASpain2315
Bank Hapoalim BMIsrael7107
Bank of America CorpUS319953
Bank of Beijing Co LtdChina1160
Bank of China Ltd AChina11401
Bank of Communications Co Ltd (A)China2978
Bank of East Asia LtdHong Kong1020
Bank of New York Mellon CorpUS85420
Barclays PLCUK136
BB&T CorpUS59134
BlackRock IncUS831,070
Carlyle Group (B)USA89.5*132
China Construction Bank Corp A & H (C)China50591
China Everbright Bank Co Ltd AChina11671
China Life Insurance Co Ltd A & H (D)China615
China Merchants Holdings International Co LtdChina4508
China Minsheng Banking Corp Ltd AChina4272
CI Financial CorpCanada7072
CITIC (E)China317.3*37
Citigroup IncUS277657
Comerica IncUS1635
Credit Suisse Group AGSwitzerland658
Dai-ichi Life Insurance Co LtdJapan7040
DBS Group Holdings LtdSingapore5720
Deutsche Bank AGGermany392
E.Sun Financial Holding Co LtdTaiwan1615
Fifth Third BancorpUS31282
Franklin Resources IncUS34134
Fubon Financial Holding Co LtdTaiwan3110
Goldman Sachs Group Inc (F)US791.5*287
Hana Financial Group IncS. Korea2580
Hartford Financial Services Group IncUS1096
Hua Nan Financial Holdings Co LtdTaiwan915
Hyundai Heavy Industries Co Ltd
S. Korea1159
Hyundai SecuritiesS. Korea318
Industrial Bank Co LtdChina729
Invesco LtdUS28418
JPMorgan Chase & CoUS4951,167
KB Financial Group IncS. Korea39234
KeyCorpUS22198
Korea Investment Holdings Co LtdS. Korea4143
Loews CorpUS2549
Manulife Financial CorpCanada33651
Meritz Financial Group IncS. Korea1259
MetLife IncUS10540
Mirae Asset Securities Co LtdS. Korea28
Mitsubishi UFJ Financial Group IncJapan275774
Mizuho Financial Group IncJapan16414
Morgan StanleyUS85326
Northern Trust CorpUS31329
Old Mutual PLCUK69
ORIX CorpJapan90337
Ping An Insurance Group Co of China Ltd (G)China56114
PNC Financial Services Group IncUS98350
Principal Financial Group IncUS1993
Prudential Financial IncUS7677
Prudential PLCUK2243
Regions Financial CorpUS25215
Royal Bank of CanadaCanada1,048381
Samsung Securities Co LtdS. Korea645
Shanghai Pudong Development Bank Co LtdChina307
Shinhan Financial Group Co LtdS. Korea56109
State Bank of IndiaIndia187
State Street CorpUS54563
Sumitomo Mitsui Financial Group IncJapan192463
Sun Life Financial IncCanada25462
SunTrust Banks IncUS42526
T Rowe Price Group IncUS451,644
United Overseas Bank LtdSingapore566
US BancorpUS147618
Voya Financial IncUS15251
Wells Fargo & CoUS510828
Yuanta Financial Holding Co LtdTaiwan1436
Totals6835.318697
Notes:All of the financial institutions on this list have "financial relationships with cluster munitions producers" that include one or more of the following: (1) ownership or management of (convertible) bonds, (2) underwriting of bond issuances, (3) provision of loan facility, (4) ownership or management of shares, (5) underwriting of share issuances.
A    CPP investments are listed as Bank of Communications Co Ltd A ($18 million) & Bank of Communications Co Ltd H ($11 million)
B    CPP investments in the Carlyle Group are listed as Carlyle Venture Partners II (US$89.5 million)

C    CPP investments listed as China Construction Bank Corp A ($7 million) & China Construction Bank Corp H ($43 million)
D    CPP investments listed as China Merchants Group, which is a state-owned corporation of People's Republic of China. It is the major shareholder of China Merchants Holdings (International) (55.4%)
E    
CPP investments listed as CITIC Ltd ($6 million), CITIC Capital China Partners (US$57.9 million), and CITIC Capital China Partners (US$253.4 million)
F    CPP investments in Goldman Sachs are US$791.5

G    CPP investments listed as Ping An Insurance Group Co of China Ltd A ($49 million) & Ping An Insurance Group Co of China Ltd H ($7 million)

* These three figures, for Carlyle, 
CITIC and Goldman Sachs, are in $US.  This is how they are listed in the CPP source ("Private Equity relationships"), see below.
Sources:1    CPP Investments 2016 (in $Cdn) (Canada Pension Plan Investment Board)
Foreign public equity holdings as at March 31, 2016

Private Equity relationships established as at December 31, 2015
(for CPP investments in Carlyle, 
CITIC and Goldman Sachs.)
2     Worldwide Investments in Cluster Munitions: A Shared Responsibility, June 2016.
By PAX, the Netherlands.

For detailed information about the exact types and amounts of financial relationships that each of these financial institutions have with the Cluster Munitions manufacturers identified in the above report, see  pages.48-141.

Other COAT data tables on the CPP's 2016 Investments in war-related Industries:$1 Billion in 31 of the World's Top 100 War Industries

$374 million in F35-Warplane Contractors
$305 Million in 13 Nuclear-Weapons Producers

$11 Billion in 113 financial institutions that made US$313 billion available to 26 nuclear-weapons producers


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