U.S. weapon manufacturers feeling the wrath of arms-control activists.

• Author: Erwin, Sandra I.
• Position: Industry - Geographic overview

U.S. production of air-launched weapons that are widely used by the Air Force and foreign allies might be in jeopardy as a result of a global advocacy campaign that targets manufacturers of military hardware.

Antiwar and arms-control groups over the past decade have homed in on landmines and cluster munitions, and are now also targeting armed drones as another category' of weapons that should be banned because they harm and kill civilians.

The manufacturing of one of the U.S. military's most widely used precision-guided munitions, the Sensor Fuzed Weapon, could be imperiled, industry sources said, because several multinational banks and insurance companies--under pressure from advocacy groups--have decided to no longer do business with producers of weapons that fall under the broad rubric of cluster munitions.

The Sensor Fuzed Weapon, made by Textron Defense Systems, of Wilmington, Mass., is a 1,000-pound dispenser that deploys 10 guided submunitions, each equipped with antitank warheads. The Pentagon, in response to pressure from the arms-control community, has defended the use of SFW on the grounds that its self-deactivating features prevent unintended civilian casualties. Officials have insisted that precision-guided systems such as SFW should not be confused with indiscriminate "dumb" munitions.

As a result of steady efforts by antiwar groups, several munitions suppliers in the United States have seen their lines of credit and insurance coverage pulled back by major financial institutions. International banks that have terminated commercial relationships with cluster munitions and landmine manufacturers include Credit Suisse, BNP, HSBC, Societe Generale and UBS, among others, according to a report by the antiwar group IKV Pax Christi, titled, "Worldwide Investments in Cluster Munitions: a Shared Responsibility"

These banks' policies explicitly state that they will not invest in companies that are involved in the production of weapons banned under the U.N. Convention on Cluster Munitions and the U.N. Convention on Antipersonnel Mines.

One of the most forceful lobbying campaigns against banks that do business with weapon manufacturers has been by the Cluster Munition Coalition. On its website, stopexplosiveinvestments.org, the alliance praised the November 2010 announcement by Credit Suisse that it would end investments in producers of landmines and duster munitions. "Credit Suisse should be commended for this strong new policy that puts civilian lives ahead of profits at all costs," said Paul Vermeulen, director of Handicap International Switzerland, a CMC member.

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Pressuring banks is part of a broader strategy by peace groups to outlaw weapons, said Steven Groves, a senior fellow at The Heritage Foundation, a conservative policy think tank. He said this might create problems for some US. companies, as most major banks today are global, multinational organizations. The challenge for manufacturers, and for the Defense Department, is that precision-guided systems that the U.S. military regards as legitimate weapons of war are being lumped with indiscriminate cluster munitions, he said.

"Cluster munitions are designed to split apart during descent, scattering multiple, smaller explosive submunitions across a wide area and striking multiple targets on the ground, such as armored columns, massed infantry, and aircraft parked in the open," he said...