Published on January 8th, 2019
Elbit Systems says it will discontinue cluster munitions production
Israeli arms company Elbit Systems is said by Israeli media that its recently acquired subsidiary IMI Systems will no longer produce cluster munitions.
IMI Systems has long been considered a producer of cluster munitions and was until recently government owned. IMI Systems has produced amongst others the M85, M970, M971, RAM cluster munitions and continued to advertise several types of cluster munitions on its website until December 2018.
Late November 2018, Elbit Systems finalized its acquisition of IMI Systems. The recent update of Worldwide Investments in Cluster Munition (December 2018) report therefore cautioned investors to blacklist Elbit Systems, unless it would stop the cluster munition production activities of its newly acquired subsidiary IMI Systems.
The global financial sector increasingly rejects companies that continue to produce cluster munitions, exemplified by the 110 banks, insurers and pension funds in the PAX report that have policies in place to stop investments in companies that produce cluster munitions.
Since the acquisition of IMI by Elbit, one of the world’s biggest insurers, Aviva, informed us that it would add Elbit to its ‘stoplist’ and had no active holdings in the company. French public pension fund Fonds de Réserve pour les Retraites (FRR) informed PAX that following its rules, FRR was planning to exclude Elbit Systems as well, a decision that would be made public at a later stage. The Dutch Financial Market Authority (AFM) included Elbit Systems in its risk radar of companies that Dutch financial institutions should have no active holdings of, based on the Dutch prohibition to invest in cluster munition producers. At the end of December 2018 it became publicly known that global bank HSBC, said to be the 7th largest bank globally, had divested from Elbit Systems. In a public comment on the decision, HSBC clarified it had divested from Elbit Systems because of its concern over cluster munitions production.
In a response to HSBC’s decision, Elbit’s vice president David Vaknin was quoted in the Jerusalem Post saying that “as part of the Elbit Systems organization, IMI Systems will not be continuing its prior activities with respect to cluster munitions” and “Elbit Systems [itself] is not engaged in the production of cluster munitions”.
Michel Uiterwaal, project leader on weapons and the financial sector at PAX: “Elbit’s announcement that it will no longer be producing cluster munitions is very positive. We hope they turn their words into actions indeed ending all production of all cluster munitions throughout their company, and ensure no such production will take place in the future”.
In May 2018, Elbit Systems still declined to comment on MI Systems’ cluster munition activities. The mounting pressure from the financial sector now seems to have convinced Elbit Systems to take a public stance and renounce the interntationally banned cluster munitions.
No further information has been released by the company. However, all advertising of cluster munitions seems to have been removed from IMI Systems’ website.
Uiterwaal: “We will follow the developments of Elbit closely and we encourage all investors to carefully evaluate this new information before doing business with Elbit Systems, to make sure all production of these prohibited weapons will actually be stopped”.