Why Divest? A Focus on Governments

Governments can set norms, negotiate international law and national legislation.

Why Divest? A Focus on Governments

Governments can set norms, negotiate international law and national legislation. Governments of States that have joined nuclear weapons free zone agreements, for example, have an important role in ensuring that financial institutions within their country are not investing in nuclear weapon producers.

What are we asking governments to do?

Nuclear weapons are prohibited by an international treaty. The Treaty on the Prohibition of Nuclear Weapons makes it illegal for nations to use or possess nuclear weapons and paves the way to their complete elimination. Nations committed to reaching the goal of abolition should sign and ratify the Treaty now.

Sign and ratify the treaty

Every country that is committed to achieving a world without nuclear weapons should sign and ratify the Treaty on the Prohibition of Nuclear Weapons. The alternative is to continue allowing the nuclear-armed nations to control the process and perpetuate systems and treaty regimes that have no power to compel disarmament. The TPNW globalizes what nuclear-weapon-free zone treaties have done regionally. It allows nations in any part of the world to formalize their rejection of nuclear weapons and help create a clear international legal norm against the possession of nuclear weapons.

States that have signed and ratified the nuclear Non Proliferation Treaty (NPT) as non nuclear weapon states have shown a moral and ethical commitment to bringing an end for all time to the harm and risks associated with the existence of nuclear weapons. And all states that have ratified the NPT have made a legally binding commitment to do this. So, even though investment in nuclear weapons producers is not illegal under the NPT, governments should make every effort to ensure that any activities carried out under their jurisdiction do not go against the aim and purpose of the treaty, and do not facilitate the production of nuclear weapons. Governments cannot afford to maintain double standards by opposing the use of nuclear weapons, while continuing to allow or even be directly involved in financing nuclear weapon producers.

Our first goal is entry into force of the treaty on the prohibition of nuclear weapons.

Along the way, we can set the stage for future activities that will help eliminate nuclear weapons, and the financing that makes modernisation possible.

Who shall I target?

Government ministries

In most countries the Ministry of Foreign Affairs is responsible for decisions related to nuclear disarmament and non-proliferation. It is often the Ministry of Foreign Affairs that leads on negotiations and coordinates on this with other Ministries such as Defence.

Ministries of Finance and/or Economics can be involved as well, in legislation that has an impact on national financial regulations. Ministries of Justice and Ministries of the Interior can become involved in legislative procedures when decisions need to be made on implementation and monitoring of legislation.

With the recent financial crisis governments in many countries have accumulated shares in banks and other financial institutions. Many financial institutions in the past few years have even become ‘nationalised’ – owned by the state. This creates an additional responsibility on the part of a government to ensure that any activity carried out by those companies does not contravene or undermine political responsibilities of the state.

Members of parliament (MPs) 

In most countries parliamentarians have an important role in both influencing and enacting legislation. Many parliamentarians have been actively involved in supporting a comprehensive ban on nuclear weapons and working to get their governments to support the negotiations.

Parliamentarians can pass motions or resolutions and take action to call on the government to endorse the treaty banning nuclear weapons. Parliamentarians can also be key supporters in national divestment campaign actions. They can ask questions in parliament, initiate parliamentary debates, table motions and lobby for legislation banning investment. Parliamentarians often have twitter accounts and should be encouraged to share  your messages on Facebook or Twitter, or information about their own activities in this issue.

A member of parliament publicly stating that they will close their bank account and calling on the party membership to follow that example is a powerful message.

Members of parliament can:

  • call on their governments to sign and ratify the treaty banning nuclear weapons;
  • sign up to the ICAN Parliamentary Appeal:
  • ask parliamentary questions to get information about the government’s perspective and any government policy towards this;
  • call for national action to prohibiting investments by any state controlled funds;
  • put the issue on the agenda with financial institutions and stimulate the creation of investment guidelines;
  • discuss and start initiatives to build support among other MPs in parliamentary committees;
  • hold debates on the investment policies of the banks used for parliamentary finances;
  • table motions for parliamentary debates on the issue of investment in nuclear weapon producers which requires the government to formulate a position and provide a response.

Government managed or owned financial institutions

The 2008-2009 financial crisis and the following government bailout of financial institutions has changed the financial landscape. Many banks now have government shareholders. This creates a new situation with opportunities for governments to ensure that financial institutions abide by international conventions or laws which the government has signed. Governments can use their position as a shareholder to change the bank’s policy on nuclear weapons, ensuring none of the institution’s money is invested in producers of nuclear weapons. As such, they can lead the way in providing good examples to other financial institutions. To lobby for legislative initiatives that prohibit investments in producers of nuclear weapons is an effective method to stop investments in your country. Governments cannot afford to maintain double standards by opposing the use of nuclear weapons, while continuing to allow or even be directly involved in investing in nuclear weapon producers. The same can be said for cities that have, for example, joined the ICAN City appeal and publicly support a nuclear weapons free world.

The Don’t Bank on the Bomb report shows some examples of governmental good practices: several government-managed funds policies are listed in the report. In those cases, a country demonstrates its commitment to end the production of nuclear weapons by taking steps to prevent investment of government managed money in producers of nuclear weapons.

How to respond to frequently heard reactions from governments

These are some responses to the arguments most frequently heard by governments. Some of this information is elaborated in the PAX publication “Doubting a Ban”. You should also refer to the ‘frequently heard reactions by financial institutions’.

It’s too early for a ban, we need to follow a step-by-step process

The step-by-step process has been around since the 1950s. While it has encouraged some nuclear- armed countries to bring down their total number of nuclear weapons, it has not yet delivered the nuclear weapons free world it promised. The prohibition of weapons typically precedes and stimulates their elimination, not the other way around. The ban treaty, once in force, would powerfully challenge any notion that possessing nuclear weapons is legitimate. Additionally, a ban treaty would facilitate the development of other treaties needed to maintain a world free of nuclear weapons- like prohibitions on building fissile materials, nuclear testing, and delivery systems. A ban can be negotiated now, even without the participation of nuclear-armed countries. Agreements relating to the verified dismantlement of nuclear warheads could be developed with the nuclear-armed nations at a later stage once they are ready to engage. But it is important to get the ball rolling and put in place a clear legal ban.

A ban treaty is not the right next step

There is currently no incentive for progress on nuclear disarmament or penalty for failure to disarm. Without clear milestones, timelines, and consequences, the step-by-step approach has effectively become a delaying tactic. The nuclear ban treaty eliminates the distinction between nuclear weapon states and nuclear armed states, and put the focus on the illegality of the weapons, regardless of who possesses them. This facilitiates the deligitimising of the weapon, and provide the legal underpinning to complete all of the ‘steps’ necessary to achieve and maintain a nuclear weapons free world.

Nuclear weapons are not illegal for the recognised nuclear weapons states

The NPT has specific provisions for the countries that tested a nuclear weapon before 1967. These five countries (China, France, Russia, United Kingdom and United States) are however, still under an obligation to negotiate the elimination of their nuclear arsenals. Furthermore, the use of nuclear weapons is generally considered illegal, because they are incapable of distinguishing between civilians and combatants, their effects cannot be controlled in time or space, and they cause superfluous injury and unnecessary suffering. The International Court of Justice has affirmed the illegality of the use of nuclear weapons. In a landmark advisory opinion in 1996, it held that “the use of nuclear weapons would generally be contrary to the rules of international law”, and reminded nations of their legal duty to disarm.[1]1  In addition, the UN General Assembly has declared that the use of nuclear weapons would violate the UN Charter and constitute a crime against humanity.2 Governments cannot afford to maintain double standards by continuing to allow or even be directly involved in investing in nuclear weapon producers when their use is clearly outlawed and there is an international obligation to disarm.

Deciding whether investment in a nuclear weapon producer constitutes ‘assistance’ and contravenes the law will be established on a case-by-case basis

Governments should set clear guidelines for financial institutions to follow and implement, which means they do not need to check every new case. Clear guidelines make implementation of law far more efficient. An exclusion list (or blacklist) is even more helpful.

Financial institutions need and benefit from clear guidelines laid down by their government. By stating clearly that prohibitions on assitance include prohibiting financing, governments support the financial institutions that have already implemented a comprehensive policy and force other financial institutions to live up to the same high standard.

In cases where governments partially own financial institutions they have an even greater responsibility to ensure that these financial institutions are not undermining the goal of a nuclear weapons free world.

We can regulate the use of or own public funds, but we can’t or won’t prohibit private investments.

It is irresponsible and inconsistent to divest public funds but continue to allow private investors to breach these principles. To ensure that a ban on investments is comprehensive and far-reaching, treaty implementation legislation must cover all types of investments: public, private as well as that of local government including councils and municipalities. Governments can achieve this by enforcing adequate regulations and by publishing a list of the companies that produce nuclear weapons that is accessible to all investors.

Our government does not want to cause a ‘situation’ with the country that is producing nuclear weapons

Your government is legally obligated to “undertake effective measures in the direction of nuclear disarmament”.3  Compliance with this international agreement is ultimately to be prioritised over relations with individual states. Part of the NPT treaty obligations is to engage with countries that are still actively producing nuclear weapons and urge them to cease production and adhere to the global norm against nuclear weapons.

The clearest way to ensure that financial institutions in a country are not funding nuclear weapon producers is to determine which companies are producing nuclear weapons and to make this list publicly available so that financial institutions can ensure that they are fulfilling these requirements.

There is a risk that our government will be pursued by a producing company

Governments are often concerned about falsely accusing a company of producing nuclear weapons, damaging that company’s image which could result in being sued by that company. However, the financial institutions in this report that do use exclusion lists show that this can be done using objective criteria. There is a growing body of literature on nuclear weapons producing companies from which a government can start to draw its own definitions and exclusion clauses, including this report. In addition, there are consultancy companies that already help financial institutions and governments draw up exclusion lists based on objective criteria, updated regularly. Usually, governments would notify a company of pending exclusion, giving the company an opportunity to discuss its case in advance.

  1. International Court of Justice, Advisory Opinion on the Legality of the Threat or Use of Nuclear Weapons, 8 July 1996, para. 105(2)(F). 
  2. See, e.g., UN General Assembly, Resolution 36/92 I, 9 December 1981 
  3. Preambular paragraph 8, nuclear Non Proliferation Treaty (NPT), retrieved from http://disarmament.un.org/treaties/t/npt/text, viewed 9 September 2013.