Today, Mines Action Canada testified to the Standing Committee on Foreign Affairs and International Trade regarding Bill S-225. This bill proposes amendments to Canada's Prohibiting Cluster Munitions Act. The amendments would make clear in legislation that no Canadian financial institution can invest in cluster munition producing companies. The Bill is being sponsored by Senator Salma Ataullahjan, who spoke on the witness panel today with Co-Directors Paul Hannon and Erin Hunt. Below is a copy of Mine Action Canada's testimony, which was then followed by an engaging question and answer period.

Oral Testimony to Standing Senate Committee on Foreign Affairs and International Trade

regarding Bill S-225

Paul Hannon and Erin Hunt, Co-Directors, Mines Action Canada

Check against delivery

Co-Director Paul Hannon

Thank you for the opportunity for Mines Action Canada to testify today on Bill S-225.

In April 2003 Mines Action Canada and a small group of NGOs decided that an international campaign was needed to address the increasing harm to civilians caused by cluster munitions.

Cluster munitions are weapons that scatter explosive submunitions across a wide area. Dropped from aircraft or fired from the ground, a container munition opens in the air and releases the small submunitions to explode across the area below. The number of submunitions packed into a container range from fewer than ten to many hundreds.   

At the time of use, cluster munitions randomly scatter many submunitions and therefore tend to strike the target and all the surrounding area including civilians and civilian infrastructure. Not all submunitions explode on impact leaving large number of explosives in the post-conflict environment. Often compared to antipersonnel mines these unexploded submunitions impede access to community resources and cause injury to civilians long after conflict has ceased.

The successful negotiations of the Convention on Cluster Munitions concluded on May 30, 2008 and the treaty was signed on December 3 by Canada and dozens of other.

After 2008, Mines Action Canada continued to campaign domestically for Canada to ratify the treaty with the best possible implementation legislation until ratification was completed in 2015. One campaigning event in particular is pertinent to the legislation under consideration now. In 2010 MAC organized an event in Toronto with 25 of the largest financial institutions in Canada. With the assistance of some international colleagues, we provided an overview of the weapon, why it was banned, and the need for Canada to ratify the treaty. We also explained to them the importance of disinvesting from companies which produced these banned weapons. The participants clearly understood both the moral issues but also the reputational risk to their institution to be seen to support the production of banned weapons and this one in particular where studies had shown that 90% of the casualties of the weapons were civilians. However, they all told us that it would be easier to convince their shareholders and boards if Canadian legislation made it clear that such investments was prohibited. This bill does make the prohibition clear.

Domestic implementation legislation is very important for international treaties as it can not only prove a state’s desire to implement and be bound by the treaty but it can augment and expand the international norm that such treaties intend to create.  Sometimes they need improvement. Bill S-225 provides improvement in a key area. My Co-Director Erin Hunt will provide more information for your consideration.  

Co-Director Erin Hunt

Thank you, Paul, and thank you to the committee for the invitation to speak today.

As Paul has established, cluster munitions are horrific weapons that Canada has rightfully prohibited. During the process to pass the Prohibiting Cluster Munitions Act, Mines Action Canada was adamant that the understood prohibition on investment in the legislation needed to become explicit to achieve the government’s goal.

Since 2007, 11 States Parties to the Convention on Cluster Munitions have enacted legislation that explicitly prohibits investment in cluster munitions producers including most recently Italy. The key to successful disinvestment legislation is clarity.

We can not expect that in 2014 financial institutions were monitoring the statements by government officials in the Foreign Affairs Committees here and in the other place on a piece of legislation concerning a weapons treaty. The financial sector requires explicit and clear instructions in order to develop the internal restrictions and regulations necessary to fully implement the government’s intention with regards to the Convention on Cluster Munitions in line with shareholder expectations.

Bill S-225 is clear. It explicitly outlines what is permitted and what is prohibited. That clarity will allow financial institutions to adapt and ensure that the letter and the spirit of the law is followed.

The transitional provision in the bill further eliminates concerns about burden on individuals and institutions by providing a year to make any necessary changes to investment or fund portfolios for example.

We know that disinvestment works. Since the Convention on Cluster Munitions entered into force Elbit Systems Ltd. of Israel, Singapore Technologies Engineering, and US companies Lockheed Martin, Orbital ATK, and Textron Systems have all stopped producing cluster munitions due in part to pressure from the financial sector. These companies are not based in States Parties to the Convention but the existence of legislation such as we are discussing put enough pressure on them to decide that these weapons no long made financial sense to produce.

At a time, when we are seeing cluster munitions being used on Ukrainian cities, Bill S-225 is another way that Canada can say that these banned weapons are unacceptable.

We thank you for your kind consideration. And we are, of course, at your full disposal should you wish any additional exchange on this matter.