New York City to discuss nuclear weapon divestment

On 28 January the New York City Council is holding a hearing on a package of legislation- joint hearing on Res. No. 976 and Int. No. 1621. The package of legislation represents a clear movement from the conceptualization of nuclear weapons in the Manhattan Project to finally banning the bomb by supporting the Treaty on the Prohibition of Nuclear Weapons. It also calls on NYC to divest all of it’s pension funds from any company associated with the production of nuclear weapons.

Specifically, Res. 976 Resolution on nuclear disarmament calls upon the New York City Comptroller to instruct the pension funds of public employees in New York City to divest from and avoid any financial exposure to companies involved in the production and maintenance of nuclear weapons, reaffirming New York City as a Nuclear Weapons Free Zone and supporting the Treaty on the Prohibition of Nuclear Weapons by endorsing the ICAN Cities Appeal.

Int 1621 is a local law establishing a New York City Nuclear Disarmament and Nuclear Weapons Free Zone Advisory Committee to “examine nuclear disarmament and issues related to recognizing and reaffirming New York City as a nuclear weapons-free zone.” The Committee will “conduct a comprehensive review of New York City’s current stance on nuclear weapons,” submitting an annual report for five years including “findings and conclusions and any recommendations for policy or legislation.” The Committee can also “host discussions, public programs and other educational initiatives.”

The hearing will take place on 28 January, and testimony by New Yorkers (and others) will be heard. Susi submitted written testimony in advance of the hearing, as she’s originally from New York and has worked along with the dedicated group of campaigners and colleagues to help move this process forward over the last several years. You can read her testimony below.

Stay tuned for an update once the Council holds its vote on this package of legislation!

Dear Council Members,

In regards to the debate on the nuclear disarmament bills, Res. 976 and Int. 1621 please accept this written testimony.

I grew up in New York City. Like countless others I’m a product of the NYC public school system, with some of the best teachers of all time. I remember we had different drills at P.S. 214- the regular fire drills, but also drills against weapons of mass destruction. On fire drill days we’d go outside (a great time to goof off), but on those other drill days we would huddle in the hallways. Away from all windows. Heads pressed against our knees. These were not exactly duck and cover drills, but they were drills conducted in anticipation of the use of weapons of mass destruction on our city.

I’m a second generation New Yorker, both my parents born and raised in the city, both products of parents seeking opportunity in the greatest city in the world. Like other New Yorkers, I was exposed to the world (and hundreds of languages and cultures) simply by riding the subway. In other parts of the world I make it clear that I’m a New Yorker first, and anything else (mom, researcher, writer) after that. No one will ever be able to take the New Yorker out of me, but without concerted action to abolish nuclear weapons, I fear that New York will be taken away from everyone.

I urge you to adopt the package in front of you, Res 976 and Int. 1621.

It is well known that a single, small nuclear weapon could wipe New York off the face of the earth. The city that never sleeps would, in a flash, become a cityscape of the most horrible nightmare. Buildings collapsed, burned. The subway becoming a place of refuge, with what survivors might exist crying for water. The impact of a single nuclear detonation on the city would be traumatic, the impact of a nuclear exchange anywhere in the world would be no less tragic.

My professional career began on Wall Street. It was there I learned the ins and outs of corporate finance, as well as the power of productive negotiations. It was on Wall Street that I found, despite the tales to the contrary, there is a way to make money and to make it do well. I also learned how important diversified portfolios are to ensuring long term earnings. My background in finance, combined with that lingering childhood memory of hiding from a potential nuclear attack drove me to work to end the existential threat posed by nuclear weapons, including through the International Campaign to Abolish Nuclear Weapons, and to produce Don’t Bank on the Bomb for my organisation- PAX.

The International Campaign to Abolish Nuclear Weapons (ICAN) is a coalition of non-governmental organizations in more than one hundred countries promoting the abolition of nuclear weapons, including full adherence to and implementation of the United Nations Treaty on the Prohibition of Nuclear Weapons. ICAN was awarded the 2017 Nobel Peace Prize for our “work to draw attention to the catastrophic humanitarian consequences of any use of nuclear weapons” and our “ground-breaking efforts to achieve a treaty-based prohibition of such weapons”.

ICAN works with partners, including PAX, on a joint effort “Don’t Bank on the Bomb”.  This project is intended to build the global stigma around the continued production of (key components for) nuclear weapons, and encourage investors, including institutional investors to end their involvement with any company associated with the nuclear weapon industry.

Don’t Bank on the Bomb is the only freely available source of information on the relationship between the private sector and the nuclear weapons industry. Last year, we published (and I attach as an annex) Producing mass destruction: Private companies and the nuclear weapons industry.[1]  This report provides full profiles of 28 companies connected to the production of nuclear weapons. Most of those companies are involved in the US arsenal, as the contracting system in the US is quite transparent. However, there is also information on companies connected to the French, Indian and UK arsenals. The report shows governments are contracting at least US$ 116 billion to private companies in France, India, Italy, the Netherlands, United Kingdom, and the United States for production, development and stockpiling of nuclear weapons. State owned companies in China connected to nuclear weapon production are starting to raise money through bond issuances, while Israeli, Pakistani, North Korean, and Russian nuclear programmes are still not transparent.

Another ICAN partner, the Norwegian People’s Aid in their publication The Nuclear Ban Monitor, interprets key components of nuclear weapons to include “the missile, rocket, or other munition, including both the container and any means of propulsion. Delivery platforms such as bombers and submarines are not key components of nuclear weapons as such, but they may be integral to a nuclear-weapon system and, in certain circumstances, investment in such a system, or the transfer of nuclear-capable bombers or submarines, could amount to prohibited assistance.”[i]

Other institutional investors, for example APG, the fifth largest pension provider on the planet, have avoided these types of investments by having policies that exclude companies involved in the “production, development, sale and/or distribution of the core weapon system” and for specifically designed or key components.[ii]

The companies involved in the production of nuclear weapons do not comprise the entire defence sector, they do not represent all of heavy industry nor is every government contractor involved in making nuclear bombs. The companies involved in producing nuclear weapons are a small portion of these overall sectors, which is why Res. 976 “calling on the New York City Comptroller to instruct the pension funds of public employees in New York City to divest from and avoid any financial exposure to companies involved in the production and maintenance of nuclear weapons” should not have an impact on the bottom line of those funds. Instead, this action will send a clear and concise message to this list of companies that the production of nuclear weapons is unacceptable and not in line with the values of New Yorkers.

More and more people are moving to cities. The growing trend towards urbanization means that the traditional role of Mayors and City Councils is expanding. To protect their citizens, municipal leaders must embrace a wide range of approaches towards securing their cities. This new reality is reflected in the UN Sustainable Development Goals, particularly Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable.

In taking up their responsibility to make cities and human settlements safe and to protect their citizens from harm, municipal leaders like yourselves can avoid financing the production of some of the worst weapons ever created. Weapons like cluster munitions or biological weapons have such indiscriminate and inhumane effects, they do not have a place in modern militaries. Despite being widely considered to be controversial and often prohibited by international treaties, these weapons are still produced in some parts of the world. Considering the changing nature of warfare towards more urban conflict, cities and other local authorities can take a stand and make sure they are not themselves linked in any way to the production of controversial or indiscriminate weapons.

In 2017, a significant majority of world governments adopted the UN Treaty on the Prohibition of Nuclear Weapons (TPNW). The treaty prohibits, inter alia, anyone from providing assistance with the development, testing, production or manufacture of nuclear weapons or other nuclear explosive devices. (Article 1e). During Treaty negotiations, the Irish delegation identified the issue of financing, stating that Ireland holds “the view that that finance does represent “assistance” when done by or on behalf of the State and this has had implications for the regulation of the investment of our public monies.”[iii]

The language in the TPNW on assistance mirrors that in the Chemical Weapons Convention. In the Oxford Public International Law commentary on the Chemical Weapons Convention, assistance is understood to include the provision “through financial resources…. to anyone who is resolved to engage in such prohibited activity” and anyone that could be “not only be a State, irrespective of whether or not it is a Party to the Convention, but also an organization, an enterprise, a person, or a group of persons, regardless of Citizenship.”[iv]

As a result, the prohibition on assistance in the TPNW is increasingly understood by financial sector actors to also prohibit investments in the private companies producing nuclear weapons.

Across the financial sector, the Treaty on the Prohibition of Nuclear Weapons (TPNW) is already having an impact. In only the first year after the adoption of the Treaty on 7 July 2017, 30 Financial Institutions previously known to have investment in companies associated with the production of nuclear weapons, ended their financial relationships.[v]  Since that time about another hundred institutions changed their involvement.[vi]

There are a number of financial institutions that have also cited the TPNW as justification for ending their exposure to the companies associated with the production of nuclear weapons. These include, but are not limited to: Amalgamated Bank (US); ABP (the Netherlands); KBC (Belgium).[vii]

In adopting this package of legislation, New York City has the opportunity to offer a values based guideline for how its money is invested. Public exclusions have a stigmatizing effect on companies associated with illegitimate activities. While it is unlikely that divestment by a single financial institution would create sufficient pressure on a company for it to end its involvement in nuclear weapons work, divestment by even a few institutions based on the same ethical objection can impact a company’s strategic direction.

Experience with other prohibited weapons systems, notably cluster munitions, shows that the financial sector is quick to reject exposure to companies alleged to be associated with prohibited weapon production.

Also in the case of cluster munitions, it is seen that stopping the financial flow to weapons producing companies has proven to directly impact them. For example, citing pressure from financial institutions, several producers of cluster munitions have stopped their production, including Textron, Lockheed Martin, Orbital ATK and Singapore Technologies Engineering – even though they are all from states not party to the Convention on Cluster Munitions (CCM).

Already the Don’t Bank on the Bomb research shows there are at least 36 financial institutions around the world with comprehensive policies preventing any type of financial exposure to any type of companies associated with producing (key components) of nuclear weapons. An additional 41 institutions have policies limiting their financial exposure.[viii]

The relationship between nuclear weapon production and institutional investors cannot be overlooked. Investors provide the necessary support to companies so they are able to carry out projects. Most nuclear armed states rely on private companies for the production, maintenance and modernization of their nuclear weapons. Publicly available documentation shows private companies are involved in the nuclear arsenals of, at least, France, India, Israel, the United Kingdom and the United States. When institutions invest in companies associated with nuclear weapon production, they provide the financing to maintain, refurbish, test, and modernize nuclear weapons. In short: no money means no production.

New York has the opportunity to renew its leadership in efforts to end the worst weapon ever created by adopting this package of legislation, to show courage to demand a better world. I urge you to do so.

 

[1] The full report can be downloaded from: https://www.dontbankonthebomb.com/2019_producers-report-final/

[i] Nuclear Weapons Ban Monitor,  “The Definition of Nuclear Weapons”, Ban Monitor website (https://banmonitor.org/the-history-of-the-tpnw/the-definition-of-nuclear-weapons), viewed 31 October 2019.

[ii] APG Asset Management, “Responsible investment & Stewardship policy”, December 2018, p. 14, available at https://www.apg.nl/pdfs/APG%20Responsible%20Investment%20-%20Stewardship%20Policy%20FINAL_ENG.pdf, last viewed 27 August 2019.

[iii] Statement by the Irish Delegation, International Conference to negotiate a legally binding instrument on the prohibition of nuclear weapons, 29 March 2017.

[iv] The Chemical Weapons Convention: A Commentary, Edited By: Walter Krutzsch, Eric Myjer, Ralf Trapp, August 2014, Oxford Commentaries on International Law,

[v] Maaike Beenes and Susi Snyder (2018) Don’t Bank on the Bomb. Utrecht, the Netherlands: PAX, p. 6. Available at: https://www.dontbankonthebomb.com/2018_report_web/.

[vi] Susi Snyder (2019) Shorting our security- Financing the companies that make nuclear weapons. PAX. Available at: https://www.dontbankonthebomb.com/wp-content/uploads/2019/06/2019_HOS_web.pdf.

[vii] Susi Snyder, website Don’t Bank on the Bomb, (4 July 2018), available: https://www.dontbankonthebomb.com/happy-birthday-tpnw-have-some-divestment/

[viii] Beenes and Snyder (2018), p. 7.

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