similar dynamics as previous international efforts to ban controversial weapons, such as the bans on anti-personnel mines, cluster munitions, and biological and chemical weapons. Proponents argue that the treaty will reinforce the stigma of nuclear weapons and create a strong social norm against them, which will eventually lead to their elimination. Taking into consideration that nuclear weapons are significantly more important for countries’ individual security and their strategic alliances than any other type of controversial weapon, it remains to be seen whether the new treaty can create the disarmament dynamic many human rights stakeholders are hoping for.
Implications for Investors
During TPNW negotiations, various proposals were made to include an explicit provision that would prohibit the financing of nuclear weapons. In March 2017, the Dutch NGO PAX argued in a submission to the UN that such a provision would “limit the flow of financing to the companies involved in nuclear arsenals and thereby have a concrete impact beyond the countries that initially accede to the treaty.” However, the final treaty text does not contain such an explicit financing provision. Instead, the treaty contains a so called “assistance clause.” According to this clause, TPNW state parties are not allowed to “assist, encourage or induce, in any way, anyone to engage in any activity prohibited to a State Party under this Treaty.” While this phrasing does not explicitly prohibit financing, it opens the possibility for state parties to individually interpret what activities are covered by it.
National legal prohibitions on the financing of controversial weapons typically originate from an interpretation of the “assistance clause,” which is included in other arms control instruments banning anti-personnel mines, chemical weapons and cluster munitions. Currently, legislation that explicitly restricts the financing of controversial weapons is in place in a dozen countries. In addition to including explicit language on a financing prohibition in their national treaty ratification laws, officials from a number of states party to the Mine Ban Treaty and/or the Convention on Cluster Munitions have made interpretative statements in which they clarified their view that the assistance clause is a de facto prohibition on financing.
“Don’t Bank on the Bomb,” a project by Dutch NGO PAX in collaboration with the International Campaign to Abolish Nuclear Weapons (ICAN) that focuses on links between financial institutions and companies involved in nuclear weapons, states the following concerning the TPNW’s potential implications for investors:
“There is a growing shared understanding that financing is a form of prohibited assistance. This is shown by state practice around the Convention on Cluster Munitions, the rationale behind the International Convention for the Suppression of the Financing of Terrorism and the practice of financial institutions from countries that have joined Nuclear Weapon Free Zone treaties. Just as with Chemical Weapons, the treaty prohibits any form of assistance. In the Oxford Public International Law commentary on the Chemical Weapons Convention, assistance is understood to include the provision of ‘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.’ Many countries raised concerns with financing the production, testing, development and manufacture of nuclear weapons during the treaty negotiations. And Cuba, when it ratified the treaty, made it explicitly clear: ‘The financing of any activity prohibited to a State Party under this Treaty is also a prohibited activity according to the provisions of Article 1(e).’ While the financial sector cannot sign or ratify the treaty, divestment activities and policy changes send a clear signal that nuclear weapons are unacceptable, and that c