Cluster bombs are currently the subject of considerable humanitarian concern internationally because of their indiscriminate effect.

Every year, thousands of civilians, many of them children, are killed and maimed by any one of the hundreds of munitions (also known as “bomblets”) released by cluster bombs.

Studies show that around 30 percent of all bomblets do not explode on impact, and therefore become de facto landmines. In such instances, bomblets can cause harm decades after the conflict has ended.

Surely Australia would seek to ban the use of such weapons? The answer is a bit more complicated than you might expect.

The Cluster Munitions Prohibition Bill (2010) seeks to do precisely that. If the legislation were passed, it would sign Australia up to the Convention on Cluster Munitions, which bans the use of the weapons by member states.

With the final decision on the draft legislation having being deferred for some months now, this is not the place for me to again rehearse arguments based on either international humanitarian law, general treaty obligations, or the role of a middle-powers such as Australia in attempting to establish new “norms” of behaviour.

Rather, I seek here to highlight ways in which certain Australians will be needlessly faced with both implementation and moral dilemmas that will not be so easily resolved as presumed. These dilemmas relate to two significant loopholes identified in the Bill relating to “military interoperability” and “indirect investment”.

Military interoperability refers to that part of the draft legislation that permits Australia’s military allies that are not party to the Convention unfettered access to stockpile, retain and transit cluster munitions within Australia, as well as allowing Australian military personnel to actively assist in cluster munitions-related activities during joint military operations with our non-signatory allies.

Removing this first loophole remains the primary focus of both the Fix the Bill campaign run by the Australian branch of the Cluster Munition Coalition, as well as the campaign launched by GetUp in mid-August 2011, whilst it is being defended by the Australian Government’s Department of Foreign Affairs and Trade, Department of Defence, and the Attorney-General’s office.

Indirect investment refers to holdings in foreign companies that produce cluster munitions as part of its broader business activities - such as components manufacturers or firms with sufficiently diversified businesses.

Australia’s restrictive reading of the Convention does not meet the standards set by the respective governments of New Zealand, Ireland, Holland, Luxembourg and Belgium, who have in their domestic legislation included statements specifically banning investment and provision of other financial services – such as banking, loans and equity – to companies that either develop or produce cluster munitions.

Other governments, including those of the United Kingdom, Germany, France, Switzerland, Lebanon, Mexico, Norway and Rwanda, have all publicly stated that they interpret the Convention as including a prohibition of direct (ie firms which specialise in producing cluster munitions - of which none presently exist) and indirect investment.

Removing this second loophole remains the focus of a small number of individual experts and the largest grouping of superannuation funds in Australia, the Australian Council of Super Investors, who represent over $300 billion in assets. At the same time the Department of Foreign Affairs and Trade is attempting to maintain the present loophole, against the best advice of the Attorney-General’s Office.

Combined, these two loopholes will have unintended negative consequences for Australia – leaving both Australian military personnel and investors with a foreseeable “clusterfuck”, to use the American vernacular.

Military interoperability will needlessly burden the Australian Defence Force and its members with a complex moral dilemma as they operate in the field.

For instance, under the present wording, it is expected that a specialist in the Australian Defence Force embedded within American headquarters would not be permitted to be actively involved actual deployment of the cluster bombs in the American arsenal.

What a tremendously conflicted message that sends to the Australian in the field – as an Aussie soldier you are not permitted to deploy cluster bombs due to your country’s humanitarian concerns, but it is expected you will operate alongside – and at time in support of – Americans while they do.

In addition, Australia have taken the extraordinary step of adding phrases that explicitly permit foreign forces not party to the convention access to stockpile, retain and transit cluster munitions within Australia. This is unprecedented - no other signatory country in the world has expressly permitted such unfettered free access to its territories as this.

To burden Australian personnel with having to resolve these differential standards when jointly operating with military allies will not be so easily resolved - via directives and procedures - as many have contended.

Indirect investment will undoubtedly burden Australian superannuation (pension) funds by banning one avenue of investment in cluster munitions producers and not others.

For instance, the bill would require Australian super funds to direct their overseas-based investment managers to cease direct investment in cluster munitions producers, whilst explaining to them that Australian legislation does permit indirect investment in firms involved in the development and production of cluster munitions (ie holdings in firms that either produce other goods as well as cluster munitions).

This could be a long conversation, since the distinction between direct and indirect investment is not one that is made elsewhere – and there are few armaments of any type that are produced by such specialist firms as to trigger this direct investment classification.

Thus, a British investment manager who is tasked with allocating the funds of an Australian super fund, will be banned from all types of investment in cluster munitions producers under British law, but may continue to invest in all seven current cluster munitions producers for their Australian clients.

Quite apart from the sound humanitarian arguments made against the deployment of cluster munitions, the current bill is unfairly and inappropriately outsourcing the function of upholding an international norm to various individual Australians.

It is down to the members of the Senate to close the loopholes in order to avoid burdening individual military personnel and super fund trustees with one big cluster … stuff up.