A landmark vote by the Church of England to ditch investments in companies fuelling the occupation of Palestine increases commercial risks for companies supplying military equipment to repressive regimes elsewhere, say UK arms trade campaigners.
The Church of England's decision on Palestine comes a week after the leaked report of East Timor's Truth and Reconciliation Commission called upon British, French and US arms companies to pay reparations for supplying Indonesia's armed forces during the brutal occupation of Timor-Leste.
It also follows the snap decision by London's School of Oriental and African Studies in November to sell its arms company shareholdings after they were publicly revealed.
The Church of England's most senior decision-making body, the General Synod, voted last night to disinvest from ìcompanies profiting from the illegal occupation [of Palestine]î.
This includes shares in US military supplier Caterpillar worth around £2.2 million, controlled by the Church Commissioners, whose board includes Prime Minister Tony Blair and the Home Secretary.
Caterpillar manufactures D9 bulldozers used by the Israeli armed forces for illegal house demolitions.
In March 2003 the American peace activist Rachel Corrie was crushed to death by an Israeli armoured bulldozer
The Church Commissioners, who oversee a £4.3bn asset portfolio, have yet to announce whether they will accept the Synod's vote.
Beccie D'Cunha, a spokesperson for the Campaign Against Arms Trade, said; "The Synod's call for disinvestment shows that selling arms to human rights abusers can damage not just reputations, but shareholder confidence.
"Ethical investors are already deserting arms companies. If reparations are enforced, the potential commercial risk of continuing to supply oppressors and conflict zones could be huge - other investors may simply run for cover too."
The Campaign Against Arms Trade (CAAT) has been campaigning for the Church Commissioners to disinvest in Caterpillar through CAAT's Christian Network, an ecumenical alliance of individuals and faith groups.