Memorandum submitted by Perkins Engines
Company Limited on OCCAR (30 September 1999)
OCCAR
Thank you for your letter dated 20 July 1999
addressed to Mr Tony Gilroy, which has been passed to me. As Director
of Defence Operations, I am responsible for the sale of Perkins
engines to military vehicle manufacturers involved in collaborative
programmes both in Europe and elsewhere, and I am grateful for
the opportunity to comment on the proposal that OCCAR be established
on a treaty basis.
It is our understanding that OCCAR has been
functioning, in as much as it is managing some projects. However,
we believe that until OCCAR gains a legal status, and is able
to place and manage contracts using its own staff, it will not
be able to function successfully. Perkins is involved in the Multi
Role Armoured Vehicle (MRAV/GTK/VBCI) programme. Although it was
the intention that contracts for this programme would be placed
by OCCAR, the lack of legal status means that contract placement,
and, it seems, programme management, have remained the responsibility
of the German Ministry of Defence procurement agency (BWB). We
feel that this situation could be prejudicial to our chances of
success.
Although we were aware of the intention to make
the Convention in September 1998, I do not have any record of
any consultation with industry which involved Perkins. Had we
commented then, our view on the Convention's potential help or
hindrance to European collaboration, and on OCCAR's accountability,
would have been the same as they are today. We believe that the
provisions of the Convention will, if followed by the eventual
signatories to the treaty, greatly help the development of European
collaboration in defence procurement, and we are very much in
favour of OCCAR and its proposed functions. That said, we are
conscious of the fact that whilst the UK government tends to act
merely as a facilitator towards defence industry rationalisation,
other governments have, in the past, tended to play a more active
role. The achievement of an "overall multi-programme/multi-year
balance" will, in our view, require the UK government to
keep a close eye on its fellow signatories, to ensure that assignment
of armament programmes to OCCAR offers "level playing field"
opportunities to industry in all member states.
Turning to the issue of accountablity, we are
concerned that the proposed structure and legal basis of OCCAR,
as a "stand alone" organisation, could leave industrial
participants in assigned programmes more exposed to risk than
they might be in national programmes managed by their own governments.
Whilst it is accepted that comprehensive customer funding, from
development through to production, is a thing of the past, and
that industry expects to share risk in partnership with government,
there would be, we believe, some unease at the prospect of sharing
this risk with OCCAR without certain guarantees. The position
of industrial participants in the event of cancellation of OCCAR
assigned programmes needs, in our opinion, further clarification.
There would seem to be no reason why the membership
of OCCAR should not be broadened, although there are obvious advantages,
in terms of decision-making, in limiting its size. As regards
the "overall multi-programme/multi-year balance", it
is our view that a larger OCCAR would find such a concept more
difficult to execute to the satisfaction of its various defence
industries.
The creation of a European Armaments Agency
is a worthwhile goal, but the achievement of such a goal could,
in our opinion, be hampered by the perceived clash of roles between
OCCAR and the larger Western European Armaments Group in the matter
of defence requirement harmonisation. The amalgamation of the
EU and WEU, and the former's inheritance of the latter's defence
responsibilities could, if not handled carefully, cloud the waters
still further. OCCAR's main role should be, in our opinion, to
provide a forum for the harmonisation of defence requirements
and the implementation of collaborative programmes. This should
not preclude the involvement of customers or industries from countries
outside OCCAR, and, provided that it is clear that it does not,
there would not seem to be a need for any other European harmonisation
groups. National and political pressures will make this difficult
to achieve, but unless it is, the opportunity to create a meaningful
European Armaments Agency will be missed.
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