Select Committee on Defence Minutes of Evidence

Examination of Witness (Questions 60 - 70)



Mr Blunt

  60. May I extend this discussion slightly. What is the primary function of OCCAR as far as you are concerned? Is it to make procurement more effective, or is it a Europeanisation of procurement practice, a step on the road to ESDI? On top of that, what is then your appreciation of the views of our partners if they are different?
  (Sir Robert Walmsley) I am absolutely clear that the purpose of OCCAR is better management of the collaborative programmes. I was very struck by my French colleague, whom I met for the first time at Northolt Aerodrome in May 1996, Monsieur Jean Yves Helmer, who sat across the table from me. He said to me, "What is the purpose of OCCAR?" I said, "Efficiency," and he said, "I absolutely agree." So there is absolutely no doubt in my mind that OCCAR has been able to deliver more efficient programme management. It has all the benefits. It would be very foolish, it seems to me, not to cash in on those whenever we can.

  61. Could you then explain to me something which I did not understand in the Preamble to the Convention you have in front of you. In the penultimate paragraph it says: "Convinced that a strengthening of their co-operation in defence equipment will contribute to the establishment of a European security and defence identity and is a practical step towards the creation of a European Armaments Agency." What does that last phrase mean? What is a "practical step"? Is it this Convention or is it the ESDI?
  (Sir Robert Walmsley) I think a "practical step" is intended to mean creating OCCAR.

  62. So the intention, therefore, is that OCCAR will become, in due course of time, the European Armaments Agency?
  (Sir Robert Walmsley) It is a practical step towards that, meaning, I think, that OCCAR could well evolve into the European Armaments Agency. We have not agreed that.

  63. This opaque language at the beginning of the document, this Preamble, is our signing up to that objective?
  (Sir Robert Walmsley) It is a practical step towards that. I am trying not to be too bureaucratic. It does not mean that we think the European Armaments Agency is a sine qua non of good procurement. It means that there are other fora, other countries and us, who have worked towards a European Armaments Agency, but not much has been achieved. This is a practical step for evolving towards it, but we will not do it unless it is included as a practical idea.

  64. We have had discussion about the difficulty of winding up WEAG, WEAO and all these other bits and pieces. We have also had evidence from Sir Colin Chandler, who was a former Head of Defence Export Services, who obviously has some expertise in this field, and who believes that: "Creating the bureaucratic mechanism to deliver European collaboration in defence is not a problem and never has been. Although a Convention has not been used before, inter-governmental MOUs have established collaborative project offices and these have functioned effectively where the political will has united behind the project throughout the period of development. " He goes on to say: his final warning is that OCCAR could "deliver a large management overhead, loss of focus and break down in accountability." Is that not part of the problem? Unless there is a clear path towards OCCAR developing to a European Armaments Agency, we are going to end up with myriad bodies, with duplication in manning or overstretched civil servants trying to do both, as they do for many countries of NATO or the EU, running from one to another but not doing any job very well.
  (Sir Robert Walmsley) That would be the case if we set up two separate agencies, OCCAR and the European Union Armaments Agency. That is why I think OCCAR is a practical step. I have not discussed this with Sir Colin Chandler but the idea to suggest that OCCAR is probably the wrong route because we have such efficient arrangements which work perfectly satisfactorily just now, does seem to me to be not learning the lessons of history. Exactly the point which you described to me: about lots of project offices all across Europe, all with their own MOUs; all separately negotiating; all with separate conditions for making foreign payments; all with different arrangements for manning; three heads of the COBRA international office; this is nonsense. What we need to do is to introduce better practice. If OCCAR allows us to wipe the slate clean by allowing us to do it with four countries, then I think there is a real chance of doing that. If it involves the European WEAG that is fine, but we will not do that unless it is a step forward and not a step backwards.

  65. So despite the fact that we have still got WEAG, WEAO, etcetera, the creation of OCCAR will lead to a reduction in the duplication of capabilities within the Member States?
  (Sir Robert Walmsley) Very much so. I have explained that as a programme comes out of these international offices, we can knock 15 per cent off its running costs. This is quite a big step forward.

  66. But you then have to carry the overheads on top of that, of installing it?
  (Sir Robert Walmsley) I think I have explained that we have five United Kingdom citizens sitting in there. We have got rid of four people out of the COBRA project office. We have got rid of the head of the COBRA project team and we are going to get rid of the United Kingdom national COBRA office, and get rid of three people off the COBRA team. That has nearly paid for the United Kingdom contribution out of one project.

  67. But let us hope that it is not a case of prognostication.
  (Sir Robert Walmsley) That is not a case of prognostication, that is fact. Let us hope we can continue in the future. I agree that the OCCAR head office will get bigger.

  68. Because there will still be an issue of expenses if we have expensive international civil servants rather than national project heads on a one-to-one basis. So there is an issue there to be dealt with. However, I do not think we need to explore it any further.
  (Sir Robert Walmsley) I agree, but these international programme offices were internationally staffed, so we always had people overseas. The COBRA project office was in Paris.

Ms Taylor

  69. This is changing it around somewhat. We have some very good friends in the USA, they are not just partners, they are friends. What is their attitude to OCCAR taking a rather more prominent role in procurement?
  (Sir Robert Walmsley) I think any organisation, which is apparently setting up a little club inside the alliance, realistically speaking is regarded with some concern, if not suspicion, by other members of the alliance. We start with that in mind. The first thing to do is to be as transparent as possible. I mentioned that I see my colleagues quite a bit. I see none of my colleagues more than I see my opposite number in the United States, Dr Jacques Gansler, who frequently wants to know what we are doing in OCCAR. We have meetings between the National Armament Directors of the countries involved in OCCAR and Dr Gansler. The biggest concern would be that we would somehow turn our back, first of all, on NATO, which we are not going to do in a procurement sense; and, perhaps more obviously, that European collaboration would be the only form of collaboration which we would contemplate. That is absolutely not the case. We have embarked this year on the Tracer programme for a new armoured reconnaissance vehicle for the army with the United States. That is quite an achievement. We have a number of other collaborative programmes in view with the United States. The issue of inter-operability, which does not in some way take the United States' needs into account, will get us all into great trouble. So I think it is right to say that none of the OCCAR partners want, in any way, to exclude the United States from the scheme of things in terms of defence equipment and co-operation. We will include them whenever it is right, and I am sure there will be an increasing attention to inter-operability, particularly on communications, command and information systems, and on things like data links where we do co-operate with the United States. There are enough fora for maintaining the dialogue. If we are transparent the suspicion will reduce but I admit that, of course, it is there.

  70. That is now. We now have it. It is in its formation stage and people are seeing the developments. But it is very, very feasible, is it not, that the US will say, "Look, here is another example of `Fortress Europe'. We have kept peace in Europe for 50 years and have been their friends and partners, and here we see the first serious development of `Fortress Europe'." I think that could be highly problematic to us.
  (Sir Robert Walmsley) I absolutely agree. But again, if it does not sound a bit provocative from me, I was cautioned by my Spanish opposite number for using that phrase. He said, "This is a phrase which the United States use about us. Do not reinforce it by repeating it back to them." So I am very careful not to do that now. I think transparency is a good thing. I think if you judge us by our actions, and if the United States judge us by our actions, then our huge defence relationship with them on equipment, as well as co-operation, means that they will take a favourable view of OCCAR. They want a strong Europe, a strong European defence industry. They would like it to be transatlantic as well because they think by doing that you are making sure that not only does their industry do well—these people are not just in it for other people's good—but I am absolutely clear of the United States' commitment to competition and to recognition that they cannot expect European nations to buy all their equipment from the United States. That means a strong European defence industry.

  Chairman: Thank you very much, Sir Robert, we are very grateful. It must be the fifth time you have been before us. We went down to Bristol. We did appreciate your contribution and making what might have been a turgid subject almost interesting, I must say. You are very welcome to stay to hear what we are going to say about DERA, but I think you have to be over 18 for that. It is not going to be nice but you are very welcome. Meanwhile, if you would like to leave one of your One Star Group to report to you, you are most welcome to do so. We will have a little time out to clear the room, and then we will have the press conference in five minutes. Thank you very much.

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