Memorandum from the Campaign Against Arms
1. The Campaign Against Arms Trade (CAAT)
is working for the reduction and ultimate abolition of the international
arms trade, together with progressive demilitarisation within
2. In advance of Quadripartite Committee's
evidence sessions with the Foreign Secretary and the Minister
of State, Department of Trade and Industry, CAAT would like to
make known its current concerns with regard to Saudi Arabia; corruption;
end-use monitoring; Timor-Leste; and the Government's proposed
Arms Trade Treaty.
3. Saudi Arabia is run by a barbaric and
undemocratic regime yet, along with the United States, it tops
the UK government's priority list for arms sales. This desire
for sales has led the UK to a policy of appeasement with Saudi
Arabia, rather than to the strong criticism its human rights record
4. The mid-1980's Al Yamamah 1 and 2 arms
deals with Saudi Arabia were by far and away the UK's largest.
On 23 December 2005 the "Understanding Document" for
"Al Yamamah 3" was signed between the UK and Saudi governments.
The details are confidential, but it commits the UK government
to help modernise the Saudi armed forces and, as part of this,
to supply Eurofighter Typhoons, assembled by BAE Systems.
5. This "Understanding" undoubtedly
breaks the spirit, if not the word, of the Consolidated EU National
Arms Export Licensing Criteria which are supposed to prohibit
arms sales which might threaten regional peace and stability,
and restrict arms deals involving countries which disrespect human
rights and fundamental freedoms.
6. Its human rights record also renders
the Saudi regime less than secure, and the "Understanding"
is likely to anger its opponents and further alienate them from
the "west". It might not be possible to control where
the equipment the UK has supplied would end up.
7. The £1 billion insurance given by
the Export Credits Guarantee Department with respect to the Al
Yamamah 1 and 2 sales (Guardian, 14 December 2004) is official
confirmation that there are worries about the stability of the
Saudi regime. It also leaves the UK taxpayer exposed to the possibility
of picking up the bill for these particularly ill-advised deals.
At the time of writing it is not known what, if any, export credit
cover will be given with respect to Al Yamamah 3.
8. Whilst BAE Systems' shareholders will
benefit from the deal, it is unlikely that the UK as a whole will.
Despite assertions by government to the contrary, there is no
evidence that the Al Yamamah deals bring any benefit to the UK
economy. Freedom of Information requests by CAAT to the MoD and
the Department of Trade and Industry have revealed that neither
have conducted any studies into the economic impact of Al Yamamah
1 or 2.
9. Indeed, most studies of the economic
impact of arms exports as a whole show they are subsidised by
the taxpayer. Even a report by Ministry of Defence and independent
economists, The Economic Costs and Benefits of UK Defence Exports
(2001), concluded, firstly, that the economic costs of
reducing military exports are relatively small and largely one-off,
and secondly, as a consequence, that the balance of argument about
military exports should depend mainly on non-economic considerations.
This conclusion is reiterated in the MoD's Defence Industrial
Strategy published in December 2005.
10. Human rights and economic issues aside,
there is a massive risk of corruption surrounding these deals.
Documents in CAAT's possession, which can be made available to
your Committee, show that in the 1960s and 1970s the Government's
arms sales unit, then called the Defence Sales Organisation (DSO),
now the Defence Export Services Organisation (DESO), advocated
that a nationalised company be used to pay bribes, largely in
connection with deals to Saudi Arabia, though not exclusively
11. This is of more than historic interest
as the corruption around arms exports is generally acknowledged
to be a problem and must be taken into account when considering
export licences to, or export credit support for, sales to countries
where the UK government knows there has been bribery in the past.
In the case of Saudi Arabia, some of the key decision makers in
the 1960s and 1970s are still in power. The two most important
examples are Prince Sultan, the Saudi Minister of Defence then
and now, and Prince Abdullah, at the time the Commander of the
Saudi Arabian National Guard, and now the King of Saudi Arabia.
12. CAAT believes your Committee was seriously
misled by the MoD in its memorandum to you of July 2003 (Strategic
Export Controls: Annual Report for 2002, Licensing Policy and
Parliamentary Scrutiny, 18th May 2004, HC390, Ev34). The memorandum
was an attempt to rebut the Guardian article of 13th June
2003 which claimed "web of state corruption dates back 40
13. The Guardian's central allegation
was that: "The government's own arms sales department [DESO]
is directly implicated in bribery abroad", substantiated
by documents detailing that "special commissions . . . are
even written by civil servants into the secret contracts on government-to-government
arms deals". It concluded "bribery has been at the heart
of DESO's mission from the day the unit was launched nearly 40
14. The MoD's memorandum to your Committee
argued: the article was "totally without foundation";
the Guardian's assumption that "special commissions"
are bribes was false; the Manual the Guardian referred
to which apparently allowed "special commissions" had
in fact been obsolete since 1991; guidelines were in place to
ensure "public money should not be used for illegal or improper
purposes"; and that "officials should not engage in,
or encourage, illegal or improper actions". In summary, the
memorandum was designed to leave the reader with the impression
that DESO had never condoned bribery in arms sales, and in fact
had procedures in place designed to "ensure legality and
propriety in the handling of Government-to-Government contracts".
This is far from being the case.
Nationalised company used to pay bribes
15. The DSO arranged for the use of a nationalised
company, Millbank Technical Services (MTS), then a wholly owned
subsidiary of the Crown Agents, to pay bribes on a proposed Government-to-Government
arms deal. A senior DSO official Harold Hubert wrote in 1972 about
a proposed sale to the Saudi Arabian National Guard:
"MTS will have little hope of business unless
we [UK Government] invite them to sell on our behalf . . . .Since,
when the Ambassador sees the King, he will indicate our willingness
to do business on a G-to-G [Government-to-Government] basis there
might be advantages to MTS co-ordinating any British equipment
business to provide the quasi-government oversight as well as
passing on the douceurs" (FCO 8/1914).
16. The Concise Oxford Dictionary
defines "douceur" as "n. gratuity; bribe".
In other documents it is clearly stated that MTS's agent was Prince
(now King) Abdullah's brother-in-law, a gentleman by the name
of Mr Fustuq. The Secretary of State for Defence, Lord Carrington,
was made aware by Lester Suffield, the Head of DSO, that this
was the case.
MoD condoned bribes
17. Hubert wrote to the Embassy in Caracas
about DSO in 1967 saying that "day by day we carry out transactions
knowing that at some point bribery is involved. Obviously I and
my colleagues in this office do not engage in it, but we believe
that various people who are somewhere along the lines of our transactions
do. They do not tell us what they are doing and we do not enquire.
We are interested in the end results". Another Foreign and
Commonwealth Office document (FCO 8/2343) refers to "[Ian]
McDonald, the Director of Defence Sales 1, called on 28 February
. . . [and said that] in his experience no arms purchase of this
magnitude would be concluded with an Arab country by means of
a simple exchange of letters; furthermore the `fiddle-factor'
was an element that could not be overlooked".
18. The MoD received copies of high-level
briefing papers which contained statements such as "most
of the special commissions are paid into accounts in third countriesthe
implications of corruption are thus clear . . . the person receiving
the commission is usually in a position to sway the purchasing
19. Far from not encouraging "improper
actions", in discussing the failure of MTS's efforts to sell
to the Saudi Arabian National Guard, Hubert states "if a
deal has to be done with Khashoggi it has to be done. His own
personal demands will probably be high, but that is the way business
is done in Saudi Arabia, the King's edicts about 25 percenters
notwithstanding. Either Khashoggi is offered the cut he wants
or we should pull out". DSO knew that agents on arms deals
paid bribes but continued to encourage their use; the Embassy
in Jedda even referred in 1974 to DSO's "penchant for dealing
Members of client governments allowed to be agents
20. From 1967 to 1976 DSO's guidelines permitted
DSO to hire as agents employees of client governments.
No effective scrutiny of agents activities
21. The guidelines of 1976 and 1977, to
which the MoD referred in its memorandum, simply tried to ensure
that DSO employees were not actively involved in unlawful activities;
by implication, promoting sales they knew to be tainted by bribery
was legitimate. MoD official E G Cass conceded the procedures
could not prevent bribery on sales DSO was promoting: "if
an isolated case came to public notice in which an agent had acted
improperly, we could claim that we had done all that could be
expected of us".
Evidence of bribery ignored by officials
22. There is considerable evidence in The
National Archives of official knowledge of bribes being paid on
arms deals from the UK to Saudi Arabia. For example, in 1971 a
letter from Ambassador Morris to the MoD says: "I conclude
. . . that as long as this mood persists, we shall get no more
large arms contracts from the Saudi Ministry of Defence, outside
the Air Defence field. Sultan has of course a corrupt interest
in all contracts, but this can be served by any nationality."
Prince Sultan was, and still is, the Saudi Minister of Defence.
23. In a heavily censored paper addressed
to Lester Suffield, newly Head of DSO in 1970, Morris writes:
"the question of corruption is obviously crucial and I have
therefore dealt with it frankly and at some length". He concludes
that: "There is no single golden key (or golden fixer) to
open the door to an orderly, if crooked, world of arms sales in
Saudi Arabia. It is a jungle inhabited by beasts of prey in which
one must move with caution and uncertainty".
24. Denis Healey, who as Secretary of State
for Defence set up the DSO in 1966, told Prime Minister Jim Callaghan
in 1977: "There was no doubt that bribery had been going
on for years on a large scale in the Middle East and Africa and
that organisations responsible to government (including defence
sales and nationalised industries) had been involved". Healey
recently told the Daily Mail (25 January 2006) that "it
would have done more harm than good to tell the truth".
25. The 1992 National Audit Office report
into the Al Yamamah deals remains secret. It was read only by
the then Chair of the Public Accounts Committee and his deputy;
none of the current members of the Committee have read it. Other
documents, which might throw light on to arms deals, especially
with Saudi Arabia, are withheld from the public, in some cases
even after the usual 30 years have elapsed. CAAT has appealed
to the Information Commissioner for the release of several of
them and awaits his verdict.
26. In the light of this evidence, it is
hard to see how the MoD can refute the Guardian when the
latter says that "bribery has been at the heart of DESO's
mission from the day the unit was launched". The bigger question,
however, is what is happening today. BAE Systems, Rolls Royce
and Airbus all argued strongly that they should not have to disclose
the names of agents when applying for cover to the Export Credits
27. CAAT would urge your Committee to recommend
that the Government is more transparent about arms deals and releases
the documents without delay. Furthermore, it is essential that
the ECGD requires copies of all contracts when it is supporting
projects or offering insurance cover and that such contracts,
or supporting documentation, contain full details of agents used.
The ECGD should scrutinise the contracts and other documents and
make further inquiries about the agents if necessary.
The use of UK-supplied water cannon in West Papua
28. CAAT wishes to draw your Committee's
attention to the deployment of two UK-supplied Tactica armoured
personnel carriers armed with water cannon to West Papua at the
beginning of August 2005. The Tactica APCs were present during
a large demonstration against special autonomy on 12 August 2005
and at a protest against the establishment of the Papuan People's
Assembly (MRP) on 31 October 2005. They were used in a clash between
the police and protesters in Jayapura.
29. The FCO has stated that it considers
that "the use by a Government within its own borders of proportionate
force to maintain law and order, subject to appropriate controls,
is legitimate and does not constitute repression or a human rights
abuse". (Hansard, 13 December 2005, Col 1953W)
This response is disturbing. The question of law and order in
West Papua cannot be divorced from the context of a highly volatile
political situation in which human rights are routinely abused
by the security forces. Their record shows that the security forces
cannot be trusted to always use "proportionate force"
and exercise "appropriate controls". Often public disorder
is caused by heavy-handed tactics by the security forces or is
started or provoked by the security forces.
30. For several decades, there have been
widespread violations of human rights in West Papua, as well as
the violent suppression by the Indonesian security forces of the
peaceful campaign for self-determination. In late January 2006,
the UN Secretary-General's special adviser on the prevention of
genocide said that West Papua is an area of concern where the
indigenous population is in danger of extinction.
31. This ongoing deployment took place during
a period of heightened tension also involving the sending of large
numbers of additional troops to West Papua in the latter half
of 2005 and Indonesian Police instructions to prevent people peacefully
demonstrating in favour of independence in November and December
2005. Two Papuan activists (Filep Karma and Yusuf Pakage) languish
in jail for 15 and 10 years simply for the offence of raising
the West Papuan flag, and have been adopted as prisoners of conscience
by Amnesty International. Just last month, Indonesian troops opened
fire on a group of unarmed protesters in West Papua's Paniai district,
killing one thirteen-year-old and seriously wounding two others.
32. Irrespective of whether the water cannon
are used in specific violations, the FCO's refusal to object to
their use provides a strong signal of political support for Indonesia's
repressive policies in West Papua. The very presence of the water
cannons is a powerful deterrent to Papuans wishing to exercise
their rights to freedom of expression and assembly, surely a violation
of their human rights.
33. The UK government should demand the
immediate withdrawal of the water cannon from West Papua; and
publicly announce an embargo on the sale of armoured vehicles
to Indonesia as well as spare parts for such vehicles already
in their possession.
Complaints on end-use assurances justified
34. CAAT appreciated the attention your
Committee gave in the last Parliament to the secret relaxation
of conditions by the FCO in 2002 on the use of UK-supplied equipment
in Aceh in your 2004 Report. The Government now accepts the argument
of your Committee and CAAT that the assurances were worthless
(Hansard, 22 November 2005, Col 1903w), and that
it no longer seeks them.
35. This, however, has serious implications.
Given the assurances were one of the main justifications offered
by successive governments to justify arms sales to Indonesia,
the UK government is now admitting it offered Parliament empty
promises about Indonesian conduct, and, therefore, misled Parliament
as far as the risk of UK-supplied equipment being used for internal
repression was concerned.
36. There are other concerns. FCO Minister
Ian Pearson told Mike Hancock MP that the Government was not aware
of any UK-supplied equipment currently deployed in West Papua
(Hansard, 22 November 2005, Col 1903w). The FCO
has since admitted that the Tactica were in West Papua at the
time it responded to Mr Hancock. It is only since CAAT, TAPOL
(the Indonesia human rights campaign), and others have made complaints
about the deployment of the UK equipment that the FCO has investigated
the incident in West Papua. Had these complaints not been made,
the UK government would have been in ignorance of the use of Tactica.
37. CAAT believes it is vital that the UK
government institute a proactive system to check the end-use of
UK-supplied military equipment.
38. The recent report by Timor-Leste's Commission
for Reception, Truth and Reconciliation (CAVR), submitted to the
UN Secretary-General, noted that the UK was a major supplier of
arms to Indonesia during its occupation of Timor-Leste and that
senior Indonesian military officials were given training in UK
39. The report says that: "Whether
or not British-made military equipment was used in specific violations
in Timor-Leste, the provision of military assistance helped Indonesia
upgrade its military capability and freed up the potential for
the Indonesian armed forces to use other equipment in Timor-Leste.
More importantly, the provision of military aid to Indonesia by
a major Western power and member of the Security Council was a
signal of substantial political support to the aggressor in the
conflict, and outraged and bewildered East Timorese who knew of
Britain's professed support for self-determination."
40. There are three recommendations in the
report pertinent to your Committee and which CAAT would urge you
to endorse. These are:
the UK, as a state that had
a military co-operation programme with the Indonesian government,
apologises to the people of Timor-Leste for failing to adequately
uphold internationally agreed fundamental rights and freedoms;
the UK, as a state that gave
military backing to Indonesia and a permanent member of the Security
Council duty bound to uphold the highest principles of world order
and peace and to protect the weak and vulnerable, assists the
government of Timor-Leste in providing reparations to victims
of human rights violations suffered during the Indonesian occupation;
business corporations which
profited from the sale of weapons to Indonesia during the occupation
contribute to the reparations programme.
41. When an Arms Trade Treaty (ATT) was
first mooted, CAAT supported the proposition believing it could
help prevent sales to human rights abusers, conflict zones and
impoverished countries. When Foreign Secretary Jack Straw announced
the UK government's support for an ATT in March 2005, CAAT sought
to clarify how an effective ATT would be compatible with the Government's
promotion of, and subsidies for, military exports, as well as
how it might affect them.
42. In his speech the Foreign Secretary
said that the "tanks of repressive regimes, account for an
enormous amount of avoidable human misery across the world".
CAAT believes that had an effective ATT been in place it would
have banned the export from the UK of spares for tanks Indonesia
used in Aceh in 2002 and 2003 and prevented the supply of UK military
equipment to Saudi Arabia.
43. Continuing, Jack Straw mentioned the
"Democratic Republic of Congoa country where six years
of conflict have caused millions of deaths". To be worthwhile,
an ATT would need to have prevented the sale of spares for Hawk
jets to Zimbabwe, used in a war which "caused millions of
44. He talked of "developing countries
who spend already over-stretched budgets on armaments for which
they have no clear need are bound to have too little left for
health, education and vital infrastructure". To have any
impact on the world's problems, an ATT would need to result in
the cessation of UK arms sales to countries like Pakistan, impoverished,
yet committing a quarter of government spending to arms, and to
Nigeria, rated by the UN as one of the 20 least developed countries
45. Unfortunately, it does not seem as though
the ATT envisaged by Jack Straw will do any of these things. The
FCO has told CAAT that the ATT won't change UK sales. This was
reinforced by the Defence Manufacturers Association's DMA News,
January 2006, which says the DMA believes "the eventual Treaty
would not bring new obligations for UK industry." An ATT
which replicates current UK guidelines more widely will not provide
adequate constraints and could well serve simply to legitimise