Memorandum submitted by the Campaign Against
Arms Trade
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
arms-producing countries.
2. Your Committee's inquiry into Cross-departmental
Working on Development and Trade is welcome and CAAT would like
to comment on two of the points raised: military exports and corruption.
MILITARY EXPORTS
3. The Department for International Development
(DfID) has responsibility for assessing applications for licences
for the export of military equipment against Criterion 8 of the
Consolidated EU and National Arms Export Licensing Criteria, assessing
the compatibility of the proposed export against the technical
and economic capacity of the recipient country. Beyond this specific
task, however, there are more general issues about military procurement
and development which CAAT believes would benefit from the input
from DfID. These would include looking UK government promotion
of sales to countries such as India, Pakistan and South Africa.
4. It is with this in mind that CAAT would
like to draw your Committee's attention to the announcement by
the Prime Minister on 25 July 2007 that the Defence Export Services
Organisation (DESO) is to close (Hansard, col 23WS). DESO's responsibility
for the promotion of military exports will move to UK Trade and
Investment (UKTI). The statement said that the Cabinet Office
would be leading work across Government to develop an implementation
plan by the end of 2007.
5. At the time of writing, CAAT has still
to ascertain exactly what consultation will be taking place on
the changes, but understands that the Department for Business,
Enterprise and Regulatory Reform (DBERR), rather than the Cabinet
Office, is now co-ordinating this. CAAT thinks it is important
that your Committee maintains a watching interest with regard
to these changes.
6. Military equipment accounts for less
than 2% of the UK's visible exports and UK Defence Statistics
show that 65,000 jobs (just 0.2% of the national labour force)
are sustained by military exports. Relative to this, the DESO
received thirteen times the budget of UKTI.
7. UKTI currently covers 39 industrial sectors.
On 1st February 2007, DESO employed 466 staff (Hansard,1.3.07,
Col1542W); its net budget 2006-07 was approximately £15 million
(Hansard,17.7.07, Col196W). About 200 of the staff are employed
on the Saudi Armed Forces Project. This is paid for by the Saudi
Arabian government and the Project and its staff will stay in
the Ministry of Defence.
8. This leaves over 250 DESO staff. It is
vital that they do not move en bloc to the UKTI, or in any other
way come to dominate its trade promotion work, and that the military
equipment sector's exports are given no greater share of UKTI
resources than is proportional to the size of the sector's contribution
to the economy.
9. The move of military export promotion
to UKTI may present an opportunity for further consideration as
to how development concerns are raised. For example, could UKTI
be charged with formally liaising with DfID before promoting military
equipment to a country in receipt of DfID support?
10. The move of military export promotion
from the MoD to the DBERR's UKTI means that the latter is now
both the overseeing department for both sales promotion and export
licensing. Although Lord Digby Jones is the Minister responsible
for UKTI and Energy Minister Malcolm Wicks' remit (rather oddly)
includes exports controls, this, again, is a change which will
need monitoring to make sure that Criterion 8 concerns are not
marginalised even more than perhaps they already are.
11. Your Committee, in its Notice of this
Inquiry, points out that DfID and DBERR share a Minister. However,
DBERR also has joint Trade Ministers with the Foreign and Commonwealth
Office and the MoD, Lord Digby Jones and Lord Drayson respectively.
These Ministers, and, in particular the latter, might have very
different interests with regards to military exports. It is also
worth noting that, within DBERR, Gareth Thomas is an Under-Secretary
whilst Lord Digby Jones and Lord Drayson are Ministers of State.
It remains to be seen if this will this be reflected in influence
over trade policy.
OECD AND CORRUPTION
12. The weakness of the UK government's
commitment to stamp out corruption became fully apparent in December
2006 when it ended the Serious Fraud Office inquiry into the Al
Yamamah deals. CAAT, together with The Corner House, has applied
for a Judicial Review of that decision. The oral application for
permission for a Judicial Review will be heard on 9 November.
13. The outcry which followed the decision
has highlighted the lack of dedicated anti-corruption legislation.
Importantly, too, it has conveyed a message that investigations
into allegations of contraventions of the existing law are pursued
or otherwise on the basis of considerations other than the evidence
available. The South African President, Thabo Mbeki, was right
to question in January 2007 why the investigation into the arms
deal with Saudi Arabia was dropped, while that into deals with
his country continued.
14. With this in mind, CAAT was disappointed
that the report of the Quadripartite Committee, "Strategic
Export Controls: 2007 Review" (HC117), limited its recommendations
on corruption to those licence applications being considered by
DfID under Criterion 8. It recommends that DfID consider including
an assessment to test whether the contract behind an application
for an export licence is free from bribery and corruption. The
section in the same report on Saudi Arabia makes no recommendations.
This, surely, only serves to reinforce the idea that the UK's
anti-corruption efforts are selective and not being applied consistently.
It does not help the cause of good governance.
September 2007
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