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DODGY DEALING: CORRUPTION IN THE ARMS TRADE

Issue 188 tel: 020 7281 0297 Feb/March 2005 fax: 020 7281 4369 email: [email protected] £1.00 : www.caat.org.uk Issue 188 CONTENTS

Editor Melanie Jarman [email protected] Legal Consultant Glen Reynolds Proofreader Rachel Vaughan Richie Andrew Contributors Kathryn Busby, Beccie D’Cunha, Ann Feltham, Nicholas Gilby, Anna Jones, Caroline Lucas, Emma Mayhew, Ian Prichard, Martina Weitsch, Irene Willis, Andrew Wood Thank you also to our dedicated team of CAATnews stuffers Printed by Russell Press on 100% recycled paper using only post consumer de-inked waste. Copy deadline for the next issue is 14 March 2005. We shall be posting it the week beginning 28 March 2005. Protesting against BAE Systems in Basildon. See page 7 SOUTH EAST SUSSEX CAAT Contributors to CAATnews express their own opinions and do not necessarily reflect those of CAAT as CAAT Lecture 3 an organisation. Contributors retain copyright of all used. Arms trade shorts 4–5 CAAT was set up in 1974 and is a broad coalition of groups and individuals working for the reduction Other news 6 and ultimate abolition of the international arms trade, together Local campaigns news & views 7 with progressive within arms-producing countries. Cover story: Campaign Against Arms Trade 11 Goodwin Street, London N4 3HQ Corruption still rife? 8–9 tel: 020 7281 0297 fax: 020 7281 4369 email: [email protected] Debate: web: www.caat.org.uk The Constitutional Treaty 10–11 If you use Charities Aid Foundation cheques and would like to help TREAT (Trust for Research and on Parliamentary 12 Arms Trade), please send CAF cheques, payable to TREAT, to the review 13 office. Unlike CAAT, TREAT is a registered charity (No.328694) and will be able to use your donation for Fundraising 14 education and research. CAATnews is part of , the Get Active! 15 Independent News Collective. www.ink.uk.com Campaigns diary 16 If you would like to receive this issue of CAATnews in large print, please call the office on 020 7281 0297

See page 13

COVER: DIGITAL VISION 2 FEB-MARCH 2005 CAATnews CAAT LECTURE 2005 CAAT Lecture

“The official arms trade is the most “There are two markets for arms: corrupt of all legal international the market for the physical trades and one in which dependent on supply and demand, are inextricably and a hidden market where bribes entangled,” says Joe Roeber, speaker are traded for influence. It is in the for the 2005 CAAT lecture. second market that procurement Roeber, a political economist decisions may be taken. whose expertise lies in the analysis of “The result is an increase in the international markets, is the latest in flow of arms, much of it to poor an impressive line of people to grace countries, where the arms may not the CAAT lectern. Previous speakers be needed and cannot be afforded.” include Samuel Brittan, author and Roeber puts forward a question Financial Times journalist, who that demands an answer: “The addressed the rationales behind governments of arms-exporting arms export subsidies; and Paul countries must ask whether the Dunne, Professor of Economics at the damage done by corruption to some of the West of , of the most vulnerable people in the who spoke of the changing nature of world is justified by the claimed, at the arms since the Cold Joe Roeber ELIZABETH GILL best marginal and in any case hotly .and its implications for the UK disputed, benefits to their own, rich economy. economies.” Roeber has been a lecturer at Come to the London School of London University as well as a Economics on 9 February to hear journalist for the Times and the buy and sell, it is inevitable that more. For those unable to make this Economist. His current membership corruption in the trade is very often date, the text of the lecture should be of Transparency International, the political. Moreover, governments are available from the CAAT office after non-governmental organisation often at the root of the problem.” He the event. devoted to combating corruption, continues: “While it is difficult Joe Roeber’s talk will be chaired puts him in an excellent position to enough to monitor deals in such an by Andrew Feinstein, a former ANC speak on the highly topical issue of opaque market, the - MP who writes and lectures on issues corruption and the international sanctioned secrecy surrounding of governance in South Africa, arms trade. critical aspects of the business particularly in relation to the arms Roeber points out: “Since actually provides the conditions that deal and the HIV/Aids pandemic. governments make the decision to allow corruption to flourish. EMMA MAYHEW

CAAT Lecture 2005 The tsunami and Aceh

Parallel Market: corruption and the Despite the devastation in Indonesia caused by the international arms trade tsunami, the UK has refused to write off Indonesia’s arms-related debt. At the end of November last year By Joe Roeber, author and journalist Indonesia still owed the ECGD £551 million for arms , having defaulted in 1998. On 12 January the Chaired by Andrew Feinstein, author and Paris Club (which includes the UK Government) agreed former ANC MP only to suspend debt payments from affected countries. Indonesia, where 52 per cent of the population live on Wednesday 9th February 2005 $2 or less per day (according to latest UN figures), 18.30–20.30, The Old Theatre, LSE, desperately needs funds for humanitarian relief and Houghton Street, London WC2 reconstruction in Aceh. Future generations of Indonesians should not be required to pay the UK back Free admission. To reserve a place, please contact for deals for which the clique around the murderous [email protected] or call 020 7281 0297. Note: Any former dictator Suharto, the UK arms industry and views expressed are personal to the speaker and do not governments are responsible. For more information, see necessarily reflect those of CAAT as an organisation. www.tapol.gn.apc.org. NICHOLAS GILBY

CAATnews FEB-MARCH 2005 3 ARMS TRADE SHORTS

Arms companies try to bypass Put some arms Freedom of Information Act in, take some The Ministry of Defence wrote to a code published earlier in 2004, arms out... arms companies in December, civil servants were urged by the promising them “the opportunity to Department of Constitutional Affairs Despite still being seek a legal remedy” should they to reject confidentiality agreements. supplied to Afghanistan (see be challenged under the new The code was overturned after CAATnews 187, Czech government Freedom of Information Act. The lobbying from the Ministry of donates ammunition to Afghanistan), MoD wrote: “Your views will be an Defence on behalf of arms the United Nations has launched a important factor in our disclosure companies. new programme to collect decisions and will also play a part Defence Secretary Geoff Hoon ammunition from across the country. in defending our decisions in the has already tried to claim as The Afghanistan New Beginnings event of any appeal.” “commercially confidential” a Programme (ANBP) is an attempt to Arms manufacturers are memo from his permanent deal with the large number of planning to write legally secretary advising that the purchase ammunition stockpiles in the country. enforceable confidentiality of Hawk jets from BAE Systems was Huge amounts of ammunition are agreements into their dealings with a waste of taxpayers’ money. thought to be with local Whitehall, effectively bypassing GUARDIAN, 24/12/2004 commanders, militia forces, at ex- measures in the new legislation. In bases and in private stores. While people who help find the caches are offered rewards, an ANBP officer denied that it was a ‘cash-for- Plea bargain saves Thatcher’s neck ammunition’ programme, pointing out that cash incentives were not part Mark Thatcher has left South Africa to prosecution sources, Thatcher will of the deal. having paid a fine of nearly face jail if he does not help the Canada is the lead nation for the £300,000 and pleaded guilty to police as an informer over the coup project and so far has contributed funding an attempt by plot. some $400,000 to conduct an initial to topple the government “Now he is ours. He survey. IRIN, 4/1/2005 of Equatorial Guinea. has committed to co- Thatcher claimed that he operate. There is no objects to had no knowledge of question of him making a coup plans, and was statement and simply US- providing a helicopter to walking away,” said one be used as an air source, quoted in the arms deal ambulance. Times – words that On a November visit to Washington, In January the Times Thatcher’s former India’s Foreign Secretary Saran reported that, according colleague, Simon Mann, raised concerns over the Bush and others involved in the administration’s plans to provide a No belly laughs yet coup, probably aren’t so $300m arms package to Pakistan (in from ‘Scratcher’ happy to hear. addition to the proposed supply of F- MIKE HUTCHINGS/REUTERS TIMES 16/1/2005; GUARDIAN, 14/1/2005 16 ). The Indian government suggested that the package had nothing to do with anti- lifts ban on arms exports terrorist operations, and would only strengthen the Pakistan Army, both In December, Japan made a that they can sell the to militarily and politically. Indian significant move away from its post- other parties. Indeed, leaders of analysts described the arms deal as war non-aggression stance by Japan’s three major business “not helpful” to democracy in adopting new military guidelines. The organisations welcomed the Pakistan or to India-Pakistan guidelines included relaxing a 35- relaxation of export restrictions. The relations. year ban on the export of guidelines also highlighted Pakistan responded that India buys to other countries, allowing Japan to and North Korea as regional arms from , , Europe and pursue a programme with the concerns, and came a day after the other countries so should not voice US. According to the Times, in order pro-US Japanese government voted protest over its neighbour’s to justify the huge investment to keep its troops in Iraq for another purchases. required, the companies working on year past its December deadline. TRIBUNE NEWS , 19/11/04; PAKTRIBUNE, 22/11/2004 the missile programme need to know ASSOCIATED PRESS, 10/12/2004; TIMES 4/12/2004

4 FEB-MARCH 2005 CAATnews DEVELOPMENTS IN THE GLOBAL ARMS TRADE

Europeans buy up US arms Shorts in brief companies exec in the dock Europe’s biggest military contractors is that this is unlikely to trigger a Former Boeing financial officer have been buying up small US political backlash, as a takeover of a Michael Sears pleaded guilty after aerospace companies, hoping that a large contractor that does major allegations that he opened job US base for bidding will up their work for the Pentagon could alarm negotiations with former US Air chances of getting a piece of the Congress. Force acquisition official Darleen Pentagon’s record . At Congress is currently considering Druyun while she was still in office. $140bn, the Pentagon’s budget a bill that would restrict awarding Sears is now a potential witness accounts for more than half of military contracts to foreign firms. against Boeing who knew worldwide spending on weapons. John Ferrie, managing director of about the negotiations. Druyun has Typically valued at $100m each, the aerospace unit in the UK’s Smiths also acknowledged inflating the deals have had little attention in Group, which bought six US firms in contracts to improve her job this world of big spenders. However, 2004, said: “In aerospace, whether prospects with Boeing. according to investment it’s civil or military, the US is the FLIGHT INTERNATIONAL, 23–29 NOVEMBER 2004 Houlihan Lokey Howard & Zukin, the largest single marketplace in the Europeans paid out a total world. If you want to be a player, the Iran supplies drones to transaction cost of nearly $2bn on US is the place to be.” Hezbollah US companies in 2004. Another LOS ANGELES TIMES, 12/12/2004 Iran has admitted that it supplied reason for buying smaller companies Hezbollah with 8 drones, after one entered Israeli air space last November. Iran also supplied EU edges South Africa surface-to-surface and anti- towards arms ignores air aircraft shells. HAARETZ, 11/11/2004 Russia pays debt to Czechs trade with force chiefs in with military hardware China BAE deal Part of the $741m debt the Russian Federation owes to the Czech The EU has agreed in principle to lift South Africa's government ignored Republic is to be repaid in military its ban on arms sales to China once the advice of its air force chiefs and hardware for Czech armed forces. disagreements are resolved over bought 24 Hawk jets, costing twice The deal includes 16 Mi-171S conditions attached to the lifting of as much as a competing aircraft helicopters and ten Mi-35 gunships. the ban. is particularly from . AIR FORCES MONTHLY, DECEMBER 2004 concerned over a proposal for EU An official investigation has countries to declare what equipment disclosed that the £1.5 billion in top ten they are selling for three years after contract awarded to BAE Systems of ‘War Profiteers of 2004’ the ban is lifted. Despite the current and its partner, Saab, included the Lockheed Martin took $21.9bn in arms embargo, the EU sold 210 supply of 28 Gripen jet fighters that Pentagon contracts in 2003 alone, million euros of military equipment to the South African air force did not contributing to the company’s China in 2002. TIMES, 9/12/2004 want. placing in The Center for Corporate A 2001 report on the deal by the Policy’s ‘Top Ten War Profiteers of auditor general and prosecuting 2004’. With satellites and planes, authorities did not mention these missiles and IT systems, Lockheed matters. The story came to light only Martin profited from every phase of when earlier drafts of the report were the war except for reconstruction. disclosed to Business Day, a South WWW.TRUTHOUT.ORG, 31/12/2004 African newspaper. The draft report includes Saab-BAE Systems recommendations of officials from Saab, the Swedish aerospace and the defence and finance ministries, group, is to have greater who concluded there was no military control of the Gripen fighter jet rationale for buying the Gripen project. Saab is to take on fighters. The government went ahead of the aircraft, and with the order anyway and the first responsibility for export orders. aircraft are due for delivery in 2007. BAE is selling its stake in Saab from TELEGRAPH, 8/1/05 30 per cent down to 20 per cent. INDEPENDENT, 8/12/2004

CAATnews FEB-MARCH 2005 5 OTHER NEWS Public sees through Government propaganda on arms exports

Results from a poll published in is a third owned by the arms Asked: December blew away Government company BAE Systems Ltd. The UK Government's Defence myths about arms exports. Export Services Organisation, DESO, The Access Omnibus BMRB poll Asked: employs 600 civil servants exclusively shows that a significant proportion of People have given a number of to promote UK arms exports. Do you the public believe that the political reasons why the Government support or oppose this? (choose influence of arms companies is the supports arms exports. Which of the one). main reason the government following, if any, do you think is the supports arms exports, as opposed main reason the Government Result: to the Government’s stated reasons supports arms exports? (choose one). 1. Support: 15.8% such as jobs, promoting security 2. Oppose: 50.6% abroad and maintaining the UK's Result: 3. Neither support nor oppose: own supplies. Also, more than half of 1. To contribute to the security of the 25.2% people polled oppose the use of UK's friends and allies overseas: 4. Don't know: 8.4% public resources for promoting arms 21.9% companies’ exports. This takes place 2. To help maintain a strong UK The Government's stated reasons for through the Defence Export Services arms industry: 15.7% arms exports are documented at Organisation (DESO), which employs 3. Because arms companies have a http://www.deso.mod.uk/policy.htm. 600 civil servants, costs £16 million lot of political influence: 22.8% The poll used a telephone survey each year and is headed by Alan 4. For jobs and the economy: 23.8% of 1,000 adults over 16 years of age Garwood, who is also Deputy Chief 5. Other (specify): 7.7% in Britain. The survey was conducted Executive at Matra BAe Dynamics. 6. Don't know: 8.1% between 17 and 19 December The company produces missiles and 2004.

ASBOs – a clarification

Several CAATnews readers being intimidated, harassed, were horrified about the article alarmed or distressed, the in CAATnews 186 about the police can order the group to use of Anti-Social Behaviour leave the area and can also Orders against people giving order that they do not return out leaflets. Harry Cohen MP for up to 24 hours after the was prompted to take the dispersal. matter up with Home Office This is what happened in Minister Hazel Blears. the case of the two people Having discussed this with giving out leaflets outside the both the Disarm DSEi people Richmond offices of the involved and with Liberty, organisers of the DSEi arms CAAT has discovered that the fair. However, a letter from police did not issue Anti-Social Hazel Blears to Harry Cohen Behaviour Orders per se, but refers to the protests as being that they used their powers “low key” and says “there is under Section 30(4) of the no shouting, violence or Anti-Social Behaviour Act. obstructing public places”. In Under these, where a police these circumstances it is officer reasonably believes that difficult to see how the police the presence or behaviour of a could have reasonably group of two or more people believed a member of the in a ‘dispersal zone’ has public might have been resulted in (or may result in) intimated, etc. Harry Cohen is any member of the public pursuing this. ANN FELTHAM

6 FEB-MARCH 2005 CAATnews LOCAL CAMPAIGNS NEWS & VIEWS

New Bristol Peace protest at BAE CAAT group Systems in Basildon At the National Gathering last autumn, a group of Bristolians The newly formed South East Essex decided it would be a good idea to Campaign Against the Arms Trade reactivate the Bristol CAAT group. group held their first action in Since then a strong core group December – a 24-hour peace vigil at of seven have been meeting, and the BAE Systems factory in Basildon. are planning to launch the group South East Essex CAAT hopes to with a media launch shortly after focus on the factory by leafleting the CAAT’s national campaign gets workers, and undermining the going in March, followed a few factory’s credibility until people in weeks later with a day-long Basildon will not tolerate an arms conference (dates non-specific as company in their area any more. South East Sussex CAAT in yet!). The region around Bristol The main worry in Basildon seems action SOUTH EAST SUSSEX CAAT contains a significant quantity of to be that people will lose their jobs. major arms manufacturers, who So we plan to highlight the fact that The vigil was a great success and, will no doubt be targets for the the UK government is heavily though it was only the first action, new group. Activity is likely to focus subsidising jobs in the arms export South East Essex CAAT has many in particular on the BAE Systems industry when they could instead be more ideas for the coming year. We and Rolls Royce plants on the edge creating jobs that will lead to a would love to hear from other CAAT of the city. peaceful society. We believe the skills supporters in the area – contact Irene Anyone interested in getting the employees use at BAE will always Willis 01268 682820 or 07876 involved should call Graham be in demand. 332695. IRENE WILLIS Davey (Treasurer and CAAT local contact) on 0117 9093491, Sam Perlo-Freeman (Chair) on Who Calls the Shots? launch 07717875368 or email [email protected], or CAAT’s next popular campaign, The Defence Export Services Anna Stavrianakis (Secretary) on ‘Who Calls the Shots?’, will be Organisation (DESO), the 07812199957 or email looking at the tangled web of government agency which promotes [email protected]. relationships linking the government UK arms exports on behalf of with the arms industry, and the often companies, demonstrates the disproportionate political influence revolving door in action: heads of We hope this space in CAATnews this gives the arms companies. CAAT DESO are always seconded from the will be useful for sharing your believes that this close relationship is arms industry, thus giving companies campaigning news – what has a major reason for the government’s direct access to the heart of or hasn’t worked for you locally continued massive financial and government. Most of them then or any ideas you have for political support for UK arms- return to industry with their new- effective local campaigning. exporting companies. If we can found connections. Other examples Please send any contributions successfully challenge this of the revolving door include high- for this page to relationship, we will move towards profile Ministry of Defence figures: [email protected] or by post to ending subsidies and reducing arms since the start of the 1990s, three the CAAT office and we will try exports. Defence Secretaries and three to include as much as possible. The initial focus of the campaign Defence Procurement Ministers have will be the ‘revolving door’: gone on to work for arms ministers, government officials and companies. members of the armed forces taking On Wednesday 9 March, up positions in the arms industry and government ministers will rub Nations Association’s lobby of industry executives taking up jobs in, shoulders with arms company Parliament will also be taking place or being seconded to, government. representatives at DESO’s nearby on 9 March, from 1.30 till This strengthens the relationship symposium, or conference. Join us in 5.30pm, so it will be possible to between the government and arms marking the launch of the campaign attend both. (Call or email the UNA companies and can therefore skew by protesting at this symposium. on 020 7766 3451 or interns@una- the awarding of contracts or the Meet at 11am at the QEII uk.org for more information on Lobby application of government export Conference Centre, Broad Sanctuary, 2005.) guidelines, for example. Westminster, London. The United BECCIE D’CUNHA

CAATnews FEB-MARCH 2005 7 COVER STORY CORRUPTION STILL RIFE?

A series of cases highlight the need for further probing into corruption in the arms trade. By Ann Feltham & Nicholas Gilby

DTI U-turn confidentiality’. If you have access to the web, read the The Export Guarantee Department (ECGD) documents at www.guardian.co.uk/ armstrade. brought in new anti-bribery laws on 1 May 2004. According to the witness statements, Alvis employed a Henceforth, companies wanting the ECGD, and ultimately company called PT Surya Kepanjen (PTSK), run by Rini and the taxpayer, to underwrite their exports needed to show Didie Soewondho (the daughter and son of a Brigadier robust anti-corruption procedures. Commissions paid to General in the Indonesian Army), to secure the sale of agents also had to be disclosed. around 100 armoured to Indonesia in the mid- These new rules did not suit some of the exporting 1990s. By Rini’s account, her ability to secure the support companies and in October 2004 the press was reporting of Suharto’s inner circle enabled the Indonesian Army to that the controls had been watered down. This followed six gain the funds it needed to purchase the Scorpions and meetings between the Department of Trade and Industry Stormers. The witness statements of Lionel Steele (Alvis’s and BAE Systems and Rolls Royce, and five with , International Sales Manager) and Nick Prest (former itself a quarter owned by BAE Systems (Hansard, Chairman and Chief Executive of Alvis and former 15/11/2004). Defence Export Services Organisation employee) show that The Corner House research group asked the courts for Global Select, a company owned by Suharto’s daughter a Judicial Review of the relaxation of the rules, saying that Tutut, convinced the inner circle to buy Alvis. the consultation had been one-sided as anti-bribery The Guardian has alleged that Global Select collected groups had not been given an opportunity to express their around 10 per cent (£16.5 million) of the sale price. By views. This January, Trade and Industry Secretary Patricia Nick Prest’s own account, Alvis’s hiring of PTSK and Hewitt backed down, agreeing to hold a public Global Select was “crucial” in enabling it to secure the consultation on the ECGD’s anti-corruption procedures. 1995 and 1996 contracts for armoured vehicles. A Indeed, documents disclosed recently show that Patricia company owned by Tutut had been linked in 2002 to the Hewitt had overridden her own civil servants in the ECGD Hawk deals which the then negotiated to dilute the rules. with the Suharto regime in the mid-1990s (Associated Press, 15/7/2002). The Indonesian daughters Both the Hawk and Scorpion deals were underwritten In December 2004 the Guardian was allowed access to by the Export Credits Guarantee Department. Indonesia the court file of the case Chan U Seek vs Alvis Vehicles has never paid for the aircraft and vehicles, as the Limited. Former Alvis agent, Singapore businessman Chan payments were rescheduled in 1998 following the Asian U Seek, had sued the company over the sale of Scorpion financial crisis. After 1998 the ECGD paid out £645 and Stormer Armoured Personnel Carriers to million for bad debts relating to arms sales to Suharto – Indonesia in the mid-1990s, claiming he was entitled to about £400 million to BAE Systems for the Hawks, £93 commission worth a shade over £6.25 million. From the million to Alvis for the Scorpions, and £150 million to published documents it appears that Chan U Seek was other UK arms companies (Guardian, 20/12/2004). involved in attempting to sell the Alvis vehicles to Currently, Indonesia owes the UK £551 million in military- Indonesia in the 1980s, but had not succeeded and had related debt (Hansard, 10/1/2005). been released by the company. This is the latest in a series of recent allegations of The disclosure of the case documents has struck an corruption in arms deals to Indonesia, though the first to important blow for the public interest against ‘commercial implicate the UK arms industry. Allegations of corrupt

8 FEB-MARCH 2005 CAATnews BRIBERY AND CORRUPTION practices have been made over the purchase of Russian Ordnance in the 1990s. According to the article, a Mi-2 and Mi-17 helicopters. Current Indonesian Defence document seen by the investigation includes an entry Minister Juwono Sudarsono has previously admitted that dated 21 September 1995 which records the sum of $3 up to 30 per cent of the money for equipment purchases million with reference to a trip to England to visit foreign is skimmed off by those involved in the procurement companies, as well as visits to Malaysia and Brazil. This process. was the point at which Chile signed the Rayo deal, a These allegations against Alvis (now itself owned by BAE multiple rocket launcher purchase from , Systems) raise important questions. What did John Major’s then a British Aerospace subsidiary. government, which licensed the deals, know about the According to the Guardian, a second entry is dated alleged payments to relatives of the Suharto family and 25th September 1997. This records a visit to China and a senior Indonesian military officers? In response to hitherto unknown visit to England by General Pinochet parliamentary questions the Ministry of Defence has said after Labour took power, listed as “Invitacion industria that “no record has been found” relating to the use of Royal Ordnance” – appended to it is the figure “$2.5 agents, or the payment of commissions, in connection with million”. US Senate investigators apparently found that a Scorpion and Hawk deals. (Hansard, 21/12/2004) The Washington bank also set up two offshore companies in FCO say that they are “looking into this matter further” the Bahamas into which General Pinochet placed nearly (Hansard, 10/1/2005). $8 million. At the time, his official income was $90,000 a A story in the Indonesian weekly Tempo year. (21–27/12/2004) reported that investigations in Indonesia had shown PTSK was written into the contracts for the Inquiry needed 1995 and 1996 Scorpion deals. Questioned about this, A wide-ranging inquiry is needed into the specifics of the the Department for Trade and Industry said “details of Scorpion and Hawks deals to confirm if the government of contractual arrangements (including agent’s commission) the time should have known there was a possibility of are provided to ECGD by exporters in confidence” corrupt practices in these deals. There is also the question (Hansard, 10/1/2005). It is completely possible, therefore, of the use of taxpayers’ money. Both Rini Soewondho and that the ECGD knew of Alvis’s arrangements, but decided Nick Prest refer to the 1996 contract being secured despite to commit UK taxpayers’ money anyway. the competition from Daewoo of “who were CAAT has discovered from the Public Record Office that offering a competitive on generous terms” the UK government was aware as early as 1973 of reports (Prest). Was ECGD cover offered to Alvis with the purpose of corrupt practices on arms sales to Indonesia. In January of enabling Alvis to secure the deal? And, if ECGD knew that year, the then UK Ambassador in Jakarta cabled the of the commissions to PTSK, was this a reasonable use of UK MoD and FCO to say that the Indonesian MoD had taxpayers’ money? paid £529,000 for a shipment of batteries but this Rini’s witness statement says that from 1978 “the included “a 55 per cent mark up which presumably would purchase of all defense equipment from foreign be shared among people in high places in Jakarta” (FCO companies must be made through agencies owned by 24/1712, piece 11). retired Indonesian (or a member of his family)”. She confirms that her family’s company was an Saudi investigation and £1 billion agent for UK firms up until the 1990s. What other UK In November 2004, BAE Systems was told by the Serious companies had dealings with PTSK? And what, if any, Fraud Office that it was widening its investigation into payments were made to agents or Suharto’s inner circle to possible false accounting in its contracts with two secure contracts for other deals? Royal Ordnance was marketing and travel companies involved with BAE -owned up until April 1987. From Nick Prest’s Systems’ Al Yamamah deal with . Former statement we know that Royal Ordnance employed PTSK. employees of the companies were alleged to have How far, therefore, was the UK government directly lavished gifts on Saudi officials. The Financial Times involved in making payments to agents or Suharto’s inner (18/11/2004) thought it likely that BAE Systems’ executives circle? would be questioned by the SFO. Most importantly, we need to know what is happening On 14 December, the Guardian revealed that should now. Do the attempts by BAE Systems and others to dilute the Saudi regime collapse (not the remotest of the ECGD’s anti-bribery procedures mean that the possibilities), the UK taxpayer, through the ECGD, will pay companies are still paying the family members of political BAE Systems £1 billion. This is the amount the Saudis pay and military figures to secure arms deals? Which of BAE Systems to virtually run their airforce. The guarantee today’s repressive regimes are being supported in this way was described by the House of Commons’ Trade & by the arms companies with the UK government’s implicit Industry Committee Chair, Martin O’Neill MP, as “foolish”. consent? CAAT continues to press the government to publish the Pinochet’s millions 1992 National Audit Office report into allegations of On 18th December, the Guardian reported that a Senate corruption surrounding the Al Yamamah project with Saudi investigation in Washington had found that up to $5 Arabia. CAAT has made a Freedom of Information Act million was listed in Pinochet’s bank records, with some request for this. There will be more about this in the next appearing to be linked to arms purchases from Royal CAATnews.

CAATnews FEB-MARCH 2005 9 DEBATE The Constitutional Treaty: should peace campaigners vote for it?

The Constitutional Treaty The Constitutional Treaty includes a number of Articles which institutionalise the of the European Union militarisation of the EU that we have been witnessing over the past ten to fifteen has been agreed but years. In particular, Article I-40 of the now needs to be ratified Treaty commits the Member States to improving their military capabilities and by each of the Member sets up a European Defence Agency. So what should peace campaigners do when States. In the UK this casting their votes in a referendum? will be the subject of a referendum.

Vote ‘yes’says Martina Weitsch of the Quaker Council for European Affairs

Is it likely that a ‘no’ vote on the Constitutional Treaty would halt the militarisation of the EU? The militarisation of the EU is already well under way. The European Defence Agency has been set up and is working. The military Rapid Reaction Force has been set up. The European Union has undertaken – and is undertaking – military interventions in conflict areas. The failure of the Treaty to be ratified won’t change that. Despite all this, though, the fact that the militarisation is enshrined in the Constitutional Treaty is a further negative aspect, because it will be very difficult to remove it from the Treaty at a later date.

What would happen if a country failed to ratify the Constitutional Treaty? Legally, it means the whole project has failed and has to be tackled by some other route. In practice it might mean: One or more countries leaving the EU. Some countries progressing on issues ahead of others (a two-speed Europe). Some further negotiation which allows countries who have failed to ratify to say to their electorate that they ‘no’ vote. That will weaken both the UK and the EU and it have won some concessions. They may, on the basis of won’t stop the militarisation. such concessions, win a second round. Finally, the Constitutional Treaty includes at least one bit One or more countries having a second referendum of good news: it includes a clause that requires the with or without any substantive changes to the European Commission to bring forward a proposal for Constitutional Treaty. legislation if one million European citizens request it. Here Generally speaking, the UK runs a very high risk of is a possibility for the peace movement across Europe to voting ‘no’ to the Constitutional Treaty. This is not because get together and to demand the introduction of serious of a popular movement against the militarisation of the civilian alternatives to military intervention in conflicts and EU but because of the underlying anti-European political to get it onto the political agenda. Maybe this is a more climate in the UK. There is, in my view, a serious risk of positive tool for change than a ‘no’ vote in the the UK being sidelined in the European Union if there is a referendum.

10 FEB-MARCH 2005 CAATnews THE CONSTITUTIONAL TREATY

The only reason that the EU could Vote ‘no’ says Caroline be interested in new military capacity Lucas MEP, a Green Party MEP and new rules allowing it to for South-East England and a undertake new missions is member of the Advisory Board that it is interested in a more of the Centre for a Social Europe offensive role around the world. There is much to disagree with in the Javier Solana said it himself in a European Constitution, be it the tendency paper that he prepared for EU towards greater centralisation, the governments. He said, “The new continuing pressure on public services, or threats are dynamic. Left alone, they the tired old Thatcherite economics that will become more dangerous... This live on in much of the EU economic policy. implies that we should be ready to But one of the most powerful arguments act before a crisis occurs.” Javier against the Constitution comes from those Solana’s philosophy sounds who believe that the primary goal of the worryingly like the Bush doctrine of European Union’s foreign and security pre-emption. policy should be to promote peace not We must decide now whether we war. want an EU that devotes its limited The Constitution extends the military resources to largely conflict capacity of the EU. At the moment, the prevention and or EU is limited in what it can do in military whether we want the EU to be a matters by what are known as the Petersburg tasks. These global military power – a sort of understudy to the US, tasks include useful peacekeeping and disaster relief tasks helping it to intervene around the world. The Constitution as well as the more suspect reference to peace offers us this future – a future of more weapons and more enforcement. offensive missions. It is a future that I believe we should The Constitution takes the EU far beyond this in a reject. number of regards. The military tasks that the EU’s groups can perform are extended so that the EU can undertake anti-terrorist missions in third countries. In practice the EU’s own constitution would allow it, for the first time as an institution, to send troops into third countries on offensive missions: let us not forget that, for many, the US-led war in Iraq, which was supported by a majority of the EU 25, was considered an anti- mission. I also have concerns about the scrutiny of those missions. The European Parliament, the EU’s only directly- elected institution, has absolutely no oversight of EU military missions or of most aspects of Javier Solana’s various roles as ‘Union Foreign Minister-in-waiting’. As foreign policy expert Dr Giovanna Bono said, there is a danger of increasing the democratic deficit in defence because “executive branches of national governments and ad-hoc coalitions of the willing will increase their powers to take decisions in multilateral security and defence policies while the [European Parliament] and national parliaments find that their…powers…remain too limited.” But this is not just a question of institutions; it is also a question of capacity. An army cannot undertake offensive missions if it does not have the capabilities to do so. The Constitution also sets up an armaments agency to encourage more military spending. The Foreign Office’s own information leaflet said that, “This should help encourage other European countries to spend more on defence.” Jack Straw has admitted as much. The EU is already the second largest defence spender in the world, spending more now than Russia or China. It is also the second largest arms exporter, after the USA.

CAATnews FEB-MARCH 2005 11 PARLIAMENTARY

DESO – what does your MP think?

The Defence Export Services and DESO. Ever since CAAT was set Organisation (DESO), then known as up (in 1974) it has called for DESO’s the Defence Sales Organisation, was closure. set up within the Ministry of Defence There is likely to be a General Arms tales in 1966. Today its aim is “to Election this year and CAAT would maximise legitimate UK defence like to know what current MPs and from Short exports in co-ordination with parliamentary candidates think about Clare Short’s new book An industry” and its 600-strong staff co- DESO. Please write to your MP, Honourable Deception? sheds ordinate most of the direct UK House of Commons, London SW1A some interesting light on the government support for arms 0AA and, if you have time, the Tanzania case. As is known, she exports, providing marketing prospective parliamentary candidates was against the export of the £28 assistance and advice on negotiation for your constituency asking what million BAE Systems air traffic and financing arrangements. DESO their views as individuals are with control system; in her view it was also sponsors arms fairs such as regard to DESO. CAAT knows what unnecessary and “very difficult to DSEi 2005 and organises overseas the parties think, but on this issue not believe that the contract had been promotional tours. every individual toes the party line so agreed without corruption”. DESO’s net operating costs for it is important that MPs and Despite being backed by Gordon 2004/5 are projected at £14.426 candidates are all quizzed. Brown, Robin Cook, Patricia Hewitt million (Hansard, 29.6.04). As well Your local library may be able to and the World Bank, she could not as its London headquarters, it has assist with details of prospective “persuade the Prime Minister, even seventeen overseas offices, most candidates in your area. At the time in a case like this, to take a stand employing three or fewer staff, of writing, most of the parties did not against British Aerospace” and though the office in Saudi Arabia has have this information on-line. “the whole episode left a very 56 (Hansard, 26.10.04). Please send copies of any letters nasty taste about the behaviour of you receive back from MPs or British Aerospace”. Once Blair had Shut it down candidates to Ann at the CAAT office. made his views known, Jack Straw Successive UK governments have This information will be of great and Patricia Hewitt backed him both practically and symbolically assistance in planning CAAT’s future and the deal was sealed. supported arms exports through DSO campaigns. ANN FELTHAM Short describes how “arms sales were one of Tony Blair’s blind spots and in this he was strongly supported by Jack Straw”, who “considered it their duty to promote British arms sales whenever possible”. Short’s depiction of the Tanzania case shows how close BAE Systems is to the Prime Minister and how it can often get its way even if opposed by many Cabinet ministers - a salutary reminder of its influence. NICHOLAS GILBY

Volunteer needed for Clean Investment Campaign CAAT is looking for a volunteer to work on the Clean Investment Campaign, for one or two days per week, in our London office. The role includes carrying out research into ’ arms company investments and helping to involve university students in the Clean Investment Campaign. This role might be of particular interest to someone who is currently studying at university or is a recent graduate, but that is not essential. To find out more, please contact [email protected] or call 020 7281 0297. KATHRYN BUSBY

12 FEB-MARCH 2005 CAATnews BOOK REVIEW Unpeople: Britain’s Secret Human Rights Abuses By Mark Curtis of Blair’s deceit and flouting of The chapters on UK policy towards Vintage 2004, ISBN international law over Iraq (among Iraq, Nigeria, Vietnam, Uganda and 0099469723, £7.99 other things), these are not the most Chile are brilliant. Curtis This is an excellent and important valuable passages. The great value demonstrates the cynical real motives book. Its central aim is the of this book is its analysis of UK behind the policies adopted, the of the conventional policy in the 60s and 70s using the frequent lying by Government to wisdom found in both reactionary declassified record, hitherto Parliament to conceal these. Curtis and liberal circles that the UK has unexamined by mainstream also highlights the importance of been, and is, a “force for good in academics or writers. arms exports in enabling past UK the world”. By careful examination of Governments to support favoured declassified Government documents repressive regimes and their policies. Curtis conclusively demonstrates that The accounts of how the UK rushed in their private deliberations, the to supply arms to crush the Kurds in UK’s foreign policy elite have never Iraq and the Biafra rebels in Nigeria been motivated by ideals such as in the 1960s are detailed, human rights, spreading democracy, depressing, and occasionally a peace or development. In the revelation. For example, Curtis shows conclusion he effectively argues that how UK-supplied Hawker Hunters mainstream NGOs and liberal played a key role in Pinochet’s coup writers, by refusing to challenge the by rocketing Allende’s palace and prevalent myths, serve to obstruct residence. These accounts underpin desperately needed progressive the other key point of the book – the change. bipartisan nature of UK foreign Though there are useful chapters policy – and the great challenges that discuss current UK imperial that lie ahead in trying to build an military planning (see CAATnews alternative. NICHOLAS GILBY 184) and Government “information operations”, and that also remind us

New staff member – Anna, Action & Events Coordinator

Hello! I’m Anna, CAAT’s new Action inspiring action. I’m an experienced benefit from training please get in and Events Co-ordinator. I’ll be trainer, and am able to train people touch with either Beccie or myself, responsible for organising CAAT’s in a range of campaigns skills: from and let me know if you have any national actions, protests and events facilitation and group work to good ideas for actions or upcoming throughout the year. nonviolent direct action and media events! I’m an experienced campaigner campaigning. Training is a key way I’ll be working part-time in the and activist, having worked with a in which we can make our actions office, whilst continuing to pursue range of local and national safer, our campaigning work more my other interests. These involve campaign groups over the last few effective, and our group work and facilitating dance and movement years. decision-making more democratic classes for children and taking local My background also involves and fun. action for environmental work in theatre and other creative We’re planning to bring training sustainability. If you’d like to get in arts, and I really look forward to the opportunities to places around the touch, please email me on challenge of continuing CAAT’s country over the coming year. If you [email protected] or give me a tradition of taking creative and or your group feel that you could call in the office. ANNA JONES

CAATnews FEB-MARCH 2005 13 CAAT CASH Fundraising

By Kathryn Busby

May I start by wishing everyone a It is that time of year once again, donated to the organisation they very happy new year and by when I ask our supporters to put represent. Being a volunteer has thanking all those who responded so themselves forward to volunteer for many benefits, including free entry to generously to our two latest appeals. CAAT with the Workers the festival, free travel and a higher The first asked for contributions Company (WBC). This year the than average standard of camping towards CAAT’s new campaign and scheme will be organised a bit facilities – and showers! It can be the total raised has already exceeded differently, as the WBC has changed hard work, with six hours of £9,000. We are delighted with this their system and will be making all volunteering per day, but as previous response and it would be wonderful arrangements much further in participants will confirm, it’s well to reach £10,000 (or more!) before advance. This should prove worth it. the launch. So if you haven’t yet beneficial for everyone involved, as made a donation and are able to, we will know much earlier how many Would you like to fundraise for please send in a cheque payable to places we have been allocated for CAAT? ‘CAAT’ and mark it ‘Campaign each festival. However, this does Do you have any ideas for Appeal’ on the back. mean that if you are interested in fundraising activities? Have you been Our thanks also go to the 167 taking part, you need to contact me involved in a successful fundraising supporters who responded to the right away. event that you think could work for second of our recent appeals and For those unfamiliar with the CAAT? Would you like to raise increased the value of their standing Workers Beer Company, here are a money for the campaign, but don’t orders to CAAT. This regular, reliable few details. Each year the WBC runs know where to start? Then please get income provides the financial basis beer tents at the major music in touch, either by email to for everything we do and is of festivals including Glastonbury, Leeds [email protected] or by telephone immense importance; we are very and Reading. Charities, trade unions 020 7281 0297. I look forward to grateful for your support. and voluntary organisations provide hearing from you. KATHRYN BUSBY Volunteer for CAAT with the volunteers to work in the tents as Workers Beer Company servers and the wages they earn are

Supporter reps Farnborough arms fair and BBC on Steering Children in Need Committee CAAT has heard that as part of Take Action Terry Wogan’s fundraising Please contact the BBC to express There was only one nomination for the BBC Children in Need your opposition to their inclusion of for the one-year vacancy for a appeal last year, a day out at a trip to an arms fair in the auction. Supporter representative on Farnborough International was sold Please ask for their assurances that Steering Committe advertised in for over £8,000. they will not offer prizes that are the last issue of CAATnews. This UNICEF estimate that in the last supportive of the arms trade in was that of Heather Woolley and ten years alone, two million future. You can call the BBC on she is, therefore, deemed elected. children have died as a result of 08700 100 222 or write to BBC The other seven Supporter war. They report that in recent Information, PO Box 1922, representatives, who were elected decades an estimated 20 million Glasgow G2 3WT or send an email earlier, are Richie Andrew, Richard have been forced to flee their through the website Bass, Nick Gilby, Jim Footner, homes. There is a terrible irony in www.bbc.co.uk/info/contactus/form Dorothy Forbes, Sam Perlo- using an arms fair – where .shtm Freeman and Janet Williamson. weapons are sold to countries ANN FELTHAM engaged in violent conflict – to raise money for children’s causes including refugee projects.

14 FEB-MARCH 2005 CAATnews GET ACTIVE!

standing order, giving CAAT an ‘Who Calls the Shots?’ report urgently needed regular income. Email: [email protected] A new report on the ways an answer – the very special Tel: 020 7281 0297 in which government- relationship between the corporate collusion drives government and arms companies. Materials available from arms exports. Place your The report tracks the web of links the office order now. that provide arms companies with The Labour government continues influence within government: the CAAT postcard to offer massive financial and revolving door of jobs-for-the-boys; Available for locally. political support for UK the expansion of Following the Iraq conflict, CAAT arms-exporting quangos and other has been very successful in companies. The official ‘advisory bodies’; the use highlighting the fact that the UK reasons for this of lobbying companies armed Saddam in the first place. support are given as and influential Labour Our campaign postcard outlines six economic, strategic Peers; cash donations questions about the arms trade. and/or political, and sponsorship; and the Thousands of these post-cards depending on what is rapidly expanding have been distributed at most convenient for of the demonstrations and other events government military through Public against the war, and have helped spokespeople. Private . CAAT to gain many new supporters. However, these The report’s Now we’re asking CAAT rationales are being information and analysis supporters to help distribute these subjected to increasing provides the means for cards locally. scrutiny. They look at understanding why the Could you take 100 or more to best flimsy and at worst pure arms companies retain their power hand out at relevant local events? manipulation. under the Labour government and, They’re free from the office, but we But if these rationales are not consequently, why the UK continues estimate it costs about £4.00 in sustainable, why does the to export weapons around the , postage and packing to government continue to support world. produce 100. If you can make a arms exports? This report provides For copies of the report contact donation, it would help us to much-needed and long-awaited Patrick at the office on 020 7281 produce more campaign materials. analysis of the prime candidate for 0297 or at the usual address. Good luck, and thanks for your help increasing support for the campaign.

The campaign thrives on appointment to see your MP in your participation. Here is person at their surgery. Contact Ann how you can get involved Feltham if you need advice on this. Correction and stop the arms trade Email: [email protected] with CAAT Tel: 020 7281 0297 In the article ‘CAAT opinion poll results’ on page 11 of the last Local action Demonstrate! issue of CAATnews, the sentence If you are able or would like to put CAAT demonstrations are peaceful, ‘In 2003 the poll showed that 46% leaflets or CAATnews out into local inclusive and fun. The more people opposed arms exports.’ should libraries or health food shops, or who come, the more effective they have had a figure of 45%, not give them out at meetings, hold a are. Have a look at the campaigns 46%. stall at a local event and require diary, or contact the office for more In the sentence ‘The CAAT polls materials, join a local group or information. follow on from a poll conducted become a local contact, get in touch Email: [email protected] for the MoD in 1998 in which 43% with Beccie D’Cunha. Tel: 020 7281 0297 opposed arms exports.’ the figure Email: [email protected] should be 41%, not 43%. Tel: 020 7281 0297 Make a donation Also note that a direct CAAT always needs your financial comparison between the MoD and Letter-writing support. If you are able to make a CAAT polls should be taken with You can never write too many letters donation, please send a cheque care. The differing figures may be on behalf of CAAT. Most MPs can be (payable to CAAT) now, to: CAAT, explained by the differing reached at the House of Commons Freepost, LON6486, London N4 questions rather than a change in address: [Your MP], House of 3BR. Alternatively, you can use the public opinion. Commons, Westminster, London form on the back page to set up a Apologies for any confusion SW1A 0AA. You can also make an caused.

CAATnews FEB-MARCH 2005 15 Subscribe now! Campaigns diary

Subscription is voluntary, but we need your support. We suggest £26 waged, £14 low 9 February 2005 income and £35 for groups. Please give more if you are able, or less if not. 2005 CAAT Lecture. See page 3. Name 9 March Address Who Calls the Shots? campaign launch and protest 21 March 2005 Postcode International Day of Direct Action Against the Tel Arms Trade. See www.dsei.org. Email 30 March 2005 I enclose a cheque/postal order for £ CAAT Clean Investment Campaign 2005 I do not want to receive an acknowledgment launch 4 May 2005 Please give by BAE Systems AGM standing order 4–12 June 2005 CAAT Stop the Arms Trade Week It helps CAAT plan ahead more effectively and costs less to administer, so more money 12 June goes directly to campaigning. Just £3 a month makes a real difference. Day of Prayer Name 13–16 September 2005 Bank address ExCel Arms Fair (DSEi), London Weekly Postcode Picket of Spearhead. DISARM DSEi hold a regular picket of Spearhead – organisers of Sort code Acc No the ExCel Arms fair (DSEi) – and would Please pay: The Co-operative Bank Plc, 1 Islington High welcome people joining them. Please email Street, London, N1 9TR (sort code 08 90 33) for the account [email protected] for details. of CAMPAIGN AGAINST ARMS TRADE (account number 50503544) the sum of Monthly pounds (£ ) 2nd Monday of each month, 7.30pm – East London Against the Arms Fair meeting at the starting on (dd/mm/yyyy) and monthly/ Garden Cafe, 7 Cundy , London E16. annually thereafter. See www.caat.org.uk for more information on arms trade events Signed

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