On the Record
An audit of Canada’s report on military exports, 2003-05
By Kenneth Epps & Kyle Gossen
January 2009
Project Ploughshares
On the Record An audit of Canada’s report on military exports, 2003–05
By Kenneth Epps & Kyle Gossen
About this Publication In this publication, Project Ploughshares provides detailed analysis of the “Report on Exports of Military Goods from Canada, 2003-2005,” published by the Export Controls Division of Foreign Affairs and International Trade Canada. Kyle Gossen conducted research and co-authored the publication during a term placement under the Co-operative Education program at the University of Waterloo. Kenneth Epps is Senior Program Associate with Project Ploughshares.
Project Ploughshares Project Ploughshares is the ecumenical peace centre of The Canadian Council of Churches established to work with churches and related organizations, as well as governments and nongovernmental organizations, in Canada and internationally, to identify, develop, and advance approaches that build peace and prevent war. Project Ploughshares is affiliated with the Institute of Peace and Conflict Studies, Conrad Grebel University College, University of Waterloo.
Project Ploughshares 57 Erb Street West Waterloo, Ontario N2L 6C2 Canada 519-888-6541 Fax 519-888-0018 [email protected] www.ploughshares.ca
The views presented in this paper do not necessarily reflect the policies of the sponsoring churches of Project Ploughshares.
© Project Ploughshares 2009
ISBN 978-1-895722-73-4
Table of Contents
1. Executive Summary 1
2. Why an Audit 3 2A. Introduction 3 2B. Canada and the International Arms Trade 4 2C. Auditing the “Annual” Report 5 2D. Methodology 7
3. A Controlled Trade—What the Report Tells Us 9 3A. Canadian Export Control Policy 9 3B. Authorization and Enforcement 10 3C. Multilateral Commitments 12 3D. Military Exports to the United States 13 3E. Reported Data 16 Total reported exports 16 Largest recipients 17 Regional distribution 18 Multilateral partners 20 Categories of exports 21
4. The Efficacy of Canadian Controls 25 4A. The Four Guidelines 25 Countries that pose a threat to Canada and its allies 25 Countries involved in or under imminent threat of hostilities 25 Countries under United Nations Security Council sanctions 26 Countries whose governments have a persistent record of serious human rights violations unless there is no reasonable risk the goods can be used against civilians 27 4B. The Record 27 4C. Adhering to Canada’s Existing Standards 29
5. Transparency: What the Report Does Not Tell Us 31 5A. Timeliness, Completeness, and Clarity 31 Timeliness 31 Missing item descriptions 31 Double-counting 32 Exports to the US 32 Data on small arms and light weapons 33 5B. Additional Data 33 Export licences 33 Dual-use goods 34 5C. International Reporting Standards 34 5D. Accuracy: Comparison of Reported Data with Data from Other Sources 36 Case study: Armoured vehicles and GDLS Canada 37
6. International Standards: The Arms Trade Treaty and Canadian Commitments 43 6A. Emerging Control Criteria from the ATT and Relevant Indicators 45 6B. Assessing Canadian Exports against Proposed ATT Standards 48 6C. Recipient Case Studies—Colombia and Saudi Arabia 49
7. Unregulated Civilian Equipment for Military End-use 56 7A. Aircraft Engines 57
8. Canadian Arms Export Controls and Reporting: Recommendations for Canadian Action 59 8A. Controlling Arms Exports to the United States 59 8B. Applying Existing Criteria 60 8C. Broadening Control Criteria 60 8D. Controlling All Transfers for Military End-use 61 8E. Improved Transparency 62 8F. Promoting International Standards 64
Appendix 1: Group 2 of Canada’s Export Control List 67
Appendix 2: Members of Relevant Multilateral Instruments 68
Appendix 3: Selected Military Goods Categories 69 Small Arms and Light Weapons 69 Small arms (ECL 2-1) 70 Ammunition (ECL 2-3) 72
Appendix 4: Acronyms and Abbreviations 74
Notes 75
1. Executive Summary
In this first detailed audit of a government report on Canada’s export of military goods, Project Ploughshares analyzes the data published by the Department of Foreign Affairs and International Trade (DFAIT) for the period 2003–2005. The purpose of the audit is to examine this published record and other evidence to determine “the propriety, compliance, and adequacy” of Canadian export controls. Compared to many weapons suppliers, Canada is a responsible arms exporter. Canada also was one of the first states to report weapons shipments in some detail. However, there are significant holes in both the practice and transparency of Canada’s export controls. A number of improvements are necessary to ensure that its export authorization system meets the emerging international standards that Canada supports. The key findings of the audit are:
• The documented trade during the three-year report period was concentrated by recipient and product. The four largest recipients—Saudi Arabia, Australia, the UK, and New Zealand— together received more than two-thirds of reported military shipments. By far the largest exported goods category was “ground vehicles,” representing more than half the total value of shipments. These were almost exclusively armoured vehicles manufactured by one company, General Dynamics Land Systems Canada, based in London. Less than 10 per cent of reported arms exports went to states outside those with which Canada has security or arms control arrangements.
• The most conspicuous failing of the Report is its omission of data on Canada’s military exports to the United States. The US is by far the largest recipient of military goods from Canada. During the period of the report, the US imported an estimated $4-billion in Canadian arms and components. At nearly 70 per cent of total estimated shipments, exports to the US represented well over twice the combined reported value of Canadian exports to all other countries. The omission of US data is a major lapse in transparency.
• Although most Canadian military exports are shipped to allied and stable governments, there is evidence that Canada does not always adhere to its own control guidelines. In most cases limited detail in the Report precludes a conclusive assessment of the risks associated with specific shipments, but there are cases in which a bias toward commercial benefit has clearly prevailed over justifiable caution. The export of armoured vehicles to the Saudi Arabian National Guard—worth almost $400-million from 2003 to 2005—is the most prominent example.
• Beyond the lack of US data, the Report has other significant transparency failings. These include a multiyear delay in its release, a decline in detail from previous reports, and several areas in which other supplier governments (such as the US and Sweden) report relevant information that Canada does not. In addition there are serious questions about the accuracy of the data reported. Quite apart from marked differences with other data sources (illustrated by annexed reviews of small arms and ammunition exports), some figures in the Report do not line up with data provided by the same government department (i.e., DFAIT) to the UN.
On the Record 1 • During the period of the Report, there were important examples of unregulated and unreported civilian Canadian equipment shipped for military end-use. The most prominent was a shipment of helicopters to the Pakistan Armed Forces in the face of a Canadian ban on military exports to Pakistan. Other examples during the period occurred in the form of aircraft engine shipments. Although for use by armed forces, none of the unregulated shipments were reported as military exports.
• Evidence from the audit points to needed improvements in Canadian export control policy and practice. These include: o Authorizing and reporting all military exports, including those to the US; o Applying existing export controls on a stricter and more consistent basis; o Broadening controls to meet relevant international obligations and emerging standards; o Controlling the shipment of all major equipment destined for the military; and o Providing greater and timelier transparency to facilitate independent scrutiny. Canada supports effective, legally binding global standards for arms transfers through universal adoption of an international Arms Trade Treaty. It can strengthen this support and lead by example by addressing the identified deficiencies in its military exports regime.
2 On the Record 2. Why an Audit?
2A. Introduction During 2004 and 2005 Canadian-manufactured helicopters worth in excess of $100-million were delivered to the Pakistan Armed Forces for use against “terrorism.” In the same two-year period, Canadian military goods worth more than $2-billion were delivered to the United States, including hundreds of armoured vehicles for US Army operations in Iraq. Canada’s latest report on the export of military goods provides data on transfers to 77 countries for the three–year period 2003–2005, yet it does not document any Pakistani or US transfers. Why the omissions? Canadian export controls regulate the transfer of military goods to other states. Decisions by the Foreign Affairs Minister and department officials are made on a “case-by-case” basis according to established guidelines. The guidelines are restrictive but not prohibitive and military shipments may be made to states that contravene control criteria. Moreover, the guidelines do not cite genocide, war crimes, corruption, and other relevant considerations that arise out of Canada’s commitments under international law. Is Canada’s export control system doing its job? To explore these and related questions, Project Ploughshares has undertaken an “audit” of the Report on the Export of Military Goods from Canada, 2003-2005. Canada claims to be—and compared to many other suppliers arguably is—a responsible arms trader and Canadian exports of military equipment are largely transparent. Yet, despite their comparative standing, Canadian export controls and reporting standards are not what they could or should be. It is not difficult to find examples of Canadian weapons transfers that point to a control system that is marred by significant holes, not compliant with accepted standards, or prone to commercial pressures. It is even easier to point to gaps in the official data on Canadian arms exports. How extensive are these problems? A thorough investigation of the record is needed to systematically identify their nature and extent. By analyzing the reported data; making comparisons with data from other sources; and identifying relevant, omitted data, it is possible to build a more complete picture of Canada’s export control practice. With more information about the practice, there are more opportunities to improve it. Project Ploughshares has monitored and analyzed the export of Canadian military goods for over 30 years. Since public military export reports began in 1990, we have examined the official data and what it has revealed—and omitted—about Canadian export controls. As a result, and with some success, we have regularly and repeatedly called for improvements to Canadian arms transfer controls as well as to the manner in which weapons exports are reported.1 This is the first detailed audit of a government report by Project Ploughshares. There are many definitions for an “audit” process. In this instance we adhere to the definition provided by the US Environmental Protection Agency that an audit is “the systematic examination of records and the investigation of other evidence to determine the propriety, compliance, and adequacy of programs, systems and operations.”2 The intent is to examine the government record of Canadian military exports for the three-year period 2003–2005 to determine—with the assistance of other sources— the propriety, compliance, and adequacy of Canadian export controls.
On the Record 3 2B. Canada and the International Arms Trade In a world saturated with conventional weapons, irresponsible transfers of military goods threaten human security by extending and magnifying violence. Every year, a wide range of conventional weapons systems are exchanged through legal and illegal channels, adding to or displacing the abundant stockpiles that also are a source for arms transfers. The infusion and circulation of arms continue to prolong conflict, magnify the atrocities committed during wars, and make the task of disarmament following peace more formidable. Arms transfers fed 30 armed conflicts worldwide in 2007,3 and contributed to widespread human rights violations, often by government forces. The devastating impact of widespread conventional weapons exposes the need for stricter and wider controls on their transfer. The international arms trade is not without regulation. States have long acknowledged the significance and special status of the international transfer of weapons through national laws to control arms exports and imports. The United Nations regularly calls for member restraint to prevent “excessive and destabilizing" arms transfers, and several UN arms embargoes, intended to end all weapons supplies to targeted states or groups, have the status of international law, legally binding on all UN member states. The control of transfers of small arms and light weapons (SALW) has garnered particular urgency, based on widespread acknowledgement that the misuse and proliferation of SALW have led to an especially egregious set of human security problems. Even so, while there are in place national export control laws of varying standards, as well as several related multilateral agreements, there is no existing global agreement to govern the trade in weapons. Recognizing the failure of existing regulations, many states, including Canada, support proposals for an international Arms Trade Treaty (ATT) to establish global standards for the authorization of arms transfers. For decades Canada has been an active and comparatively responsible participant in the international arms trade. Canada has imported military goods from foreign governments and manufacturers and exported Canadian-built weapons and components to other states. It is not a member of the top echelon of major suppliers—largely corresponding to the Permanent Five members of the UN Security Council—but is often near the top of the second tier of suppliers. Two authoritative monitoring agencies—the Stockholm International Peace Research Institute (SIPRI) in Sweden and the US Congressional Research Service (CRS) in Washington—both ranked Canada as the 6th largest arms supplier worldwide in 2004.4
Table 1: Leading Global Arms Suppliers during Period Covered by DFAIT Report Rank Supplier Value of deliveries Supplier Value of deliveries (CRS data5) 2002-05* (SIPRI data6) 2001-05** 1 United States 43,363 Russia 28,982 2 United Kingdom 16,000 United States 28,236 3 Russia 16,000 France 8,573 4 France 11,300 Germany 5,603 5 Germany 5,200 United Kingdom 3,933 6 China 3,300 Ukraine 2,226 7 Israel 3,300 Canada 1,971 8 Canada 2,700 Netherlands 1,868 9 Ukraine 2,700 Italy 1,858 10 Sweden 2,600 Sweden 1,760 *Millions of current US dollars. ** Millions of constant 1990 US dollars.
4 On the Record Table 1 provides rankings and estimates of delivery volumes of the leading suppliers of conventional arms over the period of the DFAIT report. The rankings and volumes of the two sources differ, in part because their periods of calculation differ by one year and in larger part because CRS and SIPRI use different methodologies for estimating arms delivery values. Nevertheless, the two sources agree on the leading five suppliers —USA, Russia, UK, France, and Germany—and on Canada’s rank as one of the leading 10 suppliers.7 Canada has been a comparatively responsible arms trader in that it has imposed restrictive national controls on the transfers of military goods to and from the country. It views military export control as an important foreign policy tool: A key priority of Canada’s foreign policy is the maintenance of peace and security. To this end, the Government of Canada strives to ensure that Canadian military exports are not prejudicial to peace, security or stability in any region of the world or within any country.8 In other words, effective arms export regulation is an important tool for the maintenance of peace and security. Regulation is based on the understanding that military goods require levels of scrutiny and control not typically required for other kinds of traded goods. Moreover, Canada believes the process should be transparent and sees itself as leading by example: As part of Canada’s effort to encourage greater transparency on military exports, DFAIT has published periodic reports on annual exports of military goods and technology since 1990.9 Canada was one of the first nations to commit to a public report on arms exports. For several years DFAIT touted the Annual Report as “a model of detail and completeness” intended to serve “as an example that other countries may someday match.”10 Today, many exporting states provide annual (or more frequent) reports on military exports and several report with a greater degree of transparency than does Canada.
2C. Auditing the “Annual” Report The Report on Exports of Military Goods from Canada, 2003-2005 (referred to below as the Report or the DFAIT Report) was released by the Export Controls Division of Foreign Affairs and International Trade Canada in December 2007. The latest release diverges from previous practice. The Report provides shipment data on three calendar years of export activity. This is the first time since 1990 that DFAIT has provided shipment data for more than one calendar year of export activity. As a result, the “Annual” term used in earlier report titles has been dropped. Furthermore, since no data for the period was released earlier, the multiple-year reporting created a significant delay in public access to information about Canadian military exports, especially for the years 2003 and 2004. Although their timeliness varied, prior reports typically were released within 18 months of the end of the relevant year. In this latest case, the data for 2003 was released four years after yearend. This audit will begin with a close examination and analysis of the data provided in the Report. The official record provides extensive and useful information on Canada’s conventional weapons shipments for the three-year period. Despite the faults described in this audit, the Report remains the most accessible public record of Canada’s arms trade activity. It offers a base for assessing the volume of Canadian military exports, the general nature of the equipment shipped, and the range of recipients. By comparing the three years of data in the Report with the data from earlier government
On the Record 5 reports it is possible to track trends over time, including shipment volumes across states and regions. The first objective of this audit is therefore to present a detailed picture, based on reported data, of the Canadian shipment of conventional weapons to other states. The data published in the DFAIT Report is also a record of the application of Canada’s arms export controls during the three-year period of the Report. The details provide insight into DFAIT authorization decisions and standards, and particularly the use of the control guidelines noted in the Report. A second objective of the audit, therefore, is to measure the reported record against Canada’s export control guidelines. The audit will also make use of other data sources. The additional information will serve at least three purposes. First, where direct comparisons are possible, we will attempt to determine the accuracy of information published in the Report. Second, we will use other public sources to assess the level of transparency of the Report based on comprehensiveness and usefulness of the information provided. Finally, the other sources will assist us to identify important and relevant data not included in the current publication. The third objective of the audit is thus to ascertain the accuracy and completeness of the data provided in the Report. Whereas the first objective seeks to provide a picture based on the data directly accessible from the Report, this third objective is intended to widen and complete the picture. The audit has additional purposes. As the Report notes, Canada’s military export controls are exercised within a wider foreign policy framework that, among other things, seeks to limit the destructive impact of international arms transfers. Canada supports the negotiation of an international Arms Trade Treaty to include authorization standards based on state obligations under international law. To maintain policy coherence, Canada’s arms export standards should be consistent with the standards it supports for a global agreement. Therefore, a fourth objective of the audit is to measure Canada’s arms control practice against emerging international standards as reflected in the proposed ATT. Inherent in the audit process is the intention to provide evidence for improvements to the audited system. The final objective of the audit is to recommend improvements to Canadian export control policy and practice based on the evidence derived from pursuing the other audit objectives. In the current spectrum of global arms dealers Canada is arguably at the more responsible end. Nevertheless, as this audit will demonstrate, there are significant failings in the conduct and reporting of Canada’s arms transfers that require immediate attention. In our view, the concluding recommendations will provide stronger and more coherent export controls as well as a more complete government report on the results of those controls.
Box 1: Audit Purpose and Corresponding Objectives An audit is “the systematic examination of records and the investigation of other evidence to determine the propriety, compliance, and adequacy of programs, systems and operations.” Propriety: Objective 1: To present a detailed picture of the Canadian shipment of conventional weapons to other states based on reported data. Objective 3: To ascertain the accuracy and completeness of the data provided in the Report. Compliance: Objective 2: To measure the reported record against Canada’s export control guidelines. Adequacy: Objective 4: To measure Canada’s arms control practice against emerging international standards. The other objectives support: Objective 5: To recommend improvements to Canadian export control policy and practice.
6 On the Record 2D. Methodology The audit is structured to correspond to its five objectives. To meet the first objective, the government narrative and data as published in the 2003-2005 Report is analyzed in Section 3. This includes a discussion of Canada’s export control policy and its implementation, with early attention to the special and problematic case of Canadian military exports to the United States. This is followed by a trend analysis of the distribution of Canadian arms exports by recipient, region, class, and other relevant categories. Using almost three decades of arms recipient data compiled by Project Ploughshares from Canadian government sources, the latest three-year export record is situated within the longer time period. In this manner, an early picture emerges of Canada’s military export record during the period 2003 to 2005. The published record is the basis for assessing the application of existing Canadian export control standards in Section 4. From the shipment record, it is possible to identify the recipients that meet one or more of the four guidelines under which Canada “closely controls” the export of military goods and technology. In practice, these “countries of concern” are those to which one of two guideline restrictions may apply—they are either states involved in or under threat of hostilities or states whose governments have persistent records of serious human rights violations. Although the Report detail is insufficient to conduct a thorough assessment of export control practice, it is complete enough to take some measure of the effectiveness of export controls according to Canada’s own standards. To pursue the third audit objective—to assess the accuracy and completeness of Report data—it is necessary to draw on other data sources. Box 2 lists the major external sources used. Despite claims in the DFAIT Report that its data cannot be compared with that of other sources, these public sources can complete more of the picture of Canada’s military exports. Equally important, they are the basis for casting light on the Report’s accuracy and clarity. The new picture of Canadian military exports assembled with the help of these sources will be a measure of the transparency of the government Report, as discussed in Section 5. The more detailed picture of Canada’s arms export shipments during the three year period of the Report forms the backdrop for a discussion in Section 6 of Canada’s record with regard to emerging international standards. These are standards to which Canada has made political or legal commitments through multilateral agreements, or to which, like the European Union Code of Conduct on Arms Exports (EU Code), it has agreed in principle. The audit distinguishes between an assessment of Canada’s export control practice with regard to existing national standards (objective two) and an assessment based on international standards (objective four). The intention is to examine the record against the standards currently used by the Canadian government and additionally against standards that arise from relevant international commitments. Existing Canadian control guidelines do not express all of Canada’s obligations under relevant international law with respect to the authorization of weapons transfers. These obligations are better reflected in the EU Code and especially in the core principles proposed for an international Arms Trade Treaty. The proposed ATT principles include “express limitations” against the authorization of arms transfers, not just to particular states (such as those subject to a UN arms embargo) but also of particular weapons (such as landmines). The principles also call for “limitations based on use” to prohibit the transfer of weapons that will be or likely will be used in the commission of gross violations of international human rights law, in serious violations of international humanitarian law, or in acts of genocide or crimes against humanity.
On the Record 7 Box 2: External Sources of Trade Data Major sources used in the audit for comparative export data include: ● Statistics Canada (StatsCan), the most comprehensive source for Canadian export data, including information on the type, value, and destination of all Canadian exports (www.statcan.ca). ● Canadian Commercial Corporation (CCC), a government crown corporation that facilitates contracts between Canadian companies and foreign governments. Information is retrieved through the Access to Information Act11 (www.ccc.ca). ● United Nations Register of Conventional Arms (UNROCA), a database based on voluntary reports by UN member states on imports and exports of seven major categories of conventional weapons systems (http://disarmament.un.org/cab/register.html). ● Norwegian Initiative on Small Arms Transfers, a government-backed research and NGO coalition that maintains a database on transfers of small arms and light weapons (www.nisat.org). ● Stockholm International Peace Research Institute, an independent institute with a database that compiles international transfers of major conventional weapons (www.sipri.org). SIPRI also maintains links to the national military export reports of 31 states. ● Project Ploughshares’ Canadian Military Industry Database, a compilation of publicly available records of military contracts awarded to Canadian companies (www.ploughshares.ca/control/CdnExpCont.htm). ● Canadian Department of National Defence and US Department of Defense, both of which disclose contracts online, including company information, type of goods or services purchased, and contract value (Canada: http://contractscanada.gc.ca, US: www.defenselink.mil/contracts). ● Military industry publications (such as press releases and shareholder reports from selected companies and their parent and partner companies), military industry news sources (such as Jane’s Defence Weekly and Armed Forces International), and other media sources (such as The Globe and Mail and The Washington Post).
The final objective of the audit is to provide recommendations for improved and more transparent Canadian military export control practice. As with any thorough auditing process, a careful examination of the details of Canada’s arms transfers and a comparison of reported data with that of other sources may expose omissions and deficiencies that require remedial attention. This task is perhaps the most important purpose of the audit. Section 7 discusses the significant and persistent conditions under which Canadian equipment is exported without regulation for military end-use—a major loophole in the export control system. Finally, as a contribution to the maintenance of peace and security identified by Canada as a key priority in foreign policy, Section 8 concludes with specific recommendations to align Canadian export control policy and practice with the highest multilateral standards.
8 On the Record 3. A Controlled Trade—What the Report Tells Us This section undertakes the first objective of the audit, to present a detailed picture of the Canadian shipment of conventional weapons to other states, based on reported data. It begins with a discussion of Canada’s military export control policy and practice. The DFAIT Report for 2003 to 2005 documents the shipments of goods defined as “specially designed or modified for military use.” Such goods make up Group 2 of Canada’s Export Control List (ECL). The ECL is a list of seven groups of goods (see Box 3) whose export is regulated by the government and which require an export permit issued by DFAIT for delivery outside Canada.12 Four of the seven ECL groups pertain to the development and proliferation of weapons of mass destruction (WMD)—nuclear, biological, chemical weapons, and their missile delivery systems. The remaining two groups (dual-use goods and miscellaneous goods) include goods that may be used in WMD production as well as goods that may be considered conventional weapons. The DFAIT Report is limited to the shipment of Group 2 items—the Munitions List.
Box 3: Groups of the Export Control List The ECL is made up of seven groups of items subject to export control. The DFAIT Report provides data on Group 2 only. Group 1: Dual-Use List Group 2: Munitions List Group 3: Nuclear Non-Proliferation List Group 4: Nuclear-Related Dual-Use List Group 5: Miscellaneous Goods Group 6: Missile Technology Control Regime List Group 7: Chemical and Biological Weapons Non-Proliferation List
Group 2 goods in turn are made up of 22 subgroups of controlled goods. These categories include small-calibre firearms, larger calibre guns, ammunition, rockets and missiles, military vehicles, aircraft and aircraft engines, naval vessels and naval equipment, and several classes of other goods designed for military use. The ECL subcategories include some items such as hunting firearms, which are typically used by civilians, as well as equipment used for non-military applications that was originally designed for military use, such as specialized radios. The converse is not true, however. Civilian goods sold to foreign military end-users that are not classed as designed for military use are not included in the ECL and so are not controlled. (This omission is discussed in Section 7.)
3A. Canadian Export Control Policy The Canadian government’s export control regime, authorized by the Export and Import Permits Act (EIPA) of 1947, is the responsibility of the Minister of Foreign Affairs. The EIPA requires that those intending to export controlled items obtain a permit authorizing shipment. Permits indicate such things as “the quantity, description and nature of the items to be exported as well as the final destination country and end-user.”13 The EIPA provides the Governor in Council (the federal Cabinet) with the powers to establish and revise the ECL. The EIPA also gives the Governor in Council responsibility for two country lists that prescribe the destination of Canadian military exports. The first is the Area Control List (ACL). The ACL lists countries with which the government has chosen to control trade for political or strategic reasons. All goods exported to the countries on the list, currently limited to Myanmar
On the Record 9 (Burma) and Belarus, are controlled, and the export of all military goods is banned. Consequently, Burma and Belarus do not appear as recipients in the DFAIT Report. The second country list is the Automatic Firearms Country Control List (AFCCL). The AFCCL was created by the Canadian government in 1991 to control exports of automatic firearms from Canada in an effort to address the problem of small arms proliferation. THE AFFCL is a firearms export control instrument unique to Canada.14 Although other firearms may be exported to a wide range of states, only the countries on the AFCCL, with which Canada has “inter-governmental defence, research, development and production arrangements,” are eligible to receive Canadian shipments of automatic firearms. The list of eligible states can be altered through an Order in Council, that is, by a Cabinet decision.15 The list has grown consistently from the original 13 members to a current total of 31. Once on the AFCCL, no state has ever been removed. The government considers other factors concerning the status of the recipient country beyond its possible inclusion on the ACL or AFCCL. The Report cites four criteria that guide decisions on destination: “Canada closely controls the export of military goods and technology to countries:
● that pose a threat to Canada and its allies; ● that are involved in or under imminent threat of hostilities; ● that are under United Nations Security Council sanctions; or ● whose governments have a persistent record of serious violations of the human rights of their citizens, unless it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population.”
3B. Authorization and Enforcement16 In advance of a recommendation to the minister as to whether an export permit should be granted, Canadian government experts determine whether “the proposed export is subject to military goods export controls.” Important factors are the “likely applications and the military capabilities of the proposed end user.” If the item is classed within a category of the ECL, specialists from DFAIT, the Department of National Defence, Industry Canada, and other agencies, with the help of Canadian diplomats in the field, conduct an analysis. (If the item is not on the ECL and is not destined for the two Area Control List countries, it does not require an export permit.) To make a recommendation consistent “with Canada’s foreign, security and defence policies” and one “that reflects the overall best interests of Canadians,” experts determine: ● the likely and potential military uses of the product; ● whether the military good “has largely offensive or non-offensive uses”; ● whether the product could potentially influence conflicts; ● whether any illegitimate diversion of the product is likely; ● the political and military conditions of the recipient country and the region; ● the “overall human rights situation”; and ● the “potential impacts on Canada and its allies.”
There are also efforts to prevent illegal transfers and the diversion of authorized exports. These include: ● coordination with shipping airports and ports and with receiving customs agencies to ensure that shipments match permits and the recipients are legitimate;
10 On the Record ● cooperation with federal departments and agencies in importing countries to identify and stop attempts to evade export controls; ● a system of end-use certifications and import permits in “many countries” that receive Canadian goods; ● end-use assurances that are “often requested” by the Canadian government “in order to verify the nature of the end-use or to seek a commitment not to re-export or re-transfer the good”; and ● the use of “international contacts and experience” to alert Canadian officials on possible attempts to “divert military goods to inappropriate buyers and countries.”
DFAIT material goes on to note that,
the vast majority of Canada’s controlled military goods exports go to fellow NATO members or to likeminded governments with which Canada has strong relations. These countries also have strong export controls of their own. That means the risk of illegal diversion and unauthorized use is extremely low. In the same material, Foreign Affairs Canada reveals that export permit decisions are also foreign policy tools. It notes authorization decisions can send political messages to a country, “opening or closing channels of constructive dialogue.” It cites the example of a weapons transfer approval to send a message to “show Canada’s support for a country that is making progress toward more democratic systems and practices.” Implicit in this discussion is also the message of disapproval that export permit decisions can demonstrate. The political aspect of arms export authorization is an overt tool that is most clearly applied by the Area Control List that denies all military goods to states on the list regardless of the nature or possible use of the goods. Additionally, DFAIT acknowledges in the 2003–2005 Report that “Canada has maintained a ban of Group 2 items to Pakistan since 1998.” Although not expressed in the Report, the ban to Pakistan reflects Canadian disapproval of the nuclear weapons tests conducted by Pakistan in 1998.17 Thus, just as Canada may use weapons exports to signal support for a recipient state, Canada may also deny an export as a political signal of disapproval quite independent of the extent to which the proposed transfer meets export control guidelines. The Department of Foreign Affairs presents the authorization of military exports from Canada as a thorough and comprehensive process that draws on a broad range of expertise to ensure that transfers do not contravene Canadian policy or risk diversion into illegal channels. There are aspects of the authorization process that pose a challenge to its effectiveness, however. This includes a predisposition to approve a military export unless there is a demonstrable reason to prevent the transfer. The DFAIT Report describes the approach of the government toward arms export controls: Canada’s defence industry makes valuable contributions to the nation’s prosperity. It develops high-technology products and is closely integrated with counterparts in allied countries. Export controls are not meant to hinder international trade unnecessarily but to regulate and impose certain restrictions on exports in response to clear policy objectives.”18 In the name of support for Canada’s defence industry, the government is inclined toward authorization of arms exports. With such an inclination there are grounds for concern that, in borderline cases, inappropriate military exports may be authorized to meet trade targets. This
On the Record 11 concern is compounded by the fact that the assessment procedure is closed and there is no available evidence concerning how or why decisions are made. In the case of the states that meet one or more of the criteria for “close control,” government officials make assessments based on the consultations and factors described above. The assessments are not made public, however, nor are they subject to the external scrutiny of Parliament or even of another government agency or department. Reports on the export of military goods do not record negative authorization decisions and the transfer details of the report provide the sole clues on the positive ones. As a result, questions arise about the authorization of some Canadian arms exports in apparent contravention of existing Canadian standards and guidelines. These questions are taken up in Section 4.
3C. Multilateral Commitments Canada’s arms export control policy and practice are also shaped by multilateral instruments and mechanisms to which Canada is party. These consist of arms control regimes or agreements that govern transfers of conventional military goods and controlled items or call for improved transparency in the weapons trade. The following are brief descriptions of the most significant of these instruments. Most involve political commitments by Canada, although at least one is based on legally binding obligations. United Nations Register of Conventional Arms: In 1991, a General Assembly resolution established the UNROCA, a database that includes “data on international arms transfers as well as information provided by Member States on military holdings, procurement through national production and relevant policies.”19 The Register includes seven categories of major conventional arms: battle tanks, armoured combat vehicles, large-calibre artillery systems, combat aircraft, attack helicopters, warships (including submarines), as well as missiles and missile-launchers. Since 2006 the UN has also encouraged data on transfers of small arms and light weapons. Although 172 states have reported at least once, participation is voluntary and reporting is neither comprehensive nor consistent for many countries. The Inter-American Convention on Transparency in Conventional Weapons Acquisitions is a treaty of the Organization of American States (OAS) that entered into force in 2002. In contrast to the voluntary UNROCA, the Inter-American Convention obligates Canada as a member of the OAS to report annually on its imports, exports, and domestic acquisitions of the major weapons categories of the UN Register. The reports for a calendar year must be made to the OAS by June 15 of the subsequent year. Although the OAS does not make member reports public, it appears that Canada submits the data provided to the OAS to the UN Register. Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods (Wassenaar): Wassenaar is a group of 40 weapons supplier states that seeks to “contribute to regional and international security and stability, by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilising accumulations.” Founded in 1996, the Wassenaar Arrangement jointly defines and controls the military goods and technology covered by Group 1 and Group 2 of Canada’s ECL. These are the “dual-use goods” (that is, goods that have both civilian and military uses) and the munitions list of goods “specially designed or modified for military use,” respectively. Canada adheres to the definitions and items of the Wassenaar lists. European Union Code of Conduct on Arms Exports: Although not a member of the European Union, in 1999 Canada subscribed to the “principles and criteria” of the EU Code of Conduct on Arms
12 On the Record Exports of 1998. The EU Code is a politically binding set of common standards and procedures for arms exports that reflect important international legal obligations and commitments. Organization for Security and Co-operation in Europe (OSCE): The 1993 OSCE document, “Principles Governing Conventional Arms Transfers,” directed member states (including Canada) to “exercise due restraint in the transfer of conventional arms and related technology.” The OSCE principles include requirements for states to “take into account” relevant conditions in recipient states and to “avoid transfers which would be likely” to be used to violate international security and standards. UN Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects (PoA). Canada has been a persistent advocate of the 2001 PoA, which includes a call on states “to assess applications for export authorizations according to strict national regulations and procedures that cover small arms and light weapons and are consistent with the existing responsibilities of States under relevant international law.” Since 2001, government, legal, and policy experts have sought to define the existing international legal responsibilities of States toward the export control of small arms—responsibilities that apply equally to the export of all conventional weapons. This discussion has led to proposals for an international arms trade treaty. The Arms Trade Treaty: In 2006, Canada formally supported and endorsed the core principles of an international Arms Trade Treaty, currently under consideration by the UN.20 The ATT was originally proposed by an international group of civil society organizations that included Project Ploughshares. The principles are drawn from the international obligations of states and essentially apply existing treaty and customary law to the national control of conventional arms transfers. Although Canada has not signed a yet-to-be negotiated treaty, through its endorsement of the proposed transfer principles, Canada has acknowledged that the authorization of weapons transfers should meet obligations under international law. (See Section 6 for further details on the ATT criteria.) Under the section “International Cooperation on Military Trade” the DFAIT Report describes most of these multilateral instruments. It notes: Most items in the Export Control List are there because of Canada’s commitments to like- minded countries that participate in multilateral export-control regimes or because of Canada’s obligations as a signatory to international agreements that seek to control and monitor the movement of sensitive goods and technology.21 Canada is committed to international cooperation and international standards with regard to the control of arms transfers. These commitments will be discussed later. In the meantime, let us turn to a central and defining element of Canada’s military trade that is only briefly noted in the DFAIT Report.
3D. Military Exports to the United States A major feature of Canada’s export control regime is the exemption of the US from Canadian trade regulations involving military goods. US-bound arms do not require permits, are not tracked, and are not included in DFAIT’s Report. The Report states that export controls apply to all foreign destinations. However, due to close and long-standing military cooperation with the United States, including the integrated nature of North America’s defence industry, permit exceptions apply to most Group 2 exports destined for
On the Record 13 final use in that country. Exports of military goods and technology to the United States are therefore not reported here. The sole export permits required for arms shipments to the US are those for “prohibited” firearms, which constitute a very small portion of these shipments. Other categories of firearms are exempt.22 The Canadian government provides reasons for not controlling military goods to the US. The free trade in military goods facilitates defence cooperation and collaboration between the US and Canada. It benefits the defence industries of both countries by encouraging an unhindered flow of goods over the border. It also generates greater accessibility of Canadian suppliers to the enormous market of US government contracts.23 The Defence Development and Production Sharing Arrangements (DDPSA) between Canada and the US, signed in 1956 and 1963, enable close cooperation in defence production, research, and development. The production arrangements allow “Canadian firms to compete on an equal footing with their American counterparts in the US market,”24 while the development arrangements assist “Canadian firms in developing goods for use by the US military.” Elsewhere, Canada’s Department of National Defence (DND) notes that, “with annual defence trade between Canada and the US valued at over $2 billion (Cdn), these arrangements rest on the principle that, given the interdependent nature of North American defence, both countries benefit from the economies of scale arising from specialization.” These arrangements have created cross-border trade in military goods that is exempt from the standard export control regulations of both governments. In Canada, shipments of military goods to the US are exempt from the export authorization process otherwise required by the Export and Import Permits Act. Similarly, the US exempts US suppliers to Canada from export permits for most military goods shipments. As a result of DDPSA, no formal process exists to monitor or document trade in military goods from Canada to the US. In contrast, it is possible to compile some data for military trade from the US to Canada from US arms export reporting mechanisms required for all foreign recipients of US weapons. For example, the Pentagon documents military export licenses to Canada in its annual “Foreign Military Sales, Foreign Military Construction Sales and Military Assistance” reports and its “Annual Military Assistance” reports.25 The latter includes a detailed table with the commodity description, quantity, and value of licenses for military exports to Canada. The shipment of military goods by US corporations to the Canadian government and especially to Canadian military contractors is less transparent, however, and the picture of south-to-north cross-border transfers is far from complete. Before 1992, Canadian officials reported arms transfers to the US as the sum of two aggregate figures: the value of all prime contracts with the Pentagon and the value of all subcontracts with US military contractors. The figures were compiled from voluntary submissions by Canadian military exporters; the annual totals appear in Figure 1 as US export values up to 1991. In subsequent years the government has failed to provide a figure for military shipments to the US. Instead, since 1992 the values of US exports have been estimated by Project Ploughshares.26 The Ploughshares estimates are borne out by the Report when it states that military exports to the US “are estimated to account for over half of Canada’s exports of military goods and technology.”
14 On the Record Figure 1
Estimated exports to the US for the years 2003, 2004, and 2005 were $1.355 billion, $1.509 billion, and $1.137 billion, respectively. This total of just over $4 billion for the three-year period can be compared with $1.760 billion for the sum value of exports to all other destinations. The total for all Canadian military exports between 2003 and 2005 was thus an estimated $5.760 billion, or over three times the government-reported figure. For the 2003–2005 period, exports to the US accounted for an estimated two-thirds of Canadian arms exports. With the exception of 1994, in each calendar year since 1978 exports to the US exceeded those to all other countries combined. During most years US sales were at least double the total of all others, while in some years, especially during the years of high US military spending in the mid-1980s, the ratio was more than three to one. Since 1978, Canadian arms exports have totaled $49.9 billion, of which $35.3 billion, or 71 per cent, have been shipped to the US. The combined total of US and non-US military exports increased during the 1980s, peaking at $3.0 billion in 1985 in constant 2005 dollars, and fell to a lower level in the early 1990s at the end of the Cold War. In contrast to the general downward trend in global transfers following the late 1980s, the annual totals of Canadian arms shipments rose over the most recently reported decade. These trends continued as Canadian arms sales returned in 2003 to the unprecedented volumes of the 1980s due to renewed military spending for the US-led war in Iraq, only to fall drastically in 2005. Most of the major fluctuation in global Canadian arms exports has been due to changes in the volume of exports to the US. These in turn closely correspond to US military spending. On average, the total of reported non-US and estimated US annual exports was $1.781 billion annually; the average during the Cold War after 1978 was $2.090 billion annually, dropping to an average of $1.549 billion annually since 1990. The following table shows total export figures for the period of the Report and the estimated amount accounted for by the US.
On the Record 15 Table 2: Total Canadian Military Exports 2003-2005 (in constant 2005 $ millions) 2003 2004 2005 2003-2005 Total Estimated total exports 2,127 2,175 1,459 5,760 Non-US exports 772 666 322 1,760 Estimated US exports 1,355 1,509 1,137 4,001 US exports as % of total 63.7% 69.4% 77.9% 69.5%
3E. Reported Data The DFAIT Report for 2003–2005 provides data on the nature and extent of Canadian military exports apart from those to the US. From this data we can compile informative pictures of total non-US exports as well as their distribution by size of recipients, region, multilateral partnership, and product category. After adjustment for inflation, the reported data for the three-year period of the Report can be compared with equivalent data for earlier periods and recent sales may be placed in a wider historical context.27
Total reported exports Exports of military goods over the 2003–2005 period display the variation typical of Canadian arms sales, which have fluctuated for more than a quarter of a century. Total reported non-US exports reached $771.9 million in 2003 in constant 2005 dollars—the highest level since at least 1978, the earliest year for which annual data is available.28 The level then fell to $665.6 million in 2004 and was more than halved to $322.0 million in 2005. This behaviour is not unusual for Canada’s arms exports, which have risen and fallen significantly in adjacent years many times before. Figure 2 illustrates Canada’s total reported non-US arms exports since 1978, in real terms, which range from a low of about $200 million to a high of nearly four times that in 2003.
Figure 2 Total Reported Exports of Military Goods from Canada, 1978-2005 (US data omitted) Constant 2005 millions $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 1978 1982 1986 1990 1994 1998 2002 Calendar Year
16 On the Record Largest recipients The DFAIT Report reveals further concentrations of Canadian arms shipments beyond the US. Although a reported total of 72 countries received military goods from Canada during the three-year period of the Report, over two-thirds of the exports went to the four largest recipients. Twelve additional countries imported at least one per cent of the total, or $16.9 million, of exported Canadian military equipment over the three-year period. The remaining countries imported only small amounts of goods, meaning that 56 countries combined accounted for only 7.5 per cent of the total. Figure 3 shows the four largest recipients of military exports, in unadjusted dollars, and highlights the variation in shipment values that occurred from year to year, typically due to a large contract of a single supplier.
Figure 3
Top Recipients of Canadian Military Exports, 2003-2005
$250
$200
$150
Millions $100
$50
$0 Saudi Arabia Australia United Kingdom New Zealand
2003 2004 2005
Although the order has varied over the years, nine of the largest reported recipient countries between 2003 and 2005 were also among the 10 largest aggregate importers for the period since 1978. Recently, the Netherlands, the fifth largest recipient since 1978, imported fewer Canadian military goods and moved to thirteenth place, while Singapore increased Canadian imports to move from seventeenth to eighth in the ranking. Table 3 and Figure 4 show the top non-US recipients of military exports from Canada during the three years of the DFAIT Report, in unadjusted dollars.
Table 3: Top Ten Reported Recipients of Canadian Military Exports, 2003–2005 (values in current dollars) Recipient 2003 2004 2005 Total Percentage Reported Total Saudi Arabia 157,917,932 217,824,036 12,069,674 387,811,642 23.0% Australia 183,634,560 48,238,800 39,632,809 271,506,169 16.1% UK 66,789,132 89,797,984 101,623,795 258,210,911 15.3% New Zealand 144,084,536 103,911,924 9,859,057 257,855,517 15.3% Four largest recipients 69.6% South Korea 27,182,354 37,217,633 18,148,725 82,548,712 4.9% France 13,235,367 7,225,459 19,315,811 39,776,637 2.4% Italy 5,866,230 11,957,122 14,386,490 32,209,842 1.9% Singapore 6,409,194 9,747,308 15,727,974 31,884,476 1.9% Germany 9,059,208 9,061,117 12,491,709 30,612,034 1.8% Malaysia 17,232,472 12,123,691 446,127 29,802,290 1.8% Ten largest recipients 84.2%
On the Record 17 Figure 4
Top Ten Reported Recipients of Canadian Military Exports, 2003-2005
Germany Malaysia
Singapore Other Saudi Arabia Italy France
South Korea Australia New Zealand United Kingdom
Regional distribution Over the period 2003–2005 Canada’s reported military exports were shipped largely to three geographic regions: Oceania ($556 million), Europe ($534 million), and the Middle East ($456 million). The remaining $213 million was distributed among Asia, Africa, and Latin America. Figure 5 illustrates the regional distribution for the three-year period of the Report.
Figure 5
Regional Distribution of Reported Military Exports, 2003-2005
Latin America
Europe Oceania
Asia Africa Middle East
As the following tables and charts illustrate, the distribution of Canadian arms exports among global regions varies significantly by period. Table 4 compares the regional distribution of arms exports for the 2003–2005 period with the distribution during 1) the period since 1978, 2) the last 12 years of the Cold War, and 3) the 16-year post-Cold War period. Table 5 shows the years in which each region received the largest and least value of military goods, both as a percentage of Canada’s total reported exports, and as a constant dollar value. The two charts, broken into the four largest and two smallest recipients for ease of viewing, illustrate regional export levels since 1978.
18 On the Record Oceania was the largest recipient in the most recent report at 31.6 per cent, but since 1978 has only imported 9.4 per cent of non-US military exports, nearly half of which can be attributed to the 2003–2005 period. Oceania—mainly Australia and New Zealand—has traditionally been a minor recipient of Canadian military goods, but has recently become more significant. Europe’s portion of the value of Canadian military exports has declined from 57.4 per cent during the Cold War to 42.4 per cent in the post-Cold War years, and further to 30.4 per cent between 2003 and 2005. The year 2003 marked the region’s smallest percentage share of Canadian military exports at 21.1 per cent. Europe was by far the largest non-US regional recipient over the longer period, however, importing since 1978 military equipment worth a total of $7.1 billion, nearly half of the reported global total. The Middle East has periodically been a major market for Canada’s military equipment: the early 1980s, 1990s, and 2000s saw significant jumps in deliveries to the region, largely due to imports by Saudi Arabia, as well as to a large shipment to Egypt in 1982. Exports to the Middle East have increased in the post-Cold War period from 10.6 per cent to 27.1 per cent, peaking, in terms of percentage distribution, at 67 per cent of non-US exports in 1993. Asia, despite some variance from year to year, is the steadiest major recipient of military exports. Since 1978, Asia has imported 13.5 per cent of Canada’s non-US military exports, although this value fell to 10.4 per cent during the period covered by the Report. Africa and Latin America (South America, Central America, and Mexico)29 were minor markets between 2003 and 2005 at 0.6 per cent and 1.1 per cent respectively. Since 1978, these regions have received about 4 per cent of total exports each, with shares of total reported exports decreasing significantly since the end of the Cold War for both Africa (7.3 per cent to 2.0 per cent) and Latin America (6.8 per cent to 1.6 per cent). The combined Southern regions of Latin America, Africa, Asia, and the Middle East received a total of 41.6 per cent of Canada’s military exports since 1978. The most developed countries in these regions30—Japan, Hong Kong, Israel, Taiwan, South Korea, and Singapore—account for 7.9 per cent of the global transfers. Thus, total exports to the developing world account for 33.7 per cent, or just over one-third, of reported exports since 1978.
Table 4: Regional Distribution of Reported Arms Exports for Selected Periods, 1978-2005 (values in millions) Current report Distribution during selected periods 2003 2004 2005 Current Period Available Data Cold War Post-Cold War Region 2003-2005 1978-2005 1978-1989 1990-2005 Oceania $350 $157 $49 $556 32% $1,370 9% $200 3% $1,170 14% Europe $163 $177 $195 $535 30% $7,115 49% $3,658 57% $3,457 42% Middle East $181 $249 $26 $456 26% $2,888 20% $677 11% $2,211 27% Asia $65 $71 $47 $183 10% $1,959 14% $940 15% $1,019 13% Latin America $12 $4 $3 $20 1% $564 4% $431 7% $132 2% Africa $1 $8 $1 $10 1% $628 4% $468 7% $160 2% Total $772 $666 $322 $1,760 100% $14,524 100% $6,373 100% $8,151 100%
On the Record 19 Table 5: Variation in Annual Regional Distribution of Reported Arms Exports since 1978 Maximum Minimum Region Distribution Value (millions) Distribution Value (millions) Africa 15.8% (1986) $107.8 (1986) 0.1% (2003) $0.9 (1993) Asia 34.6% (1998) $174.4 (1998) 3.3% (1993) $12.6 (1989) Europe 77.4% (1989) $532.9 (1987) 21.1% (2003) $103.3 (1993) Latin America 12.9% (1989) $77.7 (1981) 0.6% (multiple) $2.5 (1991) Middle East 67.0% (1993) $346.8 (1994) 0.9% (1986) $6.3 (1986) Oceania 45.3% (2003) $349.6 (2003) 0.6% (1978) $3.1 (1978)
Figures 6 and 7
Regional Distribution of Reported Military Exports to Smallest Two Regions, 1978-2005
$120
$100
$80 Africa Latin America $60
$40 Constant 2005 million 2005 Constant
$20
$0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Calendar Year
Regional Distribution of Reported Military Exports to Largest Four Regions, 1978-2005
$600
$500 Asia $400 Europe Middle East
$300 Oceania
$200 Constant 2005 million
$100
$0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Calendar Year
Multilateral partners Canada partners with other countries on security-related matters through multilateral and bilateral agreements. As members of the Wassenaar Arrangement noted above, Canada and several state partners establish goods lists and standards to control the transfer of conventional weapons and technology. Through Canada’s Automatic Firearms Country Control List (AFCCL) process, exports of automatic firearms are restricted to recipient countries participating in bilateral “inter- governmental defence, research, development and production” arrangements with Canada. Further, Canada has military and political alliances with the US and 24 European countries as a member of the North Atlantic Treaty Organization (NATO).
20 On the Record Over the 2003–2005 period, the majority of Canadian military exports went to countries with which Canada has at least one of the three above partnerships. Only 8.5 per cent of the value of total military exports went to countries outside of these arrangements, although they total 39 of the 72 recipient countries. Not including the US, which is a member of each of the arrangements, the 19 NATO member countries that received Canadian military equipment accounted for 28.5 per cent of the total value of reported transfers, while 30 Wassenaar countries received 68.1 per cent and 19 AFCCL countries received 84.3 per cent. See Appendix 2 for a list of the member states of these arrangements.
Figure 8
Sales of Military Goods to Partner Countries, 2003-2005
100%
80%
60%
40%
20%
0% NATO Wassenaar AFCCL
Sales to Member Countries Sales to Non-Member Countries
Two countries on Canada’s AFCCL are neither NATO members nor participants in the Wassenaar Arrangement. The first, Saudi Arabia, is an original country on the list; in fact, a significant influence behind the creation of the AFCCL was the interest of General Motors Defence (now General Dynamics Land Systems Canada) in London, Ontario in exporting light armoured vehicles (LAVs) armed with automatic weapons to Saudi Arabia.31 (Prior to the creation of the AFCCL, Canada’s Criminal Code precluded commercial export of automatic firearms.) The second country is Botswana, which was added to the list in 2001 to facilitate the transfer of surplus Department of National Defence fighter aircraft equipped with 20 mm cannons. Other countries have been “added to the AFCCL as contracts or perceived markets for Canadian-exported automatic weapons emerged.”32
Categories of exports Table 6 provides the values of Canadian military exports by ECL category, in unadjusted terms, for the period of the Report as well the totals for the 10 years of reported exports prior to it. Table 6 is compiled in large part from Table 4 of the DFAIT Report. The Report includes a proviso in interpreting the figures of its Table 4: The sum total of exports by ECL item number to an individual country calculated from Table 4 might not equal the total value of exports to that destination reported in Table 2.
On the Record 21 Since goods or technology included in a single export permit may be classified under several ECL item numbers, Tables 4 and 5 contain some double-counting. Indeed, the final row of Table 6 below illustrates the double-counting introduced by the latest Report—a procedure by which the value of an export is repeated for each of the ECL categories under which the composite products of the export can be classified. This differs from the earlier practice of assigning the value of a full military system exclusively to one category (e.g., a vessel and its radar system under “vessels and components”),33 or assigning the value of disaggregated components of a military system to their respective categories. The earlier practice precluded overlapping values among item categories. Table 6 presents, in columns three to five, the reported figures for the 22 ECL categories in Table 4 of the Report, as well as the total for each category over the decade prior to the 2003–2005 period. The final column of the table provides the ECL category total for the period 1993–2002, compiled from earlier government reports. The row for the “Derived Total of ECL Figures” totals the columns. The row for the “Actual Total” shows the “total exports of military goods and technology” presented in Table 1 of the Report. Finally, the “Double-counting” row subtracts the “Actual Total” from the “Derived Total of ECL Figures” and represents the value attributed to more than one category, that is to say, the double-counted (or more accurately, the multiple- counted) value.
Table 6: Total Exports by ECL Category (unadjusted $ millions) ECL Type of Export34 2003 2004 2005 2003-2005 1993-2002 Total Total 2-1 Small arms 7.8 .2 1.7 10.8 158.7 2-2 Larger-calibre weapons 42.5 214.1 12.8 269.4 41.7 2-3 Ammunition 21.9 25.7 27.0 74.5 140.7 2-4 Explosives 5.7 6.2 8.8 20.7 173.0 2-5 Control & Warning Systems 41.9 19.1 18.1 79.1 112.9 2-6 Ground vehicles 475.1 361.3 14.7 851.1 1,306.8 2-7 Chemical agents 5.7 3.2 11.0 19.8 30.5 2-8 Energetic materials 2.8 0.0 0.4 3.1 9.0 2-9 Naval vessels & components 35.6 31.2 28.7 95.5 251.3 2-10 Aircraft and components 53.8 95.9 94.8 244.5 866.2 2-11 Electronic equipment 61.2 53.4 54.3 168.8 713.7 2-12 Kinetic energy systems 0.0 0.0 0.0 0.0 0.0 2-13 Protective equipment 0.6 0.9 6.0 7.5 20.6 2-14 Training equipment 11.0 23.7 25.4 60.1 723.8 2-15 Imaging 22.8 25.2 32.5 80.5 59.7 2-16 Forgings 2.0 6.2 4.7 12.8 3.3 2-17 Miscellaneous 11.4 10.8 7.9 30.1 44.1 2-18 Weapons production 3.4 6.3 6.4 16.1 10.1 2-19 Directed energy systems 0.2 0.0 0.0 0.2 0.1 2-20 Cryogenic equipment 0.0 0.0 0.0 0.0 0.1 2-21 Software 3.4 9.4 14.1 26.9 11.5 2-22 Technology 22.2 34.9 27.9 85.0 2.4 Derived Total of ECL Figures 831.0 928.6 397.0 2,156.6 4,680.1 Actual Total 723.5 643.9 322.0 1,689.5 Double-counting 107.5 284.7 75.0 467.2
22 On the Record As can be seen from Table 6, the values of most ECL categories in the DFAIT Report are inflated due to inclusion of values of items which do not meet the category description. Further, it is impossible to determine an accurate total value by category because there is no means of determining where the overlap among categories occurs. We will return to the issue of double- counting again in Section 5. ECL Item 2-6, ground vehicles, represented the most significant share of total exports by ECL category for the 2003–2005 period, as they did for the combined years of the preceding decade. Although values for ground vehicles were double-counted in other categories, the figures for this category appear to reasonably represent the total value of complete ground vehicles shipped from Canada for the period. In 2003 and 2004, ground vehicles comprised over half of all reported Canadian military exports, with a total value of $836 million—more than the value of ground vehicles in the previous eight years combined. By contrast, in 2005, ground vehicles only represented 3.7 per cent of reported exports, with the completion of major shipments to Saudi Arabia, New Zealand, and Australia. ECL Item 2-2 (large-calibre weapons) figures illustrate most clearly the interpretive problems arising from double-counting. After averaging $4.1 million per year between 1993 and 2002, the total value of large-calibre weapons was reported as $214.1 million in 2004. This value results from the double- counting of the value of shipments of armoured vehicles, to Saudi Arabia in particular, which, beginning in 2003, likely were mobile gun systems, that is, weapon systems that can be categorized as both ground vehicles and large-calibre weapons. The combined system appears to have resulted in a greatly exaggerated value for large-calibre weapons. In fact, the double-counted total for Saudi Arabia in 2004 is equal to the value of large-calibre weapons reported for that year, suggesting that all ground vehicles affixed with large-calibre weapons were double-counted. If this assumption is true for the entire 2003-2005 period, the large-calibre weapons total falls from $269.4 million to $22.5 million. It is apparent that the reported ECL 2-2 figures do not accurately represent category shipments for the period. ECL Item 2-4 shipments of explosives have been below $13 million since 1993, except for exports of $17.4 million to Thailand in 1994 and $63.1 million to the UK in 2000. Sales of ECL item 2-14 training equipment jumped significantly between 1998 and 2002, from sales to Australia, Germany, Malaysia, and the UK, making training equipment the third largest export category of the 1993–2002 period, although sales have slowed since 2002. The export of ECL 2-22 technology increased drastically from zero prior to 1999 and small amounts until 2002, to $85.0 million between 2003 and 2005, largely to Korea, Malaysia, and Singapore. One ECL category, kinetic energy systems, has not been exported at all since 1993, while the total value of directed energy systems and cryogenic equipment shipped over these 13 years is below .5 million dollars. Figure 9 presents the proportion of total exports for the 10 largest ECL categories for the three-year period of the most recent report. Figure 10 presents the equivalent reported values for the decade prior to this, 1993-2002. It is important to note that, although Figure 9 is based on the values provided in the DFAIT Report, there are double-counted figures that render the graph inaccurate. The figure is presented here to illustrate the reported figures.
On the Record 23 Figure 9
Top Ten ECL Categories, 2003-2005
Training equipment Ammunition Other Ground vehicles Systems Imaging Technology
Vessels and components Electronic equipment Aircraft and components Large-calibre weapons
Figure 10
Top Ten ECL Categories, 1993-2002
Imaging Other Systems Ammunition Small arms
Explosives Ground vehicles Naval ves s el s and components
Electronic equipment Aircraft and Training components equipment
24 On the Record 4. The Efficacy of Canadian Controls This section addresses the second objective of the audit: to measure the reported record against Canada’s export control guidelines. What does the data of the 2003–2005 Report tell us about the application of Canada’s export controls during the three-year period? To what extent has Canada followed its four regulatory guidelines regarding the transfer of arms to other states? As will be shown, Canada’s export control record from 2003 to 2005 is mixed. The evidence provided by the Report points to close adherence to the guidelines in some instances and a setting aside of the guidelines in others, as well as many situations where there is insufficient detail to determine whether or not Canada is meeting its reported standards. In what follows, Canada’s existing export control guidelines are reviewed. Then, by drawing on indicators from open sources, selected transfers or recipient states are measured against guideline criteria.
4A. The Four Guidelines
Countries that pose a threat to Canada and its allies The first guideline for Canada’s military export authorization is the most obscure. Canada does not make public the states it considers a threat to Canada or its allies, nor is it possible to determine from other sources which countries fall into this category. Like the other guidelines, the “threat” guideline has not been amended since it was included in the four-guideline policy announced in 1986. At that time, the guideline applied to the Soviet bloc countries and possibly others. Since the end of the Cold War in 1989, the states considered threatening to Canada have been less obvious.35 Consequently, it is not possible to assess the Report data against this guideline.
Countries involved in or under imminent threat of hostilities The second guideline is clear in its intent if not in its application. The intent is to avoid transfers of Canadian military goods to states at war or under immediate threat of war. In keeping with the predominant nature of current warfare, the states involved in hostilities can be taken to be those affected by internal (intra-state) armed conflicts, as well as those involved in international (inter- state) conflicts that constitute the more traditional definition of warfare. With this wider definition in mind it is possible to assess the record of Canadian military exports from 2003 to 2005 against the states affected by armed conflict as reported in Project Ploughshares’ Armed Conflicts Report during the three-year period. The Armed Conflicts Report defines an armed conflict as “a political conflict in which armed combat involves the armed forces of at least one state (or one or more armed factions seeking to gain control of all or part of the state), and in which at least 1,000 people have been killed by the fighting during the course of the conflict.” A strict and consistent interpretation of the second guideline is that Canada should not transfer military goods to any state included in Ploughshares annual reports on armed conflict. Yet, under the United Nations charter each member state has the sovereign right to defend itself and most states interpret the right to self-defence as including the right to import weapons in aid of such defence. Consequently, while sources such as the Armed Conflicts Report may unequivocally identify the states “involved in hostilities,” circumstances may arise when Canada would feel bound by the UN charter or by alliance (such as NATO) partnerships to transfer military goods to states that clearly are at war. This suggests that the second guideline cannot, and certainly has not, been applied as strictly as implied by the Report. It is apparent, for example, that Canada has exercised little
On the Record 25 “close control” of arms shipments to the United States, which has been involved in hostilities in Iraq since 2003. The application of the guideline to the states that were under “imminent threat” of hostilities is even less clear. Any evaluation of an “imminent threat” would be subject to nuanced interpretation since it presupposes that hostilities have yet to emerge. Nevertheless, at least one international research source offers a relevant indicator. The School of Peace Culture at the Autonomous University of Barcelona identifies “situations of tension and high-risk disputes” in its Alert 2005 report.36 These are the countries with “contexts in which there are serious situations of social and political polarisation, with confrontations between political, ethnic or religious groups or between these groups and the state, which involve alterations in the operation of the state’s own institutions (coups d’état, curfews and States of Emergency), and in which there are significant levels of destruction, death or enforced displacement.” Strict application of the second guideline suggests that Canada should not export military goods to states that are so categorized by the Alert 2005 report. The second guideline regarding states and “hostilities” is arguably a unique and significant commitment by Canada to control potentially volatile military transfers. Implicit in the guideline is the acknowledgement that, while states have a right to self-defence under the UN Charter, when a state is close to war or involved in war, the transfer of weapons should be curtailed. It recognizes that transfers of weapons in hostile situations serve to undermine security and stability and to prolong or intensify conflicts. The guideline is unique because few, if any, other state export regulations require explicit attention to state hostilities or the threat of hostilities. The European Union Code of Conduct on Arms Trade, for example, does not include this requirement in any of its eight criteria. Canada’s second guideline calls for regulation standards that are arguably more advanced than the standards of other exporting states. Thus, if Canada wishes to claim leadership in conventional export control standards, there is all the more reason to ensure that its export control practice meets the directives of this guideline.
Countries under United Nations Security Council sanctions The third guideline—countries “under United Nations Security Council sanctions”—is unambiguously determined by Security Council Resolutions that identify the states subject to sanctions. UN Security Council sanctions are legally binding on all UN member states and, in the case of UN arms embargoes in particular, Canada is obligated to prevent Canadian arms shipments to the embargoed state. Indeed, arms embargoes are beyond a matter of “close control” by Canadian officials—they require strict legal compliance not subject to interpretation. For the most part, Canadian compliance with UN sanctions during the Report period can be determined by using UN documentation of sanction regimes as the indicator, against which the record of Canadian arms transfers can be reviewed. From 2003 to 2005, UN sanctions covered, to a varying extent, Angola, Côte d’Ivoire, Democratic Republic of Congo, Eritrea, Ethiopia, Iraq, Liberia, Rwanda, Sierra Leone, Sudan, Federal Republic of Yugoslavia, and several terrorist organizations.37 Only two of these states, both subject to a UN embargo on weapon transfers to non-state actors at the time, reportedly received Canadian military goods during the three-year period of the Report. These were Iraq and Sierra Leone. “Comprehensive economic sanctions against Iraq” ended as of May 22, 2003 and Canada reported arms shipments to Iraq in 2004 and 2005. However, an “embargo against weapons”38 to Iraq, unless weapons were “required by the Government of Iraq, or by a multinational force under unified
26 On the Record command,”39 remained in effect during the entire period. Although it is unlikely that the small arms Canada exported to Iraq contravened this embargo, more detail in the government report on the nature and timing of military shipments to recently UN-embargoed states would be beneficial for clarification. Similarly, a UN arms embargo against non-state actors in Sierra Leone was active over the entire 2003–2005 period.40 Canada shipped a small amount of ammunition to the country in 2003. Again, although there is no reason to assume an embargo infraction, more detail in the Report would help to clarify the situation. Nevertheless, with the exception of these two cases, according to the reported data none of the countries under UN or Canadian sanctions received military exports during the 2003–2005 period.41 In addition to complying with UN arms embargoes, Canada imposed its own trade sanctions on Myanmar and Belarus, the sole states included in Canada’s “Area Control List.” All items exported from Canada were controlled and all military exports were banned to the two states during the three- year period. According to the Report, Canada has also banned military exports to Pakistan since 1998. Consequently, no military goods exports were reported during the period to Belarus, Myanmar, and Pakistan.
Countries whose governments have a persistent record of serious human rights violations unless there is no reasonable risk the goods can be used against civilians Adherence to the final guideline is the most difficult to assess from the published data. The fourth guideline calls for close control of military exports to countries “whose governments have a persistent record of serious violations of the human rights of their citizens, unless it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population.” Attention to the guideline involves a two-step evaluation process. The first step is to determine which states have governments with a persistent record of serious human rights violations. This step can be reproduced externally from public data provided by authoritative independent sources such as Amnesty International reports on relevant states or even from other government sources such as the annual US Department of State Country Reports on Human Rights Practices. The second assessment step for government officials is to determine the likelihood that the specific exported item or items will be used by the recipient state against its own civilian population. Beyond an awareness of the human rights practices and malpractices of the state, this requires knowledge of the military purposes of the items and their potential for contributing to human rights violations in the hands of security forces in that particular state. In most instances, this is determined from detailed information about the exported items, a level of detail not provided by the data of the report. Consequently, with some notable exceptions where significant detail on exported items is available from other sources, it is impossible to reproduce a human rights risk assessment from the information provided in the Report.
4B. The Record Using the guidelines published in the Report, and information from the public sources cited above, it is possible to make some assessment of the record of Canadian export controls against Canada’s own standards during the 2003–2005 period. As also noted above, for the purposes of this Audit the discussion is limited to assessments of the reported data against guidelines #2 (hostilities) and #4
On the Record 27 (human rights) since there is no public information available on the first guideline (threats to Canada) and the record suggests full adherence to guideline #3 (UN sanctions). Of the 72 countries that received military exports from Canada during the period of the Report, 27 countries met one or both of the Canadian government’s criteria under guidelines #2 and #4, including 14 that received an annual average of at least $100,000 worth of equipment for the 2003– 2005 period. Table 7 lists these 14 countries. During the three years of the Report, Canada exported military equipment to four countries hosting armed conflicts and another four countries under imminent threat of hostilities. Military goods were also transferred to an additional six countries headed by governments with serious human rights violations reported each year over the period of the report. Since all the states involved in armed conflict or under threat of hostilities also were accused of human rights violations, all 14 countries of the table are categorized as states headed by governments cited for serious human rights violations.
Table 7: Countries of Concern Receiving an Annual Average Exceeding $100,000 in Canadian Military Exports, 2003-2005 Recipient Total Exports Armed Human Country 2003-2005 Conflict Rights Violations* Saudi Arabia $387,811,642 Threat X Egypt $9,396,046 X
Brazil $5,806,964 Threat X Thailand $5,800,083 X X Venezuela $4,878,127 Threat X Israel $4,679,679 X X Turkey $2,643,474 X
Mexico $2,128,564 Threat X Colombia $2,058,303 X X India $960,793 X X South Africa $899,385 X
China $466,211 X
Jordan $405,102 X
Nicaragua $389,052 X
*See text for the rationale for the recipient’s inclusion under this category. In most cases, lack of Report detail prevents a risk assessment of the use of Canadian military goods against civilian populations.
It should be emphasized here that the states identified by the “human rights” column of the table are included to reflect “step one” of the evaluation process described above. Due to a lack of detail about the shipped goods in the Report, it is generally not possible to judge “step two” of the process and to assess the risk that the transferred military goods would be used against civilian populations. There are exceptions to this caveat in the cases of Saudi Arabia and Colombia. According to the Report, Canada supplied over $370-million of armoured vehicles and parts to Saudi Arabia in particular during the three-year period. From information provided by independent sources such as
28 On the Record Jane’s Defence Weekly, it is possible to confirm that the LAVs were supplied to the Saudi National Guard, the security force responsible for the protection of the Saudi government and royal family. In the event of internal upheaval or protest, it is highly likely that these LAVs would be deployed in the urban centres of Saudi Arabia. Under such circumstances, the risk of their use in human rights violations would be great. Hence, judging by the human rights record of the Saudi government, and by the likely use of the armoured vehicles shipped by Canada, the Canadian government has not convincingly determined that “there is no reasonable risk that the goods might be used against the civilian population.” In contrast, it must be acknowledged that there may be instances of states listed in Table 10 where it is possible that there is no reasonable risk that the Canadian goods shipped to that state would be used in human rights violations. The consistent problem is that the Report does not provide enough detail to be able to independently assess each case.
4C. Adhering to Canada’s Existing Standards Our analysis of the 2003–2005 Report suggests that Canada does not consistently follow its own guidelines when authorizing arms shipments, particularly in the case of the second guideline, the close control of military exports to countries “involved in or under threat of hostilities.” From 2003–2005 the Canadian government approved the shipment of Group 2 military goods valued at an annual average of $100,000 or more to eight countries that met the criteria of the guideline. Canadian approval of arms shipments to countries involved in or threatened by conflict may be due to a failure to acknowledge the changed nature of armed “hostilities.” During the Cold War, when the current Canadian guidelines were formulated, close attention was given to conflicts between the armed forces of enemy states, largely out of concern that the fighting might escalate into regional, or even global, conflict. More recently, and especially since the end of the Cold War, by far the most common form of armed conflict has been internal or intrastate war, with the severest consequences borne by civilian populations. For more than a decade Canadian “human security”-based foreign policy has recognized the changed nature of armed conflict. Canada’s arms sales record suggests that the government has yet to bring a similar understanding to export control policy. In the case of the fourth guideline, during the 2003–2005 period, 14 countries that were recipients of Canadian military equipment worth an annual average exceeding $100,000 per year were led by governments accused of serious human rights violations. When details from the Report are combined with information from other sources, there is evidence in some instances of a high risk of use of Canadian-supplied equipment in human rights violations. The Saudi example cited above suggests that the Canadian government is paying insufficient attention to existing export control criteria, in this case by ignoring the true risks of human rights violations arising from Canadian equipment shipped for military end-use. The 2003–2005 transfers were part of multiyear deals with Saudi Arabia for hundreds of LAVS totalling more than $1.5- billion in value. It is apparent that, in approving the arms export to Saudi Arabia, the perceived commercial benefits of the contract outweighed concerns about impact on human rights. In authorizing the LAV shipments, the government overrode its own export control guidelines. In other cases of countries in which there are human rights concerns, it is typically not possible to assess the risks of human rights violations because there is insufficient detail about the transferred equipment.
On the Record 29 The evidence of the government’s own Report points to selective application of controls that are prone to influence by commercial gain. The exceptional nature of the arms trade, not the least because of the immediate and potential impact of weapons on human security, requires a vigilant implementation of the export authorization process. It is apparent that Canada must do more to meet its own arms transfer standards, beginning with a stricter interpretation and application of existing guidelines. This would be an important first step toward assuming greater responsibility for Canada’s role as a significant supplier of weapons. Canadian export controls would also benefit from an overhaul to bring them up to emerging international standards. Canada’s control guidelines were introduced in 1986 at the height of the Cold War, when much attention was given to preventing arms shipments from reaching the Soviet Union and its allies and when the proscribed list of countries that were denied Canadian military goods included Libya, South Africa, and 12 Eastern bloc countries.42 Today, almost two decades after the fall of the Berlin Wall, and at a time when the proscribed list is confined to two countries (Burma/Myanmar and Belarus), the export control guidelines remain identical to those of more than two decades ago. These dated guidelines are inadequate to meet the changed conditions of the post- Cold War political and security environment. In many areas they fail to account for Canadian obligations arising from international law and other multilateral commitments (discussed in Section 6).
30 On the Record 5. Transparency: What the Report Does Not Tell Us This section is intended to meet the third objective of the audit: to ascertain the accuracy and completeness of the data provided in the Report. It analyses the transparency of the Report, and, in particular, how and where the Report fails to reveal or clarify important details of the shipment of Canadian military goods. The section also draws on other state practices, and other data sources, to discuss the completeness of the Report data. The transparency of the Report is important not only to obtain an accurate picture of Canada’s military export record but also to provide insight into the operations and standards of Canadian export control. Following the end of the Cold War, Canada made its export of military goods more transparent. During the 1970s and 1980s the government irregularly released limited information on Canadian arms exports, typically prompted by parliamentary questions and often confined simply to a ranking of the largest importing states. The publication of the Annual Report on the Export of Military Goods from Canada, which began with the calendar year 1990, was an important departure from the Cold War period. When the annual report was first issued in 1991, its detail significantly advanced the transparency of Canadian arms exports. It became a model for advocates who were pressing other states to publish annual data on arms exports. Since 1990 Canada also has made important multilateral commitments regarding arms transfer transparency. As described in Section 3, these include commitments to report annually on exports of certain weapons categories to the UN Register of Conventional Arms as well as to the OAS Inter- American Convention on Transparency in Conventional Weapons Acquisition. Canada has maintained a consistent record of annual reports to both transparency instruments. The degree of transparency in the latest Report is less than that found in earlier versions. The timeliness, completeness, and clarity of the 2003–2005 Report are demonstrably weaker in some key areas. The latest report also has failed to fill in significant data gaps—particularly with regard to military trade with the US—that prolong Canada’s failure to meet the commitments of its multilateral transparency agreements.
5A. Timeliness, Completeness, and Clarity The latest Report demonstrates the following lapses in commitments to international transparency standards.
Timeliness The most recent government Report on military exports was published in December 2007, following a reporting hiatus of more than three years. It covers the calendar years 2003, 2004, and 2005, for which no reports had previously been produced. The Report offers no explanation for the significant delay in the release of this information. The previous 13 reports were customarily released within 18 months after the calendar year of the data they contain. There is also no explanation given in the Report for the exclusion of 2006 data.43 Unlike 25 of the 31 states that produced equivalent reports by December 2007, Canada did not publish the details of arms exports current to 2006.
Missing item descriptions The 2003–2005 Report neglects to provide detail beyond broad Export Control List category descriptions. ECL numbers represent the generic class of the items shipped and offer nothing to identify the nature of the goods. The transparency of earlier editions of the Report was greatly
On the Record 31 improved between 1995 and 2002 when they included brief descriptions of the military goods shipped to each country in addition to ECL numbers. These reports also categorized items as either “weapons systems and munitions,” “support systems,” or “parts.”44 The current report reverts to the amount of information provided in earlier, less transparent publications. The amount of descriptive detail is a measure of Report transparency. More significantly, it is central to independent evaluation of Canadian export control standards. Our earlier discussion of Canada’s control guidelines identified the need for more detailed descriptions of the military goods transferred by Canada to evaluate the risk that those goods would be used by security forces to violate human rights. Only through adequate description of the goods can the risks of misuse be judged. The detail provided by the Report is woefully insufficient to this task.
Double-counting Many figures in the Report are repeated values, due to a procedure used for the first time in the 2003–2005 Report. A note in the Report states that “since goods or technology included in a single export permit may be classified under several ECL item numbers, [the tables] contain some double- counting.” As an example, $949,200 appears as the value of shipments to Botswana in each of three ECL categories during 2004, even though a check of the figures against total military exports to Botswana for that year shows that $949,200 must be the sum of the values for all three subgroups. Consequently, it is not possible to determine the actual value of shipments in the double-counted subgroups, rendering those reported figures useless. Over the three years of the report, $467-million worth of military equipment, or nearly one-third of the total reported exports, was double-counted (or,more accurately, multiple-counted). Thus, doubt is cast on the accuracy of the data for a large subset of the reported exports, clearly adding to the ambiguity and reducing the transparency of the report.
Exports to the US As noted in Section 3, the Report contains no data on shipments to the US, the largest recipient of Canadian military goods. This information is not available because “permits are not required for the export of most Group 2 items to the United States.” Because the permit process is requisite to tracking weapons transfers, DFAIT does not monitor or record military exports to the US. DFAIT estimates that trade with the US accounts for “over half of Canada’s exports of military goods and technology,” although the actual total is likely more than this. Consequently, the Report omits the majority of Canada’s military exports; the inability to track US exports fails multilateral transparency standards to which Canada is committed. The omission of US data is a glaring lapse in reporting transparency. The opacity of Canadian arms exports to the US has deepened since 1991, ironically during the same period that more light has been shed on non-US sales. Before 1992, Canadian officials reported arms transfers to the US as the sum of two aggregate figures—the value of all prime contracts with the Pentagon and the value of all subcontracts with US military contractors. These values were compiled from voluntary submissions by Canadian military exporters. In subsequent years the government has failed to provide any estimate of military shipments to the US. Since 1992 the values of US exports have been estimated by Project Ploughshares from US prime contract data obtained from Access to Information requests to the crown Canadian Commercial Corporation. Because Canada does not regulate or monitor arms shipments to the US, it has inaccurately reported major weapons transfers to the voluntary UN Register of Conventional Arms as well as the more recent,
32 On the Record and legally binding, Inter-American Convention on Transparency in Conventional Weapons Acquisitions,45 which requires the same weapons transfer data. Since the onset of the UN Register in 1992, Canada has consistently under-reported exports to the US. From press and other reports (including from the Canadian Commercial Corporation) it can be demonstrated that armoured vehicles—one of the seven categories of the UN Register—were shipped from London, Ontario to the US during several years when Canada reported no such shipments to the UN Register. It is possible, even likely, that US shipments in other weapons categories also were not reported. Given the Canadian government’s early and ongoing advocacy of the UN Register, this failing should be seen as a major embarrassment that deserves immediate correction. Canada presents a false picture of its arms export record by exempting transfers of military goods to the US from public reports. The full volume of the Canadian arms trade is not known, reinforcing a tendency among agencies that monitor arms transfers to underreport Canadian exports. Canada also is failing to meet international obligations to report all major weapons sales. By this failure, it has weakened the multilateral transparency mechanisms it regularly touts as fundamental to confidence- building.
Data on small arms and light weapons In 2006, for the first time, Canada provided details on transfers of small arms and light weapons to the UN Register of Conventional Arms using the subcategories defined by an UN expert group as recommended standards. In contrast, the DFAIT Report contains no single category, or group of subcategories, that aligns with the UN definition of SALW. Instead, several ECL categories of goods, most notably item 2-1, which consists of “small arms and automatic weapons,” incompletely overlap with UN-defined categories. Some of these categories include weapons beyond the UN definition, such as larger calibre systems, while some SALW attached to larger weapons systems, such as machine guns on ground vehicles, are not properly included in any SALW-related categories.46 Further, there is insufficient detail in the Report to determine the types of SALW that Canada exports; only broad ECL categorizations are reported.
5B. Additional Data With respect to Canada’s military shipments, the government states in website materials that “no country reports in more detail on such exports.”47 Although earlier Canadian reports were among the most detailed in the world, today several countries report more extensively and in more refined detail. This number has increased with the decreased transparency of the latest report. If Canada is to regain its former status of transparency, it needs to at least match the practices of other reporting states. The following are two examples of details provided in the annual reports of other weapons- exporting states that could be readily made available by Canada.
Export licences Canada provides the value of military shipments for each recipient in its Report. Several countries with equivalent reports include data on authorized export licences for recipients, even though these licences do not necessarily correspond to weapon shipments. (For example, a licence may not result in a shipment because the relevant order is cancelled.) European Union countries, under the EU Code of Conduct on Arms Transfers, which Canada has formally endorsed, make public the total value and number of licences granted for the export of military goods. Details on the licences refused, provided by the United Kingdom and others, and on the companies granted military export permits, provided by the governments of Italy and Sweden among others, further increase the
On the Record 33 transparency of reports by these countries. The Canadian government explains that such details are not provided “due to the commercially confidential nature of such information and restrictions under the Privacy Act.” Yet, as this Audit will demonstrate, many details on Canadian companies and their export contracts are publicly available elsewhere. A Canadian report containing information on export licences for military goods would provide a clearer and more accurate picture of Canada’s export control policy. Furthermore, providing information on export licences issued and refused would permit more complete public scrutiny of licensing decisions.48
Dual-use goods DFAIT Reports do not include “dual-use” goods, contained in Group 1 of the ECL. Dual-use equipment may be used for either civilian or military purposes, but the “ordinary use” is considered to be commercial or civilian. With regard to conventional weapons, the dual-use goods and technology listed on the ECL are typically advanced technology items such as special metal alloys, high-speed computers, or remote-sensing equipment—goods that require export permits because of their possible strategic value. Canada does regulate dual-use goods. Its primary motivation for this regulation is to prevent their use in the development or proliferation of weapons of mass destruction. As with all Group 2 goods, dual-use goods and technology with military applications require government authorization. This means that export permit records are kept on such items, making it possible and logical for Canada to report on dual-use goods that are exported to military end-users. The current lack of data on military dual-use shipments makes it impossible to determine the size of the category, but it would certainly add to the military exports total.
Box 4: Dual Use Engines for Military Helicopters It is possible to confirm an example of an unreported shipment of dual use goods. According to subsequent media reports, the Canadian government approved export permits for the delivery of 10 PT6C-67C engines built by Pratt and Whitney Canada (PWC) to China in 2001 and 2002.49 Regulated as dual-use transfers the engine shipments required export permits, but, as dual-use shipments, they were not included in the Canadian military export data reported during 2001 or 2002. Although the engines were authorized for use in civilian helicopters, it was revealed in October 2007 that the engines were used to power Z-10 Zhisheng attack helicopters.50 China has been cited for human rights abuses committed by the military against citizens who oppose the government. In the past, Chinese-made helicopters with PWC engines also have been sold to countries with poor human rights records such as Laos, Burma, and Zimbabwe. PWC stated that it understood that China would develop its own engines for the military model. In December 2007 the US State Department indicated that it was investigating the transfer.
5C. International Reporting Standards The Small Arms Survey began producing a “Small Arms Trade Transparency Barometer” in 2004 to “assess countries’ transparency in reporting their small arms and light weapons exports, in particular with respect to aspects such as timeliness, accessibility, clarity, and comprehensiveness.” The barometer assesses national military export reports and government reports to UN Comtrade,51 and provides a compelling indication of the lack of progress Canada has made in its Report since the early 1990s. In its 2007 annual review, the Small Arms Survey ranked Canada 16th out of 37 in transparency for countries that export at least USD $10-million worth of SALW yearly.52 Canada scored 11 out of a possible 25 points, losing points for all measurements of transparency, but particularly for timeliness, clarity, and disclosure of licences granted or refused.
34 On the Record Project Ploughshares assessed the most recent annual national military export reports of the 30 countries (in addition to Canada) that release such reports.53 Based on best practices compiled from the existing reports of these states, the assessment considered the following main components of a military export report with a high level of transparency:
● a comprehensive narrative text discussing export controls; evaluation criteria and processes; justification of export licensing decisions (particularly to countries that meet criteria for close control) and details on licence denials and the criteria invoked; the monitoring process; national, regional, and international legal obligations and commitments; and other relevant information. ● categories of goods, such as the 22 Munitions List categories used by Wassenaar member countries. ● information on quantity, value, destination, and exporting company for licences and actual shipments of military and dual-use goods. ● detailed descriptions of goods and an indication of their end-user and end-use. ● equivalent details for clearly defined and distinct groups of small arms and light weapons, as defined by the UN, including SALW exported as part of larger weapons systems.
Other relevant areas of reporting, also compiled from the reports of the 31 reporting states, that would increase transparency and supplement the information listed above include the following:
● indication of exports that are incorporated into military equipment in the recipient country and sold to third parties; ● details for the import and transit of military goods in the reporting country; ● details for the disposal of state military goods and other government-to-government military transfers; ● a list of legal entities authorized to export military equipment and technology and dual-use goods; ● details on large military-contracted programs of domestic companies (such as those with a contract value over $100-million); ● case studies to show how the government assesses licences; and ● details on government assistance and grants to companies that sell military equipment.
Following are details from the military export reports of 10 countries, which illustrate the extent of Canada’s transparency gaps.
On the Record 35 Table 8: Assessing the Extent of Transparency Gaps in the Canadian Report through Comparison with Equivalent Reports by Selected States Country Country report is more transparent than Canada’s due to the inclusion of: Australia ● comprehensive text, explanations ● quantity of licences for export of military and dual-use goods and licence denials Bulgaria ● category, value, quantity, and destination of licences issued and used for import and export of military goods and of licence denials France ● comprehensive text ● category, value, and destination of licences and actual exports ● detailed information on SALW ● historical data Italy ● comprehensive text ● category, value, quantity, manufacturer, and destination of licences Macedonia ● category, description, value, quantity, manufacturer, and end-user for licences, actual exports, and transshipments of military and dual-use goods Netherlands ● comprehensive text ● category, aggregate value, and destination of licences for “definitive export” ● licence denials and criteria invoked ● disposal of state military goods to other countries Romania ● category, description, type (complete weapon system, repairs and loans, or spare parts), value, quantity, and destination of licences and actual exports Serbia ● comprehensive text ● category, description, value, destination, end-user, and end-use for export and import licences and actual exports of military and dual-use goods ● list of legal entities registered for foreign trade in military and dual-use goods Spain ● comprehensive text ● category, value, destination, end-user, and end-use for actual exports of military and dual-use goods ● value, quantity, and destination of licences for military and dual-use goods ● licence denials and criteria invoked ● information on large defence programs and their recipients Sweden ● comprehensive text, including information on defence companies and their products ● aggregate value, end-use (combat or non-combat) and destination of licences and actual exports of military and dual-use goods ● value of exports by manufacturer for large contracts ● licence denials and criteria invoked ● detailed information on SALW UK ● comprehensive text, including a detailed table of “prosecutions for strategic exports offences” and case studies on the assessment of licences to an embargoed destination ● small arms destroyed by the Ministry of Defence ● government-to-government transfers of military goods US ● category, description, value, quantity, and destination of licences ● total foreign military sales agreements and deliveries, disaggregated by destination ● information on government military assistance and training
5D. Accuracy: Comparison of Reported Data with Data from Other Sources According to the Report: Certain statistics on Canadian exports to [foreign] military users may be available from other sources, such as Statistics Canada or the Canadian Commercial Corporation, but these figures may include non-military goods such as commercial computers, civil-certified aircraft or other civilian equipment. Since there is no direct correlation between the commodity codes used by Statistics Canada and the Export Control List numbers, and because
36 On the Record each source uses different methods of data collection, a meaningful evaluation of the information from these two sources is extremely difficult. The government position suggests that it is impractical to test the accuracy of Report data by comparing it with data provided by an independent source. Fortunately, the opportunities for comparison and evaluation are not quite as remote as the Report suggests. For some controlled goods categories, the nature of the goods and the limited number of suppliers and foreign recipients makes it possible to identify and use reliable data from other sources to make meaningful comparisons with the Report. To provide an example, we examine in some detail the export of Export Control List (ECL) 2-6 goods, defined as “ground vehicles and components.” (Two additional case studies on SALW and ammunition appear as Appendix 3.)
Case study: Armoured vehicles and GDLS Canada In the case of ECL category 2-6 it is possible to identify one military system, the wheeled armoured vehicle, as the commodity whose variants constitute virtually all exports reported for the category. From the details published in the Report alone it is typically not possible to distinguish the shipment values of specific military systems and components since many systems are grouped together in an ECL item. The ECL 2-6 category is an exception because it is possible to verify data on the exported goods from details of orders and contracts reported in the press. It is also possible to identify one supplier, General Dynamics Land Systems Canada, based in London, Ontario, as the sole Canadian supplier of wheeled armoured vehicles. GDLS Canada military exports concentrate on several very large international customers: the US, Australia, Saudi Arabia, and New Zealand. During the three-year period of the government report, the one company’s sales of armoured vehicles to the three non-US recipients totaled almost half the value of all reported transfers. To evaluate the accuracy of the export figures in the Report and determine their consistency with other Canadian government sources, the following case study compares several sources that report on the exports of GDLS Canada armoured vehicles. The numbers from the DFAIT export report correspond to category ECL 2-6 figures. Data from Statistics Canada, retrieved online,54 includes all “tanks and other motorized armoured fighting vehicles (including parts)”55 exported from Ontario. Canadian Commercial Corporation figures, retrieved through the Access to Information Act, are for contracts brokered between GDLS Canada and recipient states. Finally, UNROCA56 depends on the reports of UN-member countries for its data; Canada’s figures, in this case for “armoured combat vehicles,” are reported by the Department of Foreign Affairs. While the first three sources indicate dollar values of exports or contracts, the UNROCA figures indicate the number of vehicles exported, not their value. It should be noted that Canadian Commercial Corporation data is based on contracts (that is orders), while DFAIT and Statistics Canada data is based on deliveries. The reporting period for orders and deliveries may differ. Indeed, since the shipment of products may not occur in the same year that a CCC contract was signed, three years—2001, 2002, and 2006—were examined in addition to the three-year period of the Report. Moreover, not all contracts are fulfilled by deliveries. Consequently, some differences among the three sources may be due to adjustments that occur during the life of a contract. Variations between datasets may also be due to differences in time period. CCC reports are based on fiscal year (2001-2002 is reported as 2002) and the two other sources use calendar years.
On the Record 37 Despite dataset differences, all sources sufficiently capture GDLS Canada armoured vehicle exports to make comparisons worthwhile. Comparisons are made easier by the fact that GDLS Canada is the only exporter of armoured vehicles in Ontario, and armoured vehicles are the primary product of the company. Below, the details of armoured vehicle exports reported by each source are compared for the four major recipient states during the 2003–2005 period. Australia. The Canadian Commercial Corporation brokered $568-million worth of contracts between GDLS Canada and Australia between 2001 and 2005, a large part of which is accounted for by a 2000 contract reported in the press as worth $333-million for 144 light armoured vehicles and upgrades to the existing Australian LAV fleet.57 According to the contract announcement, the LAV deliveries were to take place between 2002–2004 and DFAIT reported that $266-million in vehicles and components were exported to Australia during this period. Likewise, Statistics Canada reported $264-million in armoured fighting vehicle exports for 2002–2004.58 Both numbers fall over $65- million short of the reported contract value, and over $300-million short of the total value of CCC contracts reported between GDLS Canada and Australia. Apart from the longer period of the CCC contracts, the differences in value may be explained by the nature of the CCC contracts. They may have included the value of services not considered controlled under the ECL, as well as some production in Australia that was not reported in press accounts. Also, as can be seen in the chart below, although the total value of exports reported is nearly the same for DFAIT and Statistics Canada, the export values are distributed differently over the period.
Figure 11: Exports of LAVs to Australia, 2001-2006 as Reported by CCC, DFAIT, and Statistics Canada (in Canadian dollars)
Australia
250,000,000
200,000,000
150,000,000 StatCan CCC 100,000,000 DFAIT
50,000,000
0 2001 2002 2003 2004 2005 2006
The UNROCA reveals further information. Canada reported that it exported 98 LAVs to Australia in 2003 and 12 in 2004—34 vehicles short of the total reported in the press. Australia, however, reported that it imported 173 LAVs from Canada during the delivery period, or 29 vehicles over the reported contract total. As is clear from the chart below, the reports by Canada and Australia to the UNROCA are inconsistent in terms of totals and the years in which the exports were received. Reporting within DFAIT is also inconsistent: the Department reported over $69-million in exports of “LAVs and components” to Australia in 2002 in the Report (see chart above), but no LAVs in the submission to the UN. In the following two years the datasets are closer, but the proportions of export values and number of vehicles for 2003–2004 are not the same.59
38 On the Record Figure 12: Numbers of LAVs Exported to Australia, 2002-2005, as reported to the UNROCA by Canada and Australia
Australia
120
100
80 Exports Reported by Canada 60 Imports Reported by Australia 40
20
0 2002 2003 2004 2005
New Zealand. Although the CCC did not act as an intermediary, New Zealand also imported a large number of LAVs from Canada. According to media reports, in 2000 the New Zealand government signed a $420-million contract with GDLS Canada for 105 LAVs and spent several million in 2003 on repairs, technical assistance, and configuration. The LAV deliveries to New Zealand took place from 2002 to 2004;60 these exports appeared in the Report in 2003 ($143.4- million) and 2004 ($100.0-million) as “ground vehicles and components” totaling $243-million, $177-million short of the contract value. Statistics Canada’s total value for 2003–2005 was higher at $366-million, but still fell short of the reported contract total.61 It is possible that the remainder of the value of the contract is for LAV services, such as training and repairs, but it is not apparent that this would fully account for the difference of $123-million between the two sources.
Figure 13: Exports of LAVs to New Zealand, 2003-2005 as reported by DFAIT and Statistics Canada in Canadian dollars
New Zealand
250,000,000
200,000,000
150,000,000 StatCan DFAIT 100,000,000
50,000,000
0 2003 2004 2005
Meanwhile, through the UNROCA, Canada reported 11 and 31 LAVs shipped to New Zealand in 2003 and 2004, respectively. In addition to reporting fewer than half of the 105 LAVs apparently delivered, the Canadian report to the UN indicates a higher volume of vehicles in 2004 than 2003, the opposite of the figures in the DFAIT Report (see Figure 13). This again calls into question the
On the Record 39 consistency of Canada’s reports on military exports. New Zealand, on the other hand, indicated that it had imported 104 LAVs from Canada in 2003 and 2004 combined, just one short of the contract number. Thus, although it is not possible to determine the timing accuracy of LAV deliveries, it appears that New Zealand more accurately reported delivery numbers.
Figure 14: Exports of LAVs to New Zealand 2003-2005 as Reported to the UNROCA by Canada and New Zealand
New Zealand
80
70
60
50 Exports Reported by Canada 40 Imports Reported by New 30 Zealand
20
10
0 2003 2004 2005
Saudi Arabia. The CCC-brokered contracts between GDLS Canada and Saudi Arabia totaled $444- million in 2000 and 2001.62 Further, in 2004, a $203-million contract was signed between GDLS Canada and the Saudi Arabian National Guard (SANG) for 108 LAVs, although it is possible that some or all of these vehicles were included in previous contracts.63 Following the CCC contracts, DFAIT reported $420-million in exports of LAVs to Saudi Arabia, near the $444-million total, but falling very short if the second contract were additional. The exports reported by Statistics Canada during the 2000–2005 period amount to $466-million, also near but higher than the CCC contracts. These two sources, as can be seen in Figure 15, are similarly distributed throughout the years shown, but contain a few discrepancies.64
Figure 15: Exports of LAVs to Saudi Arabia, 2000-2005, as Reported by CCC, DFAIT, and Statistics Canada (in Canadian dollars)
Saudi Arabia
250,000,000
200,000,000
150,000,000 CCC DFAIT 100,000,000 StatCan
50,000,000
0 2000 2001 2002 2003 2004 2005
40 On the Record The numbers reported by DFAIT to the UNROCA are inconsistent with the information provided in the 2003–2005 report. The chart below shows the vehicles exported from Canada to Saudi Arabia,65 the number as reported to the UN on the left axis, and the value as reported in the Report on the right axis. The proportions are most significantly different in 2004 and 2005, when zero and 222 LAVs were reported to the UN while $214-million and less than $1-million were included in the Report for 2004 and 2005, respectively.
Figure 16: Exports of LAVs to Saudi Arabia, 2000-2005, as Reported by DFAIT to the UNROCA and in the 2003–2005 Report Saudi Arabia Number of LAVs Value of LAVs
250 250,000,000
200 200,000,000
150 150,000,000
100 100,000,000
50 50,000,000
0 0 2000 2001 2002 2003 2004 2005 Year
Value in Report UN Number
United States. The US is the primary customer of GDLS Canada, which does subcontracted work for parent company General Dynamics Land Systems in Michigan, as well as filling prime contracts received directly from the US Department of Defense (DoD) through the CCC. One of GDLS Canada’s most important exports to the US in recent years has been the Stryker family of combat vehicles, a version of the LAV III. The American parent company was awarded a $4.4-billion contract in November 2000 to supply the US Army with 2,730 Stryker Armoured Vehicles.66 The vehicles were first delivered to the US in April 2002 and first deployed to Iraq in December 2003. The production, which is ongoing, has been split mainly between the Canadian plant in Ontario and a plant in Anniston, Alabama.67 Since 2000 the Canadian subsidiary has produced hundreds of Strykers worth over $2.0-billion in total. In addition to production, GDLS Canada has been involved in over $550-million worth of repairs, maintenance, modifications, and logistics support for the Stryker vehicles since the contract was signed.68 Figure 17 shows CCC contracts between GDLS Canada and the US and Statistics Canada’s reported exports of LAVs to the US. Since DFAIT does not include US military exports in its report, no comparison is possible with DFAIT data. The Statistics Canada figure of $1.13-billion in exports between 2001 and 2006 is much larger than the CCC value of $775-million. The difference could be
On the Record 41 explained by subcontracting arrangements between GDLS Canada and its US parent company, which are not subject to CCC administration.
Figure 17: Exports of LAVs to the US, 2001–2006, as Reported by CCC and Statistics Canada (in Canadian dollars)
U.S.
400,000,000
350,000,000
300,000,000
250,000,000 CCC 200,000,000 StatCan 150,000,000
100,000,000
50,000,000
0 2001 2002 2003 2004 2005 2006
Reporting by both Canada and the US to the UNROCA on exports between the countries is poor. In particular, the US does not report on armoured combat vehicle imports from Canada, and the only exports of Canadian armoured vehicles to the US that were reported were of 93 vehicles in 2004 and two in 2006.
42 On the Record 6. International Standards: The Arms Trade Treaty and Canadian Commitments In this section the audit turns to its fourth objective: to measure Canada’s arms control practice against emerging international standards, especially those represented by core principles proposed for an international arms trade treaty. Beyond an obligation to adhere to its own export control criteria, Canada has obligations arising from international treaties and agreements that also are relevant to ensuring that military exports do not threaten the “maintenance of peace and security.” The proposal for an international Arms Trade Treaty—endorsed by Canada in a 2007 submission to the UN Secretary-General—is based on the fundamental recognition that all states should apply their existing responsibilities under relevant international law to the authorization of arms transfers. At the core of the proposed ATT are global principles, drawn from the international obligations of states, which apply existing treaty and customary law to the national control of conventional arms transfers. It is important to note that regardless of the final negotiated terms of an international arms trade treaty, the responsibility will remain with states to make the relevant assessments and decisions related to their arms transfers. Every state will need to develop clear policies and procedures to authorize conventional weapons shipments under the terms of any treaty. It must be acknowledged that these processes are not always exact or expeditious and that there will be many occasions that will call for interpretation and evaluation of changing conditions. Even so, such interpretation and evaluation should be applied against the incontestable backdrop of international law. The six “global principles for arms transfers”69 proposed by an international group of non- governmental organizations, including Amnesty International, Oxfam International and Project Ploughshares, are as follows:
► Principle 1: Responsibilities of states All international transfers of arms and ammunition shall be authorized by all States with jurisdiction over any part of the transfer (including import, export, transit, transshipment, and brokering) and carried out in accordance with national laws and procedures that reflect, as a minimum, States’ obligations under international law. Authorization of each transfer shall be granted by designated State officials in writing only if the transfer in question first conforms to the Principles set out below in this instrument and shall not be granted if it is likely that the arms of ammunition will be diverted from their intended legal recipient or re-exported contrary to the aims of these principles.
► Principle 2: Express limitations States shall not authorize international transfers of arms or ammunition that violate their expressed obligations under international law. These obligations include:
• Obligations under the UN Charter; • Any other treaty or decision by which the State is bound; • Universally accepted principles of humanitarian law.
► Principle 3: Limitations based on use or likely use States shall not authorize international transfers of arms or ammunition where they will be used or are likely to be used for violations of international law, including:
On the Record 43 • Breaches of the UN Charter and customary law rules relating to the use of force; • Gross violations of international human rights law; • Serious violations of international humanitarian law; • Acts of genocide or crimes against humanity.
► Principle 4: Factors to be taken into account States shall take into account other factors, including the likely use of the arms or ammunition, before authorizing an arms transfer. States should not authorize the transfer if it is likely to:
• Be used for or to facilitate terrorist attacks; • Be used for or to facilitate the commission of violent or organized crime; • Adversely affect regional security or stability; • Adversely affect sustainable development; • Involve corrupt practices; • Contravene other commitments or decisions on non-proliferation, arms control, and disarmament.
► Principle 5: Transparency States shall submit comprehensive national annual reports on all their international arms and ammunition transfers to an international registry, which shall publish a compiled, comprehensive, international annual report. Such reports should cover the international transfer of all conventional arms and ammunition including small arms and light weapons.
► Principle 6: Comprehensive controls States shall establish common standards for specific mechanisms to control:
• All import and export of arms and ammunition; • Arms and ammunition brokering activities; • Transfers of arms and ammunition production capacity; • The transit and transshipment of arms and ammunition.
States shall establish operative provisions to monitor enforcement and review procedures to strengthen the full implementation of the Principles. Canadian export controls are generally consistent with the international standards reflected in the core principles proposed for the international Arms Trade Treaty. Indeed, it can be argued that, in some instances, Canada’s guidelines meet or exceed relevant ATT principles. In the case of its guideline on states involved in or under threat of hostilities, Canada’s standard is more clearly defined than Principle 4’s stipulation that the transfer not adversely affect regional security or stability. In addition, while Principle 3 precludes authorization of transfers where “they will be used or are likely to be used” in violations of international law, including international human rights law, the Canadian requirement is that where there is a record of human rights abuse, it must be demonstrated that “there is no reasonable risk that the goods might be used against the civilian population.”
44 On the Record Canadian export control standards suffer from particular omissions regarding the core ATT principles, however. The most apparent are related to the unique exemption of US military trade from the export control process. Canada is not fully compliant with Principle 1 (responsibility of states) because it does not formally authorize the export of military goods to the US; and it does not currently meet transparency standards (Principle 5) because it is not able to report on US exports. Another omission can be identified from the comprehensive controls of Principle 6. Canada does not have legislation to directly regulate arms and ammunition brokering activities, in spite of a history of problematic brokering incidents in Canada or by Canadians (see Box 5).
Box 5: Illicit Brokering in Canada The UN Programme of Action on small arms commits UN member states “to develop adequate national legislation or administrative procedures regulating the activities of those who engage in small arms and light weapons brokering” (Section II, paragraph 14). According to the 2007 report by the UN Group of Governmental Experts on illicit brokering, “a broker in small arms and light weapons can be described as a person or entity acting as an intermediary that brings together relevant parties and arranges or facilitates a potential transaction of small arms and light weapons in return for some form of benefit, whether financial or otherwise.”70 Illicit brokers are the grease that lubricates the machinery of illegal arms transfers. The most notorious brokers seek to circumvent arms embargoes by exploiting states with inadequate or non-existent arms transfer controls.
Canada does not have broker-specific regulations despite persistent examples of Canadian arms brokers operating outside the law. These include:
► In the early 1980s Levy Auto Parts of the Toronto area brokered the transfer of tank spares to Israel and India and, according to the US Department of Defense, tank parts from the US to Iran. As a result of the last charge, Levy was suspended from selling arms to the US and went into receivership in 1986.
► Trans World Arms, operating from the same Montreal address as Century Arms International, was directly implicated in illegal military transfers of ammunition and mortar shells from Portugal to the Nicaraguan contras in 1985.
► Century Arms in Montreal received media attention in 1998 when it was involved in a legal dispute with a Russian arms-trading company over exports of Russian military revolvers and rifles to the US. In 1999 Century Arms moved its head office to the US where it remains involved in weapons brokering.
► In September 2002, a Canadian, the director of Defence Project International Military Supplies Inc of Toronto, was arrested in Germany as the key suspect in a multimillion-dollar arms smuggling operation to countries in the Middle East, including Iraq.
► In the most publicized recent case, Karlheinz Schreiber, a citizen of both Germany and Canada, was arrested in 1999 in Canada for extradition to Germany to face fraud charges arising from brokering a 1991 sale of German army tanks to Saudi Arabia.71 In 2007, despite losing several legal appeals, he remained in Canada where he was central to the government announcement of a public enquiry into his business relations with former Canadian Prime Minister Brian Mulroney.
6A. Emerging Control Criteria from the ATT and Relevant Indicators The transparency weaknesses of the DFAIT report described above prevent a full assessment of the recent Canadian military export record against all the export control criteria encompassed by the six core principles of the proposed ATT. From publicly available data sources, it is nevertheless possible to derive illustrative, yet practical, indicators for several criteria beyond Canada’s four existing guidelines. The indicators may be used against the data of the DFAIT Report to determine which
On the Record 45 recipients during the period 2003–2005 met additional criteria that arguably should have brought closer scrutiny of, or even precluded, transfers of Canadian military goods. We begin with a brief description of four criteria proposed for an ATT that would require attention beyond Canada’s existing control guidelines. We also describe the selected indicator or indicators that may be used to measure the status or compliance of recipient states with each criterion. The indicators are drawn from public sources and are illustrative of the measurements needed for Canada to fulfill relevant obligations under international law identified by the proposed ATT.
► Regional security and stability (Principle 4) High levels of militarization in a country may adversely affect regional—and potentially international—security and stability. Large volumes of arms shipments to a country, either in one year or cumulatively over several years, whether from one or several exporting states, raise the level of militarization of the recipient country relative to its neighbours. A country may also be in a dangerous process of militarization without importing weapons. Thus, it is not enough to look solely at Canada’s military exports to a country to determine if the recipient presents a threat to regional security and stability. Independent assessments of the level of militarization of a country are also needed. As reported in the Alert 2005 report, a country is considered to have excessively high levels of militarization if it meets one or more of the following indicators:72
● military spending is in excess of 6 per cent of GDP; ● imports of heavy conventional weapons exceed 1 per cent of GDP; or ● the number of soldiers exceeds 2 per cent of the population.
► Sustainable development concerns (Principle 4) The level or rate of development of a recipient country can be directly or indirectly disrupted by the transfer of military items. Development can be directly impeded by imported weapons that sustain violence, hostilities, and insecurity and hinder economic activity; threaten the lives and livelihoods of civilians; and lead to resource exploitation and environmental degradation. Given the limited resources of most developing countries, development can be indirectly impeded if the importation of military equipment prevents investment in essential public goods and services, particularly health care, education, and basic infrastructure. Ultimately, it must be ensured that arms transfers will not impede development and the benefits of meeting legitimate security needs must be weighed against their opportunity costs. In the analysis which follows, the United Nations Development Programme’s Human Development Index (HDI) and several indicators in the University of Barcelona’s Alert 2005 report are used to measure the development standing of arms recipients. Particular attention is given to countries with low levels of development according to the HDI, which measures:
● health—life expectancy at birth; ● knowledge—adult literacy rate and the combined primary, secondary, and tertiary gross enrolment ratio; and ● standard of living—GDP per capita (PPP US$).73 Based on these indicators, a composite HDI value between zero and one is calculated, allowing countries to be compared and ranked with consistent criteria. The level of human development is considered to be high for countries scoring between 0.8 and 1 (57 countries in 2005), medium for
46 On the Record countries scoring above 0.5 and below 0.8 (88 countries in 2005), and low for countries scoring below 0.5 (32 countries in 2005). In 2005, Canada was ranked fifth globally with an HDI of 0.949. Countries also are considered to have a low level of development if they meet at least one of the following indicators, as reported in the Alert 2005 report:
● maximum priority countries in the meeting of the Millennium Development Goals, according to the UNDP; ● high levels of inequality in internal income on the basis of a Gini coefficient74 greater than 60; ● amounts received in official development assistance (ODA) exceed 20 per cent of GDP; ● public spending on health and education is less than military spending; or ● very poor governance according to the World Bank.75 In addition, countries belonging to the group of Least Developed Countries, according to the UN Economic and Social Council, or to the group of Heavily Indebted Poor Countries, according to the International Monetary Fund, at the time of export are considered to be states where sustainable development is a major challenge. Such states, as indicated by the names of the groups to which they belong, have serious development concerns that require immediate attention. Arms transfers to such countries raise important questions about the efficacy of money spent on weapons rather than on the basic needs of their citizens.
► Corrupt practices (Principle 4) Arms transfers that are likely to involve corrupt practices have many potential dangers. Corrupt governments that receive weapons are less likely to use them for legitimate security needs or to base military decisions on democratic processes. Corruption also increases the likelihood that arms will be diverted illicitly to a country or group that would not otherwise be eligible to receive them. The indicator used to measure this criterion is Transparency International’s 2005 Corruption Perceptions Index, a measurement of the perceived level of corruption in 159 countries based on expert assessments and opinion surveys of businesspeople in the country.76 Countries are considered to be prone to corrupt practices, defined by the organization as “the abuse of public office for private gain,” if they score less than three on a scale of zero to 10, with zero representing a very high level of corruption. The group of states scoring less than three represents 45 per cent of the countries surveyed.77
► Transparency (Principle 5) The transparency of a government’s arms trade reporting can indicate its willingness to cooperate with the international community in controlling the illicit arms trade, allow public scrutiny of its exports and imports, and ultimately work toward global peace and security. The sole international mechanism for reporting official arms trade data is the United Nations Register of Conventional Arms, which annually compiles a report of weapons imports, exports, and holdings based on voluntary information supplied by states.78 In addition several states choose to release more detailed reports on their arms exports (see Section 4 above). The absence of a report to the UNROCA in 2005 and the absence of a government report on military exports, as documented by SIPRI, are used as indicators of countries with low levels of transparency.
On the Record 47 6B. Assessing Canadian Exports against Proposed ATT Standards All states that received Canadian military goods during the period of the DFAIT Report were assessed according to the four criteria derived from existing international commitments, using the noted indicators. The results can be seen in Table 9. From 2003–2005 Canadian military goods were transferred to 10 countries with very high levels of militarization. Six of these recipients (Saudi Arabia, Oman, United Arab Emirates, Israel, Kuwait, and Jordan) received an annual average of goods worth at least $100,000 across the three-year period of the report. The six recipients are all located in the Middle East, a region that for decades has suffered high levels of tension and ongoing armed conflicts. Israeli relations with neighbouring states remained tense through the 2003–2005 period and in July 2006 armed conflict broke out between Israel and Lebanon. The 2006 conflict killed over 1,110 Lebanese and 156 Israelis and more than half a million Lebanese civilians were displaced. Thirteen countries, receiving $6.4-million worth of military equipment over three years, were run by governments perceived by businesses and experts to be highly corrupt. Three of these—Venezuela, India, and Nicaragua—received Canadian arms worth an annual average of more than $100,000. Canada exported military equipment to 39 countries classified as high on the Human Development Index, 25 medium HDI countries, five countries not HDI-ranked, and three low HDI countries (Yemen, Sierra Leone, and Nigeria). However, the value of Canadian military goods shipped to these last three states was less than $100,000 per year.
Table 9: Countries of Concern (Under International Commitments) Receiving Over $100,000 worth of Canadian Military Exports per Year, 2003–2005 Recipient Country Total Exports High Corrupt Development No Report 2003-2005 Militarization Practices Concerns to UNROCA Saudi Arabia $387,811,642 X X Oman $25,967,058 X X X Egypt $9,396,046 X Botswana $7,845,394 X X United Arab Emirates $5,303,276 X X Venezuela $4,878,127 X X Israel $4,679,679 X X Kuwait $2,980,346 X X Turkey $2,643,474 X X Colombia $2,058,303 X India $960,793 X X Morocco $668,493 X China $466,211 X Jordan $405,102 X X Nicaragua $389,052 X HIPC* *Heavily Indebted Poor Country
A total of 14 countries with serious development concerns purchased $42.1-million worth of Canadian military goods over the three-year period of the Report. Of these, five received an annual average of goods valued at more than $100,000 (Oman, Botswana, Israel, Turkey, and Jordan). Further, two Least Developed Countries—Bangladesh and Sierra Leone—and three Heavily Indebted Poor Countries—Guyana, Nicaragua, and Sierra Leone—were among the recipients of
48 On the Record Canada’s arms exports between 2003 and 2005. Of these five recipients, only Nicaragua received significant shipments of military goods. Twenty-three recipient countries failed to report arms imports and exports to the UNROCA. Sixteen of these non-reporting states received more than $100,000 per year in military goods from Canada. Although not indicated in the table above, national reports on arms exports were released by only 22 of the 72 recipient countries, less than a third of the states importing Canadian military goods. Reporting states included most of those in Europe plus Australia and South Africa. During the period 2003–2005 Canada exported significant volumes of military goods to a number of countries that, under closer adherence to Canada’s international obligations, may not have been eligible to receive those goods. These countries include several—notably Saudi Arabia, Venezuela, Israel, India, Jordan, and Nicaragua—of questionable eligibility under existing Canadian export control guidelines (see Section 4). In fact, with the addition of Oman from Table 6, there were seven states receiving significant volumes of goods during the 2003–2005 period that failed the illustrative indicator benchmarks in three or more areas related to Canadian or international export obligations. Several other recipients importing smaller volumes of Canadian arms would lengthen the list. This analysis suggests that Canada would need to alter its export controls to meet the emerging standards based on international commitments. As Table 9 makes clear, greater attention to end-user conditions is necessary if Canada is to meet these international standards for the authorization of weapons exports. The two country profiles in the next section of the audit will reinforce this point.
6C. Recipient Case Studies—Colombia and Saudi Arabia This subsection focuses on two countries to which Canada has exported significant volumes of military equipment between 2003 and 2005. The two cases were selected to illustrate serious concerns that arise from a close comparison of Canadian and proposed international export standards with the export record during this period. While the government claims to “closely control” arms transfers on a case-by-case basis, the case study evidence points to some instances in which Canadian military goods are exported for military end-use to countries at war or there are significant risks of weapons misuse. Further, during the Report period goods worth millions of dollars were exported for military end-use but were not included in the Report, due to limited transparency or to their classification as dual-use or civilian. (The issue of unregulated equipment for military end-use is discussed further in Section 7.) The following discussion differentiates between the export data of the Report and the additional goods for military end-use reported by other sources. Each of the two country reports is organized as follows:79 1. Relevant general information on the country, including:80
● The value, adjusted for inflation, of Canadian military exports to the country by year since 1978; ● The percentage of Canada’s total reported military exports shipped to the country and its ranking among the 72 recipient countries; and ● Whether the country is a member of any of three security-related instruments in which Canada participates. These are: o Canada’s own Automatic Firearms Country Control List (AFCCL), that is, the countries eligible to receive Canadian exports of automatic firearms;
On the Record 49 o the North Atlantic Treaty Organization (NATO); or o the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods (Wassenaar), a group of arms supplier states collaborating to control the transfer of military goods and technology. 2. Corresponding to the criteria and respective data sources described in subsections 4A and 6A above, more detailed information is provided on how or where each state met a relevant criterion during the 2003–2005 period. 3. In light of these concerns, reported military exports to the country are presented:81 A) Those provided by Canada in the Report;
B) Those elsewhere publicly reported, noting where they may correspond to details of the Report and where they may not. Examples are also given of cases in which items were exported from Canada to an interim country before re-export to the final recipient Colombia. Colombia received reported military equipment worth several million dollars from Canada in the early 1980s, followed by 15 years of virtually no exports before a large jump in 2001 and exports worth several million dollars in the years since. Recent exports have consisted mainly of “surveillance camera systems” and “aero engine repair and overhaul” in 2001 and 2002, followed by more surveillance equipment and goods from the “forgings, castings and other unfinished products” category between 2003 and 2005.
Armed conflict in Colombia The ongoing armed conflict in Colombia can be traced back to the late 1940s, but the formation of the main groups currently opposing the Colombian Army and government-controlled paramilitary groups took place in the 1960s. The drug trade and other criminal activities have figured importantly in the dynamics of the conflict and added to the casualties. Peace talks were started in the late 1990s but failed. Meanwhile, over $2-billion worth of US military aid has entered the country for the purposes of the “war on drugs” and, more recently, the “war on terrorism.”
Figure 18
Annual Military Exports to Colombia, 1978-2005
$5
$4
$3
$2 millions
$1 Constant 2005 dollars, 2005 Constant $0 1978 1982 1986 1990 1994 1998 2002 Calendar Year
50 On the Record Canadian exports to Colombia during 2003–2005 were in apparent contravention of the Canadian criterion to closely control military exports to countries involved in hostilities. During this period, fighting was ongoing between rebels, paramilitaries, and government security forces. Thousands, mostly civilians, were killed, while two million had been displaced by the conflict by the end of 2005.82 The UN ended its four-year mediation efforts between the main rebel group and the government in 2005, while disarmament efforts continued and preliminary peace talks began once again.
Table 10: Canadian Military Exports to, and Partnerships with, Colombia Military Exports to Colombia 2003-2005 2003 $629,400 2004 $1,144,373 2005 $284,530 Total $2,058,303 Percentage of reported Cdn exports for period 0.1% (ranked 36th) Agreements and partnerships with Canada Non-AFCCL, Non-NATO, Non-Wassenaar
Human rights violations During the period of the DFAIT Report, “although serious problems remained, the [Colombian] government’s respect for human rights continued to improve”83 and the percentage of total reported human rights abuses attributed to security forces decreased. However, during the period 2003–2005 there were many citations of significant human rights problems in Colombia, the most serious including:
● unlawful and extrajudicial killings; ● forced disappearances; ● insubordinate military collaboration with paramilitary groups; and ● torture and mistreatment of detainees.
Development concerns The level of internal income inequality in Colombia was high on the basis of the Gini coefficient; public spending on either health or education was less than military spending; and foreign debt repayments exceeded the amounts received in official development assistance.
Transparency ● No report to UN Instrument for Reporting Military Expenditures (UNIRME ) ● No report to UNROCA ● No military export report.
Table 11: ECL Exports to Colombia from Canada (Detail from DFAIT Report) (in Canadian dollars) ECL ECL Description 2003 2004 2005 Total 2-10 Aircraft and components 0 3,973 491 4,464 2-11 Electronic equipment 0 0 3,253 3,253 2-13 Protective equipment 29,400 400 113,400 143,200 2-15 Imaging 600,000 0 167,386 767,386 2-16 Forgings 0 1,140,000 0 1,140,000 ECL Item Total 629,400 1,144,373 284,530 2,058,303 Reported Total 629,400 1,144,373 284,530 2,058,303 Double-counting 0 0 0 0
On the Record 51 Table 12: Canadian Military Exports to Colombia—Information from External Sources Export Actual or Company Export Description Date Possible ECL Category Corresponding to the Report 2003 2-15 L-3 Wescam Although not reported publicly, it is likely that the $600,000 figure in the imaging category was from Wescam; a "surveillance camera system" had been shipped in 2002 from Wescam, also reported at $600,000 in ECL 2- 15. Not corresponding to the Report 2005 2-10 Pratt & PT6A-68 turboprop engines were exported from Canada to Brazil for 25 Whitney Super Tucano EMB-314 light attack aircraft. The Super Tucanos were Canada ordered in 2005 by Colombia for "internal security & border patrol missions"; deliveries began in December 2006. The PWC subcontract with Embraer, Brazil, is estimated at $25 million (see Box 6).
Government policy—not oversight or accidental omission—determined that the PWC engines in Table 12 not be reported as military transfers to Colombia. When Canada exports military components for integration into a larger weapons system, the government views the site of the manufacturing process as the final destination of the component. In this case, if the PWC turboprop engines were authorized as military transfers, the shipment would be attributed to Brazil, not their final recipient, Colombia. Moreover, if the engines were categorized as dual-use equipment or, more commonly, as civilian equipment, they would not be reported as military shipments to any destination, regardless of their military end-use. There is insufficient detail in the DFAIT Report to verify which of the scenarios applies to the EMB-314 engine shipments. (See subsection 7.A for more on aircraft engine shipments from Canada.)
Box 6: Colombia Super Tucanos Illegally Strike Inside Ecuador The Colombian Air Force used its recently acquired Super Tucano aircraft powered with PWC engines in “hostilities” in March 2008. The aircraft attacked a camp of the Revolutionary Armed Forces of Colombia (FARC) inside Ecuador. The FARC and the Colombian government have been armed adversaries for 50 years, including during the recent period of Super Tucano deliveries. The air attack on the rebel camp, which the Ecuador government protested as illegal, reportedly killed 17 people including a FARC leader.84 Three months later the Ecuador military also ordered 24 Super Tucano aircraft from the Brazilian manufacturer, Embraer.
Saudi Arabia Saudi Arabia’s share of non-US reported military exports by Canada since 1978 is 16 per cent, or $2.353-billion, rising to 23 per cent for the period of the Report. Saudi Arabia has been the largest non-US recipient of reported Canadian military goods for seven of the past 14 years. The vast majority of these shipments have consisted of LAVs for the Saudi Arabian National Guard, manufactured by GDLS Canada. A significant factor in the creation of the AFCCL in 1991 was to allow Canadian-manufactured armoured fighting vehicles equipped with machine guns to be shipped to SANG for internal security uses. Armed conflict During the period of the DFAIT Report, Saudi Arabia was subjected to the threat of hostilities from the shared border with southern Iraq, terrorist attacks, and a high level of incoming refugees. Tensions also remained with Israel, with which Saudi Arabia has no diplomatic or economic relations.
52 On the Record Figure 19
Annual Military Exports to Saudi Arabia, 1978-2005
$400 $350 $300 $250 $200
millions $150 $100
Constant 2005 dollars, 2005 Constant $50 $0 1978 1982 1986 1990 1994 1998 2002 Calendar Year
Human rights violations “The government’s human rights record remained poor overall with continuing serious problems, despite some progress.”85 The most serious reported problems included:
● the inability of citizens to legally change the government ● the infliction of severe pain by judicially sanctioned corporal punishments ● beatings and other abuses of citizens by government forces ● arbitrary arrests ● incommunicado detentions ● the denial of fair public trials.
Table 13: Canadian Military Exports to, and Partnerships with, Saudi Arabia Military Exports to Saudi Arabia, 2003-2005 2003 $157,917,932 2004 $217,824,036 2005 $12,069,674 Total $387,811,642 Percentage of reported exports 23.0% (ranked 1st) Agreements and partnerships with Canada AFCCL since 1991, Non-NATO, Non-Wassenaar
Regional security and stability Military spending in Saudi Arabia was in excess of 6 per cent of GDP and the country was in a process of militarization according to the Bonn International Center for Conversion’s militarization index. Transparency ● No report to UNIRME ● No report to UNROCA ● No military export report
On the Record 53 Table 14: ECL Exports to Saudi Arabia from Canada (Detail from DFAIT Report) (in Canadian $) ECL ECL Description 2003 2004 2005 Total 2-1 Small arms 0 0 3,240 3,240 2-2 Large calibre weapons 37,552,167 209,304,640 0 246,856,807 2-3 Ammunition 0 0 10,000 10,000 2-5 Control & Warning Systems 15,379,025 2,697,237 1,033,733 19,109,995 2-6 Ground vehicles 155,094,966 214,205,300 981,709 370,281,975 2-10 Aircraft and components 0 921,499 10,216,281 11,137,780 2-11 Electronic equipment 217,582 0 0 217,582 2-13 Protective equipment 210 0 220 430 2-17 Miscellaneous 280,784 0 0 280,784 2-18 Weapons production 5,891 0 0 5,891 2-22 Technology 562,600 0 0 562,600 ECL Item Total 209,093,225 427,128,676 12,245,183 648,467,084 Reported Total 157,917,932 217,824,036 12,069,674 387,811,642 Double-counting 51,175,293 209,304,640 175,509 260,655,442
Table 15: Canadian Military Exports to Saudi Arabia—Information from External Sources Export Actual or Company Export Description Date Possible ECL Category Corresponding to the Report 2003- 2-6 General The Saudi Arabian National Guard signed contracts worth $203- 2005 Dynamics million in 2004 for 108 Light Armoured Vehicles, in addition to LAV Land Systems contracts worth $444-million in 2000 and 2001 (see LAV report above Canada for further detail). Canada reported to the UN the export of 49 LAVs in 2003, 67 LAV assault guns in 2004, and 222 LAVs in 2005. DFAIT’s export figures are inconsistent with its reporting to the UN. The value of these vehicles is included in 2-6 and other categories, particularly ECL 2-2, due to double-counting. Not corresponding to the Report 2003 2-9 or 2-14 AMEL The Royal Saudi Naval Forces (via CCC) contracted with AMEL for the Naval Tactical Team Trainer (transferred from a contract with Atlantis Systems International); when the contract was extended in 2002, it was worth $2.9-million. 2003 2-14 Schreiner Six Badger-towed targets were shipped for gunnery training; value Target unknown. Services Canada 2003- 2-10 Bell The Royal Saudi Air Force ordered 16 412 helicopter variants 2004 Helicopter (412SAs). Deliveries began in 2002; nine helicopters were shipped in 2003 and the final two in 2004, worth approximately $119.7-million and $26.6-million, respectively. There are a number of plausible reasons why the last three shipments to Saudi Arabia in the above table do not correspond to shipment details in the DFAIT Report for the period. The mismatch could arise from inconsistencies in the nature and extent of government records and reporting, as seen in the differences between the LAV data reported to the UN Register of Conventional Arms and that given by the DFAIT Report. Alternatively, since Saudi Arabia is a major recipient of US military exports, the shipments of Bell Helicopters and Atlantis System trainers in particular may have been routed through parent or partner companies in the United States. If so, the Canadian- produced equipment would have been absorbed into the unmonitored and unreported military trade between Canada and the US.
54 On the Record The most likely explanation, however, is that the shipments were not reported because they were classed as commercial exports. Even if sold for military end-use, commercial shipments do not require the export permits that are necessary for shipments reported as military exports. In the case of the Bell 412 helicopters, export data from Statistics Canada confirms the shipment of “helicopters of an unladen weight more than 2000 kg” (the weight class of Bell 412s) from Quebec (the home of the Bell Helicopter Textron Canada manufacturing site) to Saudi Arabia during 2002 and 2003. The value of these shipments totaled over $100-million. According to the StatsCan data, no other helicopter shipments were made from Quebec to Saudi Arabia during the past decade. The StatsCan data thus suggests a direct shipment of Bell 412 helicopters from Canada to Saudi Arabia during a period similar to that reported by other sources. The omission of the helicopter shipments from the DFAIT report can be explained by the categorizing of the 412 as a commercial helicopter not “specially designed” for military purposes. Beyond concerns about reported shipments of military goods to Colombia and Saudi Arabia, the two case studies reveal a gap in Canadian export regulation that allows some Canadian goods to be shipped for military end-use without authorization. In the next section this gap is examined more closely.
On the Record 55 7. Unregulated Civilian Equipment for Military End-use This section discusses a significant loophole in the Canadian export control system that permits the export without regulation of Canadian civilian equipment for use by foreign military forces. The section provides the context for one of the recommendations for improvement to Canadian export control policy and practice that follow in the next section. The Canadian military export control system fails to control exports to military end-users on two counts. First, certain Canadian-built equipment that is not designed for military use but nevertheless sold specifically for military use is not regulated through the export control system. As well, components exported from Canada for weapon systems assembled in interim states are not controlled by Canada when the weapon systems are sold to a third party. As noted in Section 3, the “International Munitions List” of equipment “specially designed for military use” is used by Canada to define the “military goods” making up Group 2 of Canada’s Export Controls List. In addition to military goods, Canada requires authorization for the export of certain commercial equipment defined as “dual-use” and listed as Group 1 of the Export Controls List. Dual-use transfers requiring export permits are not reported in Canada’s Report on military exports because the Report is limited to Group 2 items (see Section 5.2). The existing system of regulation of military and dual-use goods fails to control the frequent shipment of major Canadian civilian equipment to foreign military users. We noted above the shipment by Bell Helicopter Textron Canada of Bell 412 helicopters to the Royal Saudi Air Force in 2003 and 2004. Another example is the shipment of Bell 412 helicopters to Pakistan during 2004 and 2005, despite the ongoing ban on military exports to Pakistan noted in the DFAIT Report (see Box 7). Indeed, in spite of their frequent purchase by armed forces, Bell 412 helicopters are classed as civilian goods not on the “dual-use” list, and as a result they were transferred to Pakistan and Saudi Arabia without export authorization. Indeed, the practice of supplying sophisticated civilian equipment to military forces has become more commonplace. With a tradition of supplying to both civilian and military markets, many Canadian companies now advertise “commercial-off-the-shelf (COTS)” goods, especially in areas of advanced technology such as aerospace and computing, as readily adapted to military use. This Canadian export controls loophole allows major civilian equipment, minimally valued at tens of millions of dollars annually, to pass without regulation to militaries around the world.
Box 7: Unregulated Canadian Helicopters for Pakistan During the period of the DFAIT report, the Pakistan Armed Forces purchased 26 Bell 412EP utility helicopters for the “war on terrorism,” in a contract originally announced as worth over $346-million. Nine helicopters were delivered in June 2004, with the remainder delivered by May 2005. These shipments are confirmed by Statistics Canada data, which indicates that helicopters worth $150-million and over $90-million were shipped from Quebec to Pakistan in 2004 and 2005, respectively. (The difference in value between the Statistics Canada report and the contract announcement may be due to costs of support.) The Bell 412 helicopters were transferred to the Pakistan Army in spite of Canadian policy, as stated on the DFAIT website, that “at the present time, Canada maintains a ban on military exports to Pakistan.”86 87 This is because the Bell 412s were shipped to Pakistan as civil aircraft, bypassing export controls. The purpose of the helicopters was never in doubt. The US government, when facilitating the sale, indicated that the helicopters were to meet Pakistan’s security needs and enhance its military capability. This purpose was highlighted again at an October 2007 ceremony to hand over the helicopters to the Pakistan Army. During the ceremony Pakistan military officials spoke of the helicopters’ use to “effectively combat the menace of terrorism.”88
56 On the Record As well, many Canadian military components are shipped to military manufacturers in other countries, where they are incorporated into military equipment which is in turn sold to third parties. Under existing regulations, the Canadian government views the final destination of the components to be the interim country of manufacture. Export permits and end-use certificates are required for component shipments to such countries, but Canadian approval is not required for further shipment from the country of manufacture to a third country. If all weapons-manufacturing countries shared the same export control standards and procedures the issue of the final destination of these military system components would not be a concern, since the country of manufacture would not approve military exports that Canada would not approve. However, a significant variation in national export controls has resulted in repeated cases in which Canadian military components were shipped via interim manufacturing countries to destinations that would not have been eligible for direct shipments from Canada. Flight International reported in March 2004 that the Venezuelan air force planned to order 30 “armed trainers” chosen from among the Embraer EMB-314 Super Tucano aircraft, the Korea Aerospace Industries KO-1 aircraft, or the Pilatus PC-9M aircraft. All three aircraft types are powered by PWC engines built in Montreal. To the extent that Canadian export permits would be required—and if the engines were classed as “civilian” they would not require permits—they would be needed solely for the shipment of PWC engines to Brazil, Korea, and Switzerland respectively. Regardless of the route, Canada would not control the end destination of the engines, even though the human rights situation in Venezuela and concerns about regional hostilities suggest that a direct shipment of PWC engines to Venezuela would not be approved. The Venezuelan case is one example of a larger export control challenge stemming from the unregulated transfer of Canadian aircraft engines to foreign military users.
7A. Aircraft Engines The export of Canadian aircraft engines is perhaps the most tangible illustration of Canada’s selective regulation regarding military end-use. Many engines built by Pratt and Whitney Canada are exported to power foreign military aircraft. Yet the 2003–2005 report reflects very modest shipments of Export Control List Item 2-10, which essentially groups together aircraft and aircraft components such as engines. In fact, Canadian export controls do not authorize or report most Canadian-built aircraft engines destined for foreign military end-use. If an aircraft engine has received civilian certification, the transfer of the engine does not require an export permit, regardless of its final destination or intended use. Alternatively, if an engine has received “dual-use” classification, the shipment is not reported in the DFAIT document because data on dual-use transfers is not included in the Report. Only export data for engines classed as military appears in the DFAIT report and, based on the values reported, this represents the minority of engines transferred for military end-use. Tables 16 and 17 document aircraft shipments containing PWC engines reported for the period 2003–2005. Contract and delivery information for aircraft engines is available from public sources such as SIPRI. We can see that SIPRI and others report direct deliveries of over 100 PWC engines to Brazil, South Korea, Spain, and India during the period of the Report. The corresponding value of ECL Item 2-10 shipments totals just over $7-million and may well include aerospace items apart from aircraft engines. Clearly, most, if not all, PWC engines delivered to the four countries were classed as civilian or dual-use, despite their purpose to power military aircraft.
On the Record 57 The picture of Canadian exports of aircraft engines for military aircraft is complicated by the export control policy, which determines the site of an engine’s integration into an aircraft to be its final destination. Many Canadian engines are sold to foreign aircraft manufacturers which in turn sell the aircraft to the military of other states. Canada does not require authorization of these subsequent transfers and thus it does not report them as military exports. Nevertheless, Canadian engines routinely are shipped to foreign military forces via an interim aircraft manufacturing state. Examples of indirect shipments of Pratt and Whitney Canada engines during the 2003–2005 period are also provided in Tables 16 and 17. While most shipments likely would have been approved had they been direct, there are some—to Algeria and Indonesia in particular because they are sites of armed conflict—that might not have been authorized as direct shipments under current export guidelines.
Box 8: Canadian Engines for Attack Aircraft Perhaps a more apparent example of the indirect transfer of Canadian engines in contravention of export control guidelines is illustrated by a recent shipment of PWC engines to Switzerland and then to Chad. On January 7, 2008, a Chadian rebel base in the Darfur region of Sudan was attacked by the Chadian air force, killing three civilians and wounding four others. The Chadian government carried out the attacks with two helicopters and a Pilatus PC-9M aircraft, the latter of which contains a PWC PT6A-62 engine.89 The PC-9M, produced in Switzerland, is a trainer aircraft intended for instruction in piloting, navigation, and weapon-aiming. The PC-9M sale to Chad, a state dealing with internal armed conflict, was approved by the Swiss government in June 2006. The aircraft was classified as a dual-use good and didn’t fall under the Swiss War Material Act, which prohibits the export of military aircraft to combat zones. Although the PC-9M was sold to Chad under the condition that it be used only for training purposes, it was equipped with weapons. The 2006 sale to Chad follows others by Pilatus to such governments as Angola during its civil war, Iraq in the 1980s, Burma in the 1990s, and apartheid South Africa.90 Each PC-7 and PC-9 contained a PWC engine.
Table 16: Non-US Deliveries of PWC Aircraft Engines, 2003–2005, Reported by SIPRI Final Via Product Estimated # Total ECL Recipient engines delivered* 2-10 value Direct deliveries Brazil EMB-314 trainer/combat aircraft 60 $5.3 million turboprop engines South Korea KT-1 trainer aircraft turboprop engines 32 $0.3 million Spain C-295 transport aircraft turboprop engines 10 $1.5 million Indirect deliveries Algeria Spain C-295 transport aircraft turboprop engines 12 Not applicable Bulgaria Switzerland PC-9M trainer aircraft turboprop engines 6 N/A Greece USA PC-9/T-6A trainer aircraft turboprop 30 N/A engines Indonesia South Korea KT-1B trainer aircraft turboprop engines 5 N/A Ireland Switzerland PC-9M trainer aircraft turboprop engines 8 N/A Jordan Spain C-295 transport aircraft turboprop engines 4 N/A Poland Spain C-295 transport aircraft turboprop engines 16 N/A *Estimated by Project Ploughshares
Table 17: Delivery of PWC Aircraft Engines, 2003–2005, Reported by Other Sources Final Via Product Estimated # Total ECL Recipient engines delivered 2-10 value Direct deliveries India Saras multi-transport turboprop aircraft engines 4 0 Indirect deliveries Vietnam Poland M28 Skytruck maritime patrol aircraft engines 8 Not applicable Indonesia Poland M28 Skytruck transport turboprop aircraft engines 22 N/A
58 On the Record 8. Canadian Arms Export Controls and Reporting: Recommendations for Canadian Action This section is intended to fulfill the final objective of the audit. It provides recommendations for improvements to Canadian export control policy and practice based on the evidence of earlier sections of the audit. Existing regulations intended to control the international arms trade have proven inadequate. Readily available weapons, licit and illicit, continue to feed conflict and aid grievous breaches of international law. As a significant, if not a central, arms exporter, Canada is both part of the weapons supply problem and a potential part of the necessary solution. Although most Canadian weapons are shipped to allies, our audit of the latest arms transfer report has shown that Canada’s export control and concomitant reporting standards are not always of the calibre the government claims. During the three-year period 2003–2005, there were several examples of Canadian military shipments to states in conflict, those whose governments were accused of seriously violating the rights of their citizens, states in regions of instability or with high levels of corruption, and states for which there were questions about the impact of arms imports on sustainable development. Yet, at the same time, Canada is a consistent and active advocate of stricter international arms transfer standards. This disjunction between Canada’s support for common global standards and its domestic application of arms export controls exists because Canada endorses principles internationally that it does not fully meet nationally. The disjunction could be resolved if Canada revised its military export control policies and guidelines to meet its obligations under relevant international law and closed the loopholes that allow the unregulated shipment of equipment for foreign military end-use. By doing so, Canada would be better placed to argue for improved universal standards to more effectively control international weapons transfers. The following recommendations by Project Ploughshares identify six areas in which the Canadian government could take steps to improve both Canadian military export controls and universal arms transfer standards. The first five recommendations are intended to encourage and assist a meaningful review of Canadian military export authorization policy and practice to address the export control and transparency weaknesses identified in this audit. The sixth recommendation calls for Canadian leadership in the promotion of effective international standards for arms transfer regulation, including, in particular, actively supporting an international arms trade treaty (ATT). It is our view that Canadian leadership in securing the ATT would be strengthened if Canada were to adopt the other five recommendations. Ultimately, all the recommendations are aimed at improving Canadian arms export regulations to ensure that they are consistent with emerging international standards.
8A. Controlling Arms Exports to the United States Military exports to the United States should be subject to the same export requirements that apply to military exports to any other destination. As described in Section 3D, the Defence Production and Development Sharing Agreements between Canada and the United States, in effect for over half a century, have created cross-border trade in military goods that is exempt from the standard export control regulations of both governments. Yet Canada is subject to multilateral instruments that commit it to regulate all exports of military commodities according to internationally agreed criteria and obligations under
On the Record 59 international law. By exempting military exports to the US from export control, Canada is failing to meet these commitments. Moreover, for the 2003–2005 period of the latest DFAIT Report, the export of military goods to the US accounted for an estimated two-thirds of total Canadian arms exports. The exemption of US shipments from its export control regime means that Canada is currently regulating only a minority of its military exports, and is thus creating a major hole in the transparency of its arms export reports. The most effective procedure to ensure the full regulation of the shipment of Canadian goods for military use is to require permits for the export of all such goods, including those to the US. The government should initiate discussions with the US government and Canadian suppliers to put this procedure in place as soon as possible.
8B. Applying Existing Criteria Canadian export control criteria should be more strictly and consistently applied. Every edition of the Report on the Export of Military Goods from Canada has published identical guidelines. Our analysis in Section 4B suggests that Canada does not consistently follow these guidelines when authorizing arms shipments. Canada could more effectively regulate military exports by adhering more closely to existing standards and by paying more attention to the special controls required for military trade and less to possible commercial benefits.
8C. Broadening Control Criteria Canadian export control criteria should be broadened to meet relevant international commitments. Canada supports the “Global Principles for Arms Transfers” (Section 6), which reflect the content of international instruments pertaining to arms transfers, including international and regional treaties, UN and other multilateral declarations, and model regulations for national legislation.91 Canada is also party to several arms control agreements and declarations that formulate common export control principles. The emerging international consensus on export control principles and criteria—a process that has involved the active participation of Canada—has moved past the dated guidelines still used by Canadian export control officials. Canada is obliged to amend its regulatory procedures to better reflect this consensus and to fulfill commitments that are not adequately met at present. For example, under the terms of several multilateral bodies and agreements, Canada has agreed to take into account the impact of arms transfers on sustainable development. However, a recent study by an international partnership of NGOs has revealed that Canada, like many other arms supplier nations, does not have procedures in place to adequately fulfill this commitment.92 Indeed, current Canadian export control guidelines do not refer to sustainable development and the export permit process fails to draw upon the expertise of the Canadian International Development Agency, the government department most familiar with sustainable development. Existing Canadian export control guidelines fail to acknowledge other international commitments, not the least being obligations to prevent the use of weapons for war crimes or acts of genocide. Neither is there reference to weapons whose trade is prohibited under international treaties, such as
60 On the Record anti-personnel landmines banned by the 1997 Ottawa Treaty. Canadian regulations should be revised and strengthened to reflect the emerging international attention to common criteria based on obligations under international law. Therefore, the criteria for Canadian military export authorization should explicitly: (a) Prohibit military transfers in violation of UN arms embargoes, regional import moratoria, or conventions prohibiting the transfer of specific weapons; (b) Prohibit the transfer of military commodities to destinations where there is serious risk that they will be used
• In violation of the UN Charter’s prohibitions on the threat or use of force or on intervention in the affairs of another state; • In the commission of serious violations of international human rights law or international humanitarian law; • In the commission of genocide or crimes against humanity. (c) Take into account whether such exports are likely to:
• Adversely affect security or stability in the recipient state or region; • Provoke or prolong armed conflict; • Be used for or to facilitate terrorist attacks or violent or organized crime; • Involve corrupt practices; • Adversely affect sustainable development. (d) Prohibit military exports to states where there is a serious risk of their diversion and subsequent use in violation of any of the above provisions. Furthermore, the UN Group of Governmental Experts on illicit brokering reported in July 2007 that approximately 40 states have enacted national regulations to control arms brokering transactions. Canada is not one of them. To meet its multilateral commitments with respect to weapons brokering, Canada should include regulations specific to arms brokering in its export control policies and practices. Canadian officials were involved in drafting the 2003 model regulations for the control of firearms brokers for the Inter-American Drug Abuse Control Commission (CICAD) of the Organization of American States.93 Among other conditions, the model regulations call for the licensing of firearms brokers, penalties for those who break the regulations, and the application of these regulations to brokers operating anywhere and independently of whether the transferred weapons pass through a regulating state such as Canada. The Canadian government should adopt the model regulations for firearms brokers and extend the regulation requirements to all equipment shipped for military end- use.
8D. Controlling All Transfers for Military End-use Military export control regulations should apply to all major equipment destined for military end users.
On the Record 61 As discussed in Section 7, it is not enough to confine controls to “military goods” defined by the International Munitions List or to “dual-use” items defined by strategic concerns. Export controls should apply to all major equipment shipped from Canada for final use by foreign armed forces.94 To ensure that military goods are not indirectly exported to destinations that would be ineligible for direct shipments, Canadian export controls should extend to the final destination of all Canadian- manufactured components of equipment for military end-use. As part of the export authorization of components for military use that are shipped via countries of interim manufacture, Canada should require full end-use certification and approval so that all transshipment of components within larger goods is regulated by the Canadian government.95 Closing prominent loopholes would significantly improve the Canadian military export authorization process. Canada can also take important steps to improve the transparency of the process.
8E. Improved Transparency Transparency requires full disclosure of all Canadian exports to military end-users, with enough detail to assess possible human rights and other concerns related to international obligations. Canada should also disclose export permit decisions. When it was first issued in 1991, the annual DFAIT report advanced the transparency of Canadian arms exports and became a model publication of data on arms exports. Today, several states report to higher standards of transparency than does Canada. As described in Section 5A, there are several ways in which the Report may be improved to enhance Canadian military export transparency. Perhaps most urgently, the Canadian government should commit to the timely annual publication of its arms export report. After a hiatus of three years, the combined Report for 2003–2005 was released in December 2007. At the time of this Audit, the report for 2006 exports had not been released. The excessive delay in the release of trade data led the Small Arms Survey to downgrade Canada’s ranking in its “Transparency Barometer” for 2007, placing it just above Iran.96 The transparency failure also became the subject of a Canadian Broadcasting Corporation (CBC) radio report in October 200797 that led to questions from opposition members in the House of Commons. Clearly, Canada can make no claims to arms exports transparency if it is not releasing basic data on a regular and reliable basis. The government must ensure that the publication of an annual report is an export control priority. The Annual Report also should include full data on military exports to the US. The data should be based on export permits required by formal authorization of military exports to the United States. The acknowledged absence of US exports undermines the validity of the Report both by creating a major gap in reported shipments and by its failure to meet the multilateral transparency standards to which Canada is committed. Because it does not regulate or monitor arms shipments to the US, Canada has inaccurately reported major weapons transfers to the UNROCA, as well as the more recent, and legally binding, Inter-American Convention on Transparency in Conventional Weapons Acquisitions, which requires the same weapons transfer data. It thus has weakened the multilateral transparency mechanisms it regularly touts as fundamental to confidence-building. Canada presents a false picture of its arms export record and capacity by exempting transfers of
62 On the Record military goods to the US from public reports. Because the full volume of Canadian arms trade is not known, there is a tendency among agencies that monitor arms transfers to underreport Canadian exports. In keeping with the first recommendation above, Canada should require export permits for the export of all goods for military end-use in the United States. In the interim, and as an immediate measure, the government should recommit to compiling export data submitted by Canadian companies and to reporting estimated military sales to the US in the annual report on the export of military goods. An annual report would benefit from important additions and more detail in other areas. The annual report should document the transfer of dual-use goods for military end-use. The report should provide information on Group 1 items of the ECL, that is, dual-use goods requiring export permits. The inclusion of dual-use data would present a more complete picture of the Canadian shipment of goods for military end-use, The annual report should provide transfer data on a clearly defined, distinct group of small arms and light weapons, including SALW exported as part of larger weapon systems. Export Control List Item 2-1, consisting of “small arms and automatic weapons,” is the group of Canadian military goods most closely associated with the definition of SALW recommended by the United Nations. As noted in subsection 5.1 (and in Appendix 1), Item 2-1 goods do not include some important types of UN-designated small arms and light weapons contained in other Export Control List Item categories. Within these ECL categories no distinction is made between SALW and other military goods, preventing an accurate, independent assessment of the full extent of Canadian SALW transfers. By developing a distinct Item on the Export Control List for small arms and light weapons, as recommended by the United Nations, Canada would provide more pertinent information on its transfers of small arms. If the new ECL Item also included subgroups that distinguished among the 18 UN classes of SALW, the report would further small arms transfer transparency. The detail of the new Item would serve as a potential international model at a time when the many exporters of SALW abide by a wide variation in standards in reporting small arms exports. In the particular case of automatic firearms, Canada should isolate and report the shipment details of automatic weapons attached to larger weapons platforms. In 1991 the Criminal Code of Canada was altered to allow, among other trade activity, General Motors of Canada (now General Dynamics Land Systems Canada) to import and attach 25 mm chain guns to the light armoured vehicles it subsequently supplied to Saudi Arabia. Details of the value (and number) of these machine guns have never been released. Similarly, beginning in 1995 Bristol Aerospace in Winnipeg has shipped surplus Department of National Defence CF-5 fighter aircraft to Botswana equipped with automatic firearms. No details on the firearms shipments are contained in the Reports on arms exports. The full picture of Canada’s transfer of small arms and light weapons will remain incomplete until such exports are fully reported. The annual report should provide sufficient detail to allow independent assessment of Canada’s implementation of export control policies and principles as well as its obligations under international law. Although earlier annual reports made some advances on transparency, the latest Report represents a step backward. The 2003–2005 Report provides insufficient information to adequately assess how or
On the Record 63 where exported military equipment might impact on the citizens or neighbours of the recipient country. To build greater public confidence in the efficacy of the Canadian export control system, the Report should provide at least the level of detail and description of earlier annual reports. More usefully, the reports should provide additional detail about the goods transferred, including the type and number of goods (such as aircraft), and descriptions of the equipment. Only with sufficient reported detail can Canadians be assured that Canadian military exports will not be used irresponsibly, and that there is little risk that the transfers will contribute to human rights violations or to armed conflict. Finally, annual reports should include information on all export licences issued and refused. Although not an EU member, Canada has expressed agreement in principle with the European Union Code of Conduct on Arms Transfers. The EU Code includes operative mechanisms to promote the sharing of information on arms exports among the member governments of the European Union. In addition to reporting on transfers of military goods, many EU member states annually make public the total value and number of licences (export permits) granted for the export of military goods. Canada could better demonstrate its commitment to the principles of the EU Code by including details of export permits issued and refused in the report on the export of military goods.
8F. Promoting International Standards Canada should maintain its leadership role in promoting effective, legally binding global standards (as outlined in 8C above) for the control of international military transfers. Canada has provided important leadership on a people-centred approach to the effective control of small arms and light weapons. Among other SALW control issues, Canada has worked to build an international consensus on common standards for the national control of small arms and light weapons transfers that are consistent with existing state responsibilities under international law. In 2007 Canada hosted an international meeting in Geneva on SALW transfer control principles that brought together over 100 states, as well as multilateral agencies and civil society groups. The “informal” meeting, intended to support the formal UN meeting process, made tangible progress on the issue of common small arms transfer standards.98 Canada is well placed to advance efforts to promote small arms transfer principles through the multilateral process that has arisen out of the 2001 UN Programme of Action. Within this process, Canada should promote small arms transfer principles that are consistent with core principles proposed for a UN Arms Trade Treaty to govern the transfer of all conventional weapons. Canada also supports the negotiation of an international Arms Trade Treaty, originally proposed by a coalition of civil society groups and Nobel Peace Laureates. In a 2007 submission to the UN Secretary-General, Canada called for early negotiation of a legally binding convention and affirmed the ATT core principles promoted by the NGO Arms Trade Treaty Steering Committee.99 As with the proposed common standards for small arms transfers, these core principles are based on the responsibilities of states under relevant international law. An effective international Arms Trade Treaty would require supplier governments to adhere to international law when making arms export decisions. It would require common global standards that would preclude the common claim by states that if they denied authorization of an arms
64 On the Record transfer, others would step in to supply it. A legally binding convention based on the proposed principles would have a major impact on the irresponsible and illegal arms transfers that feed so much of the world’s conflict and criminal violence. The proposed ATT has made important progress at the United Nations. Following a three-year “Control Arms” campaign by a worldwide network of NGOs, UN member states voted overwhelmingly in favour of the General Assembly resolution “Towards an Arms Trade Treaty” in late 2006. In early 2007 the majority of member states provided written submissions to the UN Secretary-General demonstrating mostly positive views on an ATT. Through 2008, a UN group of governmental experts met to study the feasibility, scope, and parameters of an ATT and released a report in September recommending further action on the ATT. An October UN First Committee resolution has proposed an “open-ended working group” of states to begin construction of an Arms Trade Treaty. Canada also is well placed to advance stricter universal arms trade standards beyond the UN system. As a member of a host of multilateral institutions, Canada can continue to raise arms control and disarmament issues in international meetings with the view to improve global standards and practice. Just over a decade ago, Canada mounted a major diplomatic effort via many multilateral agencies and bodies to promote the Landmine Treaty (aimed at, among other objectives, a ban on the manufacturing, stockpiling, and use of anti-personnel landmines) before its signature conference in December 1997. By participating in multilateral forums like the Wassenaar Arrangement group of arms supplier states and in regional bodies like the Organization of American States, where regional security concerns are addressed, Canada is presented with a host of opportunities to advance common arms transfer principles and standards. Canada should support the two UN efforts now available to codify universal standards for authorization of arms transfers by implementing the UN Programme of Action on small arms and participating in negotiations for an international Arms Trade Treaty. Canada can also provide leadership in other appropriate multilateral settings. By pressing all states to agree to common principles based on international obligations, Canada will make a lasting contribution toward ending the global damage from irresponsible weapons transfers.
On the Record 65 Box 9: Summary of Recommendations to Improve Canada’s Export Controls 1. Military exports to the United States should be subject to the same export requirements that apply to military exports to any other destination. 2. Canadian export control criteria should be more strictly and consistently applied. 3. Canadian export control criteria should be broadened to meet relevant international commitments. (a) The criteria for Canadian military export authorization should explicitly: i. Prohibit military transfers in violation of UN arms embargoes, regional import moratoria, or conventions prohibiting the transfer of specific weapons; ii. Prohibit the transfer of military commodities to destinations where there is serious risk that they will be used • In violation of the UN Charter’s prohibitions on the threat or use of force or on intervention in the affairs of another state; • In the commission of serious violations of international human rights law or international humanitarian law; • In the commission of genocide or crimes against humanity. iii. Take into account whether such exports are likely to: • Adversely affect security or stability in the recipient state or region; • Provoke or prolong armed conflict; • Be used for or to facilitate terrorist attacks or violent or organized crime; • Involve corrupt practices; • Adversely affect sustainable development. iv. Prohibit military exports to states where there is a serious risk of their diversion and subsequent use in violation of any of the above provisions. (b) Canada should include regulations specific to arms brokering in its export control policies and practice. 4. Military export control regulations should apply to all major equipment destined for military end-users. 5. Transparency requires full disclosure of all Canadian exports to military end-users, with enough detail to assess possible human rights and other concerns related to international obligations. Canada also should disclose export permit decisions. This means: (a) The Canadian government should commit to the annual publication of its arms export report in a timely manner. (b) The annual report should include details on military exports to the US. (c) The annual report should document the transfer of dual-use goods for military end-use. (d) The annual report should provide transfer data on a clearly defined, distinct group of small arms and light weapons, including SALW exported as part of larger weapon systems. (e) The annual report should provide sufficient detail to allow independent assessment of Canada’s implementation of export control policies and principles as well as its obligations under international law. (f) The annual report should include information on export licences issued and refused. 6. Canada should maintain its leadership role in promoting effective, legally binding global standards (as outlined in item 3 above) for the control of international military transfers.
66 On the Record Appendix 1 Group 2 of Canada’s Export Control List
(Note: The full list of goods and technology, including precise definitions of the terms used in the table, may be found in A Guide to Canada’s Export Controls, available at www.exportcontrols.gc.ca.)
ECL Item Description Smooth-bore weapons with a calibre of less than 20 mm, other arms and automatic weapons with a 2-1 calibre of 12.7 mm or less and accessories Smooth-bore weapons with a calibre of 20 mm or more, other weapons or armament with a calibre 2-2 greater than 12.7 mm, projectors and accessories, 2-3 Ammunition and fuse-setting devices, and specially designed components Bombs, torpedoes, rockets, missiles, other explosive devices and charges, and related equipment and 2-4 accessories specially designed for military use Fire control, related alerting and warning equipment, and related systems; test, alignment and countermeasure equipment specially designed for military use; and specially designed components and 2-5 accessories 2-6 Ground vehicles and components Chemical or biological toxic agents, riot control agents, radioactive materials, and related equipment, 2-7 components, materials 2-8 Energetic materials and related substances Vessels of war, special naval equipment and accessories, and components specially designed for 2-9 military use Aircraft, lighter-than-air vehicles, unmanned airborne vehicles, aero-engines and “aircraft” equipment, 2-10 related equipment and components, specially designed or modified for military use 2-11 Electronic equipment not controlled elsewhere and components High-velocity kinetic energy weapon systems and related equipment, and specially designed 2-12 components 2-13 Armoured or protective equipment and constructions and components Specialized equipment for military training or for simulating military scenarios, simulators specially designed for training in the use of any firearm or weapon controlled in 2-1 or 2-2, and specially 2-14 designed components and accessories Imaging or countermeasure equipment, specially designed for military use, and specially designed 2-15 components and accessories Forgings, castings and other unfinished products the use of which in a controlled product is identifiable by material composition, geometry or function, and which are specially designed for any 2-16 products controlled in 2-1 to 2-4, 2-6, 2-9, 2-10, 2-12 or 2-19 2-17 Miscellaneous equipment, materials and specially designed components 2-18 Equipment for the production of products referred to in the Munitions List Directed energy weapon systems, related or countermeasure equipment and test models, and specially 2-19 designed components 2-20 Cryogenic and superconductive equipment, and specially designed components and accessories 2-21 Software 2-22 Technology
On the Record 67 Appendix 2 Members of Relevant Multilateral Instruments
Member countries of Automatic Firearms Participating States of the Wassenaar Arrangement the North Atlantic Country Control on Export Controls for Conventional Arms and Treaty Organization List* Dual-Use Goods and Technologies Belgium Australia Argentina Slovenia Bulgaria Belgium Australia South Africa Canada Botswana Austria Spain Czech Republic Denmark Belgium Sweden Denmark Finland Bulgaria Switzerland Estonia France Canada France Germany Croatia Germany Greece Czech Republic Greece Italy Estonia Hungary Latvia Denmark Iceland Netherlands Finland Italy New Zealand France Latvia Norway Germany Lithuania Poland Greece Luxembourg Portugal Hungary Netherlands Saudi Arabia Ireland Norway Spain Italy Poland Sweden Japan Portugal United Kingdom Korea, Republic of Romania United States Latvia Slovakia Lithuania Slovenia Luxembourg Spain Malta Turkey Netherlands United Kingdom New Zealand United States Norway Poland Republic Romania Russian Federation Slovakia
*On April 19, 2008, the government expanded the AFCCL to include an additional 11 NATO countries: Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Lithuania, Luxembourg, Romania, Slovakia, Slovenia, and Turkey (http://canadagazette.gc.ca/partI/2008/20080419/html/regle2-e.html).
68 On the Record Appendix 3 Selected Military Goods Categories This section will analyze two selected categories of military goods for which data from external sources provides additional insight into both the transparency of the Report and the efficacy of Canadian export controls. The measure of Canada’s transparency in reporting is revealed by Statistics Canada data. Canada’s export control standards are assessed by examining where these goods were shipped over the period of the Report, including to recipients not listed in the Report itself. In each category there is sufficient information from external sources to provide a useful comparison with data in the Report. The category of small arms and light weapons was selected because of its particular significance in domestic and international policy, and the important role small arms and light weapons play in armed conflicts, human rights violations, and other activities that threaten human security. The category of ammunition was selected because it clearly illustrates significant variation between Statistics Canada and DFAIT data and suggests that the DFAIT Report is far from complete.
Small Arms and Light Weapons Small arms and light weapons are the UN-designated group of weapons that have become a universally recognized problem because they are heavily traded, easily transported, and used— legitimately and illegitimately—to cause a large proportion of the deaths in the world’s war zones. For these reasons, the control of SALW is extremely important in preventing and ending armed conflict. The Report stresses this fact and discusses the importance of SALW-control to DFAIT’s policy work: Resolving the global small-arms problem is seen as an integral aspect of conflict prevention and management, peacemaking and post-conflict reconstruction. In support of this, Canada, in cooperation with like-minded partners, is looking at ways to address the problem of small-arms proliferation, which can undermine security and development efforts and contribute to human suffering. Canada has adopted an integrated approach, addressing the arms control, crime prevention and peacebuilding dimensions of the issue at the global, regional and national levels. Such an approach targets supply-side and transit issues, and seeks to cope with post-conflict surplus stocks and reduce the demand for weapons. With respect to arms controls, Canada promotes measures designed to achieve greater restraint and transparency in legal transfers of small arms and light weapons. Aspects under review include codes of conduct, transparency and registry initiatives, as well as consciousness-raising activities in security- related bodies such as the North Atlantic Treaty Organization (NATO), the Organization for Security and Co-operation in Europe, and the Wassenaar Arrangement. Canada’s own procedures are strict and seek to ensure a high level of control over exports of small arms. (DFAIT 2007) Despite the importance of SALW, there is no category in the Report corresponding to the recommended UN definition of SALW. The UN SALW definition identifies 18 classes of small
On the Record 69 arms, light weapons, and ammunition. An equivalent category in the DFAIT report would facilitate the monitoring of Canadian SALW exports, especially with regard to Canadian obligations under relevant multilateral small arms agreements such as the 2001 UN Programme of Action on small arms. A Report category based on the UN definition of small arms also would complement Canada’s recent commitment to report SALW imports and exports to the UNROCA. In the Report, several ECL categories include UN-designated SALW. ECL category 2-1 is the sole category of goods that are exclusively small arms and components, defined as “smooth-bore weapons with a calibre of less than 20 mm, other arms and automatic weapons with a calibre of 12.7 mm or less and accessories.” Other ECL categories contain small arms and light weapons, as well as weapons outside the UN SALW definition. For example, category 2-3 includes “ammunition and fuse-setting devices, and specially designed components.” All calibres of ammunition are included in category 2-3, from small arms bullets to large calibre shells for howitzers. Similarly, categories 2-2 (large-calibre weapons) and 2-4 (bombs and missiles) each include some SALW, but also include larger weapons. In addition, some additional categories of the government report may include SALW, especially when the weapons are attached as a component. For some recipient countries, the double-counting of the Report makes it impossible to determine to what extent reported values actually represent SALW transfers, rather than the value of ground vehicles and other overlapping items. Thus, it is impossible to derive an accurate measurement of the value of Canada’s total SALW exports from the Report. Below we look more closely at the Report category that is exclusively small arms: ECL 2-1. We will see that the reported data falls short of the full extent of Canada’s small arms exports, let alone all exports of the UN-defined group of small arms and light weapons.
Small arms (ECL 2-1) Reported ECL 2-1 exports from Canada between 2003 and 2005 totaled $10.8-million, with Denmark accounting for more than half of this amount.
Figure A
Top Ten Recipients of Small Arms, as reported by DFAIT, 2003-2005
Greece Switzerland Spain Other Nicaragua Italy Norway
Netherlands Denmark Australia United Kingdom
The total ECL 2-1 figure in the Report is less than a quarter of total non-US small arms exports reported by Statistics Canada.100 When the US is included, DFAIT reports a mere 5 per cent of Canada’s small arms exports. According to Statistics Canada, the US accounts for almost 80 per cent
70 On the Record of Canada’s export of small arms. There are an additional 36 countries to which Canada exported small arms that are not attributed ECL 2-1 values in the Report. Eighteen of these states are not listed in the Report at all.101 Among individual countries, the average difference in reported values between the two sources is $2.6-million; differences go as high as $13.3 million in the case of Denmark. The table below compares the reported value in the Report to Statistics Canada data for selected countries, and shows the difference between the reported figures.
Table A: Comparison of Canadian Small Arms Exports to Selected Countries, as reported by DFAIT and Statistics Canada, 2003–2005 Recipient Country DFAIT Total Statistics Canada Difference Total Australia $569,905 $2,366,505 $1,796,600 Belgium $66,624 $1,551,268 $1,484,644 Botswana $209,507 $209,507 Brazil $64,415 $64,415 Denmark $6,289,464 $19,627,389 $13,337,925 Germany $46,202 $1,943,936 $1,897,734 Haiti $121,148 $121,148 Iran $45,613 $45,613 Jamaica $357,655 $357,655 Kazakhstan $66,432 $66,432 Singapore $236,999 $236,999 South Africa $9,967 $1,541,117 $1,531,150 United Kingdom $744,886 $8,349,952 $7,605,066 United States $172,560,114 $172,560,114 Venezuela $219,079 $219,079 Total (all countries) $10,762,522 $217,592,459 $206,829,937 Non-US Total $10,762,522 $45,032,345 $34,269,823
The DFAIT Report is careful to note that when small arms are transferred to private end-users, steps are taken to ensure items are not diverted into the illegal arms trade or used to fuel local violence. As part of this process, the bona fides of the end-users are thoroughly investigated. Canadian diplomatic missions and other sources may provide information about destination countries’ firearms control laws, procedures and enforcement practices. The StatsCan data shows that in 2005 Canada shipped significant volumes of small arms to several countries where DFAIT reported no or smaller volumes of SALW shipments. These countries include Haiti, a country engaged in armed conflict where diversion of small arms into illegal channels is an ongoing problem. According to the United Nations, ammunition for small arms and light weapons should be a subcategory within the SALW definition. To adhere to the UN standard, the DFAIT Report should group the export data for the appropriate calibre ammunition. In the discussion which follows, we analyze the data for ammunition exports as it was published in the Report, that is, ammunition for weapons of all calibres grouped into the single ECL 2-3 category.
On the Record 71 Ammunition (ECL 2-3) Reported Canadian ammunition exports from Canada from 2003 to 2005 totaled $74.5 million, with Australia, UK and France accounting for nearly two thirds of the total.
Figure B
Top Ten Recipients of Ammunition Exports, as reported by DFAIT, 2003-2005
Thailand Other Switzerland New Zealand
Oman Australia Ireland
Netherlands Belgium France United Kingdom
The total value for ECL 2-3 exports, however, accounts for only 66 per cent of the total non-US ammunition exports reported by Statistics Canada.102 Factoring in exports to the US, which account for over three-quarters of the Statistics Canada total, DFAIT reports only 16 per cent of Canada’s ammunition exports. As with small arms shipments, there is a significant difference between the number of ammunition recipient countries reported by DFAIT and by Statistics Canada, with 56 fewer in the Report in this case—indeed, 25 of these countries do not occur in the Report under any category.103 The average difference in reported values for individual countries is $4.8-million, with the largest difference being $9.7-million for the UK. Table B compares the reported value in the Report to Statistics Canada data, and shows the difference between the reported figures.
Table B: Comparison of Canadian Ammunition Exports to Selected Countries, as reported by DFAIT and Statistics Canada, 2003–2005 Recipient Country DFAIT Total Statistics Canada Total Difference Algeria $124,370 $124,370 Bangladesh $90,253 $90,253 Belgium $6,274,833 $9,478,550 $3,203,717 France $8,699,548 $16,496,047 $7,796,499 Germany $280 $1,942,592 $1,942,312 Greece $356,891 $356,891 Haiti $25,696 $25,696 Italy $915,461 $915,461 Kazakhstan $271,267 $271,267 Luxembourg $985,850 $985,850 Netherlands $4,017,942 $8,801,213 $4,783,271 New Zealand $3,147,084 $8,066,915 $4,919,831 Sri Lanka $114,830 $114,830 United Kingdom $13,496,820 $23,163,835 $9,667,015 United States $361,745,273 $361,745,273 Total (all countries) $35,636,507 $432,579,043 $396,942,536 Non-US Total $35,636,507 $70,833,770 $35,197,263
72 On the Record Recipients of significant volumes of Canadian ammunition between 2003 and 2005, according to DFAIT, included two countries affected by armed conflict, Thailand and Israel. In addition, these states, as well as Brazil and Egypt, were led by governments with records of abusing the human rights of their citizens. The following chart details ammunition shipments to the four countries as reported by DFAIT for 2003–2005.
Table C: Reported Exports of Ammunition to Countries of Concern, 2003-2005 Recipient Country 2003 2004 2005 Total Armed Serious Human Conflict Rights Violations Brazil $224,000 $0 $0 $224,000 Threat X Egypt $0 $238,000 $0 $238,000 X Israel $35,875 $0 $242,753 $278,628 X X Thailand $0 $1,507,870 $0 $1,507,870 X104 X
As with small arms exports, other countries, including Algeria, Sri Lanka, and Kazakhstan, would be added to Table C if the significant shipments of ammunition reported by Statistics Canada were included.
On the Record 73 Appendix 4 Acronyms and Abbreviations
ACL Area Control List AFCCL Automatic Firearms Country Control List ATT Arms Trade Treaty CCC Canadian Commercial Corporation CICAD Inter-American Drug Abuse Control Commission CRS Congressional Research Service (US) DDPSA Defence Development and Production Sharing Arrangements DFAIT Department of Foreign Affairs and International Trade DND Department of National Defence ECL Export Control List EIPA Export and Import Permits Act EU Code European Union Code of Conduct on Arms Exports GDLS General Dynamics Land Systems HDI Human Development Index LAV Light armoured vehicle NATO North Atlantic Treaty Organization OAS Organization of American States ODA Official development assistance OSCE Organization for Security and Co-operation in Europe PoA UN Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects PWC Pratt and Whitney Canada SALW Small arms and light weapons SANG Saudi Arabian National Guard SIPRI Stockholm International Peace Research Institute StatsCan Statistics Canada UNIRME UN Instrument for Reporting Military Expenditures UNROCA UN Register of Conventional Arms WMD Weapons of mass destruction
74 On the Record Notes
1 During the last three decades there have been at least four significant advances in Canadian arms export policy that may be attributed, at least in part, to Project Ploughshares advocacy: a shift by the Canadian government from skepticism to support for the UN Register of Conventional Arms in advance of its adoption by the General Assembly in 1991; the decision to increase Canadian arms export transparency by publishing a public annual report beginning in 1991; stricter interpretation of export controls under instruction from then Foreign Minister Lloyd Axworthy in 1996; and support for an international arms trade treaty including, especially, stricter controls on small arms transfers. 2 See www.epa.gov/evaluate/glossary/a-esd.htm. 3 See Project Ploughshares’ Armed Conflict Report 2007 available at http://www.ploughshares.ca/libraries/ACRText/ACR-TitlePageRev.htm. 4 See “Canada ranked 6th largest weapons exporter in 2004,” Ploughshares Monitor, Autumn 2005 available at http://www.ploughshares.ca/libraries/monitor/mons05c.htm. 5Grimmett, Richard F., “Conventional Arms Transfers to Developing Nations, 1998-2005,” CRS Report for Congress, October 23, 2006, Table 9C., p. CRS-87. 6 SIPRI Yearbook 2006: Armaments, Disarmament and International Security, Oxford University Press, Oxford, 2006, Table 10.A.2., p. 481. 7 Both sources likely underestimate Canadian arms deliveries during their respective periods by omitting transfers to the US, notably armoured vehicle shipments. Although including such shipments would likely move Canada up the rankings, Canada would remain within the second “tier” of suppliers. 8 Report on the Export of Military Goods from Canada, 2003-2005, Foreign Affairs and International Trade Canada, p. 2. Available at www.exportcontrols.gc.ca. 9 Ibid., p. 5. 10 Annual Report on the Export of Military Goods from Canada, 1996, Department of Foreign Affairs and International Trade, p. 1. 11 The CCC estimates that more than 60 per cent of all contracts it brokers are with military agencies, primarily the US Pentagon. Under the terms of special defence trade arrangements between Canada and the US, all Pentagon contracts with Canadian companies exceeding a value of $100,000 must be administered by the CCC. 12 Items on the ECL do not require an export permit if destined for the US; see “Military Exports to the United States,” below. 13 http://www.dfait-maeci.gc.ca/trade/eicb/military/documents/exportcontrols2006-en.pdf. 14 For more on the AFCCL see http://www.ploughshares.ca/libraries/monitor/monj08h.pdf. 15 In 2008 the Canadian Cabinet expanded the AFCCL from 20 countries to include an additional 11 NATO countries: Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Lithuania, Luxembourg, Romania, Slovakia, Slovenia and Turkey (http://canadagazette.gc.ca/partI/2008/20080419/html/regle2-e.html). 16 See “Answers to Questions about Canada’s Export Controls on Military Goods” available at http://www.dfait- maeci.gc.ca/trade/eicb/military/documents/20qa-eng.pdf. 17 This has not prevented Canadian equipment from being transferred to Pakistan forces in recent years. See Figure 21. 18 Report, p. 3. 19 http://disarmament.un.org/cab/register.html. 20 See “Canadian Submission on the Arms Trade Treaty,” April 2007, available at http://disarmament.un.org/UNODA_Web_Docs/CAB/ATT/Canada.pdf. 21 Report, p. 4. 22 http://www.dfait-maeci.gc.ca/eicb/military/faq-en.asp. 23 For a discussion of the major mechanisms for cooperation between Canada and the US in defence matters, see DND, “Canada - United States Defence Relations” (http://www.dnd.ca/site/Reports/budget01/Canada-US_b_e.asp). 24 http://www.dfait-maeci.gc.ca/trade/sanctions-en.asp. 25 See the DoD website for Foreign Military Sales Reports, http://www.dsca.osd.mil/publications.htm, and the State Department website for Annual Military Assistance Reports, http://pmddtc.state.gov/rpt655intro.htm. 26 The annual estimates are based on projections from Pentagon contract values obtained from the Canadian Commercial Corporation. Using the CCC values to approximate the values of US prime contracts, subcontract estimates are calculated from a formula derived from the earlier period when prime contract and subcontract totals were reported. 27 It is necessary to distinguish between the “current dollar” and “constant dollar” values in the tables and analysis which follows. When the discussion is limited to the 2003–2005 period, current dollar figures as given in the Report are used, that is, values which are not adjusted for inflation. When longer periods are discussed, the values are adjusted for inflation for better comparative purposes and expressed in 2005 constant dollars.
On the Record 75
28 Data on total Canadian exports by country, including those to the US, were obtained by Project Ploughshares through the Access to Information process for the years 1978–1990, after which they were released in the periodic reports of the Export Control Division of DFAIT, excluding US figures. 29 In this report, Latin America includes South America, Central America, and Mexico. Thus, the regional calculations in this section exclude Greenland and St. Pierre & Miquelon from total figures. Total exports to Greenland between 2003 and 2005 were $112,365, while none were reported to St. Pierre & Miquelon. Total exports to both destinations since 1978 have been statistically insignificant at $1,020,912, or 0.007 per cent. 30 This includes countries with a Human Development Index greater than 0.9, according to the 2007 UN HDI; this represents the 28 most developed countries, plus Taiwan, which is not officially ranked but is listed as a country in Canada’s Report. 31 This contract was cited by International Trade Minister Michael Wilson before a meeting of the Canadian Senate Committee on Foreign Affairs preceding final approval of the Bill to create the AFCCL in 1991. It was offered as a reason to support the Bill’s passage. The other company mentioned was Diemaco in Kitchener, now Colt Canada, which was seeking a contract for automatic weapons with the Netherlands at the time (Senate of Canada 1991, 2:8). See “The Automatic Firearms Country Control List and Canada’s firearms exports” in the Spring 2006 edition of the Ploughshares Monitor (http://www.ploughshares.ca/libraries/monitor/monm06c.pdf). 32 http://www.ploughshares.ca/libraries/monitor/monm06c.pdf. 33 This can be determined because the 2003–2005 Report was the first since the 1991 Report to list sales of small arms or large-calibre weapons to Saudi Arabia (apart from $2,510 in “firearms” in 1996), despite the shipping during this period of ground vehicles, equipped with machine guns and mortars, worth hundreds of millions of dollars. Thus, at least in the case of ground vehicles to Saudi Arabia, entire weapons systems were previously combined under one applicable category. 34 See Appendix 1 for a list of ECL category descriptions as given in the Report. 35 This does not prevent speculation that some countries, such as Iran currently, would be on the list. 36 The Alert 2005 Report, based on information mainly from the 2004 calendar year, is used because it employs indicators for the middle year of the 2003–2005 period, which are unlikely to change drastically from the previous year or in the following year; also, some of the indicators used in the report change from year to year, making comparison over the three-year period for all indicators extremely difficult. 37 The following are the dates when the UN sanctions entered into force and when they ended, if applicable, as of April 21, 2008: Angola (September 15, 1993 – June 12, 2003), Côte d’Ivoire (May 3, 2005–), Democratic Republic of Congo (October 19, 2004 –), Eritrea and Ethiopia (May 17, 2000 – April 10, 2003), Iraq (August 6, 1990–), Liberia (June 17, 2004–), Rwanda (August 30, 1994–), Sierra Leone (July 28, 1998–), Sudan (September 23, 2004 –), the Federal Republic of Yugoslavia (November 22, 1995 – February 10, 2004), and several terrorist organizations (October 2, 2001–) (http://www.dfait-maeci.gc.ca/trade/sanctions-en.asp). 38 http://www.dfait-maeci.gc.ca/trade/iraq-en.asp. 39 http://canadagazette.gc.ca/partII/2004/20041103/html/sor221-e.html. 40 http://www.international.gc.ca/trade/sierra_leone-en.asp. 41 However, Pakistan did receive unreported goods for military use (see Figure 21). 42In 1989 when the Berlin Wall fell, Canada’s proscribed list was made up of the “Area Control List” of countries to which military exports were prohibited (and all other exports required authorization) and the list of countries proscribed by the Coordination Committee on Multilateral Export Controls (CoCom), of which Canada was a member. Libya and South Africa were the two countries on the ACL and the CoCom list consisted of Albania, German Democratic Republic, Bulgaria, People’s Republic of China, Democratic People’s Republic of Korea, Hungary, People’s Republic of Mongolia, Poland, Romania, Czechoslovakia, USSR, and Socialist Republic of Vietnam. See “Canadian Export Controls: An Exporter’s Guide,” Canadian Exporters’ Association, 1989. 43 The department had submitted export data, albeit much less comprehensive, to the UN Register of Conventional Arms on June 26, 2007 (http://disarmament.un.org/UN_REGISTER.nsf). 44 These improvements had been made by then Minister of Foreign Affairs Lloyd Axworthy following “requests from industry, non-governmental organizations and international security experts,” including Project Ploughshares. 45 Adopted in 1999, the Convention came into force in 2002 following the sixth member state ratification. (Canada ratified the treaty in 1999.) According to Article III of the Convention, “States Parties shall report annually to the depositary on their imports and exports of conventional weapons during the preceding calendar year, providing information, with respect to imports, on the exporting State, and the quantity and type of conventional weapons imported; and information, with respect to exports, on the importing State, and the quantity and type of conventional weapons exported. Any State Party may supplement its submission with any additional information it considers relevant,
76 On the Record such as the designation and model of the conventional weapons.” The reporting deadline for data on the previous year is June 15. 46 The situation is made more complex and less transparent by the double-counting process. For example, light weapons shipped to Saudi Arabia in 2004 are noted in the Report, but they are valued at close to the full value of the armoured vehicles to which they were attached. Consequently, this data is little improvement on the earlier practice of not reporting any data on light weapons attached to armoured vehicles transferred to the Saudi Arabia National Guard. 47 Answers to Questions about Canada’s Export Controls on Military Goods. 48 The government notes that “individual export applications are not subject to public review” due to “confidential product and trade information” that companies submit in their applications and to “highly classified intelligence information” that is included in assessments (Answers to Questions about Canada’s Export Controls on Military Goods, http://www.dfait-maeci.gc.ca/trade/eicb/military/documents/20qa-eng.pdf). It would be possible to arrange for such a public review, with the formal involvement of experts and civil society, without compromising confidentiality or classified information. Regardless, publicly disclosing details on export licensing decisions after the fact in the Report (e.g., quantity and value disaggregated by commodity type for each country) should not trigger such concerns. 49 The approval of export permits for the transfer was confirmed in 2007 by the Canadian government (e-mail communication from the Foreign Minister’s office on October 19, 2007). 50 Ottawa Citizen, October 18, 2007. 51 “The United Nations Commodity Trade Statistics Database (UN Comtrade) contains detailed imports and exports statistics reported by statistical authorities of close to 200 countries or areas” (http://comtrade.un.org/db/help/uReadMeFirst.aspx). 52 http://www.smallarmssurvey.org/files/sas/publications/yearb2007.html. 53 These 31 countries are listed by both SIPRI and the Small Arms Survey, which link to the available national reports; see http://www.sipri.org/contents/armstrad/atlinks_gov.html and http://www.smallarmssurvey.org/files/portal/issueareas/transfers/transam.html, respectively. The most recent reports (as of March 2008) were reviewed. 54 http://strategis.ic.gc.ca/sc_mrkti/tdst/tdo/tdo.php. 55 Commodity code 8710. 56 http://disarmament.un.org/UN_REGISTER.nsf. 57 PP Database. 58 DFAIT reported only $8-million for 2001 and 2005 combined; Statistics Canada reported $7 million. 59 The proportion of export values for 2003–2004 is about 5:1, while the proportion for number of vehicles is about 8:1. 60 http://www.armedforces-int.com/categories/light-armoured-vehicles/infantry-mobility-vehicle-imv-program.asp. 61 Neither DFAIT nor Statistics Canada reported significant LAV exports in 2001 or 2002. 62 CCC actually brokers contracts with the US Pentagon, which in turn provides the LAVs to Saudi Arabia through its Foreign Military Sales program; prior to 2002, it was possible to conclude that the value of all GDLSC exports to the US through the CCC could be attributed to Saudi Arabia shipments. When the Stryker program began, it was no longer possible to distinguish between products destined for Saudi Arabia and the US. Thus, the value of CCC contracts with Saudi Arabia for 2002 and beyond cannot be determined. 63 http://www.armedforces-int.com/categories/light-armoured-vehicles/general-dynamics-land-systems-supply-saudi- arabian-national-guard.asp. 64 In addition to the sales mentioned, in July 2006 the Pentagon announced its intention to sell 724 LAVs made by GDLSC to SANG. Although it also included related equipment, the vast majority of the $5.8-billion deal was comprised of LAVs (Jane’s Defence Weekly, July 26, 2006). No further information, including the extent of LAV production at GDLSC, is available on the deal. 65 No information on the number of imports received in Saudi Arabia is available because it doesn’t report to the UNROCA. 66 Initially 2,131 vehicles; this large order was a part of the army’s intention to “transform into a more strategically responsive force that could more rapidly deploy and effectively operate in all types of military operations, whether small- scale contingencies or major theater wars.” The Stryker was the first new military vehicle to be used by the US Army since the 1980s (http://www.army-technology.com/projects/stryker/) and several years ago was “the Army’s highest priority production combat vehicle program” (http://www.armedforces-int.com/categories/combat-vehicles/stryker- 2.asp). 67 http://www.armedforces-int.com/categories/combat-vehicles/stryker-2.asp. 68 PP Database. 69 See “Compilation of Global Principles for Arms Transfers,” the Arms Trade Treaty Steering Committee, revised and updated 2007, available at http://www.amnesty.org/en/library/info/POL34/003/2007.
On the Record 77
70 United Nations General Assembly document A/62/163, 27 July 2007, “Report of the Group of Governmental Experts established pursuant to General Assembly resolution 60/81 to consider further steps to enhance international cooperation in preventing, combating and eradicating illicit brokering in small arms and light weapons.” 71 “Court rejects Schreiber’s Appeal of Extradition,” Canadian Press, March 2, 2006. 72 Note that the indicators used in this section from the Alert 2005 Report represent stricter criteria, and countries must meet more extreme standards to be included in a category; for example, instead of including all countries with “military spending in excess of 4% of GDP,” which would indicate a high level of militarization, 6% is used, which indicates an excessively high level of militarization. Such an extreme standard also applies to the development indicators. See the Alert 2005 publication online for more details (http://www.escolapau.org/english/alerta/alerta.php). 73 http://hdr.undp.org/en/statistics/indices/hdi/question,68,en.html. 74 “The Gini Coefficient measures the level of inequality between income or consumption in an individual country. The value 0 represents perfect equality and 100 total inequality” (http://www.escolapau.org/english/alerta/alerta.php). 75 http://www.escolapau.org/english/alerta/alerta.php (Alert 2005 on left column). 76 http://www.transparency.org/policy_research/surveys_indices/cpi/2005. 77 The 2005 Corruption Perceptions Index is used because it includes more countries than the index for either 2003 or 2004, and because the Index uses the previous three years’ data. Thus, it covers the same period as the Report. The Index measures perceived, as opposed to actual, corruption because the very nature of actual corruption prevents an accurate measurement or comparison. Note that the index only includes 159 of the over 200 sovereign nations in the world in 2005; countries with insufficient valid and reputable sources on perceived corruption are not included. However, many countries not included may very well be perceived as corrupt. See the Index for more details (http://www.transparency.org/policy_research/surveys_indices/cpi/2005). 78 http://www.ploughshares.ca/libraries/monitor/monj01b.html. 79 All monetary figures in this section, except for part three (the tables detailing the military exports to each country for the 2003-2005 period), are adjusted for inflation. 80 Sources: Report on Export of Military Goods from Canada (2003–2005) and State Department Country Reports on Human Rights Practices; all information is for the 2003–2005 period, except population, which is for 2004. 81 Sources: Report on Export of Military Goods from Canada (2003–2005), Project Ploughshares’ Canadian Military Industry Database. 82 http://www.un.org/apps/news/story.asp?NewsID=16871&Cr=Colombia&Cr1. 83 http://www.state.gov/g/drl/rls/hrrpt/2005/61721.htm. 84 “Colombia’s cross-border strike on FARC irks neighbors,” The Christian Science Monitor, March 3, 2008 (http://www.csmonitor.com/2008/0303/p04s02-woam.html). 85 http://www.state.gov/g/drl/rls/hrrpt/2005/61698.htm. 86 http://www.international.gc.ca/eicb/military/destinations-en.asp. 87 The ban was imposed due to the 1998 nuclear weapon tests and 1999 military coup. The US had also previously held a ban on weapon exports to Pakistan; however, the ban was lifted when Pakistan became an ally in the “war on terror.” 88 http://usembassy.state.gov/pakistan/h07102201.html. 89 http://www.pwc.ca/en/3_0/3_0_4/3_0_4_1.asp. 90 http://www.defenseindustrydaily.com/swiss-kerfuffle-over-chads-use-of-pilatus-aircraft-04655/. 91 “Compilation of Global Principles for Arms Transfers,” Arms Trade Treaty Steering Committee, revised and updated 2007 (http://www.controlarms.org/documents/2007/Compilation%20of%20Global%20Principles%20for%20Arms%20Tra nsfers_2007.pdf). 92 See Guns or Growth? Assessing the impact of arms sales on sustainable development, Control Arms Campaign, June 2004, pp. 36- 45. In appendices to the report there is a proposed methodology for supplier governments to assess the impact of arms transfers on sustainable development. 93 “Inter-American Drug Abuse Control Commission (CICAD) Amendments to the Model Regulation for the Control of the International movement of Firearms, their Parts and Components and Ammunition, proposed by the Group of Experts – Broker Regulations,” CICAD/doc1271/03, 13 November 2003. 94 This is not a call to regulate all civilian goods shipped for military end-use. A practical approach is necessary to ensure that all relevant equipment is regulated. The point is not to authorize every “nut and bolt” but to control the major civilian equipment such as aircraft and vehicles and major subsystems such as fuselages and engines, which provide significant operational capacity to military forces. 95 In addition to domestic manufacture, some Canadian-based companies have agreed to foreign production of military goods under licensed arrangements. Licensed production is a commercial agreement that enables a foreign company or government to manufacture, in whole or in part, a Canadian-designed product. The terms typically provide for financial
78 On the Record compensation to the Canadian host company, as well as for some oversight functions by the company such as quality control. The foreign company or government meanwhile usually benefits from the transfer of technology or technical expertise in addition to any domestic and export sales of the licensed product. As the military industry follows globalization trends, including the pursuit of cheaper offshore production of military goods formerly manufactured within the main supplier nations, and as government recipients of military equipment continue to demand industrial benefits packages to “offset” the costs of procurement, licensed production is becoming a common component of the global manufacture of weapons. The extent to which Canada regulates foreign licensed production of Canadian military goods remains unclear. The terms “licensed production” or “licensed agreement” are not found in reports on Canadian military exports. Export permits are required for “equipment and technology for the production of ECL Group 2 [military] products” and these comprise Group 2-18 of the Export Control List. Canadian export control officials have confirmed that export permits are required for blueprints, software, and other information products that would be required to produce military equipment. Yet officials also have reported that transfers of personnel and expertise are not covered by Canadian export controls, even though these may be the sole transfers needed for a foreign company to begin production of Canadian military goods. The opacity of the situation was revealed in 1996 when Defense News reported that Venga Aerospace Systems Inc. of Quebec was working with China Zhonghuan Corp. in Beijing to establish a Chinese production facility for the composite Brushfire jet trainer aircraft. Venga’s president was quoted as saying that the deal did not require an export permit. This was confirmed at the time by a Foreign Affairs spokesperson, who stated that transfer of technology was not governed by export controls. If this report is accurate, then the Canadian government does not fully regulate the foreign licensing and manufacture of Canadian-designed military equipment even in countries like China where there are well-founded concerns about human rights violations. Under such circumstances, the government has no influence over the end-destination of Canadian-designed military equipment, and goods may be transferred to destinations precluded by Canadian controls from direct shipment from Canada. Indeed, in the past China has exported aircraft similar to the Brushfire to Myanmar (Burma), one of two countries on Canada’s “Area Control List,” which prohibits the export of all Canadian military goods (while all other goods require export permits). Similarly, Defense News (October 11, 2004) reported that Jordan Aerospace Industries (JAI) had won a (US) $12- million export contract to supply the new Iraqi Air Force with 16 Sama CH2000 surveillance aircraft. According to the periodical, “JAI manufactures the Sama CH2000 in partnership with plane’s designer, Zenair Ltd, Midland, Ontario.” It is not apparent whether Canadian export approval was required for Zenair Ltd. to participate in this contract. The need to clarify and implement Canadian regulation of the licensed production of military goods is reinforced by obligations arising from international law and multilateral agreements. In recent arms embargoes agreed by the UN Security Council, prohibited items included the provision of “technical assistance” and “technical data,” requiring Canada to put in place sufficient controls to regulate (and prevent) such transfers to countries and groups subject to embargo. Additionally, the OSCE “Document on Small Arms and Light Weapons,” to which Canada is a party, establishes “criteria to govern exports of small arms and technology related to their design, production, testing and upgrading.” It declares inter alia that “participating states will make every effort within their competence to ensure that licensing agreements for small arms production concluded with manufacturers located outside their territory will contain, where appropriate, a clause applying the above criteria to any exports of small arms manufactured under license in that agreement.” A clause in a licensing agreement requiring adherence to certain export standards could apply equally well to the licensed production of all conventional military goods. 96 See Small Arms Survey 2007, Cambridge University Press, Table 3.3, pp. 88-89. 97 See http://www.cbc.ca/news/background/arming-the-world. 98 See “Canada hosts international meeting on small arms transfer principles,” Ploughshares Monitor, Winter 2007 (http://www.ploughshares.ca/libraries/monitor/mond07f.pdf). 99 “Canadian Submission on the Arms Trade Treaty (Resolution 61/89)” (http://disarmament.un.org/UNODA_Web_Docs/CAB/ATT/Canada.pdf). 100 The following Statistics Canada product categories are used for small arms (these correspond to the NISAT definition for small arms, with the addition of the "Parts and Accessories" category): HS 9301 - Military Weapons (Other than Swords, Bayonets and the Like) HS 9302 - Revolvers and Pistols (Excluding Shotguns and Rifles) HS 9303 - Rifles, Shotguns, Pistols and Muzzle-Loading Firearms HS 9304 - Other Firearms (Including Spring/Air/Gas Guns) HS 9305 - Parts and Accessories of Revolvers, Pistols, Shotguns and Rifles 101 Six countries are reported by DFAIT but not Statistics Canada as receiving small arms for 2003–2005. 102 The following Statistics Canada product categories are used for ammunition:
On the Record 79
HS 930630 - Cartridges, NES and Parts Thereof HS 930690 - Other Ammunition NES (Including Bombs, Grenades, Torpedoes, Mines etc) (the category for shotgun cartridges is not included). 103 One country is reported by DFAIT but not by Statistics Canada as receiving ammunition for 2003–2005. 104 There was an armed conflict in Thailand in 2005 and the threat of hostilities in 2003 and 2004.
80 On the Record
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