Rolls-Royce Holdings Plc

▶ MTU Rolls-Royce series 4000 engine for power generation, marine, oil and gas, and rail and mining applications. In mining, these engines power vehicles like haul trucks, wheel loaders and excavators. © Facing Finance rolls-royce Holdings plc olls-Royce ‘designs, develops, manufac- MTU diesel engines produced in Friedrichs- Estimated value of tures and services integrated power hafen (Germany) have been delivered to the Navy underwritten bonds: 1 BNP Paribas 297.92 Rsystems for use on air, land and at sea.’ in India, Pakistan and China and Taiwan, all of HSBC 297.92 They are the second largest provider of defence which are conflict regions. Diesel engines for aero engines and services in the world, headquar- military armored vehicles (Leopard 1 & 2, LECLERC Estimated value of tered in the UK, with operations in over 50 Arjun, Merkava-4) are manufactured or supplied managed shares and bonds: BlackRock 727.97 countries. Rolls-Royce is the 16th largest arms by MTU Friedrichshafen and are used widely 6 State Street Global Advisors 491.92 producer and military service company on the including conflict zones. Deutsche Bank 182.03 SIPRI top 100 arms producers list, with 23% of Rolls-Royce’s defence portfolio includes BNP Paribas 120.57 their business coming from this sector.2 Through “engines for combat jets, helicopters, transporters, HSBC 68.84 its production of power systems Rolls-Royce trainers, tactical aircrafts, and unmanned aerial Revenues: 17,550.62 supports offshore drilling as well as the defence vehicles. It also provides marine propulsion industry. systems consisting of automation and control Profit after tax: 74.11 Rolls-Royce Holdings Plc operates a number of systems, electrical power systems, diesel ISIN: GB0007477614 companies, including Rolls-Royce Power Systems engines, gas turbines, gas engines, propulsions, All figures in € mln. AG, which has a wide-ranging product portfolio ship lifts, stabilization and manoeuvring systems, 7 Date and currency of company report: including MTU Friedrichshafen, L’Orange and and submarine equipment.” 31.12.2014, GBP (exchange rate as of 31.12.2014, 3 4 Bergen Engines. MTU America Inc is a subsidiary The company works within a number of www.oanda.com) of Rolls-Royce Power Systems AG as are the new consortiums to produce engines for defence operations launched in February this year, within aircraft (both jets and helicopters) including the MTU Middle East.5 Through MTU, Rolls-Royce EJ200 which is used for the Eurofighter Typhoon Power Systems produce engines for military and aircraft8 and the Adour, used on the BAE Systems marine defence. Hawk jet.9 The RB199 powers the Tornado jets10 1 Rolls-Royce (2015): About. www.rolls-royce.com (Accessed 18.12.2015) 6 Grässlin, J (2012): MTU der unterschätzte Rüstungsriese, 9 April. 2 SIPRI (2015): The SIPRI top arms producing and military service www.friedenskooperative.de (Accessed 18.12.2015) companies 2014. December 2015. www.sipri.org (Accessed 18.12.2015) 7 Defence Industry Reports (2015): Rolls-Royce Defence Aerospace. 3 Rolls-Royce (2015): Press Release: Rolls-Royce and Daimler agree on www.defenceindustryreports.com (Accessed 18.12.2015) valuation of Daimler’s equity interest in Rolls-Royce Power Systems. 16 April 2014. www.rolls-royce.com (Accessed 18.12.2015) 8 Rolls-Royce (2015): EJ200. www.rolls-royce.com (Accessed 18.12.2015) 4 Rolls-Royce (2014): Rolls-Royce Power Systems Corporate Brochure, 9 Rolls-Royce (2015): Products Combat Jets Adour. August. www.rolls-royce.com (Accessed 18.12.2015) www.rolls-royce.com (Accessed 18.12.2015) 5 Rolls-Royce (2015): Press Release: MTU Middle East; 11 February. 10 Royal Air Force (2015): Products Combat Jets Tornado GR4. www.rolls-royce.com (Accessed 18.12.2015) www.raf.mod.uk (Accessed 18.12.2015) “High ethical standards and behaviours, supported by good governance, are fundamental to our continued success. We have a strong focus on ethics that helps ensure we win right every time.” 22 38 | FACING FINANCE | Dirty Profits | 2016 Rolls-Royce Ethics Statement used by the UK, Germany and other European In relation to offshore mining, Rolls-Royce has nations. Typhoon and Tornado jets have been recently been contracted to provide diesel sold to countries such as Saudi Arabia and generators for the ships undertaking the Solwara Bahrain by their respective manufacturers, 1 Deep Sea Mining Project.19 The Solwara 1 project despite serious human rights concerns in these by Nautilus Minerals has been criticised by countries.11 The Rolls-Royce Liftsystem® is used numerous NGOs as the environmental impact predominantly on the F35B lightning II jets made assessment is insufficient and free, prior and by Lockheed Martin.12 Rolls-Royce is currently informed consent has not been gained from the embarking on a €3.5 million project financed by communities in Papua New Guinea. This final fron- the EU to develop autonomous cargo ships.13 tier in mining has the potential of causing severe In addition to this Rolls-Royce provide the environmental damage and has already caused nuclear propulsion system for the UK Navy social upheaval in the surrounding communities submarines14, which are used on the Vanguard (see the article on Anglo American in this report). class submarines armed with trident nuclear MTU America Inc., a subsidiary of Rolls-Royce ballistic missiles.15 Rolls-Royce also provide Power Systems, has been fined approx. €1 million infrastructure and servicing for nuclear power by the US Environmental Protection Agency for plants.16 producing and selling engines without the correct The Rolls-Royce group currently stands environmental certification. This allowed accused of having been involved in a multi-million heavy-duty engines (used in mining, marine and pound corruption and bribery case in relation to power generation) to be sold which emitted the state oil company in Brazil, Petrobras. carbon monoxide, hydrocarbons and nitrogen Rolls-Royce has been accused of paying bribes to dioxides. These chemicals are damaging to the secure business for their gas turbines for power lungs and can cause respiratory illness.20 generation on offshore oilrigs.17 The UK Serious All in all, since 1995, 6 instances of misconduct Fraud Office has also brought allegations against have been documented by the US Government Rolls-Royce for bribery and corruption in China resulting in $1.9M penalties.21 and Indonesia.18 → Facing Finance 11 Norton Taylor, R (2015): Saudi Arabia and Bahrain: UK arms sales trump human rights. The Guardian, 15 January. www.theguardian.com (Accessed 18.12.2015) 12 F35 Lightning II (2015): Lockheed Martin: About the F35; The multivariant, multirole 5th generation fighter. www.f35.com (Accessed 30.09.2015) 13 Wakefield, J (2014): Rolls-Royce imagines a future of unmanned ships, BBC News. 2 March. www.bbc.com (Accessed 30.09.2015) 19 Rolls-Royce (2015): Rolls-Royce to deliver multiple B33:45 gensets to 14 Rolls-Royce (2015): Submarines. www.rolls-royce.com world’s first seabed mining ship. www.rolls-royce.com (Accessed (Accessed 30.09.2015) 30.09.2015) 15 Don’t Bank on the Bomb (2013): Rolls-Royce. 20 Wheeler, L (2015): Rolls-Royce engine company will pay 1.2 million for “A Petrobas official told www.dontbankonthebomb.com (Accessed 30.09.2015) violating the Clean Air Act. The Hill. 24 March. www.thehill.com Brazilian police he received a 16 Rolls-Royce (2015): Nuclear Services. www.rolls-royce.com (Accessed 30.09.2015) $200,000 bribe from Rolls- Royce.”23 (Accessed 30.09.2015) 21 Federal Contractor Misconduct Database (2015): Rolls-Royce. 17 Sunderland, R (2015): Rolls-Royce accused in alleged multi-million pound www.contractormisconduct.org (Accessed 18.12.2015) Financial Times bribery scandal with Brazilian oil company Petrobras. This is Money. 22 Rolls-Royce (2015): Sustainability: Ethics. www.rolls-royce.com 16 February 2015. www.thisismoney.co.uk (Accessed 30.09.2015) (Accessed 18.12.2015) 18 Reuters (2014): Rolls-Royce bolsters ethics policy in face of corruption 23 House, R (2015): Petrobas scandal runs Rolls-Royce through “Car Wash”, probe, 5 March. www.reuters.com (Accessed 11.11.2015) 29 October, Financial Times. www.ft.com (Accesssed 18.12.2015) FACING FINANCE | Dirty Profits | 2016 | 39.

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