Corruption in the Arms Trade

Feb 9, 2018

The Turnbull government is very excited about turning Australia into one of the world’s ten biggest arms traders. The announcement was prompted as much as anything else by President Trump’s announcement of a $US716 billion rise in the United States military budget, with prospects of Australia gaining a significant share in this gigantic spend. Of course the government claims Australian arms sales are selective, never offending Australian foreign policy or humanitarian priorities. But foreign weapons  companies which inevitably control the trade, have a record of corruption and indiscriminate selling.

Research over several years by Andrew Feinstein, Paul Holden and Barnaby Pace – two South Africans and a British specialist in arms trading – shows how empty Australian assurances are. See Feinstein’s publication Shadow World, and thanks to Michelle Fahy of Australians for War Power Reforms for finding this.

Some of the worst offenders have deep Australian connections, their names greeting travellers In bold advertisements at Canberra Airport. They include BAE, Boeing, Lockheed Martin, Northrop Grumman and Raytheon. All have Australian subsidiaries  and extensive tie-ups with medium and small scale Australian companies, some are major financial benefactors of Australian universities, all emphasise their good corporate citizenship and the large number of jobs they have created in Australia. Their Australian websites are full of advertisements for Australian jobs.  Butter wouldn’t melt in their collective mouths.

But here are some facts about their less savoury sides.

According to research unearthed by Feinstein, Holden and Pace, BAE was fined $400 million in March 2010 by the US Department of Justice for bribing Czech and Saudi Arabian officials to favour BAE tenders. BAE has also been accused of secretly paying one billion pounds sterling to Prince Bandar of Saudi Arabia. BAE showed absolutely no concern that Saudi Arabia is using its equipment as part of its support for one of the warring factions in Yemen, or in supplying weapons to ISIS forces in Iraq and Syria.

Boeing has a record of corruption, overbilling, illegally obtaining classified Pentagon documents and paying millions of dollars in out-of-court settlements.

Lockheed Martin’s rap sheet includes illegal payments to lobbyists and corrupt influence peddling with US taxpayers’ funds; Northrop Grumman is the subject of alleged scandals, fines and out of court settlements; Raytheon is accused of trafficking in classified Pentagon documents, overcharging, and being involved in million dollar fines and bribery charges settled out of court.

Australian Tax Office data from 2015 to 2017 reveals that several weapons subsidiary companies have been notorious for avoiding paying Australian tax. Halliburton Consolidated also appears on the list. While not itself a weapons manufacturer, mainly providing oil and gas services, it has been a war profiteer in Iraq, and was accused of overpricing on government contracts.

Feinstein, Holden and Pace assert that corruption in the global arms trade contributes roughly 40 percent to corruption in all global transactions. Nor, despite what they say, do Australian-based weapons companies generally consider they have a moral obligation to consider their customers’ use of the weapons systems they supply. When questioned at the company’s 2016 annual general meeting by activists concerned about the uses to which BAE’s weaponry is put, Roger Carr, the company’s chairman said: ‘We are not here to judge the way that other governments work; we are here to do a job under the rules and regulations we are given’.

Such lack of principle must surely be alive and well in all Australian weapons subsidiary companies. The overriding philosophy is that profits outweigh principle, and Australian jobs must not be allowed to be compromised by vague concerns about where Australian arms exports go, or the aims of the governments deploying them. When questioned recently by a peace campaigner, Christopher Pyne, Minister for Defence Industry, gave the expected comforting assurances that Australian weaponry would be sold mainly to Australia’s allies, including the UK, USA, Canada and New Zealand, themselves (of course), responsible and principled international citizens like us. But he and others in Turnbull’s ministry have talked enthusiastically about selling our equipment to promising and growing markets in the Middle East and elsewhere around a troubled globe. With the best of intentions, no minister, and no official administering Australia’s defence export regulations, can guarantee that our equipment won’t fall into the hands of the armies of countries or groups bent on inter- or intra- state aggression. And no minister (or shadow minister) can be expected to resist the siren call of defence contractors creating jobs for Australian workers.

So far, the technical scope of Australian defence manufactures has not included massive death machines, but equipment that makes military operations more efficient, such as armoured personnel carriers, radar equipment, littoral naval vessels, patrol boats, and communications systems. The Australian Military Sales Equipment Catalogue of February 2017 reflects these products, as well as night vision equipment , and a limited range of small and medium calibre ammunition. Regulations governing sales are meant to ensure our sales don’t offend humanitarian priorities.

If the range of materiel available grows to meet Turnbull’s predictions about turning Australia into one of the ten largest weapons exporters in the world, the range of our death-dealing exports will expand. Led by the large foreign companies flogging it and their lack of scruples about acceptable end-users, Australia could become one of the main suppliers of weapons dealing death and destruction in an endless range of civil wars in Africa, the Middle East and South East Asia.

The government’s enthusiastic endorsement of defence industry economic blandishments reveals its shallowness and lack of vision. How much more effective would be a government-driven push to develop Australia’s capacity in green energy technology – wind turbines, photo voltaics, battery storage, hydro power. How such endeavours would improve international regard for Australia’s often claimed but never fulfilled responsible global citizenship.

Richard Broinowski is a former Australian diplomat and writer.




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