The independent resource on global security

1. Corruption and the arms trade: sins of commission

Summary

Studies suggest that corruption in the arms trade contributes roughly 40 per cent to all corruption in global transactions. This corruption exacts a heavy toll on purchasing and selling countries, undermining democratic institutions of accountability and diverting valuable resources away from pressing social needs towards corrupt ends.

A number of systemic features of the arms trade encourage corruption, of which two are particularly important. First, its deep and abiding link to matters of national security obscures many deals from oversight and accountability. Second, the rubric of national security facilitates the emergence of a small coterie of brokers, dealers and officials with appropriate security clearances. These close relationships blur the lines between the state and the industry, fostering an attitude that relegates legal concerns to the background.

The now infamous arms deal that took place in South Africa in 1999 provides numerous examples of the above types and causes of corruption. During the selection process, a number of highly questionable decisions were taken to ensure that certain contractors were selected. One example is the purchase of the Hawk trainer aircraft from British Aerospace (now BAE Systems).

Subsequent investigations have uncovered a trail of payments made to key decision makers during the selection process. Most notably, the British Serious Fraud Office identified £115 million ($207 million) in ‘commission’ payments made by BAE to ‘overt’ and ‘covert’ advisors related to the contract.

Political mechanisms of oversight—such as parliamentary and independent investigative bodies—were sidelined and bullied by the executive to prevent a proper investigation into the deal, undercutting South Africa’s fragile new democratic dispensation. Large sums of money were diverted to the arms deal that arguably should have been spent relieving the devastating legacy of apartheid. Without corruption, the state would have spent at least an estimated 30 per cent less on the deal, freeing up funds for other social goods.

In order to combat corruption in the arms trade, multilateral agreements, such as an arms trade treaty, could include clauses that both outlaw corruption and provide mechanisms for enforcement. National governments, too, could introduce a number of reforms such as a ‘cooling off’ period between employments in the state and in the arms industry. These reforms require political will, which, in turn, demands that the public voice its opposition to the status quo.

 

 

Andrew Feinstein (United Kingdom/South Africa) is a former ANC member of the South African Parliament.

Paul Holden (United Kingdom/South Africa) is a South African historian and writer focusing on corruption and governance issues.

Barnaby Pace (United Kingdom) is a freelance researcher and activist specializing
in the arms trade and corruption.