When, in December 2006, the Serious Fraud Office (SFO) dropped its corruption investigation into BAE Systems’ Saudi arms deals, CAAT and The Corner House launched a legal challenge. We were initially successful; the High Court ruled in April 2008 that the SFO had acted unlawfully in dropping the investigation. However, the SFO appealed and the Law Lords overturned this ruling on 30 July.
While it would have been excellent if the Lords had confirmed the High Court’s ruling, their decision provoked little cheer for the arms industry, aware of how much has changed in the last two years. The case and the related Control BAE campaign have had a huge impact on public perceptions and political realities, and the company remains under pressure from all directions.
Progress
Even commentators friendly to the arms trade admit how much we have achieved. So let’s remind ourselves what’s changed:
- Most obviously, it will be much harder for government to intervene so blatantly on BAE’s behalf again. While the government remains loyal to the arms industry, it knows the reaction that this can get.
- The issue of arms companies’ influence within government is now firmly on the agenda. More people than ever are aware of this influence, and realise that the arms trade will not be significantly reduced while it remains. As an example of how mainstream this issue has become, let’s remember that the call to reopen the SFO investigation was supported by over 130 Non-Governmental Organisations and 125 MPs from many parties, including six Tories.
- The legal position has been clarified, with the authorities effectively admitting that there is no provision in law to prevent a prosecutor in the UK from being bullied by a private company or another country’s government into dropping an investigation.
- CAAT’s profile has increased significantly. More of the media take CAAT seriously and there is greater public awareness of CAAT’s work.
- Public outrage generated by the BAE situation has contributed indirectly to recent CAAT campaign victories. These include the closure of DESO, the decision by Reed Elsevier to sell its arms fairs and moves by universities to ditch arms investments.
- We have shown that radical campaigners working effectively can have a big impact. The campaign brought together varied campaigning methods, including legal action, grassroots activism, media engagement, local campaigning, parliamentary lobbying and alliance-building.
- The increased understanding of a cosy relationship between arms companies and government has placed us in a strong position to campaign on other aspects of this issue, particularly the arms functions of UK Trade and Investment.
CAAT supporters have played a huge role in bringing about these changes, whether by campaigning in the street, sharing their views with friends, making donations or giving encouragement to other activists and CAAT staff. But CAAT and The Corner House cannot claim all the credit. BAE and the UK government remain under pressure from a number of sources.
Ongoing investigations
...in the US
BAE’s Saudi deals have been under investigation by the US Department
of Justice since June 2007 when the Guardian and BBC’s Panorama
alleged that £1 billion was being paid to Saudi Prince Bandar via
Washington’s Riggs bank. The next month Parliament was told that the
US had formally asked for help from the UK under a Mutual Legal
Assistance agreement. The Home Office has yet to respond formally.
In connection with the US investigation, former BAE Chief Executive Mike Turner, non-executive Director Sir Nigel Rudd and Group Business Development Director Alan Garwood (former head of DESO) were stopped at US airports in May 2008 and served with subpoenas (commands to appear at a later date and answer questions).
Worryingly though, Defense News reported in September 2008 that US and UK authorities were attempting to negotiate an end to the US investigation.
...Switzerland too
In mid-July 2008 federal prosecutors in
Switzerland said they were
conducting three criminal
investigations into possible money
laundering linked to BAE.
...the other BAE deals
BAE is still facing six other SFO
investigations. They involve deals
with Chile, the Czech Republic,
Qatar, Romania, South Africa and
Tanzania.
...the poor reputation
Despite saying that it will implement
all of the recommendations made by
Lord Woolf’s Committee on ethical
practices, the company’s poor
reputation remains. Newspaper
articles to mark Mike Turner’s
retirement at the end of August all
mentioned the corruption allegations.
His successor as Chief Executive, Ian
King, is likely to have to live with
them.
The UK government’s still in trouble
...with the Constitutional Renewal Bill
The draft Constitutional Renewal Bill
includes a proposal to give the
attorney-general a statutory right to
cancel an SFO investigation on
grounds of national security.
Prompted by our legal action, this
would prevent any judicial review of
such a decision, and would provide
for little meaningful accountability to
Parliament. However, many
parliamentarians and lawyers are
concerned. It will be interesting to
see if the government makes any
amendments to the draft Bill before it
is presented to Parliament in the
2008-9 session. If it does not, the Bill
should provoke a lively debate.
...and the OECD
In October 2008, the Organisation for Economic Co-operation and
Development (OECD) Working Group on Bribery will receive a report into the UK following the
dropping of the investigation. This is unlikely to make easy reading for the
UK government.
In the light of the Lords’ ruling, it is now even more vital that the Working Group draws up clear guidelines that state that there is no national security exemption to the OECD Convention, and making clear in what circumstances a defence of ‘absolute necessity’ is allowed.
CAAT continues to challenge the Saudi deals
Articles by investigative journalists, documents from the National Archives, the witness statements in the Judicial Review and Information Tribunal cases, requests under the Freedom of Information (FoI) Act, parliamentary answers – these are all helping build a picture of the cosy UK government-BAE-Saudi relationship which facilitates arms sales to one of the world’s most repressive regimes. It also helps CAAT to challenge these sales.
...Salam and the SBDCP
So, in a nutshell, what’s going on
now? The Air Defence Variant
Tornadoes supplied under the Al
Yamamah contracts of the mid-1980s
are now being replaced by 72
Eurofighter Typhoon aircraft under
the Project Salam. This was agreed
in outline between the UK and Saudi
governments in 2005 with a more
detailed contract signed in 2007.
The UK MoD complements this with a
contract with its main contractor,
BAE.
The first 24 planes will be built at Warton in Lancashire, with the remainder likely to be assembled in Saudi Arabia. The other Saudi Tornadoes will be upgraded and serviced under what is now called Saudi British Defence Co-operation Programme (SBDCP). Whilst the original Al Yamamah purchases were paid for in oil, both Project Salam and the SBDCP are being paid for out of the Saudi defence budget.
Recently, there has been talk of selling even more Eurofighter Typhoons to Saudi Arabia. These would be those the UK is committed to buying for the RAF, but struggling to find the money for in the defence budget.
...MODSAP
Ever since 1973, in a pre-Al
Yamamah deal, there has been a
team of UK civil servants supporting
Saudi arms sales. Now known as the
Ministry of Defence Saudi Armed
Forces Project, it employs 200
civilian and military staff in the UK
and Saudi Arabia. All the costs –
£41.8 million in 2007-8 – are met
by the Saudi government. In other
words, UK public servants are being
paid by an overseas government to
work on a project that benefits a
private company.
...and export credits
Following a CAAT FoI request, the
Export Credits Guarantee
Department has agreed to reveal
how much cover is given to BAE’s
Saudi arms deals in its annual
reports. This cover is taxpayerbacked
insurance that would pay out
if BAE was not paid by the Saudis. It
stood at £750 million at 31st March
2007 and the same a year later.
Nowhere to turn
Wherever BAE’s bosses turn, their reputation and relationship with government are under threat. Whether it’s the US, Switzerland, the OECD or the UK’s own media, BAE are faced with hostility and scrutiny. As we keep campaigning, public opposition to BAE’s privileged position and deadly trade can only increase. There is no way out for BAE.
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