Parliamentary committee “appalled” by BAE’s non-payment of reparations to Tanzania

30 November 2011

Campaign Against Arms Trade (CAAT) wholeheartedly welcomes the report of the International Development Committee on Financial Crime and Development, which castigates arms giant BAE Systems for its unwillingness to pay £29.5 million in reparations to the government of Tanzania, as mandated by a UK court.

When the International Development Committee questioned BAE on 19 July, members were uniformly critical of BAE's non-compliance. They drew attention to detailed plans by the Government of Tanzania and the UK Department of International Development (DfID) for the funds to be used to buy essential teaching materials and improve teacher accommodation. Yet BAE ignored these plans and attempted to establish their own committee to distribute funds via charities working in Tanzania.

After the hearing, BAE agreed to make the payment as agreed with Government of Tanzania and DfID - it is CAAT's understanding that arrangements are now being made to facilitate the payment.

Kaye Stearman, spokesperson for CAAT, said:

We welcome the report. We want speedy payment of BAE reparations to the Government of Tanzania in accordance with the agreement to benefit the children of Tanzania. However, this should not be the end of the matter - we welcome the Tanzanian government's plans to prosecute the individuals involved and we want to see further UK investigations into BAE activities.

ENDS

For further information or an interview please contact CAAT's Media Coordinator, Kaye Stearman on 020 7281 0297 or mobile 07990 673 232 or email media(at)caat·org·uk.

NOTES

  1. The Campaign Against Arms Trade (CAAT) in the UK works to end the international arms trade.The arms business has a devastating impact on human rights and society and damages economic development. Large-scale military procurement and arms exports only reinforce a militaristic approach to international problems Around 80% of CAAT's income is raised from individual supporters.
  2. The International Development Committee has eleven members and is chaired by MP Malcolm Bruce (Liberal Democrat). The 19 July session was to examine links between Financial Crime and Development, specifically the background to the agreement between BAE and the SFO arising from BAE's admitted criminal offence of improper book-keeping in connection with the sale of a military radar system to Tanzania, and how the people of Tanzania would benefit from the repayment of reparations by BAE. The report of 30 November can be found here: Volume I PDF (895KiB) PDF and Volume II PDF (895KiB) PDF.
  3. The agreed payment was part of a plea bargain of 5 February 2010 between the Serious Fraud Office (SFO) and BAE Systems under which BAE would plead guilty to "accounting errors" in Tanzania, while attempts by the SFO to prosecute BAE for alleged corruption would be dropped in the four countries under investigation: Czech Republic, Romania, South Africa and Tanzania. The SFO says that the amount was chosen as "equivalent to the value of the Tanzanian contract" - a reference a contract for a military radar system which Tanzania was pressured to buy from BAE Systems in 1999, although cheaper and more appropriate civil radar systems were available.
  4. In February 2010 the SFO approached DfID and requested its advice "on an appropriate mechanism for ensuring that the money was used for the benefit of the people of Tanzania while ensuring propriety and transparency". Following this request, and with detailed input, advice and facilitation from DfID and other UK and Tanzanian officials, the Government of Tanzania presented to the SFO on 16 November 2010 a detailed proposal on how it would use this payment to support education. The Tanzanian Government was given to understand that this proposal would form part of the papers and legal settlement presented to the courts in December 2010.
  5. The amount of £30 million (less court fees) was levied by Mr Justice Bean in December 2010 at the court hearing which effectively signed off the plea bargain. Mr Justice Bean did not refer to the agreement between the SFO and DfID - he may not have been aware of it.
  6. In May 2011, BAE announced that it had appointed committee members to advise on distribution of funds, which would be channelled through non-government organisations in Tanzania. BAE made no reference to the prior agreement between DfID and the Tanzanian government. The advisory board that BAE had chosen had four BAE executives and two external advisers - none with any development experience or experience of working in Africa.
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