CAATnews June/July - Parliamentary

ECGD and bribery

The Export Credits Guarantee Department (ECGD), part of the Department of Trade and Industry, insures exports, including many arms deals, which are too risky for the private market to touch otherwise. The ECGD is subsidised by the UK government. This means that while the companies involved pay premiums to the ECGD, in effect the UK taxpayer underwrites the deals, picking up the shortfall if the companies lose out.

In spring 2004 the ECGD announced that it was introducing tough new rules on bribery and corruption. Three companies – BAE Systems (which is being investigated by the Serious Fraud Office over allegations of a "slush fund" in its Saudi arms deal known as Al Yamamah, see Developments in the global arms trade and BAE AGM), Airbus and Rolls Royce – objected. The proposals were watered down by the then Trade and Industry Secretary Patricia Hewitt.

In January 2005, after a legal challenge by an anti-corruption group, The Corner House, the Government agreed to hold a public consultation over the proposals. The results of this were announced in March 2006. The ECGD has reintroduced key anti-corruption measures. These include a requirement for exporters to name agents involved in the transaction, though the current proposal for the method of doing this (itself the subject of yet another consultation) imposes conditions of the most stringent secrecy.

In general, although some loopholes remain, the new procedures are a great improvement, and it is hoped that they will significantly reduce the potential for corruption. Further information can be found on www.ecgd.gov.uk.

ANN FELTHAM

Only report not published

A Freedom of Information request made by CAAT has revealed that the 1992 National Audit Office (NAO) report on the Al Yamamah deal with Saudi Arabia is the only NAO report presented to Parliament that has not been published. The nearest equivalent is three reports from the early 1990s on security service buildings, but these were eventually published in 2000. It seems that arms sales to Saudi Arabia are afforded greater secrecy than matters pertaining to spooks.

Contact your Councillor

Many CAAT supporters will have new local councillors following the elections in some parts of England on 4th May. If you haven't done so already, do write to or talk to your councillor about disinvesting from arms companies.

• See Local campaigns news & views for more information about this year's Clean Investment figures. There's a lot more information including a briefing for councillors, which includes the legalities. Copies can be ordered from the CAAT office.