Since the 1960's Saudi Arabia has been a major buyer of UK weapons. The UK government has always been, and remains, very heavily involved as the main deals are operated through Government-to-Government contracts. About 270 UK Ministry of Defence civil servants and military personnel work in the UK and Saudi Arabia to support the contracts through the Ministry of Defence Saudi Armed Forces Programme (MODSAP)and the Saudi Arabia National Guard Communications Project (SANGCOM). They are paid for by the Saudi Arabian government.
The UK government's contracts with Saudi Arabia are complemented by those between the UK government and the prime contractors.
The Al Yamamah deals
The Al Yamamah (“dove”) agreements of the mid-1980's were between the Thatcher government in the UK and the Saudi Arabian government. Military equipment, especially Tornado and Hawk jets, were to be supplied by what is now BAE Systems. The deals also included servicing, spares and ancillary services.
The Salam Project and SBDCP
BAE sold 72 of its Eurofighter Typhoons in a £4.4billion deal called The Salam (“peace”) Project. Preliminary agreements between the UK and Saudi governments were signed in December 2005 and August 2006, and the detailed contract was signed in September 2007. The first 24 planes, the last of which was delivered in 2009, were built at Warton in Lancashire. Although the rest were to be assembled in Saudi Arabia from mid-2010 using kit supplied from Warton, some are now being assembled in Lancashire for delivery in 2013. There are outstanding price issues with respect to these.
The Typhoons are replacing the Air Defence Variant Tornados supplied under the Al Yamamah deals; the remaining Tornados continue to be upgraded and serviced under what is now called Saudi British Defence Co-operation Programme.
In May 2012 BAE won a £1.6 billion contract to help train the Saudi airforce. The contract includes 55 Pilatus aircraft made in Switzerland and 22 BAE Hawk jets.
SANGCOM is a 1978 military communications project supplying the Saudi Arabian National Guard and said to be worth about £2billion a year to what is now GPT Special Project Management Ltd. This is a subsidiary of EADS, the major European military and aerospace company.
The promotion of the sales over several decades, and the financial and practical support given to them by successive UK governments, has given succour to the undemocratic government of Saudi Arabia. This has a human rights record which makes it a “country of concern” for the Foreign and Commonwealth Office. It treats women as second-class citizens and its immigrant workers appallingly.
Selling arms to the Saudi government sends the message that the human rights of the Saudi people are of lesser concern than the commercial interests of BAE.
Corruption has been a recurrent feature with regards to arms deals to Saudi Arabia. Government records from the late 1960's and early 1970's, show that the corruption was known about by officials in the Government's Defence Sales Organisation who turned an amused blind eye. In a 1971 letter the then UK Ambassador to Saudi Arabia described Prince Sultan, Saudi Defence Minister then and still today, as having "a corrupt interest in all contracts .."
Rumours of corruption over the Al Yamamah deal started almost as soon as the contract was signed. The Government's spending watchdog, the National Audit Office, investigated, but the 1992 report has never been made public.
The allegations continued, many the subject of reports in The Guardian. In 2004, following revelations about a £60 million "slush fund", the Serious Fraud Office (SFO) began an investigation. There were further allegations in June 2007 that BAE, with approval of the UK’s Ministry of Defence, had made payments worth hundreds of millions of pounds since 1985 to bank accounts under the personal control of Prince Bandar, the son of Prince Sultan.
On 14th December 2006 the SFO announced that it was stopping its investigation. CAAT and The Corner House challenged the decision in the courts. In April 2008 the High Court ruled that the SFO had acted unlawfully in curtailing the inquiry, but this ruling was overturned by the House of Lords on 30th July 2008. More information about the case and documents which were released during it can be viewed here.
The allegations around Al Yamamah surfaced again in the United States. On 1 March 2010 BAE pleaded guilty in the United States District Court in Washington DC to "conspiring to defraud the US by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act compliance program, and to violate the Arms Export Control Act and International Traffic in Arms Regulations". The company was fined $400 million, one of the largest criminal fines in the history of the US DoJ's effort to "combat overseas corruption in international business and enforce US export control laws".
Following allegations by whistleblowers, in August 2012 the SFO began a criminal investigation into GPT with respect to SANGCOM.
The economic myths
The arms companies and the Government frequently say that the arms sales are good for the economy and employment. However, the Government has done no study on the economic benefits of the Al Yamamah deal, and even the Ministry of Defence has accepted that the economic picture about arms exports in general is not as traditionally portrayed. In its 2005 Defence Industrial Strategy, it accepted that economic arguments should not be used to justify arms exports. Whilst sales to Saudi Arabia undoubtedly bring commercial benefit to UK-based companies, such as BAE, this is not the same as benefiting the UK economy as a whole.
The arms companies are, not unnaturally, prone to exaggerate the number of jobs sustained by the arms industry. In the run-up to the decision to stop the SFO inquiry, figures of up to 50,000 jobs under threat were appearing in the press. However, a June 2006 report commissioned by the Eurofighter PR and Communications Office said that the Saudi Eurofighter deal would secure around 11,000 jobs throughout the whole of Europe, with less than 5,000 jobs located in the UK.