Law Speak - Transparency for arms deals

I RECENTLY finished reading Andrew Feinstein's The Shadow World. Together with Anthony Sampson's The Arms Bazaar, they provide deep insights into how the arms trade operates.
Malaysia's vast financial outlays – the most recent RM2.92 billion in procuring arms, and RM9 billion for six new marine combat ships – raises certain fundamental questions on transparency and accountability. While there is, of course, some need to maintain national security and commercial confidentiality, secrecy enshrouds most arms deals. This all-encompassing secrecy, says Feinstein, "hides corruption, conflicts of interest, poor decision-making and inappropriate national security choices".
This trade seems to be one of the least scrutinised and accountable areas of government and private activity – when it should be among the most highly controlled and regulated.
The US is by far the biggest arms exporter. Through companies such as Lockheed Martin, it sells weapons regardless of whether they are needed and to the most odious regimes and purposes. Admitted Colonel Wilkerson, former Colin Powell's chief of staff in the Bush administration: "We are the death merchant of the world."
Other countries such as Israel, Russia, France and China are among the big players. In their chase for deals, the arms companies of these countries have little in common with ethical considerations of what and where their weapons may be used.
Nearer home, Razak Baginda, adviser to the then Malaysian defence minister, told the Financial Times recently that he was paid €30 million in 2002 for the US$1.2 billion Scorpene submarines deal. None of this sizeable amount was used to bribe officials, he said, implying all of it went to him for his effort in securing the deal.
He was responding to the accusation by former president of Thales International Asia, Bernard Baiocco for "active bribery of foreign public (high) officials". Thales supplied these submarines in a joint venture with a defence company (DCN, later DCNS). In usual fashion, a Malaysian government spokesperson dismissed the allegations as "baseless smears for political gain".
Thales is not new to bribery. It was ordered to pay more than US$800 million fine when convicted by a Taiwan court in 2010 for bribing by inflating the price of frigates that it supplied on a US$2.8 billion arms deal in 1991.
In yet another case, Britain linked overseas aid for the Pergau Dam to the purchase by Malaysia of arms. The British government gave £231 million in 1991 and Malaysia promptly bought £1 billion worth of arms.
The World Development Movement, a charity, took court action questioning the funding of the dam. The UK law allows aid to be provided only for "promoting the development or maintaining the economy of a country ... or the welfare of its people". The British High Court struck out the aid as unlawful because of its link to commercial contracts. Weapons could hardly be considered of benefit to development and welfare issues.
Now, all these allegations of impropriety and corruption can be staunched if we had in place a comprehensive and transparent system of arms procurement.
Greater transparency when the deal was being made would have stopped it in its tracks, says the then permanent secretary of the Overseas Development Administration, Sir Tim Lankester in his book The Politics and Economics of British Foreign Aid: The Pergau Dam Case.
Feinstein states that these arms deals infect the whole governance process; often facilitated by a continuous "revolving door" through which people move between government, the military and the arms industry. Typically, high-ranking military officials either directly head, or are patrons of arms-broking companies. Without meaning to generalise, Feinstein notes that with bribery and corruption as a norm, there are very few arms transactions that are entirely above board. The combination of the sheer magnitude of the contracts, the very small number of people who make the purchasing decisions and the cloak of national security lends itself to such bribery and corruption on a massive scale. Indeed, the arms industry and its powerful political friends have forged a parallel universe that largely insulates itself against the influence or judgment of others by invoking national security. This, concludes Feinstein, is "the shadow world".
In Malaysia, the activities of arms brokers and transfer intermediaries are not specifically regulated by law.
This is surprising given the huge scale of the billions that flow out from public coffers to pay for the arms and "commissions" – a massive diversion of resources from crucial social and development needs – which in itself feeds instability.
Feinstein concludes that the arms business has a huge impact on the lives of most of the world's people – not only fuelling and perpetuating conflict but also because of its profound impact on government, "not least of which is the nature and extent of the wars we find ourselves fighting". Its victims include the taxpayers of the producer countries, the more impoverished people of the purchasing countries and those who are killed by these deadly weapons.
The international Arms Trade Treaty came into force in 2014. The treaty establishes common standards for the international trade of conventional weapons and seeks to reduce illicit arms trade. Significantly, it does not place restrictions on the types or quantities of arms that may be bought, sold, or possessed by states. Neither does it impose strong enforceable anti-corruption mechanisms, nor transparency measures on governments and companies compelling disclosure of how much and for what agents, brokers, dealers or middlemen are paid.
It has not been ratified by the top few arms producing and trading countries such as the US, China and Israel (described by an Israeli journalist as the "primary testing ground for American weapons and combat tactics".) Russia refuses to join as it fails to regulate the supply of arms to non-governmental structures and organisations without official power – a hint of the illegal "regime change" strife routinely promoted by the US.
Malaysia has not ratified the treaty. Is it not time for Malaysia to put in place measures to control and regulate the arms trade?
Gurdial is former law professor at University of Malaya. He is the recipient of the Anugerah Akademic Negara; and UM's nominee for The World Academic Science Prize 2016. He is Senior Research Fellow, South Centre, Geneva. Comments: letters@thesundaily.com