Arms and oil firms spurn UK inquiry

The bosses of some of Britain’s biggest arms and oil companies have refused to attend a parliamentary inquiry into the use of hundreds of millions of pounds of taxpayers’ money to help dictators to build arsenals and facilitate environmental and human rights abuses.

The businesspeople, including Ian King, chief executive of BAE Systems, had been invited to an all-party investigation into the export credits guarantee department’s underwriting of loans, including £35-million to Zimbabwe President Robert Mugabe to buy five Hawk fighter jets.

The all-party parliamentary group on international corporate responsibility is examining more than 40 years of departmental operations overseas that have led to it being dubbed the “department for dodgy deals” by the Jubilee Debt Campaign, a watchdog organisation.

Arms and oil companies are the biggest users of departmental underwriting because traditional lenders are often reluctant to support projects that may lead to environmental or human rights abuses.

The companies were asked to attend the hearing to offer their views on how best to reform the role of the department, which has changed its operating name to United Kingdom Export Finance.

Particularly pertinent
Other companies that decided not to send representatives include French-owned arms group Thales and Carillion, a FTSE 250 construction company and the largest provider of outsourced management for defence facilities. Graham Farley, Carillion’s director of export finance, pulled out the night before he was due to give evidence, according to Lisa Nandy, Labour MP and chair of the inquiry.

Carillion has not responded to Guardian inquiries about the reason for Farley’s withdrawal. Thales said it did not believe “there was any specific aspect that was particularly pertinent” to the company and declined to participate.

BAE Systems, the department’s biggest customer, said last week that it would not send King or any other representative to the inquiry. In a one-page letter to Nandy the company said: “As you will know, there are already strict controls on defence exports in place, with which BAE Systems fully complies. Any item exported from the UK, which is subject to export control, needs a licence. The Export Control Organisation holds this responsibility and BAE Systems works closely with it to ensure compliance.”

BAE used departmental funding to support the notorious al-Yamamah “oil for arms” deal with Saudi Arabia, involving Tornado and Eurofighter Typhoon aircraft. BAE was investigated by the Serious Fraud Office amid allegations of bribery and corruption. The inquiry was dropped following the intervention of the then prime minister, Tony Blair.

The department also loaned £35-million to Zimbabwe to buy five Hawk fighter jets from BAE between 1989 and 1992. Zimbabwe, already heavily indebted at the time of the loans, spent £49-million repaying the cost of the Hawks, according to a response to a freedom of information request from the Jubilee Debt Campaign. Mugabe’s government deployed the jets in the 1998-2002 war in the Democratic Republic of Congo, Africa’s most deadly conflict in modern history that led to 5.4-million deaths.

BP used department funds for a 1760km oil pipeline through the Caucasus, the construction of which has allegedly led to a catalogue of human rights abuses, but it also declined to send a representative.

Nick Dearden, director of the Jubilee Debt Campaign, said: “Evidence shows that neither UK Export Finance nor its advisory council are able to hold the companies they support to human rights or environmental obligations.

“What standards do exist are discretionary in any case and give no formal mechanism for complaint or evaluation.” – © Guardian News & Media 2012



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