/ 27 September 2019

Denel wants to sell arms to Egypt

Denel wants to sell arms to Egypt
Military might: An Egyptian serviceman fires an anti-aircraft missile. The Egyptian navy is negotiating to buy missiles from Denel. (Maxim Zmeyev/Reuters)

Nearly 2 000 people were arrested in Egypt this week. Their crime? Daring to protest against the country’s military government. The act of protesting is outlawed, so many of those arrested had already weighed up the risk of arrest before taking to the streets.
Most of those arrested are said to be teenagers and, as rights groups slam the continuing clampdown in Egypt, state media insist all footage of protests has been doctored.

Military power is an important part of the state’s oppressive ability. But embattled South African military technology and defence company Denel wants to supply missiles to the Egyptian navy, despite constant and serious human rights abuses by that country’s repressive military government.

Should this deal, estimated to be worth R4.5-billion, go ahead it could go a long way towards ensuring Denel’s survival without calling on the state for bailouts.

The state-owned arms manufacturer — which very nearly did not meet its payroll obligations as recently as two months ago — is one of many critical state-owned entities operating hand to mouth, dependent on state cash and bond purchases.

In May this year, Denel wrote to the department of defence requesting approval to use three different components of a missile — intellectual property for the Marlin seeker and dual-pulse rocket motor, as well as warhead technology — so that it could develop the Umkhonto-Radar missile, known as Umkhonto-R.

The missile is mainly fired from warships and is built to shoot down planes and drones. Denel wanted to supply the missile to the Egyptian navy.

In a letter responding to Denel’s request to use the department of defence’s intellectual property, its arms procurement agent — Armscor — said the intellectual property could be used as long as it remained in South Africa, and was not transferred to Egypt. It also said that a 10% royalty of the proceeds from the contract had to be reinvested in the maintenance and further development of the missile.

Denel’s letter noted that: “The 10% royalty shall be calculated on the total value of the 96 units of Umkhonto-R which will be supplied to Egypt.” The state arms company also intends to sell 32 units of an infrared variant of the Umkhonto-R.

Earlier this month, during its presentation to Parliament’s portfolio committee on public enterprises, Denel said that there is an imminent contract, which includes a R1.5-billion advance, focusing on Egypt’s navy and ThyssenKrupp Marine Systems vessels.

Denel chief executive Danie du Toit said that they anticipated R30-billion in the next two years, which will change the entity’s financial misfortunes. In August, the government had to pump R1.8-billion into Denel because it was struggling to pay salaries and suppliers. This came after it posted a R1.76-billion loss in 2018.

But Denel’s intended supply of Umkhonto-R missiles to the Egyptian navy appears to be in conflict with the National Conventional Arms Control Act.

The Act stipulates that South Africa will not export armaments to countries that abuse human rights — which Egypt has been accused of doing — and countries that are in conflict, or subject to United Nations’ and other international embargoes.

This year, a Human Rights Watch report said that since President Abdel Fattah al-Sisi got his second term in what is described as an unfree and unfair presidential elections, his security forces have “escalated a campaign of intimidation, violence, and arrests against political opponents, civil society activists, and many others who have simply voiced mild criticism of the government”.

The report went on to say: “The government continued to silence critics through arrests and unfair prosecutions of journalists and bloggers, and the Parliament issued severely restrictive laws that further curtail freedom of speech.”

Last year UN human rights experts condemned Egypt’s human rights abuses. In a press statement, they said: “We are gravely concerned at the human rights defenders’ prolonged periods of detention, reportedly arising from their peaceful and legitimate defence of human rights.”

The UN last month postponed an anti-torture conference that was meant to be held in Cairo after an uproar from human rights activists.

In an apparent defence of its initial decision to host the conference, a UN spokesperson — as quoted by The Guardian — said there was value in hosting a conference “that aims to try and reduce torture” in a country and region where torture takes place.

Denel, which makes ammunition, missiles and armoured vehicles for South Africa and customers in Africa, the Gulf and Europe, said that Umkhonto-R will be developed together with its Umkhonto-InfraRed (IR). When that missile was fired from aboard the Valour-class frigate SAS Amatola in 2005, South Africa became one of only a handful of countries to have fielded a functional, operational anti-missile air defence system.

But to complete the sale, the arms manufacturer will also have to obtain permission from the National Conventional Arms Control Commission (NCACC), which controls the trade in arms, as well as the rendering of foreign military assistance.

The committee — which is chaired by Minister in the Presidency Jackson Mthembu and comprises several ministers and deputy ministers — assesses a host of issues before making a decision. This includes the national security interest of the country and its allies, the potential to contribute to internal repression and the suppression of human rights and fundamental freedoms, and the potential to contribute to the escalation of regional military conflicts.

When asked to confirm whether Denel had submitted an application, Mthembu referred all queries to the head of the NCACC’s secretariat, Makhosonke Jele.

Jele asked what interest the application was to the Mail & Guardian, adding that any information about arms sales is “strictly regulated”: “As a citizen, should this be of interest, and you deem it to be in the interest of the public to know, this will be considered under [the] Promotion of Access to Information Act.”

A government source with know-ledge of the deal said it made sense because of the unlikelihood of surface-to-air missiles being used by Egypt against its own citizens. “You must remember Egypt is not under any arms embargo, so the financial benefits far outweigh the possibility of us finding ourselves on the wrong side of history,” the source said.

Denel spokesperson Pamela Malinda said: “Denel markets and sells all its products and solutions within the framework of the South African Constitution, the National Conventional Arms Control Act and the relevant United Nations resolutions.”