White Paper on Defence Related Industries: briefing

Meeting report

PORTFOLIO COMMITTEE ON DEFENCE
19 August 2003
WHITE PAPER ON DEFENCE RELATED INDUSTRIES: BRIEFING

Acting Chairperson: Mr D Dlali (ANC)

Documents handed out
White Paper on Defence-Related Industries
Department Presentation on White Paper on Defence-Related Industries

Delegation from Department of Defence : Mr Nick Sendall, Department of Defence
Admiral Hoerter, Department of Defence
AMD Delegation : Brig Gen Wesley, Aerospace and Maritime Defence Industries Association
Paul Gerber, Aerospace and Maritime Defence Industries Association

SUMMARY
Consequent to the 1996-1998 Defence Review, a white paper on "defence-related industries" was written by Dr Peter Batchelor, then of the Centre for Conflict Resolution, Julius Kriel of AMD and Nick Sendall on behalf of the National Conventional Arms Control Committee (NCACC). Mr Sendall briefed the Portfolio Committee on the need to update that work.

MINUTES
Briefing by Department
Mr Nick Sendall, Department Chief Director: Defence Policy, stated that four government departments are involved in these issues - Trade and Industry, Defence, Science and Technology and Foreign Affairs. The term "defence-related industries" was coined because most participants also do other work than just armaments, and there is a growing use of dual use civilian technology.

Pre 1994, the industry was secretive and without transparency. The White Paper sought to research the industry and to inform the public as well as point towards policy. It is however, done in the context of 1998/1999. The NCACC and Cabinet adopted the White Paper, and it prompted:

The NCAC Act to make the NCACC a statutory body
The Armscor Bill
Landmines Ban Bill to give effect to South Africa's adherence to the Ottawa
Convention
Marketing Support Board. This did not work, but a new support structure is being established to coordinate government support for the industry, and still in process
The Certain Conventions Weapons Convention Bill to prohibit and/or restrict the use of certain weapons. This Convention has not yet come into South African law.

There are seven chapters to the White Paper, of which Chapter Two relating to the history of the industry and its involvement in the economy is now out-of-date and needs to be rewritten.

Admiral Hoerter: The document reflects the late 1990s, but now needs guiding for the future. It identifies an arms control regime in the international arena. Government policy is that South Africa will be a responsible member of the international community, and will observe human rights. Solid economic analysis is required given foreign ownerships and changed capacities and the key technology strategies of the industry.

Brig Gen Wesley: We agree with the Department of Defence, and we are concerned about supporting peacekeeping operations in support of the SANDF. We do not do business without government approval. It is in our interest to have strong arms control, but it must not be unduly bureaucratic. A balance of support is required because survival is dependent on exports in order to have the capacity to defend South Africa.

Discussion
Mr Oudendaal (ANC): We must take into account the strategic importance of the entire industry, but do we update or redraft this document? What is the feeling of the Department and of the industry?

The Acting Chairperson: What is the Department's response to the AMD's points on government control over the industry? Are you in agreement that Chapter 2 needs to be rewritten?

Mr P Gerber (ANC): Chapter 2 is out-of-date. Industry will operate wherever it can do so legitimately, but it must have freedom of choice on where it should go. A Team South Africa approach is necessary rather than Armscor's previous control of who did what and when.

Brig Gen Hoerter: In the past, the Industry was the client of technology funding from government. This is no longer the case, but the Department of Defence establishes capabilities in the scientific and industrial domain. Debate is important as to what is strategically important. We have identified "strategically essential" as something that must be addressed. This must be driven by economic realities since the Department hasn't enough money to cover everything. The old legacy is being transformed so that companies are trading and exporting independently. Denel is struggling because of its financial crisis. Kentron owns significant sensor and signal processing capabilities.

Mr Sendall: International licensing needs to be addressed together with intellectual property which must be led by Science and Technology.

The meeting was adjourned.