Publication: Salvo Issued: Date: 1997-03-01 Reporter: Don Henning

The Defence Industry and the Media - A Matter of Transparency and Accountability



SALVO, Armscor's Corporate Journal


Don Henning, Armscor Corporate Communications

Date March 1997


The midyear furore over the untimely publication of the details of a major defence deal necessitates a sober look at the relationship between the defence industry and the media.

In late July, the Sunday Independent newspaper revealed that Denel, a major defence contractor, was planning to sell armaments to "a Middle eastern country", and threatened to reveal the name of that country. Denel responded with vigorous attempts to stop publication of the name, arguing that its client had requested confidentiality and that publication of the name would seriously jeopardise the deal. The Sunday Independent argued that the public "had a right to know", and that the name of the client country had been published overseas anyway. Denel obtained a court order in terms of legislation dating from the previous political era, but the Sunday Independent published the name of the client country regardless. Denel later withdrew the court order.

The matter resulted in a vigorous debate in the media. Some commentators agreed that the public had a right to know, citing the government's policy of transparency and accountability. Others criticised the Sunday Independent as being irresponsible and opportunistic, implying that it was "abusing freedoms" to promote its own interests and those of the economic-cum-racial group it represented.

Where does the defence industry stand now? Should it allow publication of all details of every deal it negotiates? It would close very few deals. Should it withdraw into a self-build fort and try to keep all information on all deals away from the media? This would hardly be practical, and would go counter to the prevailing spirit of openness.

From a defence industry perspective, it is a question of secrecy versus openness and the responsibility which is expected regarding defence issues.

Early in 1994, Armscor's draft vision statement on transparency and accountability read as follows :

"We are committed to a profound policy of transparency and accountability aimed at empowering our ultimate client, the SA public, to assess our acquisition and marketing decisions as well as our human resources and technology development policies within the boundaries of government policy."

It was argued that the concept of civil society - those who lie outside the realms of state power and the economy (various interest, issue-orientated, and civic groups - including informational, educational and newspaper groups) should be central to our notion of public accountability. Armscor believes that the public should be able to assess the way that it carries out its business. The concept of "Civil Society" itself has shot to prominence as a concept through the most recent wave of democratisation which started in 1974 and climaxed with the fall of the Berlin Wall.

Armscor saw transparency and accountability as operating at two different levels. The first was termed formal accountability within the parliamentary system. It shows how government money is being spent and it ensures that government policy is being implemented. This form has existed since Armscor's inception and still continues. The second level is the accountability to civil society. This is to allow the public to make inputs to decision making to ensure that priorities of the SA public are reflected and that no single party has unfettered control This is the realm of the public interest.

To ensure its accountability, Armscor produces a variety of publications such as its Annual Report and Acquisition Bulletin, and it has been engaged in discussions with organisations as diverse as human rights groupings, the trade union movement, church groupings, environmental groupings business associates, technology groupings, defence research groups and, in fact, the media. This ha been an ongoing exercise.

Also in 1994, in April, Armscor participated in government discussion on the National Policy for the Defence Industry. During that time it was stated that secrecy is not something unique to the South African arms trade. However, it was felt to be more acute because arms acquisition and sales policies were developed in the context of a mandatory United Nations arms embargo. The development of domestic military production capabilities, the import of completed weapon systems and technologies, and the sale of military items were thus all conducted confidentially.

It was pointed out during the discussion that, in that context, a key legislative mechanism for ensuring the overriding importance of total secrecy had been clause 11 A of the Armaments Development and Production Act (No 57 fo 1968) which states : "No person shall disclose to any person any information in relation to acquisition, supply, marketing, importation, export, development, manufacture, maintenance or repair of or research in connection with armaments by, for, on behalf of or for the benefit of the corporation or a subsidiary company, except on the written authority of the Minister or a person authorised thereto by the Minister ...". A fairly blanketing statement!

During these discussions it was then stated: "After the lifting of the arms embargo, this level of secrecy will no longer be required. This clause in the above act should be amended so that only information that is specifically classified by the Parliamentary Sub-committee for Defence, the Minister of Defence or a person authorised thereto by the Minister for good and adequate reason shall not be disclosed."

Hence, three years ago, Armscor was recommending that clause 11 A should cease to exist under the changing circumstances. At about the same time, in discussion with invited editors of the media, the statement was made that, whereas in the past dealings with the media had emphasised secrecy with exceptional cases of openness, the future should see the emphasis on openness with only exceptional cases of secrecy.

So, what is all the fuss about? Has Armscor and the wider defence industry gone back on what most readers would surely find a laudable point of view?

Within the context of concepts such as transparency and accountability, it is also necessary to look at the concept of responsibility. It has been said that, from a democratic perspective, neither transparency nor accountability can exist without responsibility. Armscor would argue that transparency within a democracy is not only possible but is essential. It would argue further though, that total transparency is not realistic - even within a democracy. Aspects such as national security and foreign affairs contain sensitive issues which necessitate non-disclosure.

To quote from another openly distributed Armscor publication, "Market Leads", "With regard to trade in conventional weapons, the international community addresses issues and lays down rules as a bi-lateral level. In the case of conventional weapons, national security is of utmost concern. Consequently, every individual sovereign state has the right to defence itself against aggressors and therefore also the right to decide with whom it wishes to share its defence sensitivities. In order to remain competitive in the area of defence technology and therefore to have a modern deterrent capability, states must necessarily form alliances and partnerships.

"It is considered responsible not to disclose such shared sensitivities and confidentialities, unless by mutual agreement. As a rule, non-disclosure clauses that have been agreed upon are honoured. Uncontrolled an unchecked transparency is simply regarded as irresponsible." Armscor and the wider South African defence industry respects these terms and wish to be a responsible global player.

Furthermore, it is said that: Transparency usually has two sides. Non-sensitive matters are often common knowledge, while sensitive matters such as technical specifications, military operational parameters and mutually owned technologies are managed within the structure of the state."

Thus, at the national interest level, Armscor would argue that the government should decide on what should or should not be disclosed. But the conundrum of openness and transparency goes further. There are also often commercial interests at stake. There are very few firms, commercial or military, that would disclose the essentials of business dealings before the deal has been concluded. To do so could weaken the firm's negotiating position or play into the hands of competitors. Suffice it to say that industrial and commercial espionage is a reality. A strong case can therefore also be made for commercial or corporate confidentiality.

With regard to transparency, Armscor would therefore argue that there are situations of national interest where the government needs to dominate the decision-making process and whether disclosure of information is in the best interest of the state or not. There are commercial situations where the interests of an organisation and of the broader economy should be the domain of corporate confidentiality. Then there are always situations where disclosure should be in the prime interest of the public. In all cases discretion is required and, in the latter instances, the media should be entrusted with the freedom to decide what should and should not be disclosed. Although there may be a "right" implicit in making these decisions, rights demand responsibility. Mutual trust is essential.

Returning to the opening statement that transparency and accountability are again topical, trust becomes paramount. Armscor's support of openness and transparency, of civil society being central to our notion of public accountability, and of the denunciation of clause 11 of Act 452 of 1968, is reiterated against the consideration or responsibility.

Armsocr would have preferred that the recent interdict brought against the media regarding the publication of the name of a country involved in a defence deal had not become an issue and had not been imposed. It does not do the image of the defence industry any good. The fact that the name of the country can be published in the overseas media or on the Internet makes the situation almost laughable. Yet, the terms of a non-disclosure requested by the client and the need to respect this request in a responsible way must be a very real consideration.

The situation Armscor would prefer will require a great deal of maturity from all parties - a situation where the government, industry and the media trust one another to enter into an open discussion on a prevailing situation. The National Conventional Arms Control Committee (NCACC) comprises six Ministers and six Deputy Ministers. If this committee, which regulates arms trade through a demanding three-tier system involving the approval of marketing permits, then contractual permits and only then export permits, approves the sale of equipment to a client, surely there is a case for the media to trust their decisions and to respect a request for confidentiality by the client. The generation of foreign exchange is believed to be in the best interests of all the people of South Africa. Publication of information which could result in the loss of the deal would be irresponsible and could have very far-reaching effects. But the conditions need to be understood by and discussed in confidentiality with the media. This presupposes that the media will also react responsibly.

Minister Kader Asmal, who is the Chairperson of the NCASS, has in fact argued similarly for mutual trust.

A country such as the USA has and can afford to have a high degree of transparency in its dealings. As a world power it has a very high level of political clout and is able to pressure clients through "friendly persuasion" to comply with their terms. South Africa, which has to accept among other things the "enduring attention" of the US State Department in its arms trading, has to tread a little more carefully and respect to a greater extent the client's terms. This is done in the best interest of the wider South African economy.

Falling back on legislation is not the way the industry would like to go. Armscor and its defence industry looks forward to the day that the media, looking after its public interest, and the government, looking after its national interest, and the industry, looking after its commercial interests, have reached a degree of confidence and maturity which will enable them to sit down together and agree on a course of action which is in the best interest of all. There should be a return to normality which should be reflected by laws which, as a last resort, will only enforce responsible and defined secrecy.

 With acknowledgement to Don Henning and Salvo - Armscor's Corporate Journal.