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Arms deal commission to include probe of offset packages

27th October 2011

By: Terence Creamer
Creamer Media Editor

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The independent commission of inquiry, which has been set up to probe whether there was any corruption in South Africa’s controversial arms deal, has also been given a brief to probe whether the defence and civilian offsets associated with the packages actually materialised.

The commission, which has been given the power to subpoena witnesses, including members of the current government, will be chaired by Supreme Court of Appeal judge Willie Seriti and will operate out of Johannesburg.

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The chief focus over the coming two years would undoubtedly be on whether “any person/s, within and/or outside the government of South Africa, improperly influenced the award or conclusion of any of the contracts awarded”.

But in releasing the terms of reference on Thursday, Justice Minister Jeff Radebe revealed that the commission would also probe the offset packages, as well as whether the strategic defence procurement package (SDPP) yielded the jobs benefits it was meant to.

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Should it be found that anticipated defence and industrial spinoffs did not materialise, the commission was empowered to propose what steps should be taken to “realise” these benefits.

In addition, the commission, which would be backed by a high-level secretariat and had received funding of R40-million to ensure it could implement its mandate, had also be asked to assess the “rationale” for the SDPP and whether the equipment was being properly used.

By including these aspects the probe had been made “incredibly broad”, aerospace and defence specialist Keith Campbell cautioned, which could dilute its main objective, which was to discover the nature and size of the corruption involved.

But Campbell – who tracked both the defence industrial participation, or Dips, and the national industrial participation (Nips) arising from the SDPP for Engineering News – said that a link could be drawn should the commission find that there had been fraud associated with the offset arrangements.

Should any fraud be found, it could involve officials from the Department of Trade and Industry (DTI), who monitored the Nips, as well as Department of Defence.

It could also point to transgressions by executives at the various companies that participated in the supply of the submarines, frigates, fighter aircraft, trainer aircraft and helicopters in a package that dates back to 1998.

It was common cause that the Nips had not performed as well as expected, while the Dips had been relatively successful – a finding that had led the DTI to alter its offset policies to ensure that companies delivered spinoffs within their direct field of expertise.

But arms deal campaigner Terry Crawford-Brown, whose legal challenge is credited with forcing President Jacob Zuma's hand in appointing the inquiry, also had questions about the way the terms of reference dealt with the issue of offsets.

He was quoted on Times Live as saying that the references did not raise any question over the legality of the offsets that were part of the original R29-billion arms deal.

"I believe the offsets are totally unconstitutional and yet that was the basis of the arms deal decisions. You spend R30-billion and then get R110-billion back," he said

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