Numerous acts of commission and omission by individual Armscor officials and foreign actors contributed to the Wazan debacle. We have set these out above [Section 4.8]. In the view of the Commission, however, the most significant cause was a general, institutional lack of responsibility at Armscor regarding the end destination of South African arms exports.
This lack of responsibility was evident at policy, operational and organisational levels. The bodies and officials answerable for this lack of responsibility include the previous Cabinet, the Defence Foreign Policy Committee and Armscor itself. These bodies appear to have been motivated primarily by commercial considerations in overseeing South African arms exports. They paid scant regard to human life, human rights and political developments in Lebanon.
The Wazan debacle was not an 'unfortunate accident'. Indeed, previous Armscor consignments to Lebanon similarly ended up at other destinations. Nor was it solely the result of some mischief, although mischief was undoubtedly afoot. Rather, the debacle was a consequence of South Africa's manifest disregard for where its arms exports ended up.
This finding is substantiated below [Sections 5.2 to 5.6] with reference to key features of arms trade policy, operational systems and organisational culture.
Similarly, international arms trade is a special category of international commodity trade, with a particular set of economic, political, strategic and ethical complexities. The Commission will undertake a comprehensive examination of these issues in the next leg of its inquiry.
Nevertheless, the Commission wishes to make explicit the normative perspective on arms trade which has guided its investigation and deliberations thus far, and influenced the findings in this report.
5.1.1.1 States have an inherent right, which is recognised in international law, to defend themselves against external aggression. They also have a responsibility to maintain internal order and stability. In certain circumstances the use of force may be necessary to achieve these ends.
5.1.1.2 At the same time, many regimes employ force for the illegitimate purpose of external aggression or internal repression.
5.1.1.3 States which sell arms to such regimes bear a measure of culpability for the use to which the arms are put. From an ethical perspective it is untenable for these states to argue that 'if we don't sell the weapons, someone else will'.
5.1.1.4 Put differently, the right to life which is enshrined in South Africa's new Constitution is both fundamental and universal. People everywhere are entitled to expect that this right is respected not only by their own government but also by other states.
5.1.1.5 The proliferation of arms in many countries and regions contributes to underdevelopment and instability, and thereby undermines the security of people and states. It may also lead to warfare with all its apocryphal consequences.
5.1.1.6 For the reasons outlined above, states which sell arms have an onerous duty to act responsibly. At the very least, they should take deliberate steps to ensure that their arms do not end up with aggressive or repressive regimes, in the hands of terrorist groups, or on the black market.
5.1.1.7 Certain countries and international bodies argue that the conditions of international arms trade should be even more restrictive. In the next leg of its inquiry the Commission will consider fully this position and the related questions of international arms control regimes; domestic decision-making procedures and legislative provisions; and restrictions or prohibitions on specific categories of weaponry.
According to the Smith Report, dated 26 September and presented by Armscor to the Minister of Defence following the Wazan debacle, the South African government initiated a system of country and weapons classification in 1983 in order to regulate the marketing and sale of arms. Armscor was obliged to adhere to this system when issuing permits for the marketing or sale of armaments abroad.
Countries were classified along the following lines: Group 1 countries were those with no restriction on the marketing or export of armaments which had been released for marketing; Group 2 countries could only receive 'non-sensitive' armaments; and Group 3 countries were prohibited from receiving any armaments. Smith testified that the criteria used for assigning countries to these groups included United Nations decisions; international agreements; the image of South Africa; the views of South Africa's major partners; and the stability of the recipient state.
The classification of individual countries was based on recommendations by the Defence Foreign Policy Committee (DFPC) which were assessed by the State Security Council and approved by Cabinet. The DFPC was responsible for reviewing the classification of countries and weapons on a quarterly basis.
The DFPC was initially composed of representatives of Armscor and the SADF. In 1991 the Department of Foreign Affairs and the National Intelligence Service joined the committee, and in 1994 the Department of Trade and Industry became a member. The chairpersonship of the DFPC alternated between the SADF (Chief of Staff Intelligence) and Armscor (General Manager Import and Export Control).
The country and weapons classification as approved by Cabinet is contained in a confidential document known as the Log 17 Pamphlet. The public disclosure of the 1993 version of this document was a source of much argument and controversy during the Commission's inquiry.
The classification system and the Log 17 Pamphlet are currently under review by the new Cabinet. The Deputy Minister of Defence has assumed the chairpersonship of the DFPC.
5.2.2 Weapons classification
According to the Smith Report, in 1983 the DFPC recommended, and the Cabinet approved, the classification of weapons, ammunition and military equipment into three categories.
Category A embraces all armaments released for marketing. Category B encompasses 'non-sensitive' items like vehicles, radios, anti-riot equipment, and weapons and ammunition not exceeding 12.7 mm. Category C products are those which are not released for marketing.
5.2.3 Classification of Lebanon
According to the Smith Report, in 1983 the Cabinet classified the Lebanese government as a Group 1 country. In 1985 the Lebanese government's "main opposition", the Christian Militia, was classified as a Group 2 market.
In 1987 the emphasis changed to supporting the Christian Militia which was upgraded to Group 1. The official government was downgraded to Group 2 and has retained this status ever since.
In January 1994 the DFPC recommended that the Christian Militia again be reclassified, this time down to Group 3. The recommendation has been implemented by Armscor although it has not yet been approved by Cabinet.
5.2.4 Armscor sales to Lebanon
The Smith Report contains an appendix listing the type, quantity and value of weapons and ammunition ostensibly sold to Lebanon between February 1991 and August 1994.
The products allegedly sold to the Lebanese government in August 1994 comprised AK-47s, G3 rifles and ammunition for these weapons.
The products allegedly sold to the Christian Militia from 1991 to 1993 included missile launchers and missiles; sub-machine guns; AK-47 rifles; shotgun and AK-47 ammunition; and anti-personnel mines.
These transactions were, in theory, consistent with the country and weapons classification contained in the Log 17 pamphlet. In practice, however, some or all of the weapons were diverted to end-users in other countries.
5.2.5 The civil war in Lebanon
The following overview of the Lebanese civil war is based on annual reports of Amnesty International and written submissions to the Commission from the Lebanese government and the South African Department of Foreign Affairs. The views of these bodies were not disputed by the parties represented at the Commission.
In 1975 Lebanon erupted in civil war. The main protagonists were Muslim fundamentalist and secular movements; various Christian militia, including the Lebanese Forces and the South Lebanon Army; and militant organisations representing Palestinian refugees in Lebanon. The conflict soon assumed international proportions with the direct participation of Israel and Syria, and the indirect involvement of the major powers.
The conflict had three primary causes: the drawing of national borders by the colonial powers when the modern state of Lebanon was established after World War One; the presence in southern Lebanon of large numbers of Palestinian refugees; and deep-rooted political, religious and sectarian divisions between and within the Muslim and Christian communities.
Lebanon was devastated by the war. The economy stagnated; foreign companies and capital fled; state authority and effective administration were absent, with rival Christian and Muslim governments vying for control of the country; thousands of refugees crossed the border to neighbouring lands; Beirut and other cities were virtually destroyed; and an untold number of people were killed and injured.
The war ended in 1989 with the signing of a peace agreement known as the Taif Accords. The Accords led to a political transition similar in many respects to that of South Africa: democratic elections; a government of national unity in which power is shared among different groups; a strong commitment to national reconciliation; the integration of armed forces; and the banning and dissolution of private armies, including the Christian militia.
5.2.6 Assessment
In the view of the Commission, the classification in 1985 of the Christian Militia as a legitimate recipient of South African arms, and the classification of AK-47s as 'non-sensitive' weapons, were wholly inconsistent with a responsible arms trade policy.
The Commission bases this conclusion on the following factors.
5.2.6.1 The South African government was prepared to supply missiles, missile launchers, anti-personnel mines, AK-47s and other weapons to parties engaged in a bloody civil war. Non-combatants typically bore the brunt of the fighting. Television news broadcasts at the time captured vividly the extensive damage wrought to civilians and civilian property as Beirut and other areas were laid to waste.
5.2.6.2 Like many of the other belligerents in the war, the Christian militia had an appalling human rights record. According to Amnesty International, the militia engaged in arbitrary detentions, kidnapping, disappearances, extra-judicial executions, torture and acts of terrorism. In 1982 the Lebanese Forces massacred hundreds of Palestinians in the refugee camps of Sabra and Chatila in West Beirut while the Israeli Defence Force had control of the area.
5.2.6.3 The Cabinet's willingness simultaneously to arm both the Christian Militia and the Lebanese government suggests that the country classification of these parties was based on commercial rather than political or strategic considerations. Certain documents indicate that Armscor's support for the Christian Militia was similarly motivated by commercial factors at the expense of South Africa's international image and respect for human rights in Lebanon. In July 1989 Mr PAR Erasmus (Hoofbestuurder Bemarking) submitted a memorandum to Armscor's top management recommending that the Christian Militia retain its status as a Group 1 market. Erasmus noted that the State Security Council was considering excluding from the country classification those groups like the Christian Militia which operated within countries. The Council's concern was based on media reports linking South Africa to terrorism. Nevertheless, Erasmus argued that Armscor had done good business with the Christian Militia in the past and that a contract of $40 million was in the offing. Accordingly, the classification of the Christian Militia should not be downgraded.
5.2.6.4 The Christian Militia retained its status as an acceptable recipient of South African arms for as long as four years after it had been disbanded following the end of the civil war in Lebanon. The Lebanese government, through its office in Pretoria, put two obvious queries to the Commission in this regard: 'What was the objective sought by Armscor when it dealt with an illegal military party [the Christian Militia] which was banned by a country [Lebanon] with which South Africa has friendly relations? Where did all this military equipment go over the last five years?' Early in its inquiry the Commission raised the question of where Armscor sales to a non-existent movement had ended up. Smith replied that he could not be certain; he conceded that it was possible that the weapons had gone to a prohibited country. The Commission subsequently learnt that the arms had gone to Yemen and the former Yugoslavia.
5.2.6.5 None of the parties represented at the Commission could explain the basis on which the Christian Militia had been classified and reclassified. Smith, who served as the alternate chair of the DFPC in the period in question, told the Commission that he knew nothing about the Militia or political developments in Lebanon. Other Armscor witnesses more directly involved in arms sales to Lebanon admitted to similar ignorance. The Department of Foreign Affairs, in a report submitted to the Commission, stated that "there is no militia in Lebanon that bears the official title of the 'Lebanese Christian Militia'; it is unclear which party is meant when that appellation is used". [Department of Foreign Affairs, 'The recent political history of Lebanon', March 1995, pg 12] The Commission shares the view of Armscor that this statement is "incomprehensible". Since 1991 the Department of Foreign Affairs has been involved in reviewing the Log 17 Pamphlet which refers specifically to the Christian Militia in Lebanon. The Commission further agrees with Armscor's submission that the Department's proposal to downgrade the status of the Militia in early 1994 makes no sense in the light of the above statement and the non-existence of the Militia. It appears as if the DFPC and Cabinet mistakenly referred to one of the Christian militias, the Lebanese Forces, as the Christian Militia.
5.2.6.6 Smith's professed ignorance of the Christian Militia when testifying before the Commission is belied by a report which he prepared for Armscor's top management in 1989. The report reveals that Smith knew that the Militia had little international credibility; it also indicates his willingness to sell arms to the Militia on the black market. Smith proposed that Armscor should carry the costs of modifying certain weapons which had been sold to the Militia. This would "convince the client, which experiences the same embargo situation as South Africa and has to purchase at the highest cost on the black market, that we present a good option as a long-term supplier".
5.2.6.7 It is no small irony that the previous South African government, which publicly regarded AK-47s as a symbol of 'communist terrorism', was clandestinely purchasing, selling and distributing thousands of these weapons. More surprising and troubling in the light of South Africa's recent history is the fact that Cabinet and the DFPC regarded AK-47s as 'non-sensitive' weapons which could be sold or given to rebel movements involved in civil wars. According to the Smith Report, the Aks were purchased from China and Eastern Bloc countries. They were primarily intended for distribution by SADF Special Forces to Unita in Angola "until such assistance was stopped by the RSA government". The Commission heard no evidence confirming media speculation that the arms consignment which went to Yemen in 1994 was at some stage destined for Unita. However, the supply of South African arms to Unita may constitute a focus of future investigation by the Commission.
5.2.7 Accountability
Smith argued before the Commission that Armscor was not accountable for policy decisions regarding the Christian Militia. He testified that the DFPC's classification of countries relied primarily on input from the Department of Foreign Affairs; Armscor did not make much of a contribution since "it was not involved in international politics". Further, the DFPC only made recommendations to the State Security Council and Cabinet; final decisions were taken by these bodies.
In its final submission, Armscor argued that it depended on the Department of Foreign Affairs for its political information and could therefore not be blamed for its ignorance of the demise of the Christian Militia. Had the Department done its homework, the categorisation of the Militia would have fallen away some time ago. Responsibility for the continued categorisation of the Militia consequently lies with the Department of Foreign Affairs.
For the following reasons, the Commission is not convinced by these arguments.
5.2.7.1 The Department of Foreign Affairs was not a member of the DFPC when the Christian Militia was first classified in 1985 and then upgraded in 1987.
5.2.7.2 Smith, in his capacity as Armscor's General Manager Import and Export Control, was the alternate chair of the DFPC in the period in question.
5.2.7.3 In terms of the Log 17 Pamphlet, Armscor is responsible for submitting to the DFPC all proposed amendments to the classification of countries.
5.2.7.4 Accordingly, the proposal to change the status of the Christian Militia in the mid-1980s was made by Armscor (with the support of the SADF). In March 1987 the chairman of Armscor, Mr PG Marais, formally requested the Minister of Defence to approve the following reclassifications: the Christian Militia from Group 2 to Group 1; and the Lebanese government from Group 3 to Group 2. The request was duly approved by the State Security Council. (As noted above [Section 5.2.3], the Smith Report states that the Lebanese government was downgraded from Group 1 to Group 2 in 1987.)
5.2.7.5 Although the Cabinet alone had decision-making power, it clearly relied heavily on the input of the DFPC. In the view of the Commission, accountability for the classification of countries and weapons should be borne equally by the previous Cabinet, the State Security Council and the various departments and agencies represented on the DFPC in the relevant period.
In addition to the policy decisions considered above, South Africa's lack of responsibility regarding arms exports was evident in certain of the operational systems and methods employed by Armscor. One of these was a reliance on foreign intermediaries to facilitate transactions with end-users.
5.3.2 Background
In the course of the Lebanon transactions, Armscor at no stage dealt directly with the authorised end-user of its weapons (the Lebanese government in 1994 and the Christian Militia in the period 1991-1993). Instead, negotiations were conducted and contracts were concluded with foreign intermediaries acting as agents, brokers or purchasers.
The intermediaries included Prince Anwar (buyer of the 1993 and 1994 shipments); Der Hovsepian (Prince Anwar's business associate and buyer of the 1991 and 1992 shipments); Steenberg (charterer of the ships which carried the arms); and Wazan. Wazan is variously described in Armscor documents as the official purchaser of the Christian Militia; the agent of the Militia; a buyer for the Lebanese government; and the agent of Armscor. Armscor approved Wazan's appointment as an 'exclusive agent' in 1989 but is now uncertain whether this was ever implemented. The use of middlemen is perhaps best understood in the context of the arms embargo against South Africa. The embargo inhibited Armscor from marketing its products freely and dealing directly with other governments. Intermediaries were not only able to identify buyers in the geographical areas and political situations with which they were familiar; they also created a distance between seller and buyer, obscuring their respective identities from each other.
Although Armscor witnesses consistently refused to comment on the arms embargo, there is some evidence to support the above proposition. In May 1988 South Africa's National Intelligence Service reported to Armscor on discussions that had taken place between Mr AJ Venter, a South African journalist, and the intelligence head of the Christian Lebanese Forces. The intelligence chief had expressed strong interest in doing business with Armscor but "feared publicity of any SA connection no matter how mutually beneficial it may be".
5.3.3 Assessment
The distance between seller and buyer, referred to above [Section 5.3.2], gave rise to an inherent risk that the intermediaries might sell or divert Armscor's weapons to an unauthorised end-user. This is precisely what occurred in each of the arms shipments to Lebanon between 1991 and 1994.
In the case of the 1994 transaction, Armscor dealt exclusively with Wazan, Der Hovsepian and Prince Anwar. There was no communication whatsoever between Armscor and the government of Lebanon, the ostensible buyer of the arms. The Lebanese government was in fact totally unaware of the deal. As a matter of common sense, it is extremely unlikely that the Wazan debacle would have occurred had Armscor concluded or confirmed the contract directly with the Lebanese authorities.
In the case of the shipments intended for the Christian Militia in 1991 and 1992, Armscor officials negotiated only with Wazan. They were apparently unaware that Der Hovsepian was the buyer of the weapons and ammunition and that he resold these goods to an end-user other than the Christian Militia.
In the view of the Commission, Armscor's reliance on intermediaries and its failure to deal directly with end-users is evidence that the institution cared little about where its weapons ended up.
This finding is reinforced by the fact that, contrary to internal policy, Armscor made no effort to establish the bona fides of the intermediaries with whom it worked. Nor did Armscor officials proceed with caution when there were grounds to be suspicious of these middlemen.
5.3.4 Armscor policy on marketing agents and contacts
In 1989 Armscor formulated procedures for the appointment and use of marketing agents and contacts to facilitate the sale of arms from South Africa. The procedures are contained in a document approved by Smith.
The document defines 'marketing contacts' as persons or bodies seeking to initiate transactions between clients and armament suppliers. Such contacts include "professionals" as well as "amateurs who have little or no knowledge of armaments".
A marketing contact is appointed only for the period of validity of a quotation to a particular client. An agent, in contrast, is appointed for a specified period and geographical area to facilitate the structuring, formalising and management of arms transactions. The approval of Armscor's top management is required for the appointment of agents.
The document further provides that Armscor's division of marketing contracts will register the names and details of contacts and agents on a computerised data bank. Complete details on agents must be made available for monitoring by the head of Armscor's Security Department. Agents and contacts that are regarded as undesirable persons or parties must be reported immediately to the Manager: Marketing Contracts.
Appendices to the document cover, inter alia, the benefits, disadvantages and "ill-considered use" of contacts and agents. The disadvantages include the possibility that Armscor's image and credibility may be impaired by a contact's lack of professionalism, ethics or ability. There is also the danger that agents concentrate on "conflict areas" in which Armscor may not want to be involved.
In summary, the document highlights the value of appointing agents and contacts but warns of certain risks. It outlines a number of procedures intended to minimise these risks and to ensure a professional relationship between Armscor and the intermediaries with whom it works.
In its final submission, Armscor informed the Commission that the document had been revoked at some stage but that the principles contained therein remained in force through a memorandum from top management. The memorandum reiterates that agents should be thoroughly evaluated according to stipulated criteria.
5.3.5 Bona fides of the Lebanon intermediaries
In the transactions in question, Armscor did not follow the procedures outlined above. Indeed, the Armscor witnesses who testified before the Commission appeared to have forgotten about the existence of the document and memorandum until these were tabled by Armscor's legal team. Smith told the Commission that Armscor took no steps to verify the bona fides of an agent. Vermaak testified that his efforts to assess the trustworthiness of agents amounted to having 'a good chat' with them. Armscor's Security Department reported that it had no significant information on any of the foreign actors involved in the Wazan debacle.
Nevertheless, Armscor had grounds to be suspicious of these actors before the debacle:
5.3.5.1 In a report drawn up in January 1994, Vermaak notes that "Prince Anwar's bona fides in Saudi Arabia are not as good as he claims". Vermaak also mentions that Prince Anwar tried unsuccessfully to bribe him. This report was discussed with Savides and Smith.
5.3.5.2 Vermaak was told by Der Hovsepian that he should never mention the words 'guns' or 'ammunition' over the telephone. Der Hovsepian believed that the authorities in Germany, where he resides, were monitoring his conversations. The obvious inference was that Der Hovsepian was under investigation by these authorities.
5.3.5.3 In early 1994 Vermaak, Savides and Smith became aware that the 1993 arms shipment to the Christian Militia had been distributed by Prince Anwar to 'his men in Jordan'. This was contrary to the export permit issued by Armscor.
5.3.5.4 In June 1994 Smith and other Armscor officials learnt that portions of the 1992 Skybird arms shipment to the Christian Militia had been confiscated by authorities in Belgium, and expressed uncertainty as to whether weapons were destined for Croatia (to whom, to Smith's and Armscor's knowledge, the Militia had supplied assistance).
In the view of the Commission, this information was sufficiently serious to have warranted a thorough investigation of the foreign intermediaries, and the suspension or termination of Armscor's dealings with them. Armscor's failure to take such action was negligent and contributed to the Wazan debacle.
Following the debacle, still more serious concerns about the integrity of the intermediaries emerged. The Commission heard the following allegations from Armscor and other sources: Wazan was wanted by the Lebanese government on various criminal charges; Der Hovsepian had threatened the life of Steenberg and Vermaak; and Prince Anwar had been involved in drug smuggling.
Der Hovsepian admitted that he had indeed been under police investigation for illegal arms dealing in Germany. Steenberg informed the Commission that he had few morals and was willing to lie in order to get business. And Vermaak testified that Wazan, whom Armscor claims to have learnt to trust over a long period, was "one of the smaller thugs among the big thugs [involved in the debacle]".
These allegations and admissions naturally brought into question Armscor's diligence and competence in working with foreign actors. Nevertheless, Armscor officials and legal representatives cautioned the Commission against drawing conclusions based on 'the wisdom of hindsight'. This misses the point entirely. Armscor clearly failed to exercise the necessary caution and foresight required by a responsible approach to arms trade.
Finally, the Commission did not investigate the extent to which Armscor made use of intermediaries in transactions other than with Lebanon. However, the policy document and memorandum referred to above [Section 5.3.4] suggest that this was not uncommon.
It was indicated earlier that Armscor's lack of responsibility regarding arms exports is evident from certain of its operational systems [Sections 5.1.1 and 5.3]. In addition to the reliance on foreign intermediaries, a second such system was the sale of arms on a 'free-on-board' (FOB) basis. This type of sale applied generally to surplus SADF stock and specifically to all the Lebanon transactions.
An FOB shipment entails the following features: the buyer is responsible for transporting the goods from the country of export to the country of import; the buyer charters the ship (or other mode of transport), or hires a ship charterer; the buyer pays the transport costs; and ownership of the goods passes to the buyer as soon as the goods are loaded onto the ship at the country of export.
5.4.2 The risk of free-on-board shipments
For present purposes the key issue is that, once ownership of the goods passes, the buyer is free to choose the route of the ship and the final destination of the goods. The seller has no control over this choice and may even have no knowledge of the selected end-destination. The buyer is at liberty to take the goods to a place other than that authorised by the seller.
This is precisely what occurred in the Lebanon transactions. Moreover, Armscor witnesses conceded that such outcome is an inherent risk in FOB shipments. According to Smith, "if we ship free-on-board then I make bold to say that no-one has control over the final destination of the vessel, and this applies not only to South Africa".
The risk could have been avoided had Armscor employed a different method of sale, known as 'cost, insurance and freight' (CIF), in terms of which the seller is responsible for getting the goods to the port of discharge. When the Commission asked Michael Steenberg how South Africa could ensure that its weapons arrived at the correct destination, his response was succinct and unequivocal: 'use a South African ship'.
Armscor's willingness to sell its weapons FOB rather than CIF may have been based on commercial and logistical considerations since the buyer was then responsible for the shipping arrangements and the related costs. But it is likely that there was also a political motivation. According to Mr Robinson, head of Armscor's shipping division, FOB transactions may be intended to obscure the seller's identity from the buyer. This would have made complete sense in the context of the arms embargo against South Africa. The problem, however, was that the buyer's identity could just as easily be hidden from the seller.
While FOB transactions may be commonplace in international commodity trade, they are obviously inappropriate if the seller is concerned about where its goods end up. Once again, the inescapable conclusion is that Armscor was not greatly concerned about the matter.
This conclusion is reinforced by the fact that Armscor made no effort to ascertain where the charterer of the ship planned to off-load the arms consignments. As outlined below [Section 5.4.3], such information would not have been difficult to obtain.
5.4.3 Documentation concerning port of discharge
The 1993 and 1994 arms consignments were transported by sea from Port Elizabeth on the Vinland Saga and the Arktis Pioneer respectively. Michael Steenberg was the charterer of the ships. Eagle Freight, a local shipping agency, acted as the agent of both Steenberg and Armscor. The export permits issued by Armscor in respect of the two shipments showed the end-user as being based in Lebanon.
Even before the ships left Port Elizabeth, however, a number of documents indicated that the vessels were not heading for a Lebanese port in the Mediterranean Ocean. Instead, the destination was presented variously as a port in Yemen, "One Red Sea Port" or the "High Seas".
These documents included draft bills of lading prepared by Steenberg. One of the drafts stated that the Vinland Saga's port of discharge was Roads of Mokha, a Yemeni port; the receiver of the consignment was designated as Abdul Magid Saweydan in Yemen.
Eagle Freight passed this draft bill of lading on to Armscor's shipping division but it was apparently filed without being read.
The other documents, which relied on information provided by Eagle Freight, included the Certificate of Inspection for Carriage of Explosives, issued by the South African Department of Transport; and the Report Outwards and Certificate of Clearance, issued by Customs and Excise in South Africa.
Clive Reid, a manager at Eagle Freight, informed the Commission that there was no reason for his company to have sent these documents to Armscor because the shipments were FOB. Accordingly, the selection of the port of discharge was the prerogative of the buyer. The buyer may have decided to transport the consignment by sea to Yemen and then transfer the goods by road or rail to Lebanon. In any event, according to Reid, these matters were of no concern to Armscor as the seller.
While Reid's assessment may be accurate with respect to FOB shipments of ordinary commercial goods, it is clearly misplaced if arms and ammunition are involved. Armscor officials should have been concerned about the charterer's choice of port of discharge; they could have requested copies of the documents prepared by Eagle Freight; and they should have asked Eagle Freight to alert them to any deviation from the export permit.
In the view of the Commission, Armscor's failure to take such steps was negligent and contributed to the Wazan debacle. This conclusion is not based on the 'wisdom of hindsight', as suggested by some witnesses. It is based on the standard of care and foresight required by a responsible approach to arms exports, particularly since Armscor knew that previous consignments to Lebanon had been diverted to other destinations.
As outlined above [Sections 5.3 and 5.3], two of Armscor's operational systems - free-on-board shipments and a reliance on foreign intermediaries - were inconsistent with a responsible approach to arms trade. The problem was exacerbated by organisational negligence in the application of these systems.
In this context, it was noted that on two occasions before the Wazan debacle Armscor officials learnt that earlier shipments to Lebanon had gone elsewhere. In the view of the Commission, the response of the officials to this information, and their failure to take appropriate action, constitute compelling evidence of an organisational disregard for where South African weapons exports ended up.
5.5.2 The Jordan debacle
In September 1993 a consignment of weapons and ammunition was sold by Armscor to the Christian Militia in Lebanon. Wazan was involved in the transaction, ostensibly as the agent of the Militia, and Prince Anwar was the immediate purchaser of the goods.
Handwritten notes made by Vermaak before the shipment indicate his belief that the initial destination of the weapons was to be Jordan and not Lebanon. His failure to disclose this information in the shipping instruction and the application for marketing and export permits was an act of deception, if not a statutory offence.
After the shipment, Vermaak noted in a formal report that Anwar had informed him that the consignment had been rejected in Lebanon; Anwar had therefore distributed the weapons to his 'manskappe' (men or soldiers) in Jordan. This information was shared with Savides and Smith, neither of whom took any further action.
When the Commission raised the matter with Savides, he insisted that there was no problem in the weapons having gone to Jordan. He argued that Jordan was a legitimate recipient of the arms because it was a Group 2 market in terms of the Cabinet's country classification.
The Commission expressed at the time, and records here, its great astonishment at this response. The final destination of the consignment was contrary to that authorised in the export permit issued by Armscor. The distribution of the weapons to Prince Anwar's men was therefore contrary to South African regulations and can be regarded as a black market transaction.
Although Vermaak refused to testify directly on this issue, he conceded as a general point that the distribution of weapons to private soldiers fell within the definition of a black market transaction.
Further, it is inconceivable that the Cabinet intended Armscor to sell weapons to private individuals or armies in Group 1 and Group 2 countries. By way of hypothetical analogy, the fact that Italy is considered a legitimate recipient of South African arms does not mean that Armscor is allowed to sell weapons to the Red Brigade or the Mafia.
Smith initially testified that he knew nothing about Prince Anwar. Yet when the Commission later asked him about Vermaak's report he had a different response. He said that he had thought that Prince Anwar was a member of the "Jordanian hierarchy" and that the weapons had therefore gone to the official armed forces of Jordan. Under questioning from the Commission, Smith conceded that he had no information to justify this assumption and had done nothing to confirm it at the time.
Smith also argued that when he learnt about the incident it was a fait accompli. The fact that the weapons had ended up in Jordan could not be undone.
In the view of the Commission, this argument may be technically correct but it misses the point entirely. The fate of the 1993 shipment should have served as a warning that Wazan, Der Hovsepian and Anwar could not be trusted to take South African arms to the authorised destination.
Further, Smith, Savides and Vermaak had a duty to inform Van Dyk [Manager Armaments Control] of what had occurred. The export permit issued by Van Dyk not only stated 'Christian Militia' as the end-user but also required the sale to be verified retrospectively. Although the system of retrospective verification was never implemented, Smith and others were in a position to confirm that the Militia had not received the arms.
Finally, Prince Anwar denies having told Vermaak that he distributed the weapons to his men in Jordan. Anwar insists that Vermaak was aware that the consignment had been sold to Yemen.
5.5.3 The Yugoslavia debacle
The Smith Report presented to the Minister of Defence contains a list of the weapons, equipment and ammunition allegedly sold to the Christian Militia in 1991 and 1992. Wazan was involved in the transactions, ostensibly as the agent of the Militia.
During the Commission's sitting in Berne, Der Hovsepian revealed that he was the buyer of these goods and that they had never gone to Lebanon. Der Hovsepian would not tell the Commission to which country he had sold the weapons and ammunition because of an on-going legal dispute around payment.
However, Der Hovsepian's legal representative confirmed that the country in question was a prohibited Group 3 market in terms of South Africa's country classification. In the course of this interaction, the Commission was able to glean that the weapons had gone to one of the republics that comprise the former Yugoslavia.
This was confirmed by Michael Steenberg, the shipper of the goods, in a statement taken by Armscor shortly after the Wazan debacle and presented to the Commission in Berne.
There are three significant aspects to this information. First, the supply of arms to former Yugoslavia was in contravention of a United Nations arms embargo. Second, the Wazan debacle had several precedents which constituted a distinct pattern: none of South Africa's arms exports to Lebanon between 1991 and 1994 ended up in that country; some of them went to prohibited Group 3 markets; and all of them involved Wazan and Der Hovsepian.
Third, the SANDF and Armscor became aware, before the Wazan debacle, that portions of the 1992 Skybird shipment to Lebanon had been apprehended in Belgium and were uncertain whether they may have been destined for Croatia. In the view of the Commission, their response was negligent and, in the case of Smith, amounted to misconduct and a dereliction of duty. These matters are discussed below [Section 5.5.4].
5.5.4 The Belgian debacle
In June 1994 the SANDF was told by its naval attache in Paris that a cache of South African-manufactured grenades and ammunition had been confiscated by Belgian authorities in the course of a judicial inquiry. The Belgian authorities had raised certain questions about the cache and these were forwarded by the SANDF to Armscor [Section 4.8.4].
Smith responded to the questions on behalf of Armscor in a letter dated 28 June 1994. He confirmed that the grenades concerned - that is, those seized in Belgium - were of South Africa origin and stated that they had been shipped to the Christian Militia in February 1992. He added that Armscor was also aware that the Militia had at some stage given assistance to Croatia. It was not known, Smith's letter proceeded, whether the grenades then in Belgium were also destined for Croatia ('hierdie oord'). He could not comment on whether the grenades had been stolen.
The Commission's finding that Smith was guilty of misconduct and a dereliction of duty is based on the following acts of omission.
5.5.4.1 Smith did not inform the Minister of Defence that South African-manufactured grenades had been confiscated in Belgium. It seems obvious to the Commission that an incident of this nature, involving a foreign government, should have been brought to the Minister's attention immediately. Whether or not it was the duty of the SANDF to inform the Minister, Smith himself, as Armscor's General Manager for Import and Export Control, should undoubtedly have done so.
5.5.4.2 Smith did not seek to sever Armscor's relations with Wazan or, at the very least, initiate a comprehensive investigation into what had occurred. Smith testified that he had merely asked Vermaak to issue a "stern warning" to Wazan. A thorough investigation was warranted on at least three grounds: Smith was aware of Croatia's country classification; the final destination of the arms was contrary to the export permit issued by Armscor; and Vermaak was in the process of concluding another transaction with Wazan.
5.5.4.3Smith did not inform van Dyk, the Manager of Armaments Control about the incident.
5.5.4.4 During his initial testimony in November 1994, Smith did not inform the Commission about the Belgian debacle or the link between the Christian Militia and Croatia. Nor did he include this information in his report to the Minister of Defence following the Wazan debacle.
Armscor's lawyers expressed great concern about the possibility of an adverse finding against Smith on the strength of the above. They argued that Smith deals with numerous documents on a daily basis. He could not be criticised for failing to recall a document "which appeared of prime importance to the Commission but which may not have enjoyed a similar level of priority under ordinary working conditions or may well have become lost in the vagaries of a witness' inadequate recollection". Armscor's legal team argued further that the Commission's inquiry focused primarily on the 1993 and 1994 shipments to Lebanon. Accordingly, and given the pressure of having to scrutinise numerous documents in a short space of time, the legal team had concentrated on the 1993-4 period when preparing Smith for his initial testimony.
The Commission is in no way critical of Armscor's legal team which endeavoured, with considerable success, to prepare their witnesses and assist the Commission under severe time constraints.
However, the Commission does not accept the exoneration sought for Smith. It is in no doubt that Smith should have recognised the significance of the Belgian incident at the time and when testifying before the Commission four months later. This information was directly relevant to understanding what had gone wrong in the Wazan debacle. Together with the Jordan incident discussed above [Section 5.5.2], it indicated that the debacle was not an isolated event but part of broader pattern.
In the course of its inquiry, the Commission scrutinised a large number of documents drawn up by Vermaak's section in relation to the Lebanon transaction. These included price determinations and quotations, communication with the SADF, correspondence with the foreign actors, reports to Vermaak's superiors and much else.
The documents reflect an extraordinary level of financial and administrative incompetence and carelessness. In private moments, the Commission debated whether the situation most closely resembled Kafka, Alice in Wonderland or the Katzenjammer Kids.
Contracts were concluded or altered without written confirmation between Armscor and the client. No records were kept of the flow of funds relating to the transaction. Vermaak agreed to price reductions for no apparent good reason. Formal motivations for the payment of money to Wazan are patently false but explained by Armscor witnesses as merely 'a wrong choice of words'. Documents are undated or incorrectly dated, and contain numerous arithmetical and other errors. Some of these errors were reproduced in the Smith Report, which was presented to the Minister of Defence.
Vermaak's failure to keep proper records created an environment in which financial and other forms of misconduct could flourish. The documents are so inaccurate, misleading and incomplete that the Commission had great difficulty determining which of the many incongruities resulted from negligence and which had sinister implications.
Vermaak's section also ignored many of the internal procedures contained in Armscor policy documents, some of which are intended, in whole or in part, to prevent South African weapons from ending up in the wrong hands. The documents cover the use of front companies and agents; standard conditions of sale; the handling of contracts and quotations; price determinations; client orders; purchase authorisations; product management; and reporting procedures. Vermaak's failure to adhere to certain critical procedures contributed directly to the Wazan debacle.
Vermaak and his subordinates offered five explanations for the chaotic state of affairs in their department:
5.6.1.1 Following the restructuring of Armscor in 1992, the section was acutely short-staffed. It was quite unable to cope with its administrative workload. A total of seven staff had to perform marketing and commercial tasks which were previously handled by different divisions with many more people. These problems were raised repeatedly with Savides but nothing was done about them.
5.6.1.2 The pressure on Vermaak and his staff was exacerbated by the fact that management raised their annual sales target from R10 million in 1992/3 to R30 million in 1993/4 and to R50 million in 1994/5.
5.6.1.3 In addition, Vermaak had to cover the costs of running his section from the standard commission of 5% that accrued to Armscor from the sale of surplus SANDF stock. As Vermaak put it, his section began each financial year with a 'negative balance'.
5.6.1.4 The policy documents referred to above [Section 5.3.4] were withdrawn when Armscor was restructured in 1992. However, Vermaak conceded that it was his responsibility to replace the documents but he had been too busy attending to clients to do this.
5.6.1.5 The department's priority was to service clients and potential clients. This was more important than performing administrative tasks. According to Vermaak, "if I had to record everything in writing I would not make much progress with my sales performance".
5.6.2 Quotations to clients
Included in Vermaak's files is a detailed quotation for the 1994 transaction. The document is dated, signed by Vermaak and addressed to General Lahoud, the Commander-in-Chief of the Lebanese Army. According to Bronkhorst, however, the document was never sent to Lahoud but merely drawn up for "the purposes of the record". Quotations addressed to Wazan and Anwar were similarly compiled but not sent.
There are three problems with these documents. First, Bronkhorst admitted that the quotation to Lahoud had been deliberately backdated. The Commission is uncertain whether it was drawn up after the Wazan debacle in an effort by Vermaak to cover his tracks, or whether the backdating was merely symptomatic of the administrative disorder in his department.
Second, the documents constitute a misrepresentation. They give the false impression that they were received by the client or the end-user of the arms exports.
Third, the failure to send the Lahoud quotation is an example of how Vermaak's departure from internal procedures contributed to the Wazan debacle. Had the quotation been sent, the Lebanese government would presumably have replied that it knew nothing about the transaction.
It is significant in this regard that the quotation is attached to a document which contains Armscor's standard conditions of sales. These include, inter alia, that Armscor will nominate the ship that carries the goods; that Armscor requires an official order or an end-user certificate (EUC) from the buyer; and that the buyer will not resell or transfer the goods to a third party without Armscor's prior permission.
By failing to send the quotations, Vermaak effectively waived these conditions. He testified that quotations were superfluous where the client had made an offer of purchase which Armscor had accepted. Yet the conditions of sale were not superfluous and should have been communicated to the buyer.
In the 1993 transaction no official order or EUC was obtained from the Christian Militia as required by the conditions of sale and the export permit. Armscor witnesses argued that this requirement was met by the contract of sale between Armscor and Wazan and by the bank drafts received in payment of the goods.
This is patent nonsense. An official order or EUC serves to confirm the identity of the end-user. Neither the contract nor the bank drafts achieved this purpose. Here as elsewhere, Armscor officials took procedural shortcuts which stripped away the safeguards designed to prevent such outcomes as the Wazan debacle.
Armscor claims to have received an 'official order' for the 1992 arms shipment to the Christian Militia. This document has no letterhead; it is signed only by Wazan; and it gives no indication whatsoever that it was authorised by the Militia.
5.6.3 Management accountability
Even more extraordinary than the administrative and financial chaos in Vermaak's section was the fact that senior management never noticed, let alone addressed, the myriad problems. On the contrary, Armscor awarded prizes to Vermaak in 1993 and to his section in 1994 for exceeding their annual sales target. Vermaak also received positive performance appraisals from his immediate supervisor, Savides. Armscor's legal team made the following submissions in a spirited defence of the line managers to whom Vermaak reported, Savides and his superior, Smith:
5.6.3.1 Corporations are entitled to assume that their employees act in good faith. There had never been any reason to doubt Vermaak's integrity. Moreover, even the best management systems are vulnerable to acts of deception by employees.
5.6.3.2 Armscor applied the organisational principles of 'delegation of authority' and 'management by exception'. In other words, managers like Vermaak were entrusted with considerable independence and their superiors were only expected to attend to significant problems. It would not have been practical for Savides and Smith to scrutinize Vermaak's every move given their many other duties. Nor was such scrutiny deemed necessary in the light of Vermaak's experience and proven ability.
5.6.3.3 Notwithstanding the above, Armscor accepts that Savides is "generally accountable" for the conduct of Vermaak, and Smith is similarly accountable for the conduct of Savides and, through Savides, of Vermaak. Smith testified that he is accountable for the actions of his subordinates unless they act dishonestly or engage in deliberate or purposeful negligence (doelgerigte nalatigheid) or blatant negligence (blatante nalatigheid).
5.6.3.4 Savides and Smith consistently received positive performance assessments from their respective superiors.
5.6.3.5 Even if certain internal policy documents had been withdrawn in 1992, the essence of the policies remained in force. As the author of many of these documents, Vermaak was aware of their content and regularly instructed his subordinates on internal control systems.
In the Commission's view, the problems in Vermaak's section were sufficiently serious and obvious to have warranted concerted management intervention. Whatever the deception perpetrated by Vermaak, this was not a case of a sound organisational system being thwarted surreptitiously. It was rather a total breakdown of the system.
While Vermaak did enjoy considerable independence, this was by no means absolute. Many of his actions, especially those relating to financial matters, required the approval of his superiors. Yet when the Commission asked Savides and Smith to explain the content of documents they had signed, they were frequently unable to do so.
Savides inadvertently summed up the management malaise when he testified that he was only 'nominally' Vermaak's supervisor. He and Smith failed to address the fact that Vermaak's section was acutely short-staffed; they neglected to ensure that Vermaak replaced the internal policies which had been withdrawn; and they tolerated an anarchic situation in which deceit could flourish undetected. In this context, the positive performance appraisals of Vermaak, Savides and Smith say more about Armscor's uncritical approach to staff appraisals than they do about the officials being assessed.
In conclusion, Savides and Smith failed in their duty to exercise proper supervision and control over Vermaak. They are therefore accountable, along with Vermaak, for the administrative chaos and negligence which contributed to the Wazan debacle.
The Commission is sympathetic to the bitter complaint of Vermaak's lawyers that Armscor attributed blame for the debacle to their client and the foreign actors alone. Armscor was undoubtedly justified in seeking terminate Vermaak's employment, but in the Commission's view it cannot in good faith retain the services of Smith and Savides.
5.6.4 Organisational culture
In summary, the Commission's investigation revealed a high level of incompetence and negligence in the Armscor section which sells surplus SANDF stock; inadequate control and supervision on the part of management; and a pre-dominant emphasis on marketing and sales.
The emphasis on marketing and sales is arguably the most serious problem in Armscor's organisational culture. It spawned a disregard for critical operating procedures and overrode the sense of caution required by a responsible approach to arms exports.
This emphasis was both a psychological compulsion in the case of Vermaak and a broader institutional imperative. Management repeatedly raised Vermaak's annual sales targets despite his section being short-staffed. And Armscor awarded prizes to the department, despite its dismal administrative performance, for exceeding their targets.
There was great pressure to sell surplus SANDF stock in particular, and this apparently had a bearing on the urgency with which the Lebanon transactions were pursued in 1993 and 1994. According to Armscor witnesses, the pressure derived from cuts in the defence budget; the possibility that China might "flood the market" with new AK-47s; and the prospect that the SANDF would melt the Aks or dump them in the sea if they were not sold quickly.
The preoccupation with marketing has its roots in a fatal flaw in the Armscor Act. On the one hand, the Act confers on Armscor the power to develop, acquire, market and sell arms; on the other hand, it makes Armscor responsible for controlling and regulating arms exports. Whereas the former activities require a pro-active approach to marketing, the latter demand restraint. This anomalous situation was not resolved by delegating the different functions to separate sections of Armscor. The Lebanon transaction clearly reveals an institutional emphasis on sales above restraint.
In the interests of fairness and completeness, the Commission has sought to identify evidence of a responsible approach to arms exports. It has considered carefully the final submissions made by the parties in this regard.
Regrettably, the majority of the issues listed below are qualified to a greater or lesser extent.
5.7.2 Country classification
In September 1993 Van Dyk proposed in a letter to Smith that the Christian Militia be downgraded to a Group 3 market.
Yet in the same letter Van Dyk recommended upgrading Croatia and Slovenia to Group 1. These republics of former Yugoslavia were subject to a United Nations arms embargo, imposed in 1991.
5.7.3 Control
5.7.3.1 Armscor sought to regulate arms exports through an elaborate process of reviewing applications to market South African weapons abroad. Marketing and export permits would only be granted if the applications conformed to the country and weapons classification contained in the Log 17 Pamphlet. In 1992 Van Dyk extended the permit system to the sale of surplus SANDF stock which was formally exempt from this requirement. However, the entire system was fatally undermined by Armscor's reliance on foreign intermediaries; its failure to make direct contact with the authorised end-users of its weapons; and its sale of arms on a free-on-board basis. These practices allowed the intermediaries in the Lebanon transaction to divert the arms to unauthorised destinations with relative ease.
5.7.3.2 Since May 1994 Armscor has required applicants for export permits to obtain an end-user certificate (EUC) from the responsible statutory authority in the prospective buyer country. An EUC confirms the identity of the buyer and the content of the proposed sale. It includes a commitment that the buyer will not resell or alienate the arms to a third party without the seller's permission. Following a trip overseas to investigate arms control systems in other countries, Van Dyk drew up an exemplary 'model' EUC. This was shown to Vermaak and others. However, the forged EUC from Lebanon which Van Dyk accepted in August 1994 bears little resemblance to his model. In particular, it does not state the name or designation of the person who signed the document. In the light of its previous dealings with Wazan, Armscor should have sought to authenticate the EUC with the Lebanese government.
5.7.3.3 Armscor's internal policy documents relating to arms exports are organisationally sound. Some of them are clearly intended, in whole or in part, to prevent South African weapons from ending up in the wrong hands. However, many of the critical procedures contained in these documents were ignored by Vermaak's section in the Lebanon transactions, and senior management failed to detect this. Several of the documents were withdrawn after the restructuring of Armscor in 1992 but were not replaced.
5.7.4 Diversion of arms
5.7.4.1Vermaak did not hide from his superiors the fact the 1993 arms shipment to the Christian Militia had been distributed to Prince Anwar's men in Jordan. Yet Vermaak's superiors were unconcerned about this although it was contrary to the export permit and the Cabinet's country classification.
5.7.4.2 Shortly before the Wazan debacle, Vermaak sent a fax to Prince Anwar informing him that South African arms could not go to Yemen. However, the Commission's finding is that Vermaak was part of the conspiracy to take the 1994 consignment to Yemen. On another occasion, Vermaak sought to facilitate the provision of military equipment to Yemen from a third party supplier in Singapore. In the view of the Commission, this was indirectly a contravention of the Cabinet's country classification.
5.7.5 New policy and procedures
In 1994 Armscor formulated proposals for new arms export procedures and policy. The proposals are contained in two documents: The National Policy for the Armaments Industry, submitted to the Subcouncil on Defence in April 1994; and The National Armaments Control Policy which recommends to Cabinet the establishment of a Government Inter-Departmental Sub-Committee on Export Control. By agreement with the parties, the Commission did not review the content of these documents during its investigation into the Wazan debacle. Armscor's proposals will be considered in the next leg of the Commission's inquiry.
Each of the main issues raised above constitutes evidence of an institutional disregard for where South African arms exports ended up. When put together, the issues present a conclusive and dismal picture of irresponsibility at policy, operational and organisational levels on the part of the previous Cabinet, the DFPC and Armscor.
The Commission views this institutional disregard in a far more serious light than the negligence or misconduct of individual Armscor employees. The Wazan debacle was not the result of a good system being undermined through carelessness or mischief, but rather the consequence of a bad system taking its natural course. Whereas earlier the Commission addressed the question of who knew that the Lebanon arms were going to Yemen [Section IV], here we raise and answer the question of whether anyone really cared.
Accountability for this state of affairs lies chiefly with Armscor's top management and the previous cabinet.
It follows that punitive action taken against Armscor employees in the light of this report will not be sufficient. What is required is a comprehensive review of arms trade policy, decision-making procedures, control mechanisms, operational systems and organisational culture and practice.
A review of this nature should be subject to public and parliamentary scrutiny and debate since Armscor acts in the name of South Africa and receives a substantial state subsidy (R190 million in the 1995/6 Defence Budget). The political sensitivity of armaments demands more rather than less transparency.
5.8.2 Applicability of main finding
It is important to recall that the Commission has thus far focused primarily on Armscor sales to Lebanon in 1993 and 1994, and to a limited extent on sales to Lebanon in 1991 and 1992. All these transactions were conducted by the Armscor section responsible for selling surplus SADF stock.
The Commission therefore cannot state unequivocally that its assessment and findings are equally applicable to other Armscor marketing departments; to transactions concluded with countries other than Lebanon; or to the period before 1991.
Nevertheless, it must be emphasised again that many of the criticisms expressed here are of a general nature or of general applicability. It is hard to imagine that South Africa assumed a responsible attitude to arms exports with the singular exception of those ostensibly destined for Lebanon; or that Armscor pursued one organisational and operational approach to Lebanon and an entirely different approach to other countries. It is most probable that the lack of responsibility outlined above was endemic.
In this context, it is worth noting that local and foreign newspapers, church groups and human rights organisations have alleged that Armscor sales to Sudan, Rwanda, Angola and Northern Ireland were also irresponsible. In 1991 Armscor was indicted by a Grand Jury in Philadelphia for conspiring to contravene United States arms control regulations and the international arms embargo against Iraq [Sunday Times 25 December 1994, page 4]. These allegations have not been investigated by the Commission.
5.8.3 The context of apartheid and the arms embargo
The Commission is unable to explain with absolute certainty the ethical and psychological perspectives which gave rise to the lack of responsibility from the previous Cabinet and Armscor. However, it is probable that two related political developments had a significant influence.
First, at a general level, the Nationalist government before 1990 was determined to maintain the inequitable system of apartheid through repressive means. The immorality of domestic policy extended naturally to regional and international policy. A state which injured and killed its own people was hardly likely to respect the citizens of other countries.
Second and more specifically, South Africa's internal and external policies led to the imposition of an international arms embargo against this country. The United Nations Security Council prohibited states from exporting arms to South Africa [Resolution 418 of 1977], and requested states to refrain from importing arms from South Africa [Resolution 558 of 1984]. A number of states endorsed these resolutions in their national law.
The embargo stimulated the growth of the domestic arms industry but it also restricted Armscor's ability to sell and purchase weapons freely and openly. Armscor consequently functioned behind a wall of secrecy; it employed a range of clandestine methods, such as the use of front companies, to evade the embargo; and it operated in the world of illicit arms dealing where the rules are somewhat different from those laid down in South African statutes and regulations.
The government's overriding imperative was to manufacture, purchase and sell arms in order to secure the survival of minority rule and the arms industry. This imperative was not tempered by the constraints of public accountability, independent scrutiny or international norms.
Although the arms embargo was lifted in May 1994, the preceding comments are not merely of historical interest. If the embargo had a major influence on Armscor's operational systems and organisational culture, then the vital question is whether this influence still prevails.
When the Commission asked Armscor witnesses to identify and explain the methods that had been employed to circumvent the embargo, they professed ignorance, claimed the privilege of silence or experienced a sudden lapse of memory. The review of arms trade policy and practice, proposed above [Section 5.8.1], must surely entail full disclosure by Armscor of these methods.
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