Examination of Witnesses (Questions 40
TUESDAY 10 NOVEMBER 1998
A SHARMAN, MR
B SALZMANN, MR
D EVANS, MR
N PREST AND
MR D GARLAND
40. You do not know.
(Mr Evans) I have been in to see Tony Lloyd. Whilst
you are right on the 680 process, we are wrong to separate this
one item out. The length of time for most of our export licences
is unacceptable. You are talking 50 days for 40 per cent of our
export licences; that is one third of a year. The lead time on
our products varies between three and six months. The customer
41. I understand that and that is what I am
worried about. I have great concerns. I want to make sure I have
it right. Really the products you produce cannot be used in torture
or anything like that. They are straightforward.
(Mr Evans) Any product, if you use it adversely, could
be used. We make mag-tef flares which are very high temperature
flares going off aircraft for distracting missiles. If you stick
that in an enclosed environment, it would cause a lot of damage
to somebody. Yes.
42. There is no obvious reason then for any
(Mr Evans) No.
43. That is the point I am trying to get to.
(Mr Evans) I would be wrong to say to you that if
it was used for another reason ... I do not believe this particular
product falls into that category but we do make products which
are used for decoying missiles off aircraft which give off very
hot signatures because they simulate the engines to give the missiles
something else to go for. If they were used in a different type
of environment, yes. It is the same if you picked up this bottle
and rather than drank it smashed it over somebody's head. It is
a different application.
44. How many days do you think that would take
to get a licence?
(Mr Evans) I have no idea. It would probably take
100 days to explain what it was.
45. On this question of Colombia, is it the
customer or is it the equipment? There are two elements here to
this. There is also the sense in which the kind of equipment you
are talking about could have dual use. It is portable, it gives
off a big bank, it can be used for various purposes. Are you confident
that the customer in Colombia, the Colombian authorities, are
necessarily the kind of people with whom responsible companies
would want to deal?
(Mr Evans) We sought advice from DESO on this and
their advice was that this was acceptable and they endorsed the
form 680. We follow all the procedures.
46. Do you think that DESO are necessarily the
best people to ask, given that their job is to assist in the selling
of arms? Do they have the same high standards?
(Mr Prest) The 680 procedure is actually inter-departmental.
It is not purely DESO and MOD. It is effectively a pilot of the
export licensing system.
(Mr Garland) It emanates from DESO because you have
to go to DESO, but it is then circulated.
(Mr Prest) They are the point of approach, unlike
for a licence where the DTI is the licensing authority. It follows
an inter-departmental evaluation process in a group which used
to be called the arms working party. I do not know whether it
(Mr Evans) Of which the Foreign Office is part.
(Mr Prest) On which the Foreign Office sits. It receives
the same inter-departmental consideration as the subsequent licence
(Major General Sharman) I was going to add another
Colombia point. Clearly there is a sensitivity in the Foreign
Office about certain countries and certain products. I became
specifically involved in another example; in that case it was
machine guns for Colombia to be fitted onto patrol boats via a
Spanish shipyard. The licence was eventually, after a very long
time, for the sort of reasons you have been hearing about, raised
to ministerial level and was refused. I then intervened on behalf
of the Association by writing to all the three interested Secretaries
of State. The refusal was overturned and the licence was granted
because we were able to argue, together with support from officials,
that the end use, even though it was machine guns, which clearly
have a dual use, was for stopping drug smuggling. I understand
the sensitivities in the Foreign Office but clearly it could be
far better for Mr Evans if they were to turn round and refuse
him so he did not waste more time and money trying to pursue a
cause which in the end has been lost anyway. That is our main
(Mr Garland) My company manufactures personal protection
equipment. We are the biggest in the UK and one of the biggest
in Europe and one of the leading technically in the world of manufacture
of body armour and helmets and shields. I do not have the same
horror story as David Evans. We have applied for nine export licences
in the last 12 months because we have an open individual export
licence which allows us to sell to many countries backed up by
an end-user certificate. Of the nine applications we have made
only one has been within the target date of 20 working days. Last
year, after much ground work, we obtained an order through a Hong
Kong merchant for mainland China. This was for 1,000 helmets which
were going to be followed by many, many more thousands. We applied
on 23 April 1997 and it was rejected on 13.8.97. It took over
four months for rejection. Of course I appealed. In the reason
for rejection it was said that it could be used for internal suppression.
I do not know how a helmet can really be used for that purpose.
We have one category. We do not deal in arms, we do not deal with
anything except the products we manufacture which are things to
stop knives, fragments and bullets. Apart from this question of
the delay in getting an answer, in our business we know you wait
for two or three years, you get the order and then they want it
in two or three weeks, it is traditional stuff. Of course if you
then get a delay in obtaining the export licence, they think you
are using it as an excuse for not meeting your obligations. We
also lost two orders for the United Nations, UNHCR, because of
delays. That to my mind is beyond comprehension. I fail to see
why an application with an end-user certificate from the United
Nations could not go through on the nod.
47. Both Mr Evans and Mr Garland refer to losing
orders. Do you have any idea to where you lost the orders? Do
they tend to be specific countries? How effective is the licensing
procedure in those countries? How long do your competitors have
to wait? Do they need to wait at all in fact?
(Mr Evans) It varies across the globe. In Colombia
we lost it to the USA who, I would suggest, have a far more rigid
export licensing control than most. In fact they have actually
introduced IT. You can review an export licence on the Internet
and query where your export licence is. The Department of Trade
and Industry looked at IT in late 1997 and asked for volunteers
from industry, which we gladly volunteered as we should love to
speed the process up. It floundered because we could not understand,
having put it on the computer, why they wanted us to pack the
information onto disks and send it to them anyway. That is another
area one should be looking at. It varies. If you take Israel for
example, on their equivalent of a form 680 to the customer the
Government will actually promote the firm. Different countries
have different attitudes towards export licensing and we lose
it to a variety of different countries across the globe. We export
to over 80 countries worldwide. We come up against a variety of
competitors and we follow the licensing procedure religiously
despite the delays.
48. Just to touch on the legal framework, the
effect of placing the export control regime on a clearer statutory
footing is to open up the possibility of judicial review of the
decisions. Would you envisage that happening? Have any of you
felt so aggrieved by what we have been talking about, refusals
or similar actions, as to contemplate you might want to do that?
Or would you think that would add to the delays if there were
judicial reviews of decisions?
(Mr Prest) It takes us into new territory. We would
not feel capable at this juncture of speaking for the entire industry
on the question of judicial review. It must be possible to envisage
circumstances in which companies felt so aggrieved and felt a
decision was so inexplicable that they might ask for judicial
review. I can certainly envisage that happening, which could of
course lead to further delay, but it could also perhaps lead to
a rectification of an incorrect decision if one had been made.
(Mr Salzmann) I agree that companies would want to
resort to that if they felt aggrieved.
(Mr Evans) Our preference would be to take the existing
system and improve it and build a partnership with Government
in an open forum so that we could get things done in an expedient
manner. If we go down that route, then it will incur delays and
additional costs quite frankly once you get lawyers involved.
49. As you said, once you have lost it, that
(Mr Evans) We would prefer to look at the existing
systems and how they satisfy everybody and speed them up and work
as a team quite frankly and we are quite prepared to do that.
50. There are some examples in legislation where
a failure to give a decision by a given time gives an immediate
right of appeal; on planning legislation for example there is
a statutory period. Would you like to see something like that
where you have a statutory period within which you must be given
a decision and then a formal appeals and procedure with again
a time limit on it if you are not given a decision? Would that
(Mr Evans) Yes.
(Mr Prest) I think I am right in saying that DMA made
a specific proposal on this.
(Mr Salzmann) Yes. In the section on the appeals procedure
we suggested that there should be a right for companies to appeal
not just on cases where refusal had been given, but also when
delays had been experienced in the processing system.
51. What time limit would you want to impose?
What would be reasonable?
(Mr Prest) It is for discussion. It would not be reasonable
to say that the Government was in default if a licence was not
issued within 20 working days. There are many cases which are
more complex than that.
52. It would depend on the case.
(Mr Prest) It would depend on the case but there would
need to be something longer than 20 days but considerably less
than some of the cases which have been described here.
(Mr Evans) We would support the principle.
53. Appeal to whom?
(Mr Prest) That is an interesting question in itself
and a separate point. Expanding a little on what David Evans was
saying about the amount of knowledge within the Government machine
on some of the equipment and licence issues, it is the case that
because of the length of the communication chain ... DTI is the
licensing authority but on many issues the main policy input actually
comes from other departments. On issues of whether it causes technical
security problems or whether it is likely to cause difficulties
for our own armed forces, obviously the MOD has views. On foreign
policy interests to do with regional stability or whether the
recipient is a nasty piece of work either towards his neighbours
or towards the internal population, obviously the Foreign Office
have the primary input. There is an inter-departmental procedure
which is on the whole conducted in writing and I cannot speak
for the procedure with certainty, although I did actually work
inside it myself many years ago because I was an MOD civil servant
administering export licences 20 years ago. At that stageand
it probably has not changed that muchthe inter-departmental
committee met very seldom and it was mostly done by correspondence.
That opened up considerable opportunities for delay obviously
but also for misunderstanding. Very often there was a single point
of technical authority in the MOD for evaluating what equipments
would do and what the security status of particular equipments
was and at the time it was grossly overloaded and also prone to
make judgements with no dialogue with the company, which itself
must be fundamentally wrong. To make a judgement about the capability
of equipment without a sensible dialogue with the company which
makes it does not seem sound administration. At the moment there
is not much dialogue of that sort. One of our proposals would
be that in an appeals procedure there should be a formal appeals
procedure for refusals involving an inter-departmental committee
at an official level high enough to review the decision which
has already been taken. One of our contentionscertainly
we put this forward from Alvisis that where a company requests
it, it should have the right to explain its case personally to
a small committee of that sort because a number of the arguments,
particularly related to what an equipment actually does and how
it is capable of being used, can only be exposed properly by the
company itself in dialogue with the individuals. There is no process
of that sort at the present time.
54. I happen to have been at the other end of
this process and have had to do with submissions indeed relating
to machine guns on boats, exactly those kinds of things. It seems
to me that what one has here is quite a lot of these applications
clearly can be dealt with very speedily. However, you do get quite
a number which are very difficult. They are very difficult not
least because you do actually have to take advice from quite a
lot of people, not least the high commissioner or the ambassador
in the country concerned, the defence attache« in the country
concerned, quite a number of other people. Maybe what we have
to look at is how one finds some system for signalling to you
that these are exceptional cases or difficult cases and some process
which enables you to understand that they are being dealt with
in that way which then means that civil servants have to deal
with all the others properly and speedily. It is quite difficult
to see how you can get a system where you take responsibility
away ultimately from Ministers having to take these decisions
and then sticking by them. Ultimately at the end of the day, Ministers
are going to have to be accountable for the decision they took
on whether machine guns should go.
(Mr Prest) I do not think we would argue that it should
not be a matter ultimately for ministerial decision. Ideas of
an export control ombudsman have been put forward but I do not
think that we as the DMA have pushed that particularly hard. Plainly
ultimately this is a matter of Government policy. What we are
really saying is that there should be some formal review procedure
at a higher level, which could be ministerial, could be at a more
senior official level; once an initial refusal has been given
to review a case the evidence can be properly put and the arguments
properly put. We are certainly not suggesting it should be taken
out of Government's hands; though some people have suggested that,
we are not.
(Major General Sharman) Very few licences are refused.
It is a reflection of the fact that the legitimate industry is
very responsible in what it applies for and an unofficial control
system works. Few licences are refused but I take entirely the
point that what we should like is a situation where there is a
time limit, as short as possible. We believe that would deal with
the vast majority of cases. After that time the company should
then be formally notified that a licence is contentious and is
going to be referred, to whomever it is going to be referred to,
and with some estimate of how long that process will take. At
one time last year, while officials were trying to grasp with
interpreting and understanding the ethical foreign policy dimension
that Mr Cook announced, some 30 per cent of licences were being
referred to Ministerswe believe that is far fewer now.
Again something providing the opportunity for a company to have
an input into the debate at some stage is also important.
55. Licence applications not refused in the
past include, according to the evidence we have received, exports
by Chemring subsidiaries of tear gas and plastic bullets to the
Kenyan security forces. These were used against pro-democracy
and human rights campaigners and indeed were used in the storming
of the Anglican cathedral in July of last year in Nairobi when
tear gas canisters were thrown inside the cathedral. Do you expect
exports of that kind to continue in the future? Have you noticed
any change in our Government policy towards such applications
since, for example, May last year?
(Mr Evans) The products in the incidents you referred
to were covered by an approved export licence. We have not provided
any to that country since 1994 and we have noticed quite a difference
in the attitude towards CS products on the basis of what has happened
possibly in Kenya. I would argue that there are countries which
use CS products in a reasonable manner to control civil unrest
rather than the way that they were used in Kenya. Certainly we
do not endorse that. It should be used in an open atmosphere.
We are the only UK source of CS for the UK Government for training
purposes. I would argue that in certain countries, if you did
not provide them with CS gas the alternative is a lethal bullet.
There is the dilemma.
56. I think you have confirmed that the example
I gave is the kind of example where you approve of the fact that
such exports should be licensed.
(Mr Evans) Absolutely.
57. May I come back to something you were discussing
earlier about the difficulty in relation to licences from the
Foreign Office or for that matter the DTI and the timescale involved.
What about repair and maintenance, for example you may sell a
product abroad but it has to come back to this country to be repaired?
Do you have to go through that procedure? Are there many delays
in that area?
(Mr Evans) Our products tend to be one-off products
used and not repaired and maintained.
58. It does happen in certain industries.
(Mr Prest) I am not expert on all the technicalities.
I think I am right in saying that the broad position is that unless
you hold an open individual export licence which would enable
you to ship spares and equipment in support of a particular type
of equipment in a territory, if you received a damaged assembly
back for repair in the UK you would then have to re-apply for
a fresh export licence in order to export it to the country concerned.
I believe that is currently the case today.
(Mr Salzmann) Yes. Also if goods are returned to the
UK, you would need an export licence to send them back again.
Also if goods are returned to the UK and you needed to send a
sub-system back to an overseas supplier for repair, you would
need to apply for an export licence for that, to send it back
to the overseas supplier from whence it came in the first place.
59. The question really is how difficult is
it to acquire that new licence, given the fact that you must have
had a licence originally to export it back to this country or
wherever? Do you experience these difficulties or is it relatively
easy if you have to get another licence, given the history, to
get it fairly rapidly? Earlier the point was being made about
delays, you want appeals systems and all sorts.
(Mr Prest) It depends very much on a case by case
basis and the status of the territory at the time in the eyes
of the UK Government from a policy point of view. In many cases
it would be very routine; in other cases it might not be routine.
It is another area where there should be some more detailed attention
in an industry/DTI working group of some sort to look at the mechanics
of this and how the process could be streamlined without threatening
the Government's ability overall to exercise the controls it wants
to do. Certainly the system at the moment is more cumbersome than
it needs to be in our opinion.