This opinion piece may be a fool’s errand, because it focuses on the small group which wants to see a viable South African defence industry (SADI) that has access to the international market within the same constraints of international competitors.
SADI has the potential to unlock over 50 000 jobs if there is support for the industry. This is substantial in a country with a chronic unemployment challenge.
The defence sector process of securing orders is not that of the fast-moving goods domain. It takes on average five to ten years of extensive effort to unlock business related to the defence sector, but the rewards can be significant. It is also a cutthroat business environment with international entities exercising political influence through the arms trade environment.
All these elements make for a challenging environment for SADI to gain and maintain a foothold. This foothold, if achieved, can act as a springboard for significantly bigger opportunities with the correct government support.
To compete, SADI requires an effective and efficient arms control regime so it can be a responsible player in the global market. SADI, through the Arms Control Act, is bound to international obligations on arms control rules (Arms Trade Treaty, Anti-Personnel Mine Ban Convention, certain conventional weapons, the Convention on Cluster Munitions, and the Wassenaar Arrangement); as well as domestic requirements for responsible trade, regularity and accountability.
There are number of elements that guide arms control in South Africa, but the authorisation of arms transfer is ultimately a political decision.
In South Africa, we know the political decision is a collective approach. This is what the country is saddled with and it does have a recent history of flip-flopping, or making recommendations that may seem confusing to outsiders.
The arms control act intimates arms control should be guided by the promotion of certainty, predictability, responsibility, accountability, regularity, and objectivity. The political end decision point is in contradiction to this aim.
The collective approach seems to be at the core of the current National Conventional Arms Control Committee (NCACC) impasse affecting exports to Saudi Arabia, UAE (United Arab Emirates), Turkey and Poland – but which does not restrict access of sanctioned Russian vessels to Simon’s Town.
Application of a system should not be taken lightly, but should follow a proper, logical process which the political, bureaucratic and industry entities understand fully.
The Directorate Conventional Arms Control (DCAC) environment seems to be living the Collins Dictionary definition of bureaucratic. Bureaucratic means involving complicated rules and procedures which can cause long delays. DCAC seems over-concerned with procedure at the expense of efficiency or common sense.
There needs to be an intervention.
Government still needs to control who SADI can export to. It does have the arms control accountability. A fixed spectrum of countries based on government’s risk analysis needs to be the starting point, not the end point.
SADI need a controlled list of countries and product segments open for business (Green List – comply with local and international guidelines and export permit is guaranteed); excluded from business (Red List – no trading allowed) and then a per contract evaluation list (Amber List – contracting permit evaluation guides interaction).
This process reduces the number of assessments the cabinet committee needs to adjudicate. It also reduces the effort of the scrutiny committee. The fixed spectrum country list can be updated on five-year cycle, aligning with the national election cycle and published in the Government Gazette. The scrutiny committee is then only involved in amber adjudications.
The DCAC serves as the secretariat of the national authority for licencing. Here is where a significant intervention is required to provide a proper, logical process which the political, bureaucratic and industry elements understand completely. Then it also meets the act requirements or should be guided by the promotion of certainty, predictability, responsibility, accountability, regularity and objectivity.
The industry-agreed digital system needs to be rolled out with urgency.
Unfortunately, it seems the DCAC has no understanding of winning and maintaining business, or even worse, they just do not care. Access to information is critical for promoting the business relationship.
If the export process is speeded up and government and SADI join hands, then an environment can be created to achieve the employment expansion of 50 000 jobs, as opposed to the current expectation of a loss of 15 000 indirect jobs indicated by the SA Aerospace, Maritime and Defence Industries Association (AMD). SADI revenue is currently trending towards over 85% export based because of the lack of local defence budget commitments.
But, as said at the outset, this opinion may be a fool’s errand because I don’t think anyone is listening…
Written by James Kerr, Orion Consulting CC, which provides Market Entry Strategy and Bid & Proposal services to the Aerospace and Defence related industry and assists international SME mission system product suppliers to gain traction in South Africa. Kerr has assisted various companies to enter, or expand their footprint in the defence industry with air, land and naval systems. He served as a navigator and completed an engineering degree, while serving in the SA Air Force for 13 years.
