The Department of Defence says its “Repositioning of the Defence Industry” proposal, including the place of Denel, is ready for consultation.
In its latest Annual Report (http://www.dod.mil.za/documents/annualreports/annrep%201011%20net.pdf) the department notes its Defence Supply Chain Intervention (DSCI) Division submitted a conceptual paper on the repositioning of the defence industry, in particular Denel. “This is ready for consultation with various stakeholders as well as Parliamentary Committees. DSCI is also participating in the development of a Defence Industry Support Strategy that will allow the magnification of strategic areas such as the refocusing of Denel versus defence strategic capabilities,” the annual report says.
In her report, Secretary for Defence Mpumi Mpofu said Denel remains a public enterprise falling under the jurisdiction of the Minister of Public Enterprises. “Denel is very important to the DoD as it serves as the repository of some of the SANDF’s strategic capabilities. For Denel to remain such an important supplier of defence capabilities and given the current challenges faced by Denel, the relationship between the DOD and Denel has to be clearly defined. Noting the importance of Denel to the SANDF’s continued operational efficiency and effectiveness, the DoD has adopted a framework which forms the basis of its discussions with the Department of Public Enterprises on Denel. Central to the discussions is the realisation of an end state where Denel shall remain the reliable supplier of strategic capital equipment to the SANDF, yet remains a going concern that claims a share in the international defence market. A presentation outlining several options in
terms of the public entities will be made to the Minister of Defence and Military Veterans for consideration and approval by the Council on Defence (CoD) during the financial year 2011/12,” Mpofu said.
Industry has had little policy guidance – in public at least – since the 1996 White Paper on Defence, 1998 Defence Review and 1999 White Paper on [the] SA Defence-Related Industry (WPSADRI). Minister of Defence and Military Veterans Lindiwe Sisulu last year April said she was in negotiations with other state departments about the future and positioning of the defence industry. “Yes, I am paying attention to the defence industry, paying a lot of attention to the defence industry,” she told journalists when questioned on the matter at the time. “You know, we have a kind of government where for the purposes of the easy handling of portfolios we removed the defence industry and put it under the Department of Trade & Industry (DTI) and some of it [state arsenal Denel] under the Public Enterprises (DPE) , which makes it very difficult for the manoeuvrability that is possible when there is a single minister.
“We have been in discussion, in particular with the DPE, to see how we can align this so that we have greater say and are able to direct as we are the only market in the country… we are the biggest market that they have; therefore we need to have some kind of synergy between industry and ourselves and I think the discussions are going very well and we will soon be able to work out and announce a plan in which we would have laid out our relationship with the defence industry.”
Speaking at the publication of the WPSADRI in December 1999, then-National Conventional Arms Control Committee chair Professor Kader Asmal said SA was the first country to coin the term “defence-related industry” and to do away with the term “defence industry”, as “the studies conducted in the White Paper indicate that a ‘defence industry’ could not be identified or defined as a distinct industrial sector.
Defence work is done across all sectors of the South African industrial base, Asmal added. “There is also a growing tendency for companies producing defence equipment to make use of civilian technologies, or to manufacture dual-use products which can be sold to both defence and non-defence markets. There is also an increasing overlap between defence and civilian production within companies.” The term did not catch on, however.
The white paper itself noted that government at the time recognised “that defence related industries are an integral part of South Africa’s defence capability. Government also recognises the strategic and defence value of having a local defence industrial capability. However, due to budgetary constraints, and within the framework of broader national industrial strategy, government will be very selective of which technologies and capabilities are to be retained on the basis that they are strategic or that they constitute a national asset.”
It later states that given the “realities and resource limitations, choices have had to be made and as a result five technologies and capabilities are identified. They are common to the mode of warfare of both advanced and under-developed countries and are also common across the four … Service[s] of the SANDF.” The following are considered strategically essential:
– Logistic support, repair and maintenance of equipment and systems
– Systems integration
– Command, Control and Communication systems
– Sensors, signal processing and data processing
– Combat systems software and support.
– Simulation systems and war gaming.
It is not clear if these are still considered “strategically essential.”
The 1996 White Paper on Defence recognised that the government might be called upon by neighbouring countries to play a number of supportive roles. “The SANDF could, for example, provide assistance as regards the maintenance and upgrading of weaponry and equipment.” Furthermore, the White Paper indicated that SA’s consideration of involvement in specific peace support operations will not be limited to the possible deployment of troops. “The involvement could also take the form of providing equipment, logistical support, engineering services, communications systems and medical personnel facilities.” But not much has happened on this front in the last 11 years.
Sisulu says this may be a result of the current policy and oversight misalignment. “It is only when we have this alignment that we will also be able to capture the African market, it’s a huge market; that we need to ensure our industry can move into and will be able to supply the African continent with things that is made in South Africa…”