SA defence exports, imports declined in third quarter of 2016

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The National Conventional Arms Control Committee (NCACC) has released its statistics for the third quarter of 2016, which show exports (R468 million) and imports (R11 million) were less than the same period in 2015.

In a briefing by the NCACC to the Joint Standing Committee on Defence on 17 February, the NCACC’s third quarter of 2016 report, covering the period 1 July to 30 September, shows that six marketing permits were granted, and 58 contracting permits were authorised covering 40 countries and R20 billion (R20 358 071 968). One application was denied.

In terms of exports, 720 permits valued at R468 661 120 for the South African defence industry were authorised covering 66 countries. Regarding import permits, 598 permits were authorised covering 52 countries and valued at R11 216 476.

For the third quarter of last year, the NCACC denied two permits. Taiwan was denied because “One China policy of our government” and Ukraine was denied because of “concerns in the region relative to Russia”.

Defence sector activity fell in the third quarter of 2016 compared to the third quarter of 2015, with 43 fewer contracting permits (58 versus 101 for Q3 2015) representing R68 billion less (R20.3 billion versus R88 billion). Export permits for Q3 fell to 720 from 899, and value dropped to R468 million from R642 million. Imports also dropped to R11 million from R165 million.

In the second quarter of 2016, South Africa exported R885 875 277 worth of equipment. Total defence exports for the 2015 calendar year amounted to R2.7 billion. This compares to R2.98 billion for 2014, R3.2 billion the year before and R10.6 billion in 2012.

During the post-briefing discussion on the third quarter of 2016 report, the Democratic Alliance’s Sarel Marais asked NCACC Chairperson and Minister in the Presidency Jeff Radebe how the NCACC avoided sending weapons to countries with poor human rights records while the DA’s Shahid Esau asked for clarification on the assessment of risky countries.

Rabebe said the follows UN Security Council Resolutions and once an embargo is in place, arms cannot be transferred. The NCACC is also guided by governance issues such as human rights and politics in the region, and SA national interests.

Rabebe added that the NCACC enforced decisions with a “scrutiny force” comprising members from the South African National Defence Force, Department of Trade and Industry, Department of International Relations and Cooperation, and State Security Agency, who investigate reports of instability in a particular region.

If there is a change in ownership, a company is obliged to report to the NCACC so that the change can be authorised. The directorate would conduct investigations and if necessary withdraw authorisation if the new owners have a history of human rights violations. The NCACC did not have adequate capacity to follow up some recommendations because the SA Police Service claimed it was not their priority, Radebe said.

The Democratic Alliance’s questions were likely asked after it was reported in early February that Turkish ‘fugitives’ sought by their government for alleged terrorism back home had invested in South African defence company Milkor. It also emerged that Milkor was advertising its Milkor Armoured Vehicles range on its website before it had obtained the necessary marketing permits from the NCACC. The armoured vehicles pages were subsequently removed from Milkor’s website.