Our state-owned arms company Denel has highly advanced technology which many other countries, including Saudi Arabia, would like to get their hands on. Picture: Supplied/Denel
Our state-owned arms company Denel has highly advanced technology which many other countries, including Saudi Arabia, would like to get their hands on. Picture: Supplied/Denel

South Africa must not sell the family jewels

By Shannon Ebrahim Time of article published Nov 18, 2018

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What every country usually guards like the crown jewels is their intellectual property, or IP, especially when it comes to strategic sectors like military or scientific capabilities. South Africa possesses particularly valuable IP when it comes to weapons technology, as our state-owned arms company Denel has highly advanced strategic capabilities in terms of technology which many other countries would like to get their hands on. Saudi Arabia is one of a few countries which has made a bid for joint ventures with Denel so that it can transfer our technological know-how back home and build up their own domestic defence industries. 

Saudi Crown Prince Mohamed bin Salman’s vision is for the state-owned Saudi Arabia Military Industries (SAMI) to become the 25th largest Defence Company in the world by 2030. While SAMI is currently only able to domestically produce 5% of its own weapons, it plans to increase that to 50% by 2030. To accomplish this goal, SAMI needs IP in order to manufacture its own armaments.  

This is problematic not only in terms of our national interest, but because of the fact that selling our IP to a country engaged in a brutal war as well as gross violations of human rights is actually worse than selling them arms. Exporting our mortar bombs, electronic fighting equipment and military software is bad enough, and happens to be in violation of our National Conventional Arms Control Act, but selling our IP so the Saudis can produce highly advanced weaponry is even more problematic. Once a country has our IP in hand, they are then free to develop their own destructive military capabilities without concern for future UN arms embargoes or resolutions calling for an end to conflict causing massive civilian casualties. 

It is already deeply worrying that a “Made in South Africa” Seeker II drone was shot down in Yemen. Subsequently, remnants of mortar shells produced by the Joint Venture between Germany’s Rheinmetall and Denel were found in Yemen, having caused civilian casualties. What lies ahead are allegations that South Africa is complicit in the deaths of children and civilians in Yemen as our armaments are being found in the debris next to the dead bodies. This situation is not in keeping with our laudable human rights foreign policy which is being championed by our Department of International Relations and Cooperation around the world. 

SAMI has already made a bid worth US$1 billion to partner with Denel, and it wants an answer by the end of this year. SAMI is targeting Denel’s 49% stake in the Joint Venture with Rheinmetall as it wants to be part of the development, design and manufacturing of large calibre ammunition, including artillery shells. SAMI has also offered to finance research and development in Denel Dynamics in order to develop and produce tactical missiles and precision guided weapons. To sweeten the offer SAMI would guarantee the purchase of a certain percent of Denel’s production annually. 

The reason this has been a tempting offer is that Denel is in a serious financial crisis, having just declared an operating loss of R1.7 billion for 2017/18. It is unable to pay salaries, suppliers, or deliver on R18 billion worth of orders. Without significant and urgent investment, Denel may default on its loans and could even end up liquidated. This would be at a cost of 4 000 jobs. 

But the cost to our country’s reputation and moral foreign policy of accepting SAMI’s bid given the raging war in Yemen and ongoing human rights violations would be far higher in the long run. We are deciding on this bid at a time when most countries that care about human rights, peace and security are either suspending or reviewing their arms sales to Saudi Arabia. Germany, Norway, and Belgium have already suspended arms sales to the Kingdom, and France and the UK may follow suit. The extremely brutal killing of the Saudi Washington Post columnist Jamal Khashoggi has heightened international outrage at Saudi Arabia’s human rights abuses, and it seems the killing continues. 

This week another Saudi journalist was killed under torture in Saudi custody. Turki Bin Abdul Aziz Al-Jasser has died after being tortured in detention. Saudi authorities claim he administered the Twitter account Kashkool which disclosed rights violations committed by Saudi authorities and the royal family. Whether in the Saudi consulate in Istanbul or in Saudi prisons themselves, human rights violations are continuing unabated. Our own Act says under these conditions South Africa cannot sell its armaments or military technology as we are “responsible members of the international community.”

* Shannon Ebrahim is Independent Media's Foreign Editor.

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