STAFF PAPERS

Submission to the Truth and Reconciliation Commission:

Business Sector Hearing

Compiled by Laurie Nathan, Peter Batchelor and Guy Lamb

Centre for Conflict Resolution
University of Cape Town, South Africa

October 1997

Introduction

Sections within the business community, through their extensive involvement in domestic arms production, and as an active participant in Total Strategy, provided the material means for the maintenance and defence of apartheid, both domestically and in the context of South Africa's destabilisation campaign of the Southern African region. As such, elements within the business community are guilty of directly and indirectly perpetuating the political conflict and associated human rights abuses which characterised South Africa between March 1960 and May 1994.

The aim of this submission is to describe the relationship between the business community, arms production and total strategy during the Apartheid era, with particular reference to the role of the private sector in the local "military-industrial complex".

Section 1 describes the history of private sector involvement in domestic arms production and the emergence of a local "military-industrial complex". Section 2 discusses the relationship between the business community, the state and the military in the context of Total Strategy and the National Security Management System. Section 3 discusses the impact of the 1977 United Nations mandatory arms embargo had on South Africa's business community, and identifies certain firms, both local and foreign, which assisted the South African state in circumventing the embargo. Section 4 examines the issue of South African arms exports prior to May 1994.

1. A MILITARY-INDUSTRIAL COMPLEX: THE PRIVATE SECTOR AND DOMESTIC ARMS PRODUCTION

The private sector has been involved in domestic arms production since the establishment of a domestic arms industry in the years following the Second World War. During the 1960s, in the wake of social unrest the South African government began a major drive to modernise the South African Defence Force (SADF). This included an increase in domestic arms manufacturing capability. ¹ This initiative drew on the technological expertise of the French, Belgian, British and Italian defence industries, as well as those from the Federal Republic of Germany and Israel. Private sector links with Western countries also contributed to its development. By the end of the decade the SADF was being locally supplied with rifles, mortars, ammunition, bombs, grenades and landmines.

1.1 The Creation of Armscor

In 1964, under the Armaments Act, the Armaments Production Board was created. In 1968 its name was changed to the Armaments Board and it was responsible for purchasing arms and maintaining quality and cost control in arms production. This body was complemented by the establishment of the Armaments Development and Production Corporation (Armscor) which was responsible for controlling arms manufacture. In 1976, in anticipation of the 1977 United Nations arms embargo, and to make the arms industry more efficient, a major reorganisation of these institutions was undertaken. The Armaments Board was subsequently incorporated into Armscor, which also assumed control of arms imports and exports. Two years later most of South Africa's military research capacity was incorporated into the Armscor structure as well, thereby creating a massive "streamlined" state enterprise. ²

From the outset, it was clearly stipulated that Armscor would not undertake the development or production of armaments in its own name. This would be done either through subsidiary companies, through companies in which the corporation would participate by way of shareholding and/or financial assistance, and through private sector companies.

There was a high degree of integration between the public and private sectors, particularly since it was Armscor's policy to maximise the use of private sector facilities subject to certain strategic and economic criteria. Three industrial groups, namely Reunert, Altech, and Grintek, dominated the private sector defence industry. These groups were in turn owned or controlled by one of the six large financial-mining-industrial conglomerates. Reunert was controlled by Old Mutual, Altech by Anglo American, and Grintek by Anglo Vaal. Each of these defence groups was made up of a number of divisions and subsidiary companies. ³ By 1982 there were approximately 2000-2500 private companies, which included two of South Africa's largest industrial enterprises: the Dorbyl Group and Sandock-Austral. ⁴ These companies were suppliers, contractors and sub-contractors of Armscor.

1.2 The Development of a Military-Industrial Complex

As a result of Armscor's powerful position, as well as being one of the central points of interface between the South African government and the business community, it has been argued that a "military-industrial complex" emerged. A "military-industrial complex" "functions on the basis of a structural pairing", between business and the military, "that inevitably develops into mutual interests." ⁵ This is based on two shared politico-strategic assumptions. First, there was the assumption that national self-sufficiency in arms production was a requirement of state policy and security; second, that the development of advanced technology would service the military and industry simultaneously.

In South Africa, representatives of sections of the business community were also willingly incorporated into the political arena, where they pursued an agenda of their own. Their primary concern was to secure the conditions of free enterprise, and therefore placed a high premium on political stability. ⁶ Private sector businesses were also attracted to the defence by the promise of substantial profits. Additionally, the arms industry offered the potential for solving some of the structural limitations on growth in the national economy. It was seen as a generator of defence self-sufficiency. ⁷

1.3 Conclusion

Between 1989 and 1993 defence cuts and disarmament measures had a dramatic impact on the public sector defence industry. Due to the Armaments Development and Production Act (1968) Armscor was prohibited from using its production facilities for commercial purposes. Therefore in order to try and ensure the survival of the defence industry, government formed a new state-owned industrial company, called DENEL in April 1992. DENEL inherited most of Armscor's subsidiaries and research facilities, while Armscor retained responsibility for armaments acquisition and the overall co-ordination of the domestic defence industry.

The defence cuts and disarmament measures also had a dramatic effect on the private sector defence industry, which led to downsizing and reconstruction of this sector. This also significantly altered the "cosy" relationship between the public and private defence industry. ⁸ In addition, the power and influence of the "military industrial complex" was fundamentally reduced.

2. THE BUSINESS COMMUNITY AND TOTAL STRATEGY

From the 1970s the South African government made a series of conscious efforts to compel the private sector business community to collaborate in the maintenance of apartheid. In order to achieve this objective the South African state successfully made use of an interrelated, two-pronged, "carrot and stick" approach. In the first instance where co-operation was not forthcoming, legislation was formulated to coerce the business community into collaborating. Second, the South African government "wooed" the business community by introducing political and economic reforms as well as pandering to the interests of capital. Central to the state's toolbox was Total Strategy, an instrument used not only to justify the imposition of coercive legislation, but also as a sales gimmick to co-opt the business community into supporting apartheid.

Except for a few dissenting voices, the business sector embraced the idea of Total Strategy whole-heartedly and in the process grudgingly accepted the imposition of coercive legislation without much protest. It is important to note that many sections within the business community were not innocent victims of state manipulation, they collaborated with the apartheid regime due to the fact that in many instances it was in its best interest to do so. ⁹

2.1 An Overview of Total Strategy

From the 1950s key decision-makers within the South African security establishment, influenced by the Cold War mentality, saw South Africa as an intrinsic component of Western society, whose duty it was to repel the global spread of communism. These policy makers perceived South Africa to be of vital strategic importance to the West due to its geographic location, mineral wealth, highly developed infrastructure, strong economy, and its anti-Communist stance. The impact of this perception was that a security ideology that envisaged the South African state as the target of a "total communist onslaught" directed from Moscow began to develop within Pretoria's corridors of power.

Drawing directly from the writings of counterinsurgency strategists such as Beaufre, Kitson and McCuen ¹⁰ , the South African securocrats concluded that this onslaught was being waged on several different levels - with specific focus on the psychological, political and economic. ¹¹ This meant that almost every issue, domestic and foreign, local and national, was potentially a security issue, which justified the involvement of the military establishment in every aspect of society. It also provided the basis for the increasing involvement of the business community in domestic arms production in order to afford the material means for defending apartheid against the "total onslaught".

As the Soviet Union was engaged in a "total onslaught", the South African State's response needed to be equally comprehensive, co-ordinated and total. The report of the Potgieter Commission of Inquiry (1970) which motivated for the formation of a centralised intelligence agency, BOSS (Bureau of State Security) was the first government document that called for a organised response to the "communist onslaught". Throughout the first half of the 1970s the notion and means of achieving a total strategy slowly evolved, however, divisions within the security establishment, especially with respect to the intelligence agencies prevented the effective formulation of such a strategy. ¹² It was only with the disclosure of the 1975 and 1977 Defence White Papers that such a "total strategy" was clearly spelt out. In order to achieve this co-ordinated response an elaborate network of security committees called the National Security Management System (NSMS) was established as a shadow or clandestine administration. This system was implemented in two phases. First, in 1972 the State Security Council (SSC) was created as an advisory body to Cabinet. Second, in 1979 the structure was revised and the NSMS was fully implemented with the SSC as the principal organisation. The NSMS was essentially "a hierarchy of institutions intended to lead the whole state to efficiency." ¹³ The SSC consisted of a group of politicians and officials responsible for key security related departments - Defence, Law and Order, Foreign Affairs, Justice and National Security under the chairmanship of the Prime Minister and later the State President.

Decisions taken by the SSC were put into effect by the Secretariat, an ad hoc body of about 100 officials which was supported by Interdepartmental Committees. Joint Management Centres (JMCs), sub-JMCs and mini-JMCs (later joint Co-ordination Centres) also ensured that decisions and strategies were implemented. In later years this security apparatus was further refined and underwent two changes in name - the National Management System (1986) and the National Co-ordination System (1989). However, in principle the structure remained the unchanged. ¹⁴

2.2 Legislative Coercion

Effective legislation to coerce the private sector into co-operating with the apartheid regime was first introduced in 1970 with the National Supplies Procurement Act. This piece of legislation gave the Minister of Defence the authority, "when necessary for the security of South Africa" to order any individual or company to "manufacture, produce, process or treat and to supply or sell" any goods or services to the South African Defence Force (SADF). This act was initially enforced in 1975 to meet the shortage of camping equipment required for troops invading Angola. ¹⁵

Over the next fifteen years further legislation was introduced to compel the business community to co-operate with government policy. Examples included the National Key Points Act (1980), which forced certain "key" industries to take rigorous security precautions at their own expense, the Atomic Energy Act and the Petroleum Products Amendment Act. These laws, in addition to others, resulted in the growing militarisation of the private sector. In addition they required defence firms to maintain secrecy about their production levels, sources of supply, and their trading partners. ¹⁶

2.3 The Courting of the Business Community

The economic and political survival of the apartheid regime, as well as the success of Total Strategy depended on the active participation of private sector business. Consequently, security strategists developed a range of strategies both to win their support, and to draw them into the implementation of the state's social and economic reform programmes. In general these strategies focused on the promotion of profit maximisation and social stability. ¹⁷

Government strategies were put into effect at the 1979 Carlton and 1981 Good Hope conferences where business was encouraged to participate in politics, and many businessmen were appointed to government commissions and committees. ¹⁸ As a result a close working relationship between the state and the private sector developed. Leading businessmen participated in key policy-making bodies, which fell under the State President's Office, such as the Economic Advisory Council and the Scientific Advisory Council. In addition, the Defence Advisory Council, set up by PW Botha in 1973 to deal with armaments production, brought together the head of the Defence Force, the President of the Armaments Board and a small number of businessmen and military officers. When Botha became Prime Minister in 1977, 13 prominent businessmen were co-opted to the Council, including the chairmen of some of the largest corporations in South Africa. The Defence Advisory Council included representatives from Anglo American, Barlow Rand, Tongaat and SA Breweries. ¹⁹ From 1977 to 1982, the Defence Advisory Council played an important role in integrating state security planning with economic objectives; however, the Council was disbanded in 1982.

A close relationship between business and government also developed in the arms industry. Through Armscor's subsidiaries and by means of managerial advisory groups, Armscor had deep links with private sector firms and research companies. By the early 1980s, some 600-800 private companies were involved in arms production, with approximately 70% of Armscor's production being contracted out to the private sector. ²⁰ The Board of Armscor included the Chief of the SADF and the Director of General Finance as state representatives, with the remaining eight seats being filled by businessmen, entrepreneurs, financiers and scientists. The names of these directors were in principle kept secret, except in the case of Mr J. Maree of Barlow Rand. He was "lent" to Armscor between 1979 and 1982 to reorganise the management system, make it more efficient and reduce costs. ²¹

In certain instances the relationship between the state and sections of the business community was more strategically important to business. With sanctions being imposed many companies, especially those involved in the arms industry, in order to ensure their survival, required the support and assistance of the state for sanction-busting activities (see Section 3).

The relationship between the business sector and the apartheid government was not always all that amicable. During the mid-1980s, as a result of prolonged social unrest, business became increasingly critical of apartheid policies. However, only a small number of businesses were motivated by honourable intentions. By in large the business sector's criticism derived from the fact that the violence and social unrest was having a negative impact on economic activity. The business sector showed its true colours, when, following the neutralisation of the unrest and a return to "economic normality", facilitated by the state of emergency, much of the business sector ceased their criticism of the government. This state of affairs, in fact enhanced business confidence in the government's ability to contain social unrest in the short term. ²²

2.4 Conclusion

During the last twenty years of the apartheid era the state had a coherent strategy of drawing the private sector into the conception and implementation of its national security strategy. The private sector by and large did not articulate a clear response to this; but in practice it increasingly collaborated with the state in its security strategies at a local and regional level, and in the process benefited in many respects from the strategic and military initiatives taken by the apartheid regime.

With the end of the Cold War, FW de Klerk's rise to power and the unbanning of the ANC and other anti-apartheid organisations Total Strategy was abandoned. The business community concentrated all their efforts on coping with the fundamental political changes. The legacy of the business community's role in maintaining apartheid still remains.

3. THE BUSINESS COMMUNITY AND THE UNITED NATIONS ARMS EMBARGO

In 1963, in the wake of the Sharpville massacre (1960), the United Nations Security Council imposed a voluntary arms embargo against South Africa. In 1977, following the Soweto uprisings the UN arms embargo became mandatory. The South African government tried to circumvent this arms embargo in three interrelated ways. First, South Africa began to develop a domestic arms industry with the eventual aim of making it self-sufficient. Second, through the exploitation of loopholes in the embargo regulations. Third, where the previous two strategies failed to produce the requisite materials, arms and defence equipment would be acquired covertly from international sources, often with the assistance of sympathetic governments. The business community played a fundamental role in facilitating this process.

3.1 The Development of the South African Arms Industry

The South African arms industry was launched with the acquisition of foreign production licences. By 1963 South Africa had acquired 127 foreign licences. In addition progress in defence industry development also depended on technology transfers and imports. Britain and the United States, even though they agreed to abide by the 1963 arms embargo, still continued to supply South Africa with spare parts, radar and electronic equipment. In addition jet bombers and helicopters were also imported. ²³

By the time of the imposition of the 1977 embargo, which called for the revocation of all production licences, the domestic arms industry was able to produce a wide range of military equipment locally. However, it was still highly dependent on foreign technology, either imported by the private sector or manufactured under licence by subsidiaries of foreign countries. The short term and unintended advantage of the 1977 embargo was that the South African government saw this move as signalling the cancellation of licence agreements, which benefited South Africa as Armscor could continue production without paying expensive licence fees. ²⁴

In essence the 1977 mandatory arms embargo marked the end of South Africa's legal acquisition of production licences for weapons systems. South Africa's defence industry, however, had developed to the point where Armscor no longer required licences but rather needed certain sophisticated high-technology items and for technical co-operation with foreign industries, which was easier to hide conceal than the purchase of licences. ²⁵ France, Federal Republic of Germany, Italy and from 1972, Israel, were the biggest technology providers for most of South Africa's weapons systems, with France being South Africa's largest supplier of arms between 1960 and 1983. ²⁶

As has been described in Section 1 and Section 2, the business community played an important role in driving the development of the local defence industry. Added to this many private sector firms also took advantage of major disinvestment moves by mainly British and American companies and bought out their assets at bargain prices. ²⁷

3.2 Exploiting the Loopholes of the Arms Embargo Agreement

One of the crucial sources of military technology for the South African arms industry was provided by multinational/transnational companies operating in South Africa. For instance British companies Marconi and EMI provided electronic components and material for Armscor's industries. The subsidiaries of transnational companies have also been important for other dual-purpose industries, in the vehicle and light-engineering fields. ²⁸ Examples include, British Leyland (SA) provided transport for the SADF and ICI helped establish an explosives factory. ²⁹

Foreign subsidiaries were also subjected to legislative coercion. In 1978, the South African Parliament passed the Protection of Business Act. It was designed to counter the effect of the Sullivan Principles in the United States and the EEC Code of Conduct of 1977, which demanded a certain anti-Apartheid policy from US and European firms that worked in South Africa. The Act prohibited foreign subsidiaries from complying with instructions from their overseas head offices without prior permission from the South African government.

In order to ensure the maintenance of technology transfers in the face of disinvestment. South Africa also invested in arms enterprises overseas. An example of this was South Africa's financing and participation in the Cactus missile project in France. Following major disinvestment by foreign companies in South Africa, many of the electronic companies rather than accept local ownership, sold shares in their businesses to South African industries. Among the shareholders were: the General Mining Corporation, with shares in Siemans (FRG); Sanlam, which owned shares in Plessey Electronics (UK); and Barlow Rand, which owned 50 per cent of Marconi (UK). ³⁰

3.3 Sanctions-Busting Activities

Where South Africa could not procure arms by legal or quasi-legal methods, the South African government resorted to covert action and underhand tactics, which usually involved the smuggling of arms, components and weapons technology. Front companies, paper companies or dummy companies, as well as forged documentation and third parties were generally used in these operations. ³¹ In 1981 a United Nations seminar held in London came to the conclusion that military equipment from fifteen countries reached South Africa since the 1977 embargo.

A less controversial, but more effective means of circumventing the arms embargo regulations was the import of dual-use or grey area equipment. The vagary of the definitions "weapons" and "arms technology" in the embargo regulations facilitated a large number of items that had could be used both in the civilian and military sector, such as electronic equipment and various types of aircraft to be easily imported into South Africa and used for military purposes.

In both respects, even though such activities were fairly risky, certain private sector companies, realising the massive profits to be made, agreed to act as "conduits" for Armscor, and its trade in arms. In terms of the aircraft industry, the Meyers-Jansen Aircraft Corporation (changed its name to CR Jansen Aviation in 1970) assembled light planes from the United States for the South African military and Police. Rotocraft Helicopters, which was based in Cape Town was also involved in similar activities. ³²

In the electronics industry, British corporations Plessey, Racal Electronics, General Electric Corporation, Marconi, Decca and EMI electronics were all involved in production for Armscor. Their subsidiaries later provided the basis for new South African companies. This was also the case with International Telephone and Telegraph (ITT), Sperry-Rand and IBM (USA), and the West German-based Siemens and AEG-Telefunken. ³³

In the armoured vehicle industry, the West German Company, Magirus-Deutz, in the mid-1970s delivered 5000 LKW chassis without engines to its subsidiary in South Africa. In 1978 the firm was purchased by a South African business and renamed Truckmakers Inc., which was one of the major suppliers to the SADF during the 1980s. ³⁴ Businesses in similar circumstances included: Magnis Heavy Travel Corporation, Sigma Motor Corporation, Atlantis Diesel Engines Works and Anderson Generators. ³⁵

3.4 Conclusion

Over the two decades that the mandatory arms embargo was in place, South Africa was able to build up an arms industry and continued to be the leading military power in the region. It did not restrict the SADF from operating beyond South Africa's borders, nor from being deployed internally to quell social unrest in the townships. This meant that in effect the arms embargo was inefficient. Apart from Armscor's role, elements of the business community played a key role in supporting the development of the arms industry, exploiting loopholes in the embargo regulations and embarking on sanctions-busting activities.

4. SOUTH AFRICA'S ARMS EXPORTS

As a result of surplus production capacity and rising overhead costs brought about by the expanding defence industry, South Africa began to pursue export markets. Before 1980 South Africa's only export market was Rhodesia, however, with the independence of Zimbabwe in 1980 that market effectively disappeared. In 1982 South Africa's attendance at an international arms exhibition in Greece marked the beginning of South Africa's entry into the international arms market. In that year South African arms exports amounted to R22million. ³⁶

4.1 "Dubious Dealings": South African Arms Exports and the Arms Embargo

In 1982 the South African government decided to prioritise the promotion of arms exports in order to ensure the economic viability of the armaments industry. The following year it introduced a system of country and weapons classification to regulate such exports. Armscor was obliged to adhere to this system in fulfilling its delegated responsibility to control the marketing and sale of arms. Neither the system nor the implementation thereof were subject to public scrutiny and parliamentary oversight. Nor was there adequate government control over Armscor's export activities.

The 1984 UN Resolution 558 imposed a voluntary arms embargo on arms imports from South Africa, however, it impact was very limited and value of South Africa's arms exports continued to increase. For instance, between 1984 and 1987, South African arms exports increased from R48million to R454million. ³⁷ Critically, many private sector defence-related firms supplied Armscor with the equipment and weaponry to be exported.

These developments took place due use of front companies by Armscor to disguise sources of supply and focused on relations with other "pariah" states who had been similarly excluded from access to major sources of arms supply. Success in South Africa's arms export promotion can also be attributed to the creation of a sales department linked to Armscor called Nimrod and its aggressive advertising and marketing tactics. ³⁸

In September 1994 a consignment of arms, ostensibly destined for Lebanon, was shipped from South Africa to Yemen where it was rejected by the Yemeni authorities. A public outcry followed media revelations that the consignment included ten thousand AK-47 assault rifles, that Yemen was a prohibited destination for South African armaments in terms of Cabinet policy, and that the sale had occurred without the knowledge of the new government. The incident became known as the `Wazan debacle', with reference to the involvement of a Lebanese agent named Eli Wazan. In October 1994 President Mandela established the Commission of Inquiry into Alleged Arms Transactions Between Armscor and One Eli Wazan and Other Related Matters. ³⁹ A summary of the relevant findings of the Commission are presented below.

4.2 Main finding

The Commission's First Report was based on a quasi-judicial inquiry into the Wazan incident and other consignments of South African arms purportedly sold to Lebanon between 1991 and 1993. ⁴⁰ The Commission found that numerous acts of deceit and negligence by Armscor officials and foreign actors had contributed to the debacle. However, the most significant cause was a general, institutional lack of responsibility regarding the end destination of arms exports. This lack of responsibility was evident in both the policy of the National Party government and the conduct of Armscor's management and staff.

Under National Party rule the Minister of Defence created a structural conflict of interest by conferring on Armscor the authority not only to manufacture, export and promote the sale of arms, but also to regulate and control arms transfers. The Lebanon inquiry revealed a preoccupation with the former activities at the expense of the latter. The emphasis on marketing and sales spawned an indifference to critical operating procedures and overrode the sense of caution required by a responsible approach to arms trade.

The head of Armscor's War Sales Department told the Commission that he regarded the servicing of clients and potential clients as more important than performing his administrative tasks. He argued that if he had to record everything in writing, he would not make much progress with his sales performance. When asked whether he ever wondered who used the weapons he had sold, against whom and with what consequences, he replied: "No, I'm a salesman not a politician".

The Wazan affair was thus not an `unfortunate accident', as claimed by Armscor, but an inevitable consequence of a systemic disregard for where South African weapons exports ended up. As the Commission discovered, three earlier arms shipments to Lebanon had similarly been diverted to prohibited countries, namely Yemen and the former Yugoslavia.

4.3 Policy position

Official documents presented to the Commission revealed a strong emphasis on expanding arms exports for strategic and economic reasons, and little emphasis on exercising restraint. The criteria for classifying countries were relatively vague; Armscor and government officials who testified before the Commission were unable to shed further light on the matter. Respect for human rights was not included in these criteria.

The previous Cabinet's country classification lists similarly revealed scant concern for civil war, military rule and abuse of human rights in the recipient state. In 1989 acceptable purchasers of South African weapons included Bulgaria, Haiti, Indonesia, Malawi, Sri Lanka, Sudan, Liberia, Nigeria, China and Somalia. ⁴¹ Arms supplies to the government of Rwanda, which began in the late 1980s and ended shortly before the onset of genocide, included grenades, mortars, bombs, rocket launchers, rockets, rifles, machine guns and pistols. ⁴²

Pretoria also distributed large quantities of military equipment to the rebel movements Renamo and Unita, its political allies in Southern Africa. In other instances the motivation for fuelling internal conflicts was purely commercial. For example, Cabinet was willing to arm both the Burmese regime and the Karen resistance movement, as well as the Lebanese government and the opposition Christian militia.

In the case of Lebanon, Cabinet was prepared to supply missiles, missile launchers, anti-personnel mines and other weapons to the Christian militia, engaged in a bloody civil war in which non-combatants bore the brunt of the fighting. Like many of the other belligerents, the militia had an appalling human rights record. According to Amnesty International, they engaged in arbitrary detentions, kidnapping, disappearances, extra-judicial executions, torture and acts of terrorism. The militia retained their status as an acceptable recipient of South African arms for as long as four years after they had been disbanded following the end of the civil war in 1989. An internal Armscor memorandum in 1989 argued that the militia should retain their favourable status on the basis of expected income from pending arms sales, even at the expense of South Africa's international image and human rights in Lebanon.

The Commission surmised that the manifest irresponsibility which characterised arms transfers under apartheid was due to two factors in particular. First, the immorality of domestic policy extended naturally to foreign policy; a state which injured and killed its own citizens was hardly likely to respect those of other countries. Second and more specifically, the international community reacted to apartheid by imposing arms embargoes on South Africa. ⁴³ Armscor consequently operated in the world of illicit arms dealing, relying on front companies, fraudulent bills of lading and other clandestine methods to traffic its wares.

In summary, the apartheid government's overriding imperative was to manufacture, purchase and export arms in order to secure the survival of minority rule and the armaments industry. This imperative was not tempered by the constraints of independent scrutiny, public accountability or international norms. As a result, South Africa contributed through its arms sales to widespread loss of life, injury and destruction of property in many regions.

4.4. Recommendations

The Commission ended its First Report by recommending that an Armscor official be prosecuted on charges of fraud and theft; that the employment of two senior managers be terminated; that the Minister of Defence appoint a new Board of Directors for Armscor; that responsibility for the arms control function of government be transferred from Armscor's Management Board to a Cabinet committee; and that a thorough review of arms export policy be undertaken in the light of South Africa's new Constitution and democratic dispensation.

In its Second Report the Commission made extensive proposals on reform of arms export policy, procedures and decision-making processes. ⁴⁴ It presented the following normative framework for new policy:

States have an inherent right, which is recognised in international law, to defend themselves against external aggression. They also have a responsibility to maintain internal order and stability. In certain circumstances the use of force may be necessary to achieve these ends.

At the same time, many regimes employ force for the illegitimate purpose of external aggression or internal repression. States which sell arms to such regimes bear a measure of culpability for the use to which their arms are put. From an ethical perspective it is untenable for these states to argue that if `we don't sell the weapons, someone else will.

Put differently, the right to life which is enshrined in South Africa's new Constitution is fundamental and universal. People everywhere are entitled to expect that this right is respected not only by their own government but also by other states.

The proliferation of arms in many countries and regions contributes to underdevelopment and instability, and thereby undermines the security of people and states. It may also lead to warfare with all its apocryphal consequences.

For the reasons outlined above, states which sell arms have an onerous duty to act responsibly. At the very least, they should take deliberate steps to ensure that their arms do not end up with aggressive or repressive regimes, in the hands of terrorist groups, or on the black market.

The Commission concluded that the primary goal of new policy should be to restrict and not promote the export of arms. The ethical, political and strategic reasons for exercising restraint should take precedence over the economic and commercial motivation for selling weapons and ammunition.

CONCLUSION

The objective of this submission has been to provide a description of the relationship between the business community, arms production and total strategy during the apartheid era. The central argument is that the elements of the business community through their extensive involvement in local arms production, as well as being active participants in Total Strategy, provided the material means for the preservation and defence of apartheid. As such, sections of the business community are guilty of directly and indirectly perpetuating the political conflict and associated human rights abuses which characterised South Africa between March 1960 and May 1994.

During this time the apartheid state had a systematic strategy of enticing the private sector into the defence of apartheid. The private sector did not articulate a clear response to this, and many sections within this community increasingly collaborated with the state by supporting the development of the local arms industry, exploiting loopholes in the embargo regulations and embarking on sanctions-busting activities. This led to the development of a "military-industrial complex", an arrangement from which certain private sector businesses benefited enormously.

Notes

^1. Landgren, S. 1989. Embargo Disimplemented: South Africa's Military Industry, (Oxford: Oxford University Press), p. 41