BAE refuse to rule out selling arms to UK's enemies

By staff writers
May 5, 2010

The chair of the arms firm BAE Systems has declined to guarantee that his company will not sell arms to countries which threaten Britain.

At BAE's Annual General Meeting (AGM) in London today (5 May), the company's chair, Dick Olver said he was “passionate” about serving the UK. But challenged by a shareholder for a “guarantee” that he would not allow arms sales to countries “that threaten the UK or US”, he failed to answer, speaking only in general terms about rigorous standards.

BAE bosses are keen to build on their firm's image as a “British company”, although British sales now account for only a minority of their trade. But the tactic backfired at the AGM when a PowerPoint slide about BAE's British business displayed the Union Flag upside down.

BAE, one of the world's largest multinational arms companies, has long been criticised by churches, faith groups, NGOs and charities for selling weapons to oppressive regimes such as Saudi Arabia and Indonesia. The firm is routinely accused of undue influence within the UK government.

Olver was caught by surprise at the AGM when the first question was asked by South African former MP Andrew Feinstein, who has led attempts to expose the truth behind BAE deals with his country.

Feinstein quoted Olver's words back at him. Olver had repeatedly responded to corruption allegations by claiming that “BAE have done nothing wrong”. But in February this year, BAE reached a plea bargain with British and US authorities, admitting to minor breaches of the law while avoiding more serious charges.

Feinstein said that Olver's statements at the time of the settlement contradicted his earlier assurances.

“You have lied to the shareholders of this company,” insisted Feinstein, “If you have a shred of personal integrity... you will today publicly apologise to the shareholders and the communities you misled and you will resign with immediate effect”.

Olver responded by saying he rejected the allegations “with every sinew of my being”, adding “I have spent six years doing precisely the opposite of what you suggest”. He claimed that he did not know about the law-breaking until it was brought to his attention.

The majority of questioners focused on corruption, with others asking about specific deals, the company's relationship with the UK government and the remuneration of directors. Many questions were asked by opponents of the arms trade who buy single shares in an attempt to hold BAE to account.

The directors became visibly flustered as questioner after questioner challenged their claim to “be a global leader in responsible business conduct”. They claimed that they had turned down business for ethical reasons but declined to give any examples.

The meeting faced repeated shouts of “answer the question!” as Olver responded to questions with repetitive comments about the benefits he says that BAE brings to Britain. Barnaby Pace, a researcher specialising in arms trade issues, repeated his frequent offer of a public open debate in which Olver could defend BAE. Olver failed to respond.

As part of the plea bargain, BAE had admitted to conspiring to defraud the US Department of Justice. But in response to questioning from Symon Hill, co-director of the Christian thinktank Ekklesia, Olver claimed that none of the board knew that the defrauding was going on.

Challenged by peace activist Albert Beale, Olver refused to publish information on the ratio between the pay of the highest and lowest paid employees in BAE. He defended a bonus of £189,000 to Linda Hudson, the new head of BAE in the US, for two months' work. Commenting on directors' remuneration, he insisted that “what they are paid is a very small amount when we think what they're doing”.

The directors struggled to defend their use of a private company aeroplane, with Olver insisting that it is “absolutely essential”. In an attempt to present his company as ethical, he emphasised the small part of BAE's business that produces environmental components for buses. This prompted a heckler to shout, “Are you going home on a bus tonight?”.

Outside the meeting, at the Queen Elizabeth II Conference Centre in central London, demonstrators gathered in a peaceful protest organised by the Campaign Against Arms Trade (CAAT). They formed a “People's Jury” and put a giant puppet of Dick Olver “in the dock” on the grounds that BAE had now escaped the British courts through their plea bargain with the Serious Fraud Office (SFO). The SFO were widely regarded as excessively lenient after abandoning all investigations into BAE in return for £30 million and an admission of “accounting irregularities”.

The demonstrators had earlier 'chased' the Olver puppet away from the headquarters of UK Trade and Investment (UKTI), the government unit that promotes exports and which CAAT accuses of submitting to undue influence from BAE. UKTI devotes more staff to promoting arms exports than to all civil sectors combined, although arms make up less than two per cent of British exports.

“Our People's Jury was an attempt to get the true facts about BAE's activities onto the record, given that they are now very unlikely to reach court, thanks to the shameful plea bargains between BAE and the UK and US authorities" said CAAT's Sarah Waldron.

She added, “The BAE AGM shows that BAE is still a company in denial about the distress and destruction that are the outcomes of its unethical activities”.


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