The multinational arms company BAE Systems was grilled today (19 July) by the House of Commons International Development Committee over the methods by which the firm proposes to pay almost £30 million in "reparations" to the people of Tanzania.
The payment was accepted by a court in December 2010 as a part of a "plea bargain" between the company and the Serious Fraud Office (SFO).
The Campaign Against Arms Trade (CAAT) has denounced the process by which BAE Systems, the wrongdoer, is planning to distribute the funds, bypassing the government of Tanzania and disregarding the advice and expertise of the UK's Department of International Development (DfID).
The Committee repeatedly asked why it was taking BAE so long to pay the £29.5 million, a delay which baffled the Director of the SFO. It was pointed out that the company could have made provisional plans as soon as the plea bargain was agreed in February 2010 and the money paid immediately after the court hearing.
BAE's reluctance to implement the plan drawn up by DfID and the government of Tanzania was also questioned.
DFID told the committee that funds should be distributed in accordance with an agreement between itself and the Tanzanian government, with money spent by schools on teaching materials and improved classroom facilities, including 4.4 million textbooks, 2 million desks, and teacher accommodation. The process would be independently monitored, evaluated and audited.
DfID stated that there would be "legitimacy issues" if BAE ignored the will of the Tanzanian government.
The committee urged BAE to think again on this and distribute the money fully in accordance with the plan before the committee's report is completed in early October.
BAE's conduct was criticised after the hearing by Ann Feltham, CAAT's Parliamentary Co-ordinator, who attended the session.
"If unaccountable arms company appointees are allowed to determine which projects this payment should go to, it would be a highly retrogressive and irresponsible step for democracy and parliamentary processes in Tanzania," she said.
Feltham added, "BAE admitted criminal responsibility in court and the judge made damning remarks about BAE's culpability. BAE should not be involved at all. The elected representatives of the Tanzanian Parliament must have proper oversight of the BAE payment."