Transparency in arms purchases

By P. R. Chari

STUNG, NO doubt, by the criticism and widespread beliefs that the defence apparatus is a corrupt organisation, following the disclosures in the Tehelka tapes of civil and military officials taking presents, liquor and asking for women, the Ministry of Defence (MoD) is getting serious about cleaning up its image. The amounts involved in the incidents of malfeasance revealed by Tehelka are trivial. But this well-publicised expose has greatly eroded the image of the defence establishment and the managers of national security.

The MoD and the armed forces, incidentally, have yet to recover from the battering they took when the Bofors and HDW cases came to light. There are certain consequences of these happenings for the defence apparatus that may not be apparent to outsiders; this is their deleterious effect on lowering the morale of the fighting troops. Their conviction that senior officers and politicians are more concerned with personal aggrandisement than the welfare of the troops and equipping them adequately is growing. This augurs ill for the motivation of troops defending the borders of India. Their cynicism would only increase with the knowledge that the Defence Minister who needed to resign after the Tehelka tapes came to light is now waiting to be re-inducted into the Cabinet; they will also note the delay in disciplinary proceedings being initiated against several of those indicted by the tapes.

It would be naive to expect that corruption can ever be totally eliminated in any system. Individuals manning the MoD and Services Headquarters, however, can easily become corrupt, since the thick blanket of secrecy surrounding these establishments, ostensibly on national security grounds, shields their nefarious activities. Moreover, these individuals also come from the same permissive milieu in the country that has witnessed steady erosion in values over the years. Disconcertingly, India is now classified among the most corrupt countries in the world, along with Indonesia, Vietnam and China, according to the corruption index notified annually by Transparency International. This index is based on the likelihood that a businessman will have to use bribery to obtain public contracts.

The MoD's seriousness about cleaning up its image can be gauged from its having taken the extraordinary step of consulting Transparency International on how to improve its defence procurement procedures. The MoD's anxieties are understandably related to the huge deals that are in the offing for jet fighters, submarines and tanks. A cloud rising over any of these deals, involving the MoD or the Services in suspected malfeasance, would erode the people's faith completely in the defence apparatus and affect the political fortunes of the coalition parties comprising the NDA Government; they might usefully reflect on what happened to the Congress in 1989 following the Bofors case becoming the main election plank of the then Opposition, which is now in the Government.

So, what can be done? It would be useful to enumerate what is being contemplated by the MoD, and what remains to be implemented in this regard. First, the Group of Ministers have recommended the creation of a Defence Procurement Board to undertake procurement activities in a more professional and cost-effective manner. It would preserve the institutional memory, harmonise the requirements of the armed forces and ensure their greater participation in the decision-making process. The Board, headed by the Defence Secretary, would be concerned with only major acquisition and procurement cases; other cases would be handled by the Special Secretary (Procurement). Hopefully, better coordination between the MoD and the armed forces would result from these arrangements, as also within the various wings of the MoD and within the three Services. Cases are known where two wings of the MoD have negotiated separately with the same manufacturer for the same equipment. It should also be possible to ensure greater professionalism in the Board by training the incumbents in negotiating techniques. Two more suggestions have been made to improve the functioning of the proposed Board. Its designed structure does not include representatives of the Defence Research and Development Organisation, and lower acquisition organisations in the Services Headquarters are not at present within the Board's span of control. Both these lines of criticism are valid.

Second, it seems that Transparency International has advised the MoD to enter an ``integrity pact'' with the arms manufacturers, in which both sides accept mutual commitments. The Government commits its officials not to demand or accept bribes, and the arms manufacturers commit themselves not to pay or offer bribes and, further, that they would disclose all commissions and payments made by them to anyone, including agents used for the deal. Something like this was attempted in the mid-1980s, when arms manufacturing firms were generally informed that their quotations should not include any cushion for kickbacks, but this initiative was fitful and only had a limited success. The ``integrity pact'' can work if it is supported by greater openness about the procurement process itself. The Defence Minister has said that details of weapons acquisitions would be posted on the MoD's website, which is a big step forward in the right direction. A further suggestion can be made to ensure the integrity of the defence procurement process, which is to devise regulations for protecting ``whistle blowers''. Persons within the system are the ones who can provide the most authentic information about corruption, although it must be accepted that some are driven by qualms of conscience, but others by the desire to fulfill their private agendas. The motives of ``whistle blows'', therefore, could be suspect, but the veracity of the information provided by them should be the touchstone for its acceptance or rejection.

Third, ensuring greater transparency in the defence procurement processes does not require the banning of representatives, liaison officers or the commission agents of the arms manufacturers. Previous attempts to ban them have failed miserably, as the Tehelka expose revealed. Neither is banning them necessary. This may appear surprising; but they do serve useful purposes to ensure that supply of spares and ancillaries, repairs to equipment and after-sales services are speedily undertaken, and costly defence equipment does not lie idle for long periods of time. What is necessary is to license these agents, and obtain annual reports of their activities, income and expenditure and other relevant information.

These steps, if taken earnestly, would go a long way towards promoting transparency in arms purchases. There are two further matters that need final mention. First, no procedural or organisation reform can be worked if the personnel manning them are dishonest. Due care has to be taken to vet the reputation of officials dealing with procurement matters. There was a time when only officials with a proven integrity were appointed to these sensitive posts. Now, one is not sure whether proven integrity is not, perhaps, a disqualification for making such appointments, looking to the general reputation of the incumbents manning several such posts. Second, the defence sector is not an island in the continent of the Government of India. If such elaborate procedures are being envisaged to provide transparency in defence purchases, should the same systems not apply to other Ministries making large-scale purchases? Maybe the process should start with the MoD and national security management, but it needs to be extended to other Ministries to reform their working systems and procedures. Transparency must become the new mantra for the entire Government.

(The writer is Director, Institute of Peace and Conflict Studies, New Delhi).

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