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Monday, 10 October 1994
Page: 1349

Senator MARGETTS —by leave—The issue of defence exports is essentially a moral and social one. It is an issue of taking responsibility. As John Kerin said when he was Chairman of the Joint Foreign Affairs and Defence Committee and was kicking off the inquiry into this issue, `The immense expenditure on loss of life, on equipping ourselves to kill and destroy and on defending ourselves from others so equipped is horrific.' It is a horrible thing that our best technical efforts—the genius of humanity—seem to be used first and mainly for the purpose of developing new threats to life and to each other. It has been estimated in the past that over half the scientists currently working are working for the war industry. That may be a few years out-of-date, but I do not imagine things have changed too much.

  The attempt to regulate this industry in such a way as to be certain we send weapons only to `approved armies' is a moral question. It is a question of social ethics and responsibility. What armies will be approved and why? Which ones will not be approved, and why not? What does that mean? When we approve, what are we approving? Whose pain, death and maiming are we saying is a justified result?

  There is a second question. Australia, through its government, actively encourages defence exports. We subsidise the stuff. There is a question in this inquiry, included for industry's benefit, as to how well we are promoting these exports.

  In regard to the first point—that arms dealing is an ethical issue—I did not see much cause for optimism about Australia taking a principled, moral role. We seem to be happy to sell to almost anyone—basically, to anyone on whom the United Nations has not imposed sanctions. We are certainly not leaders here. During the inquiry, we saw the Minister for Defence (Senator Ray) actively promote the sale of arms to Indonesia and Thailand. At the time Indonesia was, and still is, a nation that the United States refused to sell arms to on the grounds that it was likely they would be used in human rights violations, particularly in East Timor.

  Thailand has a history of suppression of minority groups, forced village relocation schemes and support for the Khmer Rouge, although that support may be at a lower level than official government policy. The latter emphasises a further point about Thailand: it has a military which is very politically active and which seems to be made up of fairly autonomous factions, not always under central government control. It has a history of coups.

  Indonesia has, essentially, a military government which has been involved in the invasion of other nations, repression of protest over such action at a level described as `massacres', repression of the press for criticism of government incompetence and corruption, repression of political opposition and repression of unions. It is a nation with immense wealth concentrated in a few hands—basically, the hands of those in government or their families. Ordinary people are often forced by poverty to work for 80c or 90c per day, roughly half the official minimum wage of about $1.80 per day. These are governments we see as very good candidates for our military exports.

  In relation to the second issue—the promotion of military exports—I felt repelled by the feeling that was prevalent: that facilitating such promotion was the real job of the committee. Yet I did take some hope in the fact that, despite all the effort and money poured into this industry and despite the moves to free up the export process advocated in earlier inquiries, defence exports have declined. They have declined rapidly. The export push is a failure. What concerns me is that there is little recognition of this, and `the light at the end of the tunnel' mentality persists. We will probably see even more schemes to promote military exports. The evidence is now in, however, to show that this is economically irresponsible, and the light in the tunnel is liable to be an oncoming train.

  During the inquiry, a certain amount of dust was thrown up about what exactly a defence export is. There was a lot of talk about ambulances, socks and blankets. There are views that say that even though those things are not deadly in themselves, such exports actively assist an army to do whatever it is doing, so these exports should be stopped whenever an army is acting in a way that we do not wish to support. I would agree with this. While these views are important considerations which get little attention, currently none of these things is a regulated export—except in circumstances such as with Iraq, where we have to make special cases or fall outside international sanctions.

  In general, we do not consider these things at all. Most talk about these things was a smokescreen put up to make it look as though the defence goods which Australia exports may be harmless. We may export these things, but they are not regulated and no information is available. The goods we do make that we regulate are guns, ammunition, fragmentation grenades, the odd frigate or patrol boat, components of advanced weapon systems and command and control systems. We also export a certain amount of surplus equipment—the occasional Mirage jet or Iroquois helicopter.

  Let us be clear. When we talk about defence exports, we are mainly talking about things that kill people or are part of a thing or system to kill people. Extending the definition is a good idea, but any discussion of what is going on does not include this. What is going on is horrific. We are supposed to prevent exports that stir up conflict where there are current traditional tensions between nations. So we sell Mirage jets to Pakistan! We sell them as spare parts and, according to Graham Cheeseman of the Defence Academy, we sell at 20 per cent of their value. But they work, and Pakistan has them in the air.

  There is no reason to mention the tension between Pakistan and India here. Everyone here should know of it. It has been common knowledge for a good 40 years. Last month former Prime Minister Nawaz Sharif announced Pakistan had built nuclear weapons, prompting a deployment of conventional and unconventional weapons by India, another nuclear weapon state. The Secretary-General of the United Nations, Mr Boutros Boutros-Ghali, had to rush over there to try to pacify things.   We have regulations designed to stop human rights violations. That did not stop the proposal to export fragmentation grenades or 750mm ammunition to Sri Lanka, engaged in what amounts to race-based civil war. These exports were stopped but by public outcry at the evident intent to export in spite of regulations. We see everywhere an attempt to promote defence exports and cooperation with regimes known for their civil and human rights violations.

  We are told that this is the best way to influence them—by keeping diplomatic channels open. This is exactly the logic used by those who kept dealing with Hitler through the rise of the Nazis and the invasion of Austria, until the invasion of Poland. Indonesia invaded Timor. It moved populations around to try to undermine the local people, exactly as China did with Tibet. Indonesia has subsequently periodically massacred Timorese who resist or protest the occupation of their land. We play three monkeys and do nothing. Not only is our voice silent internationally while we decry the aggression against Kuwait, but we actively assist the Indonesian army. We are happy to train its members. The Minister for Defence talks about selling it weapons. We are happy to do all sorts of things the United States has said it will not do because of human rights implications. We are happy to ignore those implications and the human rights of people in Indonesia.

  We had some talk of moral stand about refusing to interfere in the so-called domestic affairs of Indonesia—East Timor, East Papua, the closure of journals, the suppression of unions fighting for at least the minimum wage of $1.80 per day, and the imprisonment of union leaders for decades. At the same time we feel totally happy to assist Papua New Guinea in suppressing the people of Bougainville who are trying to be free of a government that ignores social, economic and ecological devastation by so-called `Australian' transnational mining companies. Australia has an interest in assuring Bougainville is safe for exploiters with `Australian' identities. Again, we do not just morally sanction; we actively assist. We train troops and police forces. We arm them. We give them helicopters and say, `We didn't know, what can we do?' when those helicopters are rearmed as gunships. What did we think would happen?

  While we agree that defence exports are declining, we are extremely wary of the whittling away by Defence of what it considers real defence exports. We note that in table 2.1, $187 million of `export approval' is cut down to $17 million of what is called real exports. Only $27 million of that is related to approvals given which have not yet resulted in exports. Thirty million dollars is exports of `sporting goods', not considered real by defence. Thirty million dollars is double the $17 million defence thinks is real.

  If they are regarded as `sporting goods', let us look at what they comprise. In 1992-93, when sporting goods were only $8.2 million, they included $717,000 worth of guns for Singapore. That is a lot of new guns in a year for a city state with tough gun laws. Who is shooting what for fun? Do they have skeet ranges on the rooftops? Are all these really for the police? Or are they simply guns not for the military to be sold perhaps to someone from out of state—a traveller from Cambodia or the golden triangle. The fourth biggest buyer of sporting guns was Cyprus. Is there good hunting in Cyprus! New Caledonia and Namibia were in the top 10, and Papua New Guinea was number 11.

  With regard to sporting ammunition, Kuwait bought $351,000 worth; Bangladesh bought $173,000 worth. They do a lot of duck hunting in Bangladesh. Papua New Guinea bought $108,000 worth, and this was in a year when less than $10 million in sporting weapons was sold. I wonder what sort of end-user certificate they had and how much consideration the applications received.

  Certainly the Mirage jets did not get much of a look-in. Perhaps defence did not consider it a real export. Then again, we had the Steyr rifle deal. Defence did not consider the two sample lots of 50 guns each as needing any consideration. They were just samples in a bid for a $300 million order. The order was not considered. There was no export application for the whole deal, even in principle.

  The two new committees mentioned in the main report on page 46 to consider broader policy issues and consider applications at an early stage did not consider this proposal. No-one considered it. But the Minister for Defence was happy to promote it and when the public became concerned and the concerns resulted in a reaction in Thailand, the Minister for Trade was happy to go over there and calm things down and put in his word for the sales. Where is the consideration here? Where is the disinterested judge?

  There is the moral hypocrisy involved in putting troops out to defend oil wells in Kuwait, which we may end up doing again, while ignoring the invasion of Timor, Grenada or covert warfare against Nicaragua, or the genocidal wars in Bhutan against the Gorkas, in India against the Nagas, in Turkey against the Kurds, in China against the Tibetans. Aside from this, there is the question of helping the build-up and transformation of militaries.

  This support of military build-up and transformation is the cornerstone of our export policy, particularly in the ASEAN region. The build-up in ASEAN is the cornerstone of nearly every exporter's policy. We are told that there is no build-up since little more money is being spent, but Thailand is getting an aircraft carrier, Malaysia is getting 18 MIG-29s, Indonesia has bought 39 E German warships, ordered three submarines, 24 British Hawk fighters and other weapons in the last year. Its budget was increased by 24 per cent. It is getting them cheap or, in the case of Malaysia, trading MIGs from Russia for palm oil.

  This is the famous peace dividend—the massive availability of inexpensive surplus weapons, the push for exports by all manufacturers as they try to survive in the face of a decline in superpower buying. In ASEAN it is less a build-up in the classic sense than a transformation as military forces in the area go from basic forces prepared to fight a defensive ground war to more strategic forces capable of hitting over long distances at population centres.

  As countries like Thailand are getting an aircraft carrier, the classic response is submarines. The response to submarines is detection and anti-submarine weaponry. The response to aircraft is aircraft missiles, detection and so on. It is a raising of the technological stakes and the likelihood that civilian population centres are targeted. It is a vast increase in what defence people call projection capability, the ability to strike over long distances.

  This transformation is occurring and is modernisation in a different sense from replacing an old rifle with a new one. It is the sort of thing that creates fear, insecurity and demands a response. This is where we are targeting our weapons sales. We have put three defence trade commissioners into Malaysia, Thailand and Indonesia to do so at the approximate cost of $1 million.

  We are not doing anything here for peace or security. We are actively working against it. We are doing the sorts of things that everyone reading Senator Gareth Evans's Cooperating for Peace would conclude are among the least productive or most counterproductive things a nation wanting peace could do.

  The situation also emphasises the fact that it is a buyers' market. Everyone is trying to sell here. ASEAN is a small market, and economically there has not been a lot of money spent on arms compared with what we ourselves spend. The ASEAN defence market in total is only about the size of the Australian defence market. It is a tiny market and everyone is trying to sell into it. It is little wonder human rights and any other consideration which might lead us to hesitate gets short shrift. It also makes the prospect of a massive and expanding defence export market on our doorstep fairly ridiculous. The only reason we look to it is that when we look elsewhere we see defence exports collapsing in a heap.

  We need to face the fact that in economic terms the defence industry is a basket case. As with most markets, this is not universally true. There are some competitive producers. But this is one area the push for market rationalism never reached. We see the government pouring money into the Australian Defence Industries. In 1992-93 $366 million was poured into this to convert loans to equity. This is in a government owned company where the government already had 100 per cent of equity. It was simply a subsidy.   That year the government also gave $162 million to ASTA, the former Government Aircraft Factories, now Aerospace Technologies of Australia. There are also the subsidies through purchase policies designed to support these industries.

  The main report notes specifically that sale to the Australian defence forces or the ADF is a good selling point for exports. The prime reason we hear for the support and subsidy of an export defence industry is that we need to get it off the ground. There is no evidence that it will ever get off the ground in the commercial sense spoken of. The reason we are given that it must get off the ground is that exports are needed to make our domestic industries competitive. Domestic demand alone is not sufficient to justify domestic production at normal competitive levels, we are told. There is evidence that we will never get enough of a market in ASEAN to make them competitive, and other markets are collapsing.

  The reason we must have domestic industries, we are told, is that we need to be self-reliant. We are not self-reliant in any sense that involves self-sufficiency. We currently import much of our equipment. We look like continuing that way unless the defence industry here undergoes a huge expansion. If self-sufficiency is the root principle that leads inevitably to the conclusion that we need a dramatically expanding export defence industry, then we need to re-examine that principle.

  Mr Woodman noted that in the history of the policy of defence self-reliance the original definition meant having the ability to maintain, repair and modify our defence equipment. It did not mean building our own submarines or frigates, and then trying to flog submarines and frigates around the place to pay for the shipyards.

  Mr Woodman's proposal was that there are real problems with our current policy. He suggested that we need to reassess what we are doing in the light of the original goals of self-reliance. This would hopefully result in abandoning our mad push for defence exports. These exports are not major economic contributors. They are not employers. Defence exports are a small share of total exports. They are a declining share. It is time to give up promoting these and end the duality that leads to lack of regulation and the subsidies that cost the taxpayer so much. This would result in a far better result in terms of our foreign policy objectives and our international credibility.

  In the light of the comments that I have just made, it would seem obvious why it was felt necessary by me and five other members of the full foreign affairs, defence and trade subcommittee to include a report which we called an additional report. It was additional because in terms of the terms of reference we felt that whole sections were not fully considered, in particular, the strategic, political, economic, international and human rights implications of defence exports. Therefore, whilst some aspects of the full committee report may include the legitimate concerns of the majority of the committee, without fully considering the information in the additional report, a reader might well get the impression that all was well with a policy of promoting defence exports as a positive thing for the economy, for Australia and for the region. I do not believe it is so and I would like to say that I am very pleased that other members and senators have supported the additional report.