1.0 A shared vision of security

1.1 On behalf of the 24 member denominations and nine provincial councils of the South African Council of Churches, the National Executive Committee wishes to express its appreciation to the Minister of Defence for making himself available to meet with us. We know that the Minister has been eager for such a meeting to take place ever since his appointment in mid-1999. We are pleased it has at last been possible to come together to discuss critical issues of human security in our nation and our region.

1.2 We know that we share a common vision of the importance of national security, as articulated in section 198(a) of the Constitution: "National security must reflect the resolve of South Africans, as individuals and as a nation, to live as equals, to live in peace and harmony, to be free from fear and want and to seek a better life." We see this shared vision reflected also in the government's 1996 White Paper on Defence.

1.3 We especially appreciate the Minister's willingness to discuss the current strategic defence procurement programme. We have monitored the deal with growing concern and have expressed--individually and collectively--reservations about its cost and appropriateness. Most recently, the August 2001 SACC triennial National Conference adopted a resolution calling on the government to decline all optional tranches of the arms procurement programme and to explore the complete abandonment of the deal.

1.4 While media reports have tended to highlight sensational allegations against individual public officials, the SACC has sought to focus public attention to two larger principles: national spending priorities and the public accountability of national policymakers. We hope to return to these themes in our discussion today.

2.0 Spending priorities

2.1 The SACC has repeatedly questioned the merits of spending a substantial amount of public resources on sophisticated weaponry. In part; our objections stem from the fact that the country faces no credible external military threat. Even if we accept the premise of the Defence Review--that South Africa must switch from a "threat-specific" form of defence to a "threat-independent" level of constant readiness--we still question whether submarines and high-tech fighters represent most appropriate and cost- effective way of achieving that goal.

2.2 More importantly, South Africa faces more immediate threats to its security: poverty, inequality, and the AIDS pandemic. We believe that by investing this money in improving health care, education, and the provision of housing and basic services we could make much more rapid progress toward realising the Constitution's vision of national security.

2.3 We appreciate the fact that the government has dramatically reduced defence spending from 1994 levels and that South Africa spends a comparatively small percentage of its national budget on defence. However, we are concerned that the strategic defence procurement programme has made defence one of the fastest growing line items in the budget for the life of the current Medium Term Expenditure Framework. This sends the wrong message to our people about national spending priorities.

2.4 We are also anxious about the long-term costs of the deal. We understand that the bulk of the contracts are denominated in foreign currencies. As a result, the real cost of these weapons has risen dramatically over the past two years It seems unlikely this trend will be reversed in the next decade; indeed, it may even become more pronounced.

3.0 Offsets

3.1 One of the most publicised aspects of the arms deal has been the package of "offsets"-- industrial participation and trade agreements meant to create 65,000 jobs and to generate more than R100 billion in economic activity. While we applaud the government' s commitment to creating jobs, we have reservations about the effectiveness of this strategy. Internationally, offset agreements have had a relatively poor record of achieving their targets. Moreover, a disproportionate number of the jobs created are likely to be highly-skilled technical positions. If our priority is to create jobs and reduce poverty , these resources could be more productively deployed.

3.2 Given the mixed impact of offset agreements, we are concerned that there be adequate systems in place to monitor the implementation of the agreements. This should include the establishment of a broadly representative committee--including civil society representatives--to assess the likely impact of the offset agreements, to analyse their potential for reducing poverty and unemployment, and to monitor progress toward the achievement of their stated objectives. We would also urge government to disclose the full details of the offset agreements to facilitate independent evaluation of their success and impact by civil society organisations. Finally, we are eager to know what process and criteria government will use to determine if the offset agreements have been satisfied or whether the associated penalties should be invoked.

4.0 Public accountability

4.1 Parliament's oversight role in financial matters--including the arms deal--remains extremely limited. Since Parliament is one of the most important channels for public participation and input in national policy debates, this means that public accountability is correspondingly diminished.

4.2 The government has been at pains to point out that the White Paper and the Defence Review were prepared in open, consultative processes with plenty of opportunities for public comment. However, Parliament's acceptance of these documents should not be equated with endorsement of a specific arms deal--or, indeed, of increased military spending in general. The Defence Review explored force design options, but these represented a long-term vision, rather than an immediate shopping list.

4.3 More Important, Parliament continues to have no authority to alter the spending plans presented to it by government, nor does it have an effective role in reviewing and approving specific defence procurement plans. This issue is likely to surface again soon if press reports are correct in indicating that the Department of Defence is preparing to invite tenders for ground-to-air missiles and other equipment for the army.

4.4 Finally, we are concerned about the long-term impact which the current debate may have on the Standing Committee on Public Accounts (SCOPA). Until recently, SCOPA was seen as one of the most effective and non-partisan committees in Parliament. SCOPA plays a critical role in ensuring the fiscal transparency and accountability of government. We would encourage government give urgent attention to restoring popular confidence in SCOPA as an independent and effective agent of public oversight and accountability.

5.0 Way forward

5.1 In light of these concerns, we urge the government to signal immediately its intention to decline all optional components of the current strategic defence procurement package, even if this implies that the unit cost of aircraft in the first tranche will increase accordingly.

5.2 We further urge the government to consider seriously the complete abandonment of the deal, We acknowledge the government's justifiable concern that the termination of the contracts might prejudice future business transactions. However, we believe that this risk must be set against the potential domestic social and political consequences if the arms deal ultimately inhibits the government's ability to deliver improved conditions for South Africa's poorest households.

5.3 If, in the end, the government decides it is not in the best interests of the nation to abandon the deal, then we propose that any decision concerning the taking up of the options should be linked to the achievement of demonstrable progress in the fulfilment of the existing offset agreements.