Focus: In the line of fire

“Our technology could be used in Cat scanners or in defence electronics,” said Maria Tagliaferro, the director of corporate communications at Analog Devices, which has its headquarters in Massachusetts and a factory in Limerick. “We like to call our business applications ‘general purpose’ rather than ‘dual use’.”

The firm produces electronics for American fighter aircraft. Analog says it makes products in Limerick for use in radar systems and satellite communications but it conceded this equipment could have military uses too.

Other firms such as Data Device Corporation (DDC), with headquarters in New York and a factory in Cork, make components that, according to its website, are the “lifeline” of the Apache helicopter.

Software developed by Iona Technologies is responsible for logistical support for the scheduling, planning and control functions of all Pratt & Whitney’s jet engines, including those designed for military use.

The names of the firms that are granted military or dual-use export licences are withheld by the government citing “commercial sensitivities”. Despite this concession to the industry, officials in the Department of Enterprise are concerned that some of this high-tech equipment could end up in the wrong hands in contravention of international law. Last year they ordered a review of licensing for arms exports and dual-use technology.

Publication of the report was low-key. As the implications of its findings begin to circulate, concern is being raised among those with most to lose from any impediments to the growth of the industry.

The recommendations are worrying to exporters, who argue jobs could be lost if companies relocate in order to avoid reams of red tape.

“The worry is that it is yet more documentation and this inevitably raises the broad costs of trade for the sake of another act of terrorism that may never happen,” said John Whelan, the chief executive of the Irish Exporters Association. “The concern is that multinational companies would shorten their supply chains and this would affect exporting countries like Ireland in particular.”

In the world of high-tech electronics, a slave can serve many masters and Irish microchips power some of the most potent weaponry on the planet.

A total of 84 military export licences were issued last year compared with 911 dual-use licences — considerably more than in 2002. Most of the licences are granted for exports to America. Many companies would prefer to avoid the paperwork for dual-licence categorisation.

Although the licence itself is free, it means comprehensive administration procedures for companies, including the notional responsibility of ensuring customers do not sell into the wrong hands any components that can be used for military purposes. One of the companies that argued successfully that its products should not be classified as dual-use was Intel, the world’s biggest manufacturer of computer chips, which employs 3,200 people in its €1.5 billion Irish operation.

The increasing importance of new technology to weaponry and the post-cold war outsourcing of arms manufacture to private operators has dovetailed with Ireland’s growing reputation as a producer of state- of-the-art electronic components.

Boeing, for instance, uses DDC components in the construction of the Apache. The American manufacturer may be better known for its passenger planes but it is now the second-biggest producer of defence equipment in America.

Jim Loughran, Amnesty International’s research and campaigns officer, said: “Amnesty International is not opposed to the arms trade per se, but feels that the lack of transparency and accountability in the current export-control system creates a situation in which members of the Oireachtas, concerned members of the public or investigative journalists cannot find out what is being exported from Ireland or what it is being used for.

“Amnesty opposes the transfer of Apache helicopters to Israel and would oppose the export from Ireland of components that would enable those weapon systems to function, particularly those described as ‘the lifeline of the aircraft’,” said Loughran.

DDC said nobody was available to comment.

The Irish branch of Amnesty International welcomed the Forfas-commissioned review of export licensing, which was compiled by Fitzpatrick Economic Consultants and the Stockholm International Peace Research Institute (Sipri), but criticised its tone and timing.

“The language makes it one for the policy boffins but the real pity is that it appeared a week after the Dail recess and sank without trace,” said Loughran.

The purpose of the export controls, as stated in government guidelines, is threefold: to prevent the export of dual-use items for the production or delivery of nuclear and other weapons of mass destruction; to prevent the export of military goods to countries whose behaviour is considered a threat to international or regional peace; and, to comply with restrictions imposed by the United Nations, European Union and the Organisation for Security and Co-operation in Europe on exports to particular countries in order to bring about a change in the behaviour of the government of those countries.

After 9/11, the government is concerned that it be seen to be adopting codes of best practice.

The consultants do not comment on government policy but do recommend several procedural changes to the licensing of dual exports.

“We understand there have been no prosecutions initiated for failure to comply with export controls,” the document states. “An implication of the absence of any prosecutions is that existing legislation governing both military and dual-use items has never been tested.”

But that doesn’t mean that it won’t be in the future, and the consultants make a number of recommendations.

These include the introduction of new legislation specifically designed to govern military exports; enhanced co-operation across government departments and the customs service; better information for exporters to make them aware of their responsibilities; the publication of an annual report to the Oireachtas on export activity of such goods; an increase in personnel dedicated to scrutinise licences and an increase in penalties for those companies found to be in breach of their reporting obligations.

Amnesty has also raised concerns in the past about arms brokers who have used Ireland for unspecified purposes. In 1996 Leonid Minin, one such dealer, was listed as a shareholder in an Irish-registered company. He was arrested in Italy in 2000 on international arms trafficking charges but released because his activities did not constitute a threat to the Italian state.

Seamus Bannon, the head of the trade and innovation department of Forfas, who chaired the group that supervised the review, said work would begin next month on implementing the recommendations.

“The interface between military and non-military goods has become so blurred that the legislation had to be looked at,” he said. “Penalties, for instance, are very modest and they have to reflect the seriousness of any breach.”

Penalties for failure to comply with the terms of EU and national legislation on controlled goods include fines — the most severe of which is a maximum of €12,700 or three times the value of the goods — and/or up to two years in prison.

Loughran said that while he welcomed the review, he is concerned that the lack of transparency will continue.

The government insists Ireland is compliant but Amnesty believes this is impossible to verify at present.

Loughran cites three export licences granted for sales of telecommunications equipment to Burma in 2000.

“These could be perfectly innocent but the problem is one of transparency — there are no details of what these components are, who is exporting them and what their final usage will be. Considering that Burma is ruled by a military junta this is not good enough.”

The problem for Ireland’s policy makers is simple. Are they prepared to sacrifice jobs for principles, particularly if it is not clear that some dual-use goods may be used for illegal military purposes. On this issue, the consultants said: “Irish export controls face two essentially competing policy demands namely that between effective controls and meeting international commitments on the one hand and the need to facilitate trade and ease administrative burdens on the other.

“While dual-use exports for military use are not of large overall significance for Ireland, the number and nature of Irish-based firms exporting controlled dual-use goods is significant as part of an overall high-tech industry base.

“Were Irish export licensing controls on dual-use items to be significantly tighter than competitor locations, keeping in mind these are mostly sold to civilian and not military users, such business could relocate.”

The battle lines have been drawn and exporters are determined not to be part of the collateral damage.

THE GLOBAL PLAYERS

ARMS are big business. According to Sipri (Stockholm International Peace Research Institute) figures, world military expenditure in 2002 was an estimated $784 billion (€637 billion) — a 3% increase on a decade earlier. In Africa, Latin America, southeast Asia and the Middle East, military expenditure was between 18% and 44% higher than in 1993.

At $38 billion, America is the biggest arms exporter and according to the Sipri figures accounted for 41% of total exports. Next was Russia (22%), followed by France (9%), Germany and Britain (5%). Between 1998 and 2002, the top 15 exporters of conventional weapons accounted for 95% of total world exports.

Ten of the 15 countries increased military expenditure between 1993 and 2002. The largest increases were in Iran and China, where the 2002 figures were 182% and 119% of the 1993 figures, respectively. Ireland’s figure of $749m in 2002 was 40% higher than the 1993 spend.

Both production and exports of conventional weapons are highly concentrated among a small number of countries, according to the Forfas report. The EU contains three of the top five exporters of military goods: France, Germany and Britain. With the inclusion of Slovakia, Italy, the Netherlands and Sweden, it has seven of the top 15. The Sipri yearbook ranks Ireland at 63 out of 65 suppliers of conventional weapons between 1998 and 2002 but does not publish any figures.