Denel (Pty) Ltd was established as a state-owned industrial company under the Ministry of Public Enterprises in April 1992. It inherited most of Armscor’s production and research facilities, and over 15 000 employees. At the time of its formation, Denel restructured and reorganised the former Armscor subsidiaries into a number of divisions and subsidiaries within five industrial groups: systems, manufacturing, aerospace, informatics, and properties and engineering services.

Since its formation, Denel has faced a declining domestic defence market as a result of defence budget cuts. It has also been confronted with an uncertain policy environment, given the new ANC-Ied government’s commitment to restructuring state assets (privatisation) and the lack of clear government policy on the future of the domestic defence industry. The company has pursued adjustment strategies to ‘commercialise’ the former Armscor subsidiaries and to reduce its dependence on local defence sales. The most common strategies have included diversification and conversion.

All of Denel’s divisions and subsidiaries have actively pursued strategies of diversification since 1992 – some through joint ventures or alliances with local and foreign civilian firms, and the purchase of existing civilian product lines. Ll W, which manufactures small arms and artillery systems, embarked on a joint venture with a civilian company, BELL (Pty) Ltd, to manufacture skid steer loaders. Somchem, which manufactures rocket systems, anti-Jarmour weapons and missiles, has entered into a licensing agreement with Tubi Sarplast from Italy to manufacture glass-reinforced polyester pipes. Simera, which manufactures fixed- and rotary-wing military aircraft, has a contract from Rolls Royce (UK) to build gearboxes for commercial aircraft engines.

Some of Denel’s divisions have pursued diversification through spin-offs, by developing civilian products using existing defence technology and production facilities. This strategy has been accompanied by significant investments in R&D, new product development, and a major marketing strategy to identify new local and foreign civilian markets. Kentron, which manufactures missiles and air defence systems, has developed new civilian products including traffic engineering systems, observation systems, and plastic and glass-fibre products. Eloptro, which manufactures electro-optical equipment for military purposes, has developed civilian products such as glass-moulding and night vision equipment. Musgrave, which manufactures rifles and shotguns, has developed new civilian products including cricket bats and motor vehicle parts. Somchem has developed civilian chemical and composite material products using its defence technology and production facilities. PMP, which manufactures small- and medium-calibre ammunition, has developed civilian products including brass and copper products, drill bits and pressed parts for the motor industry. Naschem, which manufactures medium- and heavy-calibre ammunition, has developed civilian products for the mining industry and a range of plastic products. Informatics, which is the major supplier of information technology (IT) products and services to the SANDF, has become one of the largest players in the local commercial IT market through equity partnerships (Information Database Technologies) and acquisitions of civilian IT companies, such as AZ Computers.

The success of these diversification efforts has been reflected in the increasing value and share of Denel’s civilian business. In 1992, civilian sales (domestic and exports) contributed about 20 per cent to Denel’s turnover. By 1995, civilian sales contributed about 30 per cent. In terms of value, civilian sales increased by nearly 40 per cent in real terms between 1992 and 1995, while the value of defence sales declined by 20 per cent during the same period.

Only one of Denel’s divisions, Houwteq, pursued a strategy of conversion after 1992. Having been involved in military satellites and missile launch systems, the company pursued the development of low-earth orbit satellites after 1992. During 1992 and 1993, the company developed two civilian products: Greensat (an observation satellite with remote sensing abilities) and Greensense (a resource management satellite system). Despite favourable reactions to both products from the international community, efforts to obtain an international partner or a client willing to invest proved unsuccessful, and the company’s activities were terminated in October 1994. The failure of this conversion effort was primarily related to political factors, particularly South Africa’s efforts to become a member of the Missile Technology Control Regime (MTCR), and not because the ‘conversion’ products developed by Houwteq were commercially unviable.

Despite Denel’s success in increasing the value and share of its civilian business, its diversification and conversion efforts have been inhibited by internal and external factors. Internal factors have included the management culture of Denel, which has been protected from competitive market forces, a high dependency on defence sales and defence-specific technology in certain divisions, and the fact that many of Denel’s production and research facilities inherited from Armscor are commercially unviable. External factors have included a severe recession, the United Nations arms embargo (lifted in May 1994), and the absence of any clear policy direction from government on the future of the domestic defence industry.

Denel Organisational Structure

Source: Deniel, Annual Report 1992/93

Defence industrial adjustment

South Africa’s defence firms (public and private) pursued a variety of adjustment strategies after 1989 to survive the impact of the defence cuts. These included defensive strategies, whereby firms attempted to reduce their dependency on their defence business, and offensive strategies, whereby firms attempted to maintain or increase their defence business.¹ Diversification is defined as an adjustment strategy whereby a defence firm attempts to reduce its dependence on military business by divesting itself of military divisions or by acquiring all or part of the assets or products of civilian companies. This strategy includes mergers, joint ventures and co-production agreements with civilian companies. Diversification usually involves the broadening of a company’s civilian production activities, and may be a permanent alternative to defence, or just a (temporary) complement during periods of limited or declining demand. The strategy of spin-off is a variant of diversification, with an emphasis on internal development rather than the acquisition of civilian firms or products. Using this strategy, a defence firm may attempt to develop civilian products utilising existing defence facilities.

¹ See Brzoska & Lock, 1992; Renner, 1992; Southwood, 1991; Willett, 1990; and Dunne & Willett, 1992 for comprehensive discussions of the different types of adjustment strategies.

Conversion is defined as the transfer of resources and the reorientation of productive capacities from military use to civilian purposes (Renner, 1992:32). At the level of defence firms, it involves the conversion of all or certain facilities to civilian production. It also includes the development of new or alternative civilian products using existing defence resources, the scaling down of plants and facilities, and the opening of new facilities (Southwood, 1991). Plant-based conversion involves the alternative (civilian) use of a specific defence plant’s existing skills, equipment and technology to produce civilian products – ‘swords into ploughshares’ (Dunne & Willett, 1992). In South Africa, the most common defensive strategies included diversification, spin-off and conversion. The most common offensive strategies included concentration and monopolisation of existing defence markets, increasing arms exports, and acquisitions and joint ventures with other defence firms.

Defence industrial adjustment in the public sector

With the restructuring of the public sector arms industry, Armscor retained responsibility for acquisition for the SADF, while Denel concentrated on R&D and the manufacture of armaments. Armscor retained other functions, including marketing support, arms control (the issuing of export permits), the sale of SADF surplus weapons, and, most importantly, overall co-ordination of the local defence industry.

In its ‘new’ role, Armscor pursued several adjustment strategies: initiating and supporting technology retention and development programmes; pursuing export markets through international marketing and marketing support; introducing more competitive procurement policies; negotiating counter-trade agreements with foreign suppliers; retrenching staff, implementing internal cost-cutting measures; and expanding the corporation’s client base (Batchelor, 1996). These strategies were aimed at ensuring the survival of the domestic arms industry, which in turn constituted the rationale for Armscor’s existence.

From its inception, Denel pursued a number of adjustment strategies to ‘commercialise’ the former Armscor subsidiaries and to reduce its dependence on the domestic defence market (Cilliers, 1994; Rogerson, 1995; Batchelor, 1996). Some of these strategies were aimed at reducing the company’s dependency on its defence business and included retrenching staff, internal cost-cutting, the closure of certain production facilities, spin-offs, diversification and conversion. Some were aimed at maintaining or increasing the company’s defence business – local and foreign – and included mergers, acquisitions and joint ventures with defence firms, and increasing arms exports. The adjustment strategies Denel pursued after 1992 were not mutually exclusive, in that the company made no attempt to get out of the defence market altogether. Instead, it pursued a dual-track approach which involved adapting to the declining domestic defence market by rationalising and consolidating its defence operations, and reducing its dependence upon the local defence market by diversifying into civilian markets and products, and through increasing arms exports (Batchelor, 1996).

Most of Denel’s divisions pursued strategies of diversification in order to reduce their dependence on the local defence market. These strategies of diversification included joint ventures, acquisitions or mergers with civilian firms, the purchase of non-military product lines or licensing agreements, and the development of civilian products using existing defence technology and production facilities (i.e. spin-off) (Batchelor, 1996). These diversification strategies were accompanied by significant investments in R&D and new product development as well as by a major marketing strategy to identify new (local and foreign) civilian markets.

Only one of Denel’s divisions – Houwteq – pursued an explicit strategy of conversion involving the transformation of all its resources and productive capacities to civilian purposes. Houwteq, formerly involved in military satellites, became involved in the development and marketing of low-earth orbit (LEO) satellites. However, its conversion strategy was commercially unviable and the division was closed in October 1994.

The outcome of Denel’s adjustment experience after 1992 was reflected in the trends in the company’s turnover and profitability, and in the changing composition of the company’s business. Denel’s turnover declined in real terms between 1992 and 1995, largely as a result of the dramatic declines in the value of domestic defence business. The company’s poor level of profitability was related to the commercially unviable nature of many of the assets and facilities inherited from Armscor.

Denel Composition of Turnover (1992-95)
(Figures are in Rm in constant 1995 prices. Figures in italics are percentages.)

Sources: Denel, Annual Report, various years

Despite this, the composition of Denel’s business changed dramatically during the same period. The company’s domestic defence business declined from 63 per cent in 1992 to 45 per cent in 1995, as a result of the declines in defence spending. This was offset to some extent by increases in exports (mainly arms) and civilian sales. The increasing value and share of Denel’s civilian business were directly related to the company’s diversification efforts.

Since coming to power in April 1994, the ANC-led government has consistently rejected the idea of privatising Denel. It has also failed to articulate a vision or strategy for the company, either in terms of its defence business or further diversification and conversion efforts. In the absence of a clear policy direction from government, Denel will continue to pursue new defence and civilian markets, while attempting to reduce its dependence on the local defence market. Its success in civilian markets will probably be limited to divisions such as Informatics (information technology), which utilise dual-use or generic technologies. Some divisions, such as LIW, which are heavily dependent upon defence business, will continue to find it difficult to diversify or convert their defence activities to civilian purposes.

Defence industrial adjustment in the private sector

The defence cuts which led to the restructuring and commercialisation of South Africa’s public sector arms industry had a dramatic effect on the private sector arms industry. The changes in Armscor’s procurement policies, which entailed more competitive procurement and acquisition from abroad, together with the formation of Denel as a contractor and competitor, fundamentally altered the ‘cosy’ relationship between the public sector arms industry and the private sector. The cuts in procurement spending, which led to the cancellation or postponement of major weapons projects, resulted in a dramatic downsizing of the private sector arms industry and were accompanied by declining output, profitability and large-scale retrenchments. Private sector defence firms were forced to pursue adjustment strategies to minimise the impact of the procurement cuts.

The most common offensive adjustment strategies included the concentration and monopolisation of certain defence markets, increasing exports, and joint ventures and alliances with foreign defence firms. These strategies not only helped to consolidate the monopoly positions of the country’s three major private sector defence groups (Reunert, Altech and Grintek) in certain sectors of the domestic defence market, but allowed some medium-sized firms (for example, XCEL Engineering) to increase the value and share of their defence business. Most private sector defence firms embarked on export drives to offset the declining domestic demand for armaments and to find new markets for their defence products. Although there were some barriers to exporting, such as the United Nations Security Council Resolution 558 of 1984, which encouraged countries to refrain from purchasing South African armaments, many firms were successful in finding new export markets. The major defence groups, which had extensive links with multinational companies, were relatively successful in finding export markets for their products. Smaller firms with niche products (for example, Milkor) also managed to find export markets, while for some firms (for example, Northbend) arms exports exceeded the value of local defence business or replaced local defence business (Batchelor, 1996). Most firms pursued joint ventures and strategic alliances with foreign defence firms.

The most common defensive adjustment strategies involved retrenching workers, downsizing a firm’s defence activities and diversification. The private sector defence industry downsized dramatically after 1989, and this was reflected in the nearly 80000 workers retrenched between 1989 and 1995. Cutting back on R&D and capital spending contributed to the under-utilisation of resources (capital, labour and technology) in the manufacturing sector. Many defence firms were operating at sub-optimal production levels with large surplus capacities. Many adopted spin-off or diversification strategies, but very few attempted to convert their defence activities to civilian use. Some firms (for example, Grinaker Avitronics) were relatively successful in developing civilian products (microwave products, voice technology products) from existing military technologies, whereas smaller firms found it more difficult to develop spin-offs because of the resources needed to fund R&D. Many of the major defence groups were successful in acquiring civilian firms or product lines through licensing agreements. Conversion was not a popular strategy among private sector firms as it was perceived as expensive and difficult.

Private Sector Arms Industry Sales (1992-95)
(Figures are in Rm in constant 1995 prices. Figures in italics are percentages.)

Sources: Armscor; Some Statistics of the SADIA Members of the Defence Industry (SADIA: Johannesburg, 1996)

The private sector arms industry as a whole witnessed declines in the value of total sales, largely as a result of the cuts in defence spending. However, the share of civilian sales (domestic and exports) in total sales increased substantially after 1992. The value of private sector arms exports also increased significantly after 1992, despite a slight dip in 1994.

Adjustment outcomes

Between 1989 and 1995, the size and structure of South Africa’s domestic defence market changed quite dramatically as a result of the cuts in defence spending, the formation of Denel, the lifting of the United Nations arms embargo and South Africa’s reintegration into the international community. The size of the domestic defence market, as measured by Armscor’s total acquisition spending, declined by 30 per cent between 1992 and 1995. The share of imports increased slightly during 1995, with the lifting of the United Nations arms embargo in May 1994. Despite real declines in the value of Denel’s domestic defence business, it was able to maintain its share of the domestic market between 1992 and 1995. This resulted from the company’s attempts to subcontract less of its defence work to the private sector. The three major private sector defence groups (Reunert, Grintek and Altech) increased their collective share of the domestic market between 1992 and 1995 at the expense of the rest of the private sector, whose share declined quite dramatically after 1993. The private sector as a whole, including the three major groups, witnessed increases in its share of the domestic defence market between 1992 and 1994, before experiencing a dramatic decline in 1995.

One of the most significant adjustment outcomes of the declining domestic defence market has been the increase in South Africa’s arms exports. Almost all defence firms have pursued export markets aggressively since 1989, and particularly since the lifting of the arms embargo. Armscor’s international marketing efforts, the presence of South African defence firms at international defence exhibitions, together with the support of the ANC-led government, have contributed to the increasing value of the country’s arms exports, and the contribution of arms exports to manufactured exports and total exports.

Structure of the South African Defence Market (1992-95)
(Figures are in Rm in constant 1995 prices. Figures in italics are percentages.)

* Includes Reunert, Grintek and Altech.
Sources: Armscor, Annual Report, various years; Some Statistics of the SADIA Members of the Defence Industry (SADIA: Johannesburg, 1996)

The nearly 200 per cent increase in the value of South Africa’s arms exports since 1989 has been accompanied by scandal. In September 1994, a consignment of surplus small arms, supposedly intended for Lebanon, was diverted to Yemen, which was involved in a civil war and was a prohibited destination for South African arms sales (The Star, 1 October 1994). The consignment, which included over 9000 AK-47s, 15 000 G-3 assault rifles and some 14 million rounds of ammunition, was the second part of a dual shipment, the first having found its way, illegally, to the former Yugoslavia (Cameron Commission, 1995a:38). The events surrounding these shipments led to the establishment of the Cameron Commission of Inquiry. Its mandate was to investigate the irregularities of the Armscor-Wazan deal and to comment on South Africa’s arms trade policies.

South African Arms Exports (1989-94)
(Figures are in Rm in constant 1995 prices. Figures in italics are percentages.)

Sources: Armscor; South African Reserve Bank, Quarterly Bulletin, various issues

In November 1994, it was alleged that elements within the South African armed forces had continued to supply arms to Unita in Angola for several years after the Bicesse Accords. It was also alleged that Armscor shipped consignments of weapons, mainly surplus weapons, to southern Zaire in late 1992 and early 1993, and that these weapons were intended for Unita (Human Rights Watch Arms Project, 1994:51). While Armscor and the South African government denied the charges, it admitted that rogue elements within the defence industry and private companies could be supplying arms to Unita. In mid-1995 it emerged that certain South Africans had sold arms to the Hutu government in Rwanda before its defeat in 1994 by the Rwanda Patriotic Front (Mail & Guardian, 2 June 1995). While Armscor and the South African government stopped official arms sales in February 1993, it is evident that unofficial sales continued during 1993 and 1994. The cabinet asked the Defence Minister, Joe Modise, to investigate the alleged arms sales to Rwanda to prevent any damage to South Africa’s diplomatic relations. In October 1995, the Office for Serious Economic Offences began investigating certain irregularities in the commissions paid for the sale of 12 ex-SANDF Puma helicopters to Romania in March 1994 (The Star, 21 October 1995).

In response to these incidents the government appointed a ministerial committee in March 1995 to make recommendations on government arms trade policy and possible arms export control mechanisms (Van Dyk, 1996:5). The committee’s recommendations were submitted to cabinet, and approved in August 1995, just after the release of the First Report of the Cameron Commission. The Cameron Commission’s Second Report, released in November 1995, contained recommendations on arms trade policy. These included a code of conduct governing arms sales, a system of country and product classification, and an oversight role for parliament in approving arms sales. It also made recommendations on harmonising existing arms control legislation, and centralising the arms control function in a single agency or government department (Cameron Commission, 1995b:vi-xiii).

The conversion of South Africa’s arms industry

The process of demilitarisation which accompanied South Africa’s transition to democracy is a crucial element in the dismantling of the apartheid system. The short-term negative effects, such as job losses and the decline in industrial output, need to be balanced with the positive long-term aspects, such as the reallocation of resources to more pressing socio-economic needs and higher levels of economic growth. For the government and the private sector arms industry, the challenge is to optimise the transformation and reorientation of military resources for civilian purposes with minimal adjustment costs.

The declining domestic defence market, and the highly competitive nature of the post-Cold War international defence market, have forced most of South Africa’s defence firms to pursue defensive adjustment strategies such as spin-off, diversification and conversion. Diversification efforts, which have included mergers and acquisitions of civilian firms, acquisitions of civilian products, and the development of new civilian products based on existing defence technologies, have led to higher levels of civilian sales. However, in the absence of any government support for the conversion of the country’s defence resources labour, capital and technology – defence firms have been expected to pursue conversion in accordance with market forces. Many firms’ conversion efforts have met with limited success because they attempted to produce civilian prototypes of existing defence products without any real knowledge or understanding of commercial markets.

The limited number of successful conversion efforts in South Africa’s arms industry is not unique. International evidence suggests that without government support and the political will to support conversion, only those companies with relative strengths in dual-use technology markets, or those at the lower levels of the product hierarchy, will find conversion relatively easy. There have been no attempts in South Africa to reproduce the classic plant-based form of conversion that was immortalised by the Lucas Aerospace Plan in Britain in the 1970s. This is not surprising, given the tremendous barriers to exit from the defence market and the presence of a severe domestic economic recession which accompanied the declining domestic demand for armaments.

The failure to reallocate resources successfully from the defence to the civilian sector suggests that the government should take a more interventionist role in defence industrial adjustment. Support for a government-sponsored conversion strategy has come from several quarters, including the trade unions, church groups and elements within the ANC. However, beyond a rhetorical call of ‘swords into ploughshares’, little work has been done on the formulation of a conversion policy which optimises gains from the demilitarisation process. Understandably, in the absence of a coherent defence industrial adjustment policy, defence firms will continue to pursue strategies aimed at increasing their share of local and foreign defence markets. The top-down approach implied in government-orchestrated conversion strategies has not been particularly successful in Eastern Europe and the former Soviet Union, which suggests that an alternative approach needs to be identified for South Africa’s arms industry.

Political conversion concerned with demilitarising the economy and restructuring the country’s industrial and technological priorities, rather than with the micro-level, technical aspects of conversion, seems to be the most appropriate approach in the South African context. The government should provide a conducive macroeconomic environment which encourages the conversion of resources from military to civilian purposes. This could be achieved through mechanisms and incentives such as tax breaks, subsidies to spin-off companies, retraining programmes for defence workers, and economic regeneration programmes for towns or regions affected by defence cuts. The government, in conjunction with industry, labour, local and regional authorities, and other interested parties, could formulate a national conversion strategy. This should be integrated with existing industrial and science and technology policies, and aim to redirect industrial, technological and scientific resource capabilities towards meeting the country’s pressing socio-economic needs.

The conversion of South Africa’s arms industry is an important strategy for demilitarising components of the industrial base which were part of the apartheid military-industrial complex and which have ‘survived’ into the post-apartheid era. It is the most appropriate mechanism for developing and regenerating the county’s industrial base and for eradicating the destructive legacy of militarism which is still pervasive in South and southern Africa.

ARMS EXPORTS AND ARMS TRADE POLICY IN THE NEW SOUTH AFRICA

Arms exports have become a contentious policy issue in the new South Africa. The country entered the international arms market in 1982, and during the 1980s exported armaments to its surrogate forces in Angola and Mozambique and to a number of ‘pariah’ states such as Cambodia, Chile, Taiwan and Lebanon. These armaments were either locally produced or re-exports of captured or imported arms. Since the ANC-Ied government came into power in April 1994, various individuals and companies have been implicated in arms trade scandals. Most of these have involved small arms and ammunition rather than large conventional weapons. What is more important, the recipients of the exports have tended to be non-governmental sources (for example, opposition movements) or countries experiencing internal conflict, such as Rwanda, Angola and Yemen.

In response to these incidents, the government appointed a ministerial committee to make recommendations on government arms trade policy and possible arms export control mechanisms (Van Dyk, 1996:5). The committee’s recommendations were submitted to cabinet, and approved, during August 1995, just after the release of the First Report of the Cameron Commission.

The Cameron Commission’s Second Report, released in November 1995, contained recommendations on arms trade policy. While many of these recommendations have been incorporated into the government’s new policy on arms trade matters, the cabinet is still opposed to some of the recommendations relating to aspects of transparency in arms sales and parliament’s oversight role in approving arms sales.

New Arms Export Policy

Before the April 1994 elections, the export of conventional arms was controlled by Armscor in terms of the Armaments Development and Production Act 57 of 1968 (as amended). However, there was an anomaly in the system, in that Armscor was charged with marketing arms and issuing export permits (Van Dyk, 1996:5). During 1994, Armscor recommended that the function of issuing export permits be transferred to the Department of Defence.

Following the recommendations of the ministerial committee, a cabinet memorandum was issued on 30 August 1995 and provided details of the government’s interim arms trade policy. The White Paper on Defence, which was approved by parliament in May 1996, contained a statement of government policy on the arms trade, and provided details of the new arms control processes and structures (Department of Defence, 1996:41-5).

The new arms control system includes four levels of control:

• a processing unit within the Ministry of Defence;
• a departmental review conducted by designated government departments;
• a scrutiny committee comprising the Secretary for Defence and the Directors General of the departments of Foreign Affairs and of Trade and Industry; and
• a cabinet committee – the National Conventional Arms Control Committee (NCACC) – under the chair of Kader Asmal, Minister of Water Affairs and Forestry. The NCACC comprises six ministers and four deputy ministers. The function of processing and issuing arms export
  permits, previously the responsibility of Armscor, is now carried out by the Directorate for Conventional Arms Control in the Defence Secretariat (Van Dyk, 1996:5).

Applications for arms exports are assessed on a case-by-case basis according to a system of product classification and the government’s policy guidelines. In theory, the following criteria are used in assessing each export application:

• the recipient country’s record on human rights and fundamental freedoms;
• existing tensions or armed conflicts, and the internal and regional security situation in the recipient country;
• the recipient’s record of compliance with international arms control agreements and treaties;
• the nature and cost of the arms to be transferred in relation to the circumstances of the recipient country, including its legitimate security and defence needs, and the objectives of least diversion of human resources and economic resources for arms procurement; and
• the degree to which arms sales are supportive of South Africa’s national and foreign interests.

Theoretically, South Africa will avoid arms sales that are likely to:

• cause, or be used for, the violation or suppression of human rights and fundamental freedoms;
• contravene South Africa’s international obligations;
• endanger regional or international peace by introducing destabilising military capabilities into a region, or otherwise contribute to regional instability and negatively influence the balance of military power;
• be diverted by the recipient country or re-exported to third countries;
• be used for purposes other than the legitimate defence and security needs of the recipient country; or
• contribute to the escalation of regional conflicts (Directorate for Conventional Arms Control, 1996:3-4).

While the implementation of the new arms trade policy has contributed to tightening control on arms exports (including exports of surplus weapons), there are still a number of legal, technical and political issues that remain unresolved.

Legislation

Currently, there are different pieces of legislation covering the export of conventional arms, small arms and ammunition, teargas, explosives, weapons of mass destruction, dual-use technology, space technology and nuclear technology. The Acts are administered by different government agencies. New legislation on conventional arms control is required to give legal effect to the creation and operation of the NCACC and to transfer the issuing of arms export permits from Armscor to the Directorate for Conventional Arms Control in the Defence Secretariat. The Cameron Commission recommended that arms control legislation be harmonised and rationalised, and brought under the control of one government department – or, preferably, a statutory arms control agency (Cameron Commission, 1995b:25-6). Inspectorate

The cabinet memorandum of 30 August 1995 approved, in principle, the establishment of an independent inspectorate to ensure that all levels of the arms control process are subject to independent scrutiny and oversight, and are conducted according to the policies and guidelines in the cabinet memorandum. It is expected that the inspectorate will make regular reports to NCACC and the cabinet. By late 1997, this inspectorate had not been established.

Monitoring and enforcement

Customs and Excise does not have a mandate to monitor and control arms exports, as evidenced by the allegations of illegal arms exports to Angola and Rwanda. The Cameron Commission has recommended that government regulations be promulgated to give Customs and Excise an explicit mandate to monitor compliance with arms export controls (for example, end-user certificates). Additional resources and training need to be made available to Customs and Excise to enhance its capacity to monitor and control arms exports. The Cameron Commission has also recommended much greater inter-agency functional co-operation between the police, Intelligence, and Customs and Excise, and the establishment of a dedicated police unit for investigating alleged arms control contraventions.

Transparency and Accountability

Despite the establishment of the new arms control system, including the NCACC, information on the value, content and destination of South Africa’s arms exports remains hidden from public scrutiny. Parliament, particularly the portfolio committees on defence and foreign affairs, do not have formal access to information on proposed arms sales or a formal role in commenting on such matters. The Cameron Commission has recommended that the government present an annual report to parliament, providing details of all arms sales conducted during the year, and that the relevant parliamentary committees should have a formal role in commenting on, and approving, proposed arms sales (Cameron Commission, 1995b:xi).