Arms deal: We might have done some things differently – Alec Erwin

2014-02-17 14:40

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He has learnt many lessons through his involvement in the arms deal, says Alec Erwin, former minister of trade and industry.

Erwin testified today at the Arms Procurement Commission into the controversial deal – the first former minister to do so. He had been part of the interministerial committee that was tasked to oversee the deal.

Erwin conceded before Judge Willie Seriti that, with hindsight, some things might have been done differently, especially relating to policy regarding the offset programme. The offset programme – contracts obligating foreign companies to provide investments and jobs in return for buying their arms – was known as the National Industrial Participation Programme (NIPP).

“We did begin contemplating some adjustments [to the NIPP] as early as 2004 as a result of the negotiating process,” Erwin said.

“An adjustment has been made to the NIPP ... in a broader context of government procurement.

“In 2004, I became the minister of public enterprises and shortly thereafter, we began the process of planning for the large electricity contracts with Eskom and for procuring rolling stock for the railways. As a result of our experience, we began a process of developing a new policy package called the competitive supply and development programme, which attempts to develop investment or partnerships within the sector you are procuring in,” said Erwin. His testimony comes shortly after the trade and industry department released a damning report about the failure of the arms deal offsets. Read: Erwin's arms deal offset flop Erwin tried to explain the issue as follows: “It’s inherent in the NIPP that projects can change ... with the substitution of one project with another over time. The actual package of projects was not a contractual matter, it was the total obligation that was contractual and which was not varied.

“It was an ongoing process of adjusting projects to meet the criteria we wanted. Not all projects which were subsequently implemented were agreed to at the time of signing the contracts,” he said.

He also contextualised why it was important at the time of the arms deal that the policy focused on offsets.

“We need to realise the total economic context in 1999 when we were not receiving a great deal of incoming foreign investment. We were attempting to attract foreign investment to help us modernise the economy, open new markets, bring in new technology. Those imperatives were driving us in the NIPP,” he said.

The commission was adjourned early to give the Lawyers for Human Rights an opportunity to go through Erwin’s statement. Advocate Marie de Vos said she was only given the statement this morning and had not had time to prepare for cross-examination.

An issue of declassification of records, specifically the affordability report, became a point of contention between Seriti and De Vos.

Seriti said he was worried that De Vos’ clients – Andrew Feinstein, Hennie van Vuuren and Paul Holden – were in possession of a document that had not yet been declassified.

Commission spokesperson William Baloyi said Erwin’s testimony should be completed by the end of tomorrow.

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