Call for action on corruption
15 January 2007
Jubilee Debt Campaign is one of 130 organisations that have written to UK Prime Minister Tony Blair urging proper investigation of allegations of corruption surrounding UK company BAE's arms deal with Saudi Arabia.
Jubilee Debt Campaign is concerned that many rich country lenders have been complicit in corruption over the years, and that this has helped to build a huge burden of unjust and unpayable debt in poor countries.
The letter concerns the decision by the UK's Serious Fraud Office to drop an investigation into a 20-year-old contract for British manufacturer BAE to provide arms for Saudi Arabia: there are long-standing allegations of corruption surrounding the deal. The letter states that dropping the investigation does "irreparable damage to the UK's reputation as an anti-corruption champion on the world stage", and says that the decision to drop the case threatens to undermine Britain's participation in the OECD anti-bribery convention, and the new United Nations Convention Against Corruption.
Tackling corruption is also critical if we are to prevent the build-up of unjust debts. This particular contract was not underwritten by official UK government insurance: but many contracts for arms sales to poor countries are, even when there are concerns about corruption or the use of the weapons. For instance, the UK insured huge amounts of arms sales to Indonesia during the Suharto dictatorship, when billions were stolen by the regime and weapons were being used against Indonesia's people. When the Indonesian government defaulted on these loans, the UK government paid out to the British suppliers, and continues to demand 'repayment' from Indonesia for its reckless lending. Indonesia currently owes the UK over £700 million in old debts.
Rich countries must accept responsibility for such unjust debts by cancelling them (as Norway recently has). They also need to ensure that they lend responsibly in future, and do not tolerate corruption and bribery by arms manufacturers or any other British companies doing business abroad.
Read more on the Saudi Arabia deal from The Corner House.
Read our FAQ, 'Doesn't corruption make debt cancellation pointless?'.