‘Defence lobbying will be legal soon’
13 Dec 2014 11:54 PM GMT
"There should not be any kickbacks. We are working on legalising defence agents and middlemen. Whether you call them middlemen or agents or lobbyists or representatives, they should be formalised and legalised,” Parrikar said in an interaction at a summit organised at Hotel Taj Mahal in New Delhi.
“There should be legal agreements and if contracts are broken, there should be prohibitive penalties,” he said. “I cannot accept a soldier losing his life while loading his gun. I promise accountability in Defence Ministry,” Parrikar added.
“We need a clear policy, for example Finmeccanica has been blacklisted. They have 39 subsidiaries. Do we rule ourselves out to deal with all 39? I don’t think so. There shall be clear policy for that... what does blacklisting mean?” he said.
Parrikar said delays in clearance of defence projects was another reason which increases the role of middlemen. The dilemma over defence agents has haunted successive administrations, particularly after the Bofors scandal, and each one has been unable to deal with it or neutralise it by rendering the system more transparent.
But agents or consultants are officially recognised in the energy sector, unlike in the defence sector. Soon after assuming office in 2004, the Congress-led coalition introduced the ‘integrity clause’ that is now mandatory for all Indian military contracts to obviate allegations of corruption and to ensure ‘unprejudiced’ dealings.
This clause makes it incumbent upon the supplier to “unequivocally” confirm that no individual or firm was employed to facilitate the deal. It states that the contract would be terminated and the money refunded if, at any stage, it were established that this declaration was incorrect. After assuming office in 1999, George Fernandes as Defence Minister reinforced the ban on agents and ordered an inquiry into all military purchases, including spares, since 1985 worth over Rs 70 crore.
India, which has already invested about $50 billion in defence purchases over the last decade, is likely to spend more than $100 billion this decade. Estimates suggest that the commission given by companies to agents ranges from four per cent to 15 per cent.
“There should be legal agreements and if contracts are broken, there should be prohibitive penalties,” he said. “I cannot accept a soldier losing his life while loading his gun. I promise accountability in Defence Ministry,” Parrikar added.
“We need a clear policy, for example Finmeccanica has been blacklisted. They have 39 subsidiaries. Do we rule ourselves out to deal with all 39? I don’t think so. There shall be clear policy for that... what does blacklisting mean?” he said.
Parrikar said delays in clearance of defence projects was another reason which increases the role of middlemen. The dilemma over defence agents has haunted successive administrations, particularly after the Bofors scandal, and each one has been unable to deal with it or neutralise it by rendering the system more transparent.
But agents or consultants are officially recognised in the energy sector, unlike in the defence sector. Soon after assuming office in 2004, the Congress-led coalition introduced the ‘integrity clause’ that is now mandatory for all Indian military contracts to obviate allegations of corruption and to ensure ‘unprejudiced’ dealings.
This clause makes it incumbent upon the supplier to “unequivocally” confirm that no individual or firm was employed to facilitate the deal. It states that the contract would be terminated and the money refunded if, at any stage, it were established that this declaration was incorrect. After assuming office in 1999, George Fernandes as Defence Minister reinforced the ban on agents and ordered an inquiry into all military purchases, including spares, since 1985 worth over Rs 70 crore.
India, which has already invested about $50 billion in defence purchases over the last decade, is likely to spend more than $100 billion this decade. Estimates suggest that the commission given by companies to agents ranges from four per cent to 15 per cent.
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