Proactive Prevention of Corruption to
Energize Defence Acquisitions
As ghosts of the 1986 Bofors arms
deal return to haunt India’s defence acquisition managers, reports of involvement
of agent in the VIP helicopter deal involving Italian defence major Finmeccanica
underline challenges of probity in defence procurements in India. The response
of the government is standard statements by the Defence Minister Mr A K Antony
that all complaints will be investigated thoroughly and action taken against
those found guilty is no relief to the armed forces who are facing severe
shortages in ships, submarines, fighter and trainer aircraft, artillery and air
defence guns and missiles and even ammunition.
A
post complaint investigation as is the norm at present places the process of
acquisitions into a reverse spiral which is even haunting the Rafale MMRCA
fighter deal considered by procurement specialists as an impeccably transparent
process. It is evident that lack of proactive prevention of corruption by the
Ministry of Defence and Armed forces has led to a state where all
investigations are either in the final stages of a contract or post contract
indicating that there are no proactive measures to monitor corruption which
should be the norm to prevent reversing decisions which have been clinched.
More over this provides scope for competitors and their agents to use pliable
sources of influence in and out of government to raise frivolous complaints to
delay decision making.
A
proactive process to prevent corruption, comprising of due diligence of
companies and their products, prevent subversion of personnel by correct
selection and constant monitoring by internal and external agencies going right
to the top of the acquisition chain and encouraging whistle blowers through an
institutionalized mechanism needs consideration to ensure that aberrations of
integrity are detected ab initio. In the Tatra case it is the Army Chief
General V K Singh who had to, “blow the whistle,” whereas preliminary exposure
of wrong doing if any could have avoided much of the embarrassment.
While
the Defence Procurement Procedure has an Integrity Pact, this is seen to be
blatantly violated or ignored given the impression of pliability of India’s
defence procurement system. While the government has forfeited bank guarantees
of some firms black listed recently this does not solve the problem of
acquisition for defence forces as process for instance of artillery guns is
delayed. A few of recent cases of cancellation of contracts and black listing
of firm due to allegation of corruption would reveal that proactive actions to
prevent corruption would have ensured that the rot could have been nipped in
the bud.
A
major case of corruption which did not receive as much public attention as
others thereafter has been the Sudipta Ghosh case where the former Chairman of
the Ordnance Factory Board (OFB) has been accused of illegal gratification from
a number of companies six of which have been black listed for 10 years
recently. These include some of the leading global majors with proprietary
technologies such as Rheinmetall Air Defence and Israel Military Industries.
Proclivities of the government’s top defence production manager to corruption
if any should have come to light far before he occupied the high chair, checks
and balances were obviously lacking or were possibly ignored. More over the
stove pipe of gratification could have been contained with effective monitoring
by the Department of Defence Production under whom the OFB works.
Recent
revelations in Tatra Sipox-Vectra case denote that there could be lack of due
diligence by Bharat Earth Movers Limited (BEML). Using simple search tool as
Google search credibility of firms can be verified. The government machinery
has a vast infrastructure for investigation at its disposal which does not seem
to have been applied in this case if preliminary reports in the media are any
indication. No further comments are being made as the process of investigation
is still ongoing.
The
Ministry of Defence response in the case of complaints has been standard, broad
statements of zero tolerance of corruption and threat of cancellation of
contracts. For instance, Minister of Defence Mr A K Antony said during the
press meet at the DEFEXPO in March 2012, “If we find anything wrong, we will
not hesitate to cancel the contract at any stage. There will be zero tolerance
to corruption. We have canceled many major contracts following corruption
charges. We have very strong safeguards on integrity. For any contract beyond
$20 million, integrity is a must. In the integrity pact, the strongest action
will be taken against anybody found to be involved in malpractice. We will
protect our interests and money.” He similarly –
In
the recent DEFEXPO the Ministry of Defence has reportedly deployed flying
squads to prevent malpractices. Many of these were restricted to misuse of
stalls and infrastructure, what checks were there to control individuals
masquerading as agents is not clear.
Cancellation
of contracts only helps competitors who have lost in the bids either at the
technical and commercial stage where as the armed forces are deprived of their
needs to fight wars today or tomorrow, be it artillery guns, helicopters, basic
trainers or submarines. More over in some cases where firms have proprietary rights
there is a likely to be a gap in technology as well.
This
is not to say that a laissez faire policy is to be adopted but to highlight the
fact that merely depending on integrity clause of the DPP is not likely to
result in preventing corruption as past cases have highlighted and future ones
may underline. Enforcing integrity by
proactive prevention of corruption in defence from the time the Request for
Information (RFI) is issued to final contract is signed and executed is necessary.
Some suggestions which could be considered for this are as follows:-
- Due
diligence of all firms in the defence procurement loop be it government or
private by independent agencies on a regular basis preferably once a year.
- Inducting
personnel of high integrity and providing specialized training in procurement
with special emphasis on probity in the procurement chain.
- Active
role by vigilance agencies during the process with responsibility and
accountability to ensure checks during the process.
- Incorporating
a whistle blower clause in the DPP in addition to the integrity existing at
present.
- Fast
track resolution of complaints, court cases and arbitration. Special courts
could be nominated for this purpose so that the procurement process is not
disrupted for long time.
There
are no two opinions that corruption in defence deals cannot be accepted at any
cost. At the same time it is imperative that policies, interventions and
mechanisms should be put in place so that these are contained during the
process of procurement starting with the first point of contact with firms and
personnel rather than at the last stage or after finalization of contracts.
This is particularly important for critical deals which are in the pipeline and
which have been long delayed as artillery guns. Thus working on the premise
that prevention is better than prosecution processes need to be geared to avoid
delays in acquisitions in the Indian forces/
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