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British Aerospace (BAE) Systems,UK: The Ethical standpoint .

British Aerospace (BAE) Systems,UK: The Ethical standpoint .

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Published by Aditya Nayak
British Aerospace Systems is the World's largest arms contractor. The First non US firm to make the finish line beating America. It continues to flourish, most often than not with the help of its corrupt practices, undoubtedly supported by the British Government. Find out for yourself, if the British Government are aware of BAE's corrupt measures & other ethical issues.
British Aerospace Systems is the World's largest arms contractor. The First non US firm to make the finish line beating America. It continues to flourish, most often than not with the help of its corrupt practices, undoubtedly supported by the British Government. Find out for yourself, if the British Government are aware of BAE's corrupt measures & other ethical issues.

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Categories:Types, Business/Law
Published by: Aditya Nayak on Feb 25, 2011
Copyright:Attribution Non-commercial

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01/05/2012

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 1 
Contents 
BAE: Company overview
2Global StandingsAllegations 
Analysis of BAE¶s corrupt involvement in:
Saudi Arabia        2Chile         3Czech Republic       3Qatar         4Romania    4South Africa        5Tanzania        5
 Conclusion
6
 Reference
7
 
  
 
 
 
 2 
BAE¶s long standing corruption scandals and The BritishGovernment.
 
BAE was recently named the largest arms manufacturer in the world. This placewas usually taken up by American companies in the past. BAE Systems employs over 107,000 people worldwide and has its presence in more than 100 countries. Thecompany specializes in manufacturing arms for the air, naval & land forces. They alsoprovide technical support in the fields of advanced electronics and security informationtechnology.
 
Despite the recession, the company managed to rake in £ 22.4 billion for the year 2009. The BAE credits its operational framework and effective businessmanagement systems for its performance. BAE¶s major µhome market¶ consists of countries like Australia, India, Saudi Arabia, South Africa, Sweden, United Kingdom &the United States of America. They also have global business development offices inmost of these countries with the addition of countries like Korea, Bahrain, Singapore,Poland, Turkey etc.  BAE- Texas was awarded a $ 629 million contract by the US armyto develop mine resistant vehicles. The BAE Systems has been dubbed as a ³TaxHaven´ by critics in the past. £498 million was paid as tax to the British Government inthe year 2006 alone. (http://www.oef.com)
 
The amount of money that exchanges hands via the BAE Systems is definitelynoteworthy. It is because of this that the company has been embroiled in variousallegations on bribery and corruption in the past. The involvement & the silence of theBritish Government are questionable, since the actions taken against the BAE systemshave hardly encouraged fair practices.  The Serious Fraud Office (SFO) had beeninvestigating corrupt business practices in countries like Chile, Romania, Saudi Arabia,South Africa, and Tanzania and most recently in the USA. (http://www.guardian.co.uk)
S
audi Arabia (1985-2008)
The BAE was involved in the Al Yamamah arms deals in Saudi Arabia since1985. The deal involved selling Tornado & Hawk jets to Saudi Arabia. It also included acommitment to training and maintenance contracts. The BAE is known to have earned£43 billion in 20 years through these transactions. The UK Government was paid for byup to 600,000 barrels of crude oil per day. (http://news.bbc.co.uk)The BAE systems have been under investigation on this deal sighting corruptionand bribery charges in order to secure contracts. They have been accused of maintaining µSlush funds¶ of £ 60 million for entertaining Saudi Royals by the SFO.  TheUK National Audit Office (NAO) was also involved in the investigation. Interestingly, thereports were never published, making it the only NAO report to be withheld. The
 
 3 
M
inistry of Defense further claimed that the sensitive data would harm UK¶s commercialinterests. The Saudi Government pulled out of the deal to buy Euro fighter jets fromBAE upon being investigated by the SFO on the slush funds. Following this, the SFOmysteriously dropped its investigation altogether on BAE sighting the need to safeguardnational & international interests. The SFO also had a credible witness to the slushfunds incidents. Edward Cunningham, an employee of BAE Systems provided evidenceon the same to the SFO. The SFO notified Sir Kevin Tebbit, permanent secretary at the
M
inistry of Defense, However the matter was suppressed for two years before thereport was leaked to the Guardian in UK. (http://www.guardian.co.uk)
 
The SFO¶s decision to drop the investigation was challenged by the Corner House and the Campaign Against Arms Trade (CAAT). The SFO and the BritishGovernment had apparently decided to discontinue the allegations following threats bythe Saudi Government to pull out of the fight against terror. The High Court ruling inApril 2008 pointed that the British Government was guilty of caving in to politicalpressure and manipulating laws. The SFO was granted an appeal against the HighCourt ruling in the House of Lords. On the 30
th
of July the House of Lords passed theverdict in favor of the SFO. The House of Lords emphasized that the BritishGovernment and the SFO had not acted unlawfully and that it was indeed a matter of safeguarding national security.  (http://news.bbc.co.uk)
Chile, 1989-2005
In a report published by the Guardian in 2005, it was revealed that BAE had beensecretly paying out money to the tune of £1 million to General Augusto Pinochet, theformer dictator of Chile. The Chilean director has been under investigation onallegations of murder, torture & tax evasions in Chile since his rise to power. AugustoPinochet had arranged an artillery rocket deal with BAE in 1989. BAE also had acontract with Chile to refurbish its Howitzers with new barrels.BAE extended its hospitality to the General in London at a time when the otherswere trying to get him arrested over mass murder and other allegations leveled againsthim. The General was paid £14 million pounds in commission, most of them from Armsmanufacturing companies like that of BAE. BAE has been paying its commissionthrough the off shore Red Diamond trading routes, which does not appear in BAE¶spublished accounts. (http://www.guardian.co.uk)
Czech Republic, 2004
This matter concerns that of Czech Republic leasing Gripen fighter jets from theBAE for £400 million in 2004. The Czech Republic were at the same time, pressurizedto buy a much larger fleet of Gripens at a total worth of £ 1 billion which eventually

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