Ministry of Defence (MOD)

Return to an Address of the Honourable the House of Commons
dated 18 July 1996 for the Appendices to the Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions laid before The House on 15 February 1996*

Volume One
Section D Arms and Defence-Related Exports to Iraq
Chapter 1 The Howe Guidelines

Excerpt:
THE MINISTRY OF DEFENCE (MOD)

D1.126 The relationship between the IDC and the MOD was more complex than that between the IDC and the FCO. This was attributable to the role of the MODWG and to the MOD’s dual function in promoting defence sales and safeguarding operational and security interests. The MOD members on the IDC had the responsibility at IDC meetings of supporting and explaining the MODWG opinion on “significant enhancement” and also of putting the MODWG view on the general advisability of the grant of the export licence. The MOD members at IDC meetings usually included at least two, sometimes three, officials from DESS (then known first as DS13 and later as Sec(D) Sales). At the first two meetings Mr Sandars, Head of DS13, was present, but thereafter the senior MOD official present at the meetings was normally either the Chairman or deputy Chairman of the MODWG. Usually both were present. In addition, either or both of RMD2a and RMD2b (from the Defence Sales Organisation, later to become the DESO) would be present, as well, on many occasions, as other DSO representatives. *138

D1.127 The security and operational side of the MOD was represented by only one member at IDC meetings, namely, the incumbent of the Defence Commitments (Rest of the World) Desk (D Cts (ROW)), a member also of the MODWG. On the footing that DS13 officials occupied a neutral position between, on the one hand, defence sales interests and, on the other hand, the interests of the security and operational side of the MOD, the MOD representation at IDC meetings seems to have been heavily weighted in favour of the former with the latter represented only by D Cts(ROW). The IDC members who were also members of the MODWG were, therefore, DESS2 (and/or DESS2a), the two RMD representatives and D Cts (ROW). It was the function of the head of DS13 or his representative to convey to the IDC the MOD view formed at the MODWG meetings. The function of the RMD representatives was to provide information about the equipment in question and D Cts (ROW)’s function was to deal with queries that might be made regarding the operational significance of the equipment. If the MODWG had concluded that an application should be refused, it was not the function of the RMD representatives to continue at the IDC meeting to press the argument in favour of the grant of the application. In a Note dated 21 May 1985 to the two RMD representatives, ARMD2a and ARMD2b, Mr Dawson, who had succeeded Mr Sandars as head of Sec (D Sales) (as DS13 had become) rebuked them for making submissions to the IDC that had not been cleared with Sec (D Sales) and, in one case, that contradicted the recommendation previously made by the MODWG. Mr Dawson directed that RMD submissions should, in the future, be channelled through Sec (D Sales) in order to avoid the danger “that we as the MOD Committee Secretariat, and you as DSO representatives, could well be submitting conflicting views to the [IDC] simultaneously.” *139

D1.128 It was, at the outset, envisaged that the decisions or recommendations of the IDC would be put to the Minister for Defence Procurement (Min(DP)). But whether the purpose of this was simply to keep the Minister informed or whether the purpose was to obtain his approval before the decisions or recommendations were acted on, was a question on which the Minister and the officials seem to have had somewhat different views. Since the relationship between the Minister (DP) and the officials dealing with IDC matters is one which assumed increasing relevance as the Inquiry proceeded, it is convenient to trace the development of this early issue through the documents.

D1.129 In a letter dated 11 December 1984 from Mr Collins (MED) to Mr Sandars, Mr Collins said that “In the early stages of the [IDC’s] work we shall have to refer many of the [IDC’s] decisions to FCO Ministers for approval. It will be important to establish for each item discussed at our meetings whether referral to Ministers is necessary before executive action is taken. I imagine the grounds for any such referral will normally be operational in the case of MOD, industrial in the case of DTI and political in the case of the FCO.” *140 And at the IDC meeting held on 18 December 1984 it was agreed “that a clear distinction would have to be made between decisions taken by the Committee, and recommendations which would have to be submitted for Ministerial approval.” *141

D1.130 On 31 January 1985 Mr Lavender, Sec (D Sales)2 (which previously had been DS13b and later became DESS2) wrote a Note *142 for the Minister (DP)’s Private Secretary in which he said that the IDC had met three times and “formed a concerted view in the light of the new guidelines on the majority of outstanding items for which approval to supply to Iran or Iraq had been sought. Once a definitive list of [IDC] decisions prepared by the FCO is available I will ensure that a fuller report is sent to you for Minister (DP)’s information.”

D1.131 It appears that Mr Lavender was contemplating that, so far as the MOD was concerned, the IDC would be taking definitive decisions. The report of its “decisions” would be sent to the Minister for “information”. This was certainly not the case in the FCO where endorsement by FCO Ministers of IDC licensing decisions was regarded as necessary. *143 In a Note *144 dated 13 February 1985 to senior officials and to the Min(DP), Mr Lavender referred to “lists of outstanding export licence and Arms Working Party applications for Iran and Iraq which have been considered by the Committee ... These lists are endorsed to reflect the final decisions reached by the [IDC] and as agreed are submitted for Min (DP)’s information.” In paragraph 4 of the Note, Mr Lavender told the Minister that “while in the majority of cases, the Committee will reach a consensus view, FCO officials may wish to submit individual cases ... to FCO Ministers. Similarly there may be cases where MOD officials may wish to submit to MOD Ministers ....” A note in response dated 18 February 1985 from the Minister’s Private Secretary said that the Minister had “asked that he should continue to be advised on subsequent applications.” *145 The inference in paragraph 4 of Mr Lavender’s 13 February 1985 Note is that individual cases not submitted to Ministers would be dealt with in accordance with the IDC consensus view. In relation to FCO Ministers this was not so. Until FCO approval had been signified to the DTI, executive action on the IDC decisions could not be taken. And, it seems, FCO officials understood MOD practice to be the same as FCO practice. In an undated Note in February 1985 Mr Aron (MED) informed DTI and MOD officials of FCO Minister’s approval of lists of AWP applications and ELAs that had been dealt with by the IDC and said that “subject to the agreement of Sec (D Sales), who I understand are also consulting their Ministers, the companies concerned should be informed of the decisions taken as quickly as possible.” *146 Mr Aron was, I think, wrong in believing that Mr Lavender was ‘consulting’ the Minister (DP). The Minister was, it seems, simply being “informed”. *147

D1.132 The Minister was Mr (now Sir) Adam Butler. In his evidence to the Inquiry Sir Adam made clear that he had throughout wanted to be “in a position to challenge the conclusions of the IDC and pursue matters with Ministers as necessary.” He said that he had asked in February 1985 “that the lists determined by the IDC should be made available to me to see before being formally passed to DTI.” *148 It was an obvious prerequisite, if the Minister was to be in that position, that he should, as a matter of routine, be informed of the IDC decisions in sufficient time to enable him to intervene if he wished to do so. A practice to that effect was not, however, instituted. Instead, Mr Lavender wrote a Note dated 13 March 1985 to senior officials and to the Minister (DP), in paragraph 2 of which he referred to attached lists of export licence and AWP applications endorsed to show the IDC decisions and said that “these decisions will now be conveyed to the companies concerned.” *149 The Minister was being presented with a fait accompli. In paragraph 3 of the Note Mr Lavender did ask whether the Minister “wishes to continue to see a list of all routine applications or would prefer to see an extract of contentious or sensitive cases.” The Minister’s response, however, conveyed by a Note dated 22 March 1985 from his Private Secretary, said that “...on the assumption that the full list is produced in any event and no extra work is involved in submitting it to him, he would wish to continue to see the full list for the time being.” *150 The Note said also that the Minister was “grateful for your Minute of 13th March and the attached list.”

D1.133 The approach that Mr Lavender seems to have adopted was reinforced by a Note dated 12 March 1985 to him from Mr Roger Keeling, of RMD2a (the DESO regional marketing desk for Iraq) *151 Mr Lavender received the Note on 13 March after his Note of that date to the Minister (DP) had been dispatched. In the Note Mr Keeling complained about the delay being caused by the new procedures, which he described as “unnecessary bureaucracy”. He said that it was “the time taken to announce the corporate [i.e. the IDC] decisions” that concerned him. He went on: “while the FCO may, for their own reasons, find it necessary to seek Ministerial endorsement of the clearance (they tend I understand to do this for all countries) I can really see no reason for us to do the same. Minister (DP) has approved the revised guidelines to be applied and I would have thought that having done that he would have been content to delegate responsibility for working within those guidelines to officials within the Department.” Mr Keeling then suggested that once the “MOD view”, presumably a reference to MODWG recommendations, had “subsequently received FCO endorsement or refusal”, the “Whitehall view” would have been produced and could immediately be acted on. He asked Mr Lavender to do what he could “to see if there is no way that we can remove one layer of decision making in order to speed up the process.” And, as an afterthought, Mr Keeling enquired whether it was “in fact a formal requirement that all cases must be seen by [the Minister] to receive his ‘chop’ before action can be taken?”

D1.134 Mr Keeling’s suggestion for sidelining the Minister was brought by Mr Lavender to the attention of Mr Dawson, Head of Sec (D Sales). Mr Hextall (Mr Lavender’s HEO in Sec (D Sales) 2) provided Mr Dawson with a draft reply to Mr Keeling and a manuscript explanatory Note in which he (Mr Hextall) said this:

D1.135 The view there expressed was, not, in my opinion, warranted by anything in the submission of 13 March or the reply of 22 March. In the event, Mr Dawson wrote to Mr Keeling in the terms of Mr Hextall’s draft. The letter, dated 26 March 1985, was copied to the Director General of Marketing and to the Assistant Regional Marketing Director for Iran and said that the author shared Mr Keeling’s concern at the time being taken before IDC recommendations could be implemented. *153 It said that “it was nevertheless Minister (DP)’s wish to see the recommendations on each and every application, once they had been endorsed by FCO Ministers, before those decisions could be promulgated.” The letter went on to refer to Mr Lavender’s Note of 13 March and to contend that the Minister’s response in his Private Secretary’s Note of 22 March “now enables us to reply to those applications considered by the [IDC] once FCO Ministers have endorsed the resulting consensus decisions, at the same time as submitting the lists to Minister (DP) for information. In practice, therefore, we will in future respond on outstanding AWP’s once FCO Ministers have endorsed the [IDC’s] views.” The letter was thus adopting Mr Keeling’s procedural suggestion but without the suggestion being put to or approved by the Minister. There was nothing in the response of 22 March which, on any reading, could have been taken to constitute that approval. I do not understand how Mr Dawson could have thought it right to dispense with Mr Butler’s approval of the proposed procedures. It is fair to say, however, that Mr Dawson, if he had not read the two relevant Notes, may not have been aware that the approval was lacking.

D1.136 In a Note dated 29 March 1985 to MOD officials (including Mr Lavender) and DTI officials, Mr Aron (MED) wrote in the same terms as he had written in his undated Note of February. *154 He, at least, regarded “MOD Ministers’ concurrence” as still being necessary.

D1.137 In a Note dated 3 April 1985 from Mr Lavender to Mr Butler, to which schedules setting out the decisions reached by the IDC at its meeting on 15 March 1985 were attached, Mr Lavender referred to the Minister’s wish “to continue to receive the full lists showing the decisions reached by the [IDC].” *155 Mr Lavender’s next Note to the Minister was dated 6 June 1985. With this Note Mr Lavender enclosed schedules of the decisions reached at the IDC meeting on 9 May. He said he “would be grateful if [the Minister’s Private Secretary] could let me know if Minister (DP) wishes to see these schedules in future.” There is nothing to indicate why doubt on this point had arisen and in a Note dated 12 June the Minister’s Private Secretary confirmed, as had been confirmed as recently as 22 March, that the Minister did wish to continue to see the schedules. *156

D1.138 On 29 July 1985, however, Mr Lavender had a meeting with the Minister to discuss the decisions at the IDC meeting held on 27 June 1985. At this meeting Mr Lavender told Mr Butler that Mr Luce, the FCO Minister, had raised no objections to the IDC recommendations. Export licences had already been issued and the companies informed accordingly. In a Note dated 30 July 1985 to Mr Dawson and other Sec (D Sales) officials, Mr Lavender referred to this meeting with Mr Butler and said that Mr Butler had asked “for the procedures to be tightened in respect of his involvement and [had] asked if he can see the future lists immediately after the IDC meeting so that he can raise any queries he had with Mr Luce if necessary.” *157 The Note added “This new procedure will be implemented at once”. A Note to Mr Lavender dated 9 August 1985 from Mr Butler’s Private Secretary confirmed Mr Butler’s request that “procedures should in future be tightened up and the list of applications passed to him following the meeting of the [IDC], in parallel with Mr Luce.” *158

D1.139 Mr Lavender, in a Note dated 12 August 1985 copied to FCO and DTI officials, as well as to the DESO Regional Marketing Desks for Iran and Iraq and to D Cts (ROW), set out the “slight adjustment to the IDC procedures which Minister (DP) requested.” *159

D1.140 It seems from the documents to which I have referred and from his written evidence to the Inquiry that the Minister, Mr Butler, was not aware until his meeting with Mr Lavender in July 1985 that he had been effectively denied the opportunity of challenging IDC decisions and that, as soon as he became aware of the position, he had it remedied. The position should never have arisen. Mr Lavender ought not, in my opinion, to have assumed, without the Minister’s express concurrence, which was never sought and never given, that the Minister was content to relinquish his personal supervision of IDC licensing decisions and to delegate responsibility to the officials. In his evidence to the Inquiry, Mr Lavender made clear that he knew the Minister wanted “to have an opportunity to intervene in the decisions on the ELAs and AWP applications if he so desired” *160 but said that he thought that “what we did was to allow a sufficient time for Minister (DP) to intervene if he so wished”. I am unable to accept that he thought he was allowing the Minister sufficient time to intervene. Mr Lavender’s note of 3 April 1985 at one and the same time sent the Minister the lists of IDC decisions at its 15 March meeting and informed the Minister that “these decisions are now being conveyed to the companies concerned”. FCO Ministers’ approval had been communicated to the DTI and the MOD on 29 March. The Minister (DP) was given no time to intervene. Mr Lavender attached to his Note to the Minister of 13 March 1985 a list of the decisions reached by the IDC at its 8 February meeting and, in the same Note, said that “These decisions will now be conveyed to the companies concerned” (emphasis added). These records are not consistent with an intention on Mr Lavender’s part to allow sufficient time for the Minister to intervene if he should wish to do so. Until the intervention of the Minister in July, the need for expedition in order to further the interests of defence sales was treated as of greater importance than Ministerial approval of IDC licensing decisions.

D1.141 The matter to which I have been drawing attention was remedied by August 1985 and is not of itself of any very great importance. Its importance for the purposes of the Inquiry lies in such light as it casts on the working relationship between the DESO RMD desks and DESS, and on the attitude of DESS to the IDC and to the role of the Minister.

Endnotes
*138 - On occasions as many as four or five representatives from the DSO (or the DESO) would be present, e.g. the IDC meetings on 15 August 1985 and 15 January 1986

*147 - In his written evidence dated 30 September 1994 Mr Lavender said that the word “information” was used in the sense of keeping the Minister informed, rather than specifically seeking his approval

*148 - see Sir Adam Butler’s written evidence to the Inquiry submitted on 10 October 1994, paragraphs B.6.1 and B.10.3.1

*160 see Mr Lavender’s written statement dated 30 September 1994, paragraphs 6.15 and 6.23

* The Full report is available from The Stationery Office Ltd., PO Box 276, London, SW8 5DT.