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 Two
Section D Arms and Defence-Related Exports to Iraq
Chapter 6 Specific Export Licence Applications After the Cease-Fire

Excerpt:
(XIII) TERRAFIX LIMITED

(XIII) TERRAFIX LIMITED

The Application for AWP Clearance

D6.348 In December 1989 Terrafix Limited (Terrafix) applied for AWP clearance with a view to promoting its automatic vehicle location system in Iraq and Iran. These applications were added to the list of AWP applications for consideration by the MODWG at its next meeting of 10 January 1990. The lists were distributed on 3 January to the members of the MODWG *654.

D6.349 The automatic vehicle location system (AVL system) is a system for automatically recording the location of a vehicle. The system allows the tracking of vehicles within 250 miles of a base station. *655 The data base which formed part of the AVL system was regarded by Lieut- Colonel Glazebrook as being “security sensitive because it can be used for other purposes in the military field”. *656 On 10 January 1990 the application was assessed “R(Enh)” by the MODWG. According to Mr Hextall’s written evidence to the Inquiry, the MODWG recommendation was based on “enhancement grounds”. It is not, however, clear whether he intended to distinguish between the “enhancement” test and the revised form of guideline (iii) which called for refusal of an application which would be of direct and significant assistance to either country in the conduct of offensive operations in breach of the ceasefire. *657

D6.350 The recommendations of the MODWG made on 10 January 1990 were discussed at the IDC meeting on 22 January 1990 and the IDC agreed to recommend refusal. The recommendations of the IDC were formally put up to the Minister (DP), Alan Clark, by way of a submission from Mr Barrett dated 26 January 1990. *658

D6.351 In the submission Mr Barrett requested that the Minister take particular note of a number of applications and the IDC’s recommendations in relation to them. These included the application by Terrafix for AWP clearance for Iraq. The submission stated:-

“Terrafix have sought approval to promote their automatic vehicle location system to a number of countries including Iran and Iraq. The system allows the tracking of free ranging vehicles within 250 miles of the base station, and can be used either on its own or as part of a unified Command Control Communication Information (C3I) system. The MODWG viewed the supply of such a system to either Iran or Iraq as a very significant enhancement, which would in the case of Iraq be of direct and significant assistance in the conduct of offensive operations in breach of the ceasefire. The IDC agreed to recommend refusal on these grounds”.

Mr Barrett’s submission appears to suggest that the MODWG (and the IDC) had in substance applied the revised form of guideline (iii).

D6.352 Mr Hextall recollects that Mr Barrett was advised by the Assistant Private Secretary to the Minister (DP), in advance of a formal reply to the submission, that the Minister was not content with a number of the refusals recommended by the IDC. *659

D6.353 A further MODWG meeting was held on 7 February 1990. Lieut-Colonel Glazebrook was present at that meeting. He recalls Mr Barrett saying that the Minister (DP) wanted further explanation as to why the MODWG had refused, inter alia, the AWP application by Terrafix in respect of Iraq and that Mr Barrett had asked him to provide a justification for the refusal which would then be incorporated in a further brief to “go forward to the Minister.” *660 Lieut-Colonel Glazebrook prepared a minute to Mr Barrett on the same day which stated that:

“AUTOMATIC VEHICLE LOCATION SYSTEM. The company applied to promote their system in about 18 Middle East countries and so this is not an individual request specifically for IRAQ. Apart from the high technology employed in the hardware, this equipment needs a digital map data base which, in itself, is security sensitive because it can be used for other purposes in the military field. In refusing IRAQ, the MODWG were aware that clearance has been given for other, more secure countries such as OMAN and SAUDI ARABIA and, therefore, that the company have sufficient opportunities to export elsewhere.” *661

After sending the minute, Lieut-Colonel Glazebrook heard no more about it and assumed that the information on Terrafix had been incorporated in the brief that Mr Barrett would forward to the Minister. *662

D6.354 The Minister (DP) met Mr Barrett and Wing Commander Morris on 15 February 1990. Mr Barrett recalls *663 that Mr Clark “was clearly not convinced by the arguments put forward by the MODWG despite [the fact] that [he] took the military member of the MODWG [Wg Cdr Morris] who was also on the IDC to the meeting”. In a minute dated 16 February 1990 from the APS to the Minister (DP) to Mr Barrett, the APS records that the “Minister saw no reason to deny this application”. *664 Mr Clark’s explanation for overruling the advice of the MODWG and IDC was as follows:-

“My grounds for overruling the advice was that I felt this could be done within the revised Guidelines as the equipment was not lethal, nor was it aggressive. (Enhancement, the third heading, is so elastic that it would have to be very tautly argued where the other two elements were not present). My interest was heightened by the fact that a number of other countries were also keen to acquire this equipment”. *665

D6.355 Mr Clark’s explanation of the basis on which he overruled the advice given to him about the AWP application is difficult to reconcile with a rigorous application of the Guidelines. Mr Clark had received advice from the MOD military and security experts to the effect that the AVL system would, in the case of Iraq, be of direct and significant assistance in the conduct of offensive operations in breach of the cease-fire. Officials had, on that footing, applied revised guideline (iii). Neither lethality nor agressiveness was relevant. As to Mr Clark’s reference to “the other two elements”, his meaning is not entirely clear. It would undoubtedly be easier to demonstrate the military potential of equipment if its lethality or aggressiveness was obvious. But under the revised guideline (iii) the absence of lethality and of aggressiveness would not necessarily frank equipment for export to Iran and Iraq. It might without either of those qualities be of direct and significant assistance in the conduct of offensive operations. As to Mr Clark’s reference to the fact that other countries were also keen to acquire the equipment, the argument does not seem material. In adopting the approach which he appears to have done, Mr Clark did not, in my view, direct his mind to the right questions. The recommendations from the MODWG and the IDC, who had properly weighed all the factors including, in particular, the military capabilities of the AVL system, were intended to give effect to the Guidelines. Mr Clark’s explanation for his reasons for overruling that advice is not, in my opinion, consistent with the Guidelines.

D6.356 The decision of the Minister (DP) was reported to the MODWG in the updated list of applications annexed to a minute dated 28 February 1990 from Mr Devlin of DESS for consideration at the next meeting on 7 March 1990. *666 The list recorded the approval of the applications by Mr Clark (despite the advice to the contrary given by Mr Barrett and Wing Commander Morris at the meeting of 15 February 1990) by means of the annotation “APPROVED BY MOD. MINS”. The MODWG meeting was attended by Lieut-Colonel Glazebrook and he noted in manuscript on his copy of Mr Devlin’s minute “Min(DP) more difficult on sales and will not necessarily accept Sy [Security] advice. Gung-ho for defence sales.” *667 Lieut-Colonel Glazebrook told the Inquiry that the manuscript note recorded what the chairman of the MODWG, Mr Barrett, had said at the beginning of the meeting. *668 Mr Barrett had also said that the Minister (DP) was “approving more defence on sales” (sic) and would not “necessarily accept security advice that a particular sale should not take place”. He added that it was in this context that Mr Barrett had made the remark “Gung-ho for defence sales”. Lieut-Colonel Glazebrook confirmed that Terrafix was given as an example by Mr Barrett of the Minister being “Gung-ho for defence sales”. *669

Further meetings of MODWG and IDC - March to August 1990

D6.357 The agenda listing the Terrafix AWP applications for Iran and Iraq was circulated to members of the IDC on 8 March 1990 for its next meeting on 19 March 1990. At that meeting the decision of Mr Clark was discussed and it was noted that Mr Clark had approved the AVL system for export for a number of countries with the sole exception of Syria. The IDC agreed at the meeting that (i) the DTI would check whether the AVL system was licensable and (ii) if it was licensable, the FCO would consult with its Ministers as to whether it should contest the Minister (DP)’s view that the system should be supplied to Iran and Iraq. *670 Lieut-Colonel Glazebrook did not attend the IDC meeting but told the Inquiry that he understood that the DTI had suggested at the IDC meeting that no licence was needed by Terrafix and that the DTI therefore wished to “establish the position”. He told the Inquiry that:

“We felt that it should be licensed. It did not itself have enough in it to be licensed, but it deserved to be licensed because of the Terrain Data Map.” *671

The inference which I have drawn from the use of the word “we” is that Lieut-Colonel Glazebrook was referring to the MODWG and that they considered that if the AVL system was not licenseable it “deserved” to be. From the evidence submitted to the Inquiry, it is unclear whether the MODWG concerns regarding licenseability of the AVL system were taken any further. At the MODWG meeting of 14 June 1990 it was agreed that, from then on, the DTI should attend the MODWG meetings to enable the DTI to understand better the concerns of the MODWG.

D6.358 The application of Terrafix for AWP clearance remained pending until the IDC meeting of 18 May 1990. The summary record of the 18 May IDC meeting recorded the following in respect of both applications for Iraq and for Iran:

“DTI have established that this equipment is licensable. MOD Working Group initially refused the application on enhancement grounds. The IDC backed this recommendation. Afterwards Mr Clark overruled the IDC and gave his approval. MED will now prepare a separate submission to Ministers recommending refusal on enhancement grounds.” *672

A copy of the summary record was sent to Mr Barrett under cover of a letter from FCO/MED dated 8 June 1990. The letter stated that “FCO Ministers have endorsed the recommendations made by the IDC at their meeting on 18 May.” *673 Thereafter the Terrafix applications continued to appear on the pending lists at the meetings of the IDC and MODWG until the UN embargo on Iraq was introduced in August 1990.

Endnotes:

*654 - MOD/31.1.227

*655 - MOD/31.1.371 at 373

*656 - MOD/31.2.49 at 51

*657 - Mr John Hextall’s written statement of 1 November 1993 section N-1; and MOD/31.1.349 at 358

*658 - MOD/31.1.371 at 373

*659 - Mr Hextall’s written statement dated 1 November 1993 Section N-I

*660 - the transcript of Lieut-Colonel Glazebrook’s oral evidence, Day 5, 12 May 1993, p. 15; see also p. 23

*661 - MOD/31.2.49 at 51

*662 - transcript of Lieut-Colonel Glazebrook’s oral evidence Day 5, 12 May 1993, p. 23

*663 - Mr Barrett’s written statement dated 27 October 1993, paragraph N.2.1

*664 - MOD/31.2.113 at 115, see also paragraph D6.307 supra

*665 - Mr Clark’s written statement dated 17 and 18 November 1993, paragraph N.2.1

*666 - MOD/31.2.159

*667 - MOD/31.2.159

*668 - transcript of Lieut-Colonel Glazebrook’s oral evidence Day 5, 12 May 1993, p. 24 669 Ibid p. 26

*670 - MOD/31.2.303 at 313; MOD/32.1.9 at 41; MOD/32.1.9 at 39

*671 - transcript of Lieut-Colonel Glazebrook’s oral evidence Day 5, 12 May 1993, p. 34

*672 - MOD/32.2.93 at 101

*673 - MOD/32.2.91

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