Welcoming BAE’s payout to the people of Tanzania

This morning the House of Commons International Development Committee, of which I am a member, put out a press release welcoming BAE Systems’ belated confirmation that it will pay £29.5 million to the Tanzanian Government as required by the court following their conviction for an accounting offence in relation to the sale of an air traffic control system to Tanzania.

I persuaded the International Development Committee to hold an inquiry into the affair.  BAE Systems were called to give oral evidence on 19 July 2011.  At the evidence session, I warned the company’s Group General Counsel, Philip Bramwell, that it “would do your company a great deal of good if the entire £29.5 million was passed to a third party – DFID seems to be the most obvious one – before we write the report”.  My question (Q84) can be read in the transcript of the oral evidence session here.

The following day, 20 July 2011, BAE “wrote to the Secretary of State for International Development… agreeing to make the payment of £29.5 million… and proposing that we should adopt the suggestion made by one of the members of the committee that the payment should be made to DFID.”  The letter from BAE Systems to the International Development Committee can be read here.  The Department for International Development asked BAE to make the payment direct to the Government of Tanzania, which the BAE Chairman, Dick Olver, now confirms they will do.

BAE in its fine and this payment to Tanzania is having to pay back every penny it earned from this contract.  The money must be used by the Tanzanian Government to benefit the people of the country.  They were the ones who lost out when cash which should have been spent on schools and health care was used instead to pay for a grossly overpriced and unnecessary radar system.

I have campaigned for tougher laws against transnational bribery and other financial crimes because it is the poor who lose out when developing countries get snared by dodgy contracts.  This case sends out a clear signal that British companies must be transparent about international contracts and abide by the law.