The paradox of a 'responsible' arms maker Submarine unable to Submerge.

Ahmad Zahid To Take Lim On Submarine Trip To Disprove Opposition Allegations

LANGKAWI, Dec 7 (Bernama) -- Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi will accompany Penang Chief Minister Lim Guan Eng on a trip onboard the KD Tun Razak submarine on Friday, to disprove opposition allegations that it is unable to submerge.

Ahmad Zahid said he and Lim, who is also DAP secretary-general, will board the Royal Malaysian Navy's second of two Scorpene submarines at the 11th Langkawi International Maritime and Aerospace Exhibition 2011 (LIMA) at the Awana Porto Malai at 3pm.

He said this was an indication that the defence minister was on hand to observe the workings of the submarine which was alleged to have been unable to submerge.

"Guan Eng telephoned me yesterday to say he was coming here. Although the submarine was to serve as a static exhibition at LIMA this time, I have nevertheless, asked that it give him a ride."

Ahmad Zahid was speaking in a press conference at the Mahsuri International Exhibition Centre (MIEC) here today.

He said he had sent invitations to all members of parliament (MP) and senators, including those in the opposition, to board the submarine and embark on a diving stint.

The defence minister said that (apart from Lim) Lembah Pantai MP Nurul Izzah Anwar had replied that she would not be able to participate in the submarine trip.

He said those who talked (criticised) a lot were apparently, not brave enough to embark on a trip in the submarine.

 When news broke that Defense Minister Zahid Hamidi had chickened out of a ride on the controversial Scorpene submarine at the 11th hour, there was a flurry of calls for Penang Chief Minister Lim Guan Eng to also withdraw.

Don't go, it's a trap! Remember Fuad Stephens! Remember the curse from the birthday cakes! were among the cries of protest from his supporters that included Pakatan Rakyat members.

But ride the Scorpene, which has cost Malaysian taxpayers a pretty penny and left the nation stuck with billion-ringgit debts for the next two decades at least, Guan Eng did. And keeping him company were PKR's Mansor Othman and DAP's P Ramasamy.

"I have another official function to attend to. They will definitely be back," Zahid told reporters this afternoon, sensing the unspoken question.

Guan Eng and team were slated to return from the dive and be back at the Hotel Awana Porto Malai around 4pm. But by late evening there was still no news of them and some confusion arose as to whether the Pakatan team had decided against proceeding without Zahid.

Sources also told Malaysia Chronicle that Guan Eng did change his mind, but by 7.48pm, his assistant had emailed photos of him and the other two leaders on board the Scorpene to the media. All three men appear to have returned safe and sound! (scroll below)

"Got call from Lim Guan Eng after his more than 90-minute Scorpene submarine dive with two deputies. Pity Zahid not with them," Guan Eng's father, Lim Kit Siang, the DAP adviser, broadcast on his Twitter.

Why let BN put us in a spot

If the Pakatan team had gone ahead and returned safely, then there would be nothing so sinister after all about Zahid's sudden withdrawal. Umno and BN would probably try to turn the situation on the Pakatan Rakyat led by Opposition Leader Anwar Ibrahim.

But what is also deplorable is actually the arrogance that is becoming evident in so many Umno leaders of late. Not only do they feel they have the right to make abrupt U-turns as they wish despite having given clear assurances to the contrary, they now behave and speak with impunity, knowing that the courts and the police will surely take their sides and defend their wrong doings.

In the case of Zahid, he obviously thought nothing of leaving Guan Eng and team in the lurch. Given the BN's ruthless track record, many believe that Lim, Mansor and Ramasamy should not have taken the risk.

"It is not worth it. Guan Eng is a very influential leader. He is not just a fine politician but a man with ideas and a vision. Obviously, he would be a main target for the BN, not that I am saying they would resort to murder although we also have the Altantuya incident which really reeks of desperation," PKR vice president Chua Jui Meng toldMalaysia Chronicle.

"But the fact is, accidents do happen. So if Zahid himself doesn't dare to take the risk, why should our Pakatan leaders have to put themselves on the spot. Of course, if something had happened to Guan Eng, Mansor and Ramasamy, you can be sure BN would have already lost themselves the next general election. But I think the lives of our leaders are more important."

Raising the memory of Fuad Stephens

Mohammad Fuad Stephens was the first Chief Minister of Sabah, and also the first Huguan Siou or Paramount Leader of the Kadazandusun community. In 1964, he stepped down as Chief Minister in order to become the first Malaysian federal cabinet member from Sabah

In 1973, Fuad was appointed as the governor of Sabah, known as the Yang di-Pertua Negara (the post was later known as Yang di-Pertua Negeri). He held this position until 1975. Later that same year, Fuad together with Harris Salleh formed a new political party called Berjaya and proceeded to win the 1976 state election, defeating Tun Mustapha's USNO.

Forty-four days later, he died in a plane crash, and till now, Sabahans have bitter memories of how and why he died. The suspicion is still strong that the Umno-led federal government was behind the crash as Fuad had allegedly wanted to pull Sabah out from the Federation due to a deadlock over negotiations for oil royalty.

Recently, Tengku Razaleigh Hamzah, who was then the Finance minister and the architect of the Petronas Development Act 1974, recounted to the East Malaysian press of how he nearly died in that crash with Fuad. At the last moment, an official had quietly motioned him to leave the plane and under impression that he was needed to clear some matter or other, he did so. The revelation further bolstered the view of many Malaysians that Fuad was murdered.

Altantuya-Scorpene scandal

The offer to Guan Eng and the Pakatan team to take a dive on the Scorpene came about 21 months ago, when the DAP leader slammed the government after it was reported that the two Scorpene subs, costing more than RM7 billion, were malfunctioning. Suddenly earlier this week, and also in conjunction with the LIMA 2011 event at Langkawi, Zahid offered to 'prove' to Guan Eng the Scorpenes could dive.

"Guan Eng telephoned me yesterday to say he was coming here. Although the submarine was to serve as a static exhibition at LIMA this time, I have nevertheless, asked that it give him a ride," Bernama reported Zahid as saying.

The national news agency also reported that "Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi will accompany Penang Chief Minister Lim Guan Eng on a trip onboard the KD Tun Razak submarine on Friday, to disprove opposition allegations that it is unable to submerge."

Bernama also wrote that Zahid said: "he had sent invitations to all members of parliament (MP) and senators, including those in the opposition, to board the submarine and embark on a diving stint.  The defence minister said that (apart from Lim) Lembah Pantai MP Nurul Izzah Anwar had replied that she would not be able to participate in the submarine trip.  He said those who talked (criticised) a lot were apparently, not brave enough to embark on a trip in the submarine."

The Altantuya murder link to Najib

The Scorpenes were ordered by Prime Minister Najib Razak in 2002, when he was still the Defense minister. The purchase has been fraught with controversy since day one, with activists lambasting its high cost and unsuitability for the local terrain. Najib was also accused to taking a kickback of at least 114 million euros (RM570 million) from the deal through his proxy Abdul Razak Baginda. The subs were delivered last year.

In 2006, the nation was shocked when a Mongolian translator, Altantuya Shaariibuu, was found murdered in Malaysia after she purportedly came to collect her US$500,000 share of the Scorpene commission from Baginda. Two of Najib's former bodyguards have sentenced to hang for her killing but Malaysians are convinced the 'mastermind' has yet to be caught.

When accepting the offer of the Scorpene ride, Guan Eng pointed out that 21 months had elapsed since his query - more than enough time to repair the technical faults that had been present. However, he noted that corruption and controversy still dogged the ships even though the technical problems may have been resolved.

""Zahid's gesture also does not answer questions about the costly RM3.68 billion purchase and RM534 million service contract or 'commission' given to Perimekar Sdn Bhd," said Guan Eng.

The Penang chief minister, who is also the DAP secretary general, celebrated his 51st birthday on Thursday. Penang Umno members had sent him 5 cakes - four in the shape of human excreta and one in the shape of the number 4, which symbolizes death to the Chinese.

Melbourne, Australia - This is the first in a three-part essay that explores an often neglected aspect of corporate responsibility: the paradox of being a "responsible" arms maker. The author argues that the "negative externalities" - or the impact on society - inherent in the deployment and threat of the use of weapons makes the standard of corporate responsibility difficult to apply. Instead, the author argue, those interested in corporate behaviour should view such firms through a "corporate social irresponsibility" lens, a strategy that identifies and allows a response to be made to normative developments, through proactive engagement and divestment strategies.

In this chapter, the author introduces the concept of corporate social irresponsibility. The next chapter will examine the current limits of the responsibility of arms makers, before the problem of institutional investment in cluster munitions producers is addressed in Part Three.

"War, mechanisation, mining and finance played into each other's hands. Mining was the key industry that furnished the sinews of war and increased the metallic contents of the original capital hoard, the war chest; on the other hand, it furthered the industrialisation of arms, and enriched the financier by both processes. The uncertainty of both warfare and mining increased the possibilities for speculative gains: this provided a rich broth for the bacteria of finance to thrive on."

Lewis Mumford, Technics and Civilization, 1934

Proponents of the social responsibility of business and investment have seldom assessed the makers of conventional armaments such as machine guns, attack helicopters and battle tanks. Fewer still have attempted to devise and implement such programmes within firms, even though a growing number of civil society groups have begun to identify the entities involved - both directly and indirectly - in the development, production and investment of "controversial" weapons such as landmines and cluster bombs.

The prevailing argument is that arms makers and producers, as well as their financers, are not capable of being socially responsible due to three unique characteristics. First, the producers of arms are commonly viewed as agents of the state due to their importance in maintaining national sovereignty - rather than independent actors liable for the harm resulting from their products. Second, there is a belief that the manufacture of arms necessitates a higher degree of opaqueness than other industry groups, due to national defence considerations. Third, the state plays a dual - and sometimes conflicting - role as both the principal customer and regulator.

These three characteristics aside, I argue that the emerging concept of corporate social irresponsibility (CSI) proves far more useful in assessing arms makers' limits of responsibility. By focusing on the negative externalities, we can examine the practice in the context of constitutive and regulatory norms, as opposed to those norms that are either moral or practical. Put another way, CSI effectively confines analysis to a relatively precise set of considerations, while a more traditional corporate social responsibility (CSR) approach requires choosing from a host of potential implementation strategies and activities. Thus, CSI provides a degree of specificity not offered by the more nebulous concept of CSR and actually complements existing CSR programmes and activities.

By arguing in favour of CSI's value to institutional investors, I will address a seemingly large paradox: Can arms makers be socially responsible? This essay takes a small step towards answering that question, by examining the investment policies, practices and procedures of a handful of Australian pension and sovereign wealth funds in relation to investment in the development and production of cluster munitions - a class of weapon banned under international law since August 2010. The case selection is especially significant as the international Cluster Munitions Conventionis the most ambitious disarmament and humanitarian treaty of the last ten years, and the Australian investment industry - with A$4tn ($4.0tn) in assets - is the fourth largest in the world.

Although no Australian firm is in the top 100 manufacturers of conventional weapons globally, Australian banking and financial institutions are among the largest investors in similar companies overseas. By focusing on the Australian experience, this chapter explores the "dilemma" institutional investors face when the positions of domestic governments do not explicitly prohibit direct and indirect investment as has happened in other markets, such as in New Zealand, the United Kingdom, Germany, France, Ireland, the Netherlands, Luxembourg, Belgium, Switzerland, Lebanon, Mexico, Norway and Rwanda.

Drawing on theoretical discussions in international relations and critical studies of corporate social responsibility, I find that the negative externalities inherent in armaments manufacturing demand that institutional investors view such firms through a "CSI lens", especially when tasked with identifying and developing strategies to account for emerging social norms.

Characteristics of the armaments industry

The phrase "armaments industry" is a misnomer: It is not a distinct industrial sector, but rather a loose collection of firms operating in a number of disparate industry and sub-industry groups including aerospace and defence, electronics, semiconductors, information technology and shipbuilding. Very few companies operate solely for military purposes; they either derive a significant proportion of their revenue from civilian goods or producing "dual-use" components with both military and civilian applications.

Despite widespread arguments to the contrary, the marriage of the military and industry has been, in fact, an observed phenomena since 1897, when founder of the modern human rights movement, Jean Henri Dunant, predicted:

"Everything that makes up the pride of our civilisation will be at the service of war. Your electric railroads, your dirigibles, your submarines... telephones... and so many other wonderful inventions, will perform splendid service for war."

"The US has not published a single document on its development and production of conventional armaments."

Today there are thousands of companies that may be classified as belonging to "armaments industry", albeit to varying degrees and in a number of different ways. For example, Boeing is widely known as a manufacturer of commercial aircraft. However, the firm also derives around half of its A$60bn ($60.8bn) revenue from military contracts. These businesses are often structured so that individual firm's suppliers, operations and functions are located in different states. As a result, it remains especially difficult for investors to identify and implement policies that require the targeting - either through exclusion or engagement - of specific stocks or sectors, as is usually done in responsible business and investment programs.

A number of national governments have begun disclosing high-level information on their domestic activity in this area. However, significant gaps in publicly available information remain. For instance, the US has not published a single document on its development and production of conventional armaments, despite having the highest level of government expenditure, the greatest volume and value of exports, and the largest number of private companies in the world. Instead, they have made some basic information about the scale and scope of the arms production available along with that of other major sectors in the Annual Industrial Capabilities Report to Congress.

Disclosure is slightly more forthcoming in parts of Europe, with the British and French publishing comprehensive stand-alone financial and employment data from 1992 and 1997 respectively. In the absence of regular reporting cycles, prior to a review of defence procurement in 2010, the Australian government most recently commissioned a survey of domestic activity in the mid-1990s as part of a broader strategic review.

In response, civil society groups and scholars have increasingly called for greater governmental and inter-governmental transparency through voluntary reporting instruments such as the Stockholm International Peace Research Institute's (SIPRI), Arms Industry Database, or the UN Register of Conventional Arms. However, the information contained in these databases is incomplete and unverified; the responsibility of arms markers still must overcome a high degree of complexity and opaqueness when assessing the limits of responsibility of arms makers.