With all the talk about costly SoEs and whether to privatise them or not, one has been keeping under the radar – even despite its recent R1.8-billion bailout – Denel. Denel should be the first in the queue to be privatised as in its current state it not only places an undue burden on South African taxpayers, this apartheid relic harms our foreign policy and undermines our democracy.

For far too long Denel’s presence in our government, economy and society has continued without adequate scrutiny. Denel does not provide a substantive reason for its continued existence.

For example, as unprofitable and mismanaged as SAA is, there are still some reasonable arguments for keeping it: it provides a service which may not otherwise be available; helps ensure competition in the market; and helps transport and development in Africa. Denel’s original mission, however, was designed to keep the SADF supplied for its illegal and immoral conflicts against our neighbours. As a responsible and democratic power we are neither in need of weapons, nor would we likely face an embargo.

The continued selling of arms to human rights abusing regimes harms SA’s ability to be a champion for human rights in the world. There are already a number of reasons why the pursuit of human rights internationally is difficult: the need to maintain partnerships, the relative importance of competing national interests, or long- versus short-term planning. What does not help South Africa’s mission is the continuation of a state-owned arms industry.

News broke in 2011 that South Africa had supplied weapons to Libya around the time of the uprising against Muammar Ghaddafi’s regime. Minister Lindiwe Sisulu stated that the selling of weapons to Saudi Arabia has only recently become controversial due to the egregious murder of Jamal Khashoggi. Far more alarming, however, is that Saudi Arabia has been accused by the UN of potential war crimes in Yemen. The Saudi-led war in Yemen has seen the targeting of civilians and numerous human rights violations for the past five years.

SA by its position and history is often called upon to represent African interests in international bodies, the UN, G20, BRICS etc. That becomes undermined by the hypocrisy of pushing for human rights while selling arms to human rights abusers. One cannot simultaneously condemn Saudi Arabia for the actions in Yemen and then help supply their military. Moreover, having a state-owned arms company that is desperate for customers effectively turns our diplomats and other representatives into salespeople for Denel, again at the cost of the taxpayer.

Countries that actively protect human rights tend to be other liberal democracies. As we know all too well, ensuring domestic human rights does not come cheap, as seen in the percentages of budgets devoted to social issues such as housing, healthcare, education and welfare. It is not by coincidence that these states tend to have a much smaller military budget. In effect, then, those countries that support human rights the most (where Parliament and DIRCO could be most assured that SA weapons would not be used to violate human rights) tend to be the smallest markets for weapons sales. The reverse is that countries that tend not to respect human rights also have much larger budgets for buying weapons.

Balancing the arms industry and political ambitions is nearly impossible. To be profitable, Denel would need to be able to sell to as many customers as possible. But we choose not to because we know from our own painful history how weapons are used by human rights abusing regimes to stay alive. Do we really want as taxpayers to be sustaining an industry that profits on the misery of others? Surely as the children of the inhumanity of apartheid, we ought to do better?

The state’s continued ownership of Denel in its current form also undermines a key constitutional tenet of our democracy. Parliament is meant to have an effective oversight of all exports of weapons, under the purview of the National Conventional Arms Control Committee (NCACC), to ensure that they will not be used to violate human rights. The reality, however, makes a seemingly simple mission far more complicated. As Denel is owned by the state, there is then pressure on other state institutions to ensure its viability. NCACC is meant to be an oversight power and check on the selling of weapons, but as a state institution it then simultaneously has an interest in ensuring the profitability of Denel. This constitutes a substantive conflict of interest for Parliament, and will continue to do so if nothing changes.

South Africa’s liberation movements often relied on arms from other revolutionary governments. Perhaps the reason to keep Denel is to be able to supply old allies or other revolutionary movements. But we have a democracy and a parliament that is meant to openly adjudicate the merits of such requests for assistance in order to ensure that human rights are not violated.

Something has to change. Two options for reform of the SoE could be: privatise to the highest bidder; or overhaul Denel to focus on supplying post-conflict reconstruction engineering.

The first option would come with problems. Any domestic arms industry would still be required to abide by arms control legislation but would lose out on government officials acting as salespeople and government bailouts. Thus the underlying problem remains of trying to sell weapons only to regimes which respect human rights. However, a privatised arms industry would go a long way to removing the conflict of interest in Parliament and DIRCO. As long as Denel remains an SoE the possibility of a conflict of interest in its regulation remains.

The second option is perhaps less realistic and more costly, but not impossible. Put the literal “building” into “peacebuilding”: no more self-propelled guns, rather develop rapid water trucks, emergency sanitation equipment, investments in reconstruction and development. Demining is already an established element within Denel so it is not inconceivable that other humanitarian-based engineering and manufacturing could be developed under a greatly restructured and re-orientated SoE. Under these circumstances Denel would be a far less problematic SoE by no longer posing a risk to human rights; it would not compromise Parliament’s oversight role and it could also embolden the human rights mission of our foreign policy.

In any event, the current structure and mission of Denel remain anachronistic in a democratic post-apartheid era. There is no reason to let this particular SoE escape the scrutiny of the South African public and let it remain unchanged while we are asked to foot the bill. DM