An evaluation of the BAE/SAAB South African Royal Manufacturing project in Virginia, Free State Province : a case study of the implementation of the South African Defence Offsets

• Main Author: Wellmann, Gwendolyn
• Format: Others
• Language: English
• Published: Nelson Mandela Metropolitan University 2010
• Subjects: Arms transfers > South Africa; Weapons industry > South Africa; South Africa > Military relations
• Online Access: http://hdl.handle.net/10948/1296

This study is an evaluation of the BAE Systems/SAAB consortium National Industrial Programme project, South African Royal Manufacturers (SARM), which forms part of BAE Systems/SAAB’s National Industrial Participation Programme (NIPP) obligations resulting from their participation in South Africa’s 1998 Strategic Procurement Programme (popularly referred to as the ‘arms deal’). SARM was a gold chain manufacturing plant, located in the Free State mining town of Virginia and which was implemented by the BAE Systems/SAAB consortium in partnership with the Harmony Gold Mining Company. Funding for the business was provided by the BAE Systems/SAAB consortium as part of their industrial participation obligation. This funding was supplemented with a loan obtained from the South African Industrial Development Corporation (IDC) to the value of 40% of the cash funds; while land and buildings, as well as loans in the form of gold granules and bars, were provided by Harmony Gold Company, as part of what they describe as their corporate social responsibility towards the Virginia area where they are the only mining company operating; and also simultaneously as their obligation towards gold beneficiation as required by law. The business failed after less than 12 months of operation amidst allegations of theft of gold and the sudden lay-off of approximately 500 poor black rural women. The company’s liquidation appears to be on the backburner indefinitely. The study was conducted over a period of 18 months, and this thesis written over several more. As part of this evaluation several issues were investigated. These issues are: the push for beneficiation of South African mined metals; the National Industrial Participation Programme; local government development; the BAE Systems/SAAB consortium and other similar companies which are involved in jewellery production for export as part of both the country’s beneficiation drive, as well as the 3 NIPP. These other companies are used in this study as a ‘control’ group against which SARM’s performance can be measured realistically. Different research methods were used during the evaluation, including secondary document reviews, face-to-face and telephonic interviews with key-informants, the use of e-mail to contact key-informants, as well as conducting face-to-face questionnaires with random interviewees, and a focus group discussion with SARM ex-workers. There were several limitations to this study. The primary limitation was the inaccessibility of official and legal documents pertaining to both SARM, and the 1998 arms deal. SARM no longer exists, and thus the evaluation results should be used as lessons learned for similar projects in the future.