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Armaments Corporation of South Africa (Armscor)

South Africa's domestic arms industry originated in 1940 with the appointment of an Advisory Committee on Defence Force Requirements to study and to assess the country's military-industrial potential. Relying on its recommendations, the government, with British assistance, established six factories to produce or to assemble ammunition, bombs, howitzers, mortars, armored vehicles, and electronic equipment. A number of private companies also produced weapons during World War II. Most weapons factories were dismantled in the late 1940s.

Seeking long-term military research and development capabilities, the government in 1945 established the Council for Scientific and Industrial Research (CSIR) to study the country's overall industrial potential. The Board of Defence Resources, established in 1949, and the Munitions Production Office, established in 1951, oversaw policy planning concerning armaments. In 1953 the first rifle factory was established, and the Lyttleton Engineering Works, formerly the Defence Ordnance Workshop, collected technical data and information on manufacturing methods. In 1954 the government established the National Institute for Defence Research (NIDR) to assess and to improve the fledgling defense industry.

In 1960 the increasingly security-conscious National Party (NP) government stepped up programs to improve the arsenal of the armed forces. Pretoria raised arms production levels, sought new foreign sources of weapons, and began to acquire new defense technology systems. These efforts intensified after the 1963 United Nations (UN) Security Council resolution restricting the sale of arms, ammunition, or military vehicles to South Africa. The Armaments Act (No. 87) of 1964 established an Armaments Production Board to manage the Lyttleton Engineering Works and a state-owned ammunition plant. The board assumed responsibility for coordinating arms purchases among government, military, and private agencies.

The Armaments Development and Production Act (No. 57) of 1968 established a special production unit, the Armaments Development and Production Corporation (Armscor), to consolidate and to manage public and private arms manufacturing. Through Armscor's efforts, South Africa soon achieved self-sufficiency in the production of small arms, military vehicles, optical devices, and ammunition. During the mid-1970s, Armscor reorganized as the Armaments Corporation of South Africa (still Armscor), expanded existing arms industries, and assumed control over most research and development done by NIDR. Before the voluntary UN arms embargo was declared mandatory in 1977, South Africa received military technology through licensing agreements, primarily with West Germany, Italy, Israel, France, Belgium, and Canada. Licensing and coproduction agreements in the 1970s and 1980s made it difficult to distinguish between fully indigenous military manufactures and those that relied on foreign manufacturing capabilities.

During the 1980s, Armscor was a central feature of South Africa's military-industrial complex, a state corporation that depended on private industry for specific processes and components. Armscor's financial autonomy was evident in its access to the capital market for loans, but at the same time, many of its functions were closely tied to the government. Armscor executives reported directly to the minister of defense. Armscor's ten-member corporate board had overlapping membership with the ministry's Defence Planning Committee and included leading businessmen, financiers, and scientists, as well as the government's director general of finance and the chief of the SADF. In addition, Armscor was represented on the government's high-level military planning and policy bodies.

Armscor's marketing and sales department, Nimrod, undertook an aggressive arms export promotion campaign in the 1980s. It participated in international arms exhibitions, in Greece in 1982, in Chile each year from 1984 through the end of the decade, and in Turkey in 1989 (displaying its G-5 howitzer and Rooikat armored vehicle). Armscor also displayed its manufactures at numerous demonstrations and trade fairs in South Africa. Despite the UN ban on arms sales to Pretoria and a 1984 UN ban on the purchase of arms from South Africa, Armscor's business flourished. The corporation did not disclose export figures or customers during the 1980s, but the United States government estimated South Africa's arms sales at US$273 million (in constant 1989 dollars) over the five-year period from 1984 to 1988. The best year was 1985, when it earned roughly US$102 million.

Armscor did experience the effect of the cutback in weapons sales in the late 1980s. Its work force had increased from 10,000 to 33,000 between 1974 and 1984, but had declined to about 20,000 by 1989. At that time, Armscor purchased most of its manufacturing components from twelve subsidiary companies and an estimated 3,000 private contractors and subcontractors, representing a total work force of more than 80,000 employees. The government began to privatize parts of the arms industry in the early 1990s. Under a major restructuring that began in April 1992, a segment of Armscor and several of its manufacturing subsidiaries were reorganized as an independent weapons manufacturing company, Denel. Denel and several other manufacturers produced equipment on contract with Armscor, which retained overall responsibility for military acquisitions. Armscor also acted as the agent of the state, regulating military imports and exports, issuing marketing certificates, and ensuring adherence to international agreements.

Despite the numerous international embargoes against arms trade with South Africa in the 1970s and 1980s, it nonetheless developed the most advanced military-industrial base on the continent. In the late 1970s, it ranked behind Brazil and Israel, among developing-country arms suppliers. The reasons for this apparent irony are evident in South Africa's defense production infrastructure, which had developed even before the first UN embargo in 1963; in the incremental, haphazard, and inconsistent ways in which the arms embargoes were imposed and enforced; in the deliberate refusal by several countries to comply with the embargoes; in Pretoria's use of clever and covert circumvention techniques; and in its ability to develop and to exploit advanced commercial and "dual-use" technologies for military applications. By the late 1960s, South Africa had acquired at least 127 foreign production licenses for arms, ammunition, and military vehicles. South Africa had purchased fighter aircraft, tanks, naval vessels, naval armaments, and maritime patrol aircraft, primarily from Britain. After that, military equipment was carefully maintained, upgraded, and often reverse-engineered or copied, after the embargo made it difficult to obtain replacements or replacement parts.

During the 1970s, South Africa expanded and refined its ability to acquire foreign assistance for domestic military production. Its broad-based industrial growth enabled it to shift imports from finished products to technology and components that could be incorporated into locally designed or copied military systems. Through this maneuver, multinational firms and banks became major sources of technology and capital for South Africa's defense industry, even during the embargo era. Dual-use equipment and technology--such as electronics, computers, communications, machine tools, and industrial equipment--and manufacturing techniques were not subject to embargo and were easy to exploit for military applications. South African engineers also were able to modify, to redesign, to retrofit, and to upgrade a wide range of weapons using foreign technology and systems.

South Africa also invested in strategic foreign industries; recruited foreign technicians to design, to develop, and to manufacture weapons; rented and leased technical services, including computers; and resorted to cover companies, deceptive practices, third-country shipments, and outright smuggling and piracy to meet its defense needs. By the 1980s, the defense industry, as extensive as it was, was nonetheless incapable of designing and producing some advanced military systems, such as high-performance combat aircraft, tanks, and aerospace electronics.

Even as Pretoria's diplomatic isolation increased in the 1980s, as many as fifty countries -- including several in Africa -- purchased Armscor's relatively simple, dependable, battle-tested arms for their own defense needs. The Johannesburg Weekly Mail , citing government documents, disclosed arms shipments in the mid-1980s to Iraq, Gabon, Malawi, Chile, France, Belgium, and Spain. Morocco and Zaire obtained Ratel armored vehicles from Pretoria, and South Africa's mobile razor-wire barrier, used for area protection and crowd control, was exported to at least fifteen countries, including several in Africa, and to United States forces in West Germany.

The Iran-Iraq conflict of the 1980s and of the Persian Gulf War of early 1991 highlighted Pretoria's previous sales to several countries in the Middle East. Armscor had sold G-5 towed howitzers to both Iran and Iraq, and G-6 self-propelled howitzers to the United Arab Emirates. South Africa also provided vaccines to Israel, for that country's use as a precaution against the possible Iraqi use of biological weapons. Numerous other reports of South African arms sales to the Middle East, to Peru, to several leaders of breakaway Yugoslav republics, and to other countries indicated the international awareness of the strength of South Africa's arms industry. The London-based humanitarian organization, Oxfam, criticized South Africa in 1992 for having sold automatic rifles, machine guns, grenade launchers, and ammunition to war-torn Rwanda. Military sales to Rwanda continued in the mid-1990s, even after that country's genocidal outbreak of violence in 1994.

In 1995, as a result of the Cameron Commission reports, and especially the recommendations from the Modise Commission (resulting in a Cabinet Memorandum on 30 August 1995), the roles and functions of Armscor with respect to the import and export of conventional arms were transferred to the National Conventional Arms Control Committee (NCACC).

Two of the three primary roles of Armscor had been transferred (production to Denel in 1992 and arms control to the NCACC in 1995) thus focussing Armscor on acquisition management and the management of certain strategic capabilities on behalf of the DoD through its subsidiary companies. During 1996, Armscor, with the cooperation of the DoD, conducted an investigation into the roles and functions of Armscor. This investigation made proposals with regard to the management and execution of the DoD's acquisition function. The roles, functions, structure, division of responsibilities, organisational positioning and interface between the SANDF, Defence Secretariat, Armscor and the defence industry were addressed.

The South African Defence Review, approved by Parliament in April 1998, addressed the role and function of Armscor. The Defence Review envisages an integrated Department of Defence Headquarters which includes the Defence Secretary, C SANDF and the Chiefs of the Corporate Divisions. Armscor resides outside of this integrated headquarters, though the Chairperson of Armscor reports to the Minister of Defence in the same manner as the Defence Secretary and the C SANDF.

Acquisition refers to all those actions that have to be taken to satisfy the need for materiel, facilities or logistic services. It involves, in sequence, requirements planning, operational research, technology acquisition, design and development, operational qualification, quality assurance, industrialisation, initial procurement and commissioning. Procurement on the other hand, is a much narrower concept that involves contracting for a requirement on the basis of an existing specification or by purchasing, manufacturing, leasing or hiring where the production process has been previously qualified during an acquisition activity. Procurement can be a component of acquisition.