A startling report

Without maintenance, a fighter jet quickly falls into disrepair. Without upgrading, military forces find their weapons outdated and outsmarted. Whilst the trade in physical weaponry attracts headlines, post-sale services (commonly held to include services such as maintenance, upgrading, repair, modification and training) can be directly linked to human rights abuses in some of the most contentious of global conflicts. This was the findings of recently-released investigations from non-profit media organization Lighthouse Reports and the academic-practitioner collective Global Legal Action Network (GLAN) (hereinafter the Investigations).

Through their research, GLAN and Lighthouse Reports highlighted the findings and initial legal assessments of three cases of post-sale servicing of warring parties in Libya and Yemen. Perhaps most strikingly, but certainly not an isolated incident, the investigations uncovered that in 2019, a UAE Mirage aircraft maintained and upgraded by French companies, bombed a camp in Tajoura, Libya killing at least 50 refugees.

Despite the risk of post-sale services contributing to human rights and humanitarian law violations, critical regulatory and oversight gaps in the control of such non-physical military exports persist. The Investigations reveal that French companies assisting the UAE did so in compliance with applicable legal requirements on arms export control.This blog highlights some of the key findings of the Investigations and explores developments in the regulatory environment. If the international community is interested in preventing further breaches of humanitarian and human rights law, a robust system regulating the provision of post-sales services is required.

Read more about the Business and Human Rights Clinic

Post-sale services: the regulatory position

Arms trade law, in particular the Arms Trade Treaty (ATT) and the EU Common Position on Governing Control of Exports of Military Equipment (the Common Position), which implements the ATT in the EU, regulates the sale of arms by EU Member States. The Common Position sets out lists of weapons, equipment and technologies regulated through arms export licencing. When considering whether to grant a licence, states must take into account various factors, including the risk that the supply subject to the licence is likely to contribute to serious violations of international humanitarian law. 

Yet, as the Investigations demonstrate, this regulatory regime is unfit to regulate post-sale services. Not only has interpretation of the ATT and Common Position by states been radically divergent, the exclusion of the jurisdiction of the European Court of Justice over breaches of the Common Position is itself a significant weakness. Two of the glaring regulatory gaps brought out in the report are discussed below:

Temporal scope

The Common Position provides only tepid language about the need for any review of a licence after it has been issued. Where contracts are short-term, this can be of little concern. Most post-sale services, however, are not granted pursuant to a standalone license, but are rather authorised as part of the export of the weapons system they are meant to service. While the delivery of the weapon may take place over a short timescale, the provision of post-sale services can last for many years after the delivery of the physical equipment and the granting of the export licence. 

As found by the Investigations, the French authorities granted a licence for the export of the aircraft likely used in the Tajoura airstrike, as well as connected post-sale services, as long ago as 1986. No licencing assessment could possibly anticipate risks over such a period. The lack of a required review mechanism makes a mockery of the licencing system, which allows the continuation of the provision of services in a humanitarian situation vastly changed from the time the licence was granted.

This means that despite widespread reporting that the UAE is not only likely conducting hostilities in Libya in disregard of international human rights standards, but that its involvement in the conflict is a breach of the current UN arms embargo in Libya, Dassault continues lawfully to provide maintenance and upgrading on aircraft used by UAE. 

Geographical scope

As a particularly glaring regulatory gap, where post-sale services are provided on an EU company’s home state territory, they are not subject to the Common Position (as no export has technically taken place). For instance, between 2016 and 2017, the Report found that the state-owned company Defence Conseil International (DCI) provided battle-critical training on the operation of the Caesar (a self-propelled 155mm howitzer system) to the Saudi National Guard at DCI’s facilities located in France. This training was integral to the operation of the targeting system of the weapon, and without such training, the weapon would be vastly less effective. The Caesar, and therefore this training, have been linked to serious violations of international law during the Yemen conflict throughout this relationship.

Holding post-sale service providers to account

Any tools in the toolbox?

In light of the regulatory shortcomings, some experts, including Christian Schliemann and Linde Bryk, have explored avenues from outside of traditional arms-control law to hold post-sale service providers to account. Business and Human Rights (BHR) standards are one such avenue. 

The UN Guiding Principles on Business and Human Rights (UNGP) and OECD Guidelines are authoritative soft law standards laying down comprehensive human rights due diligence obligations for private companies. They apply broadly to all business sectors but place particular emphasis on the heightened risks incurred by businesses that operate in certain high-risk environments.

The due diligence requirements apply throughout the entire duration of any contract, requiring continual review of any associated risks after the original export has taken place and whilst post-sale services continue to be provided (UNGP 17). These standards are critical to ensuring the accountability of the defence sector. Following the UNGPs, Dassault, for example, should have periodically assessed the risks associated with its UAE contracts considering incidents such as the Tajoura airstrike. In addition, BHR standards apply to every commercial transaction regardless of the location of the contract, assisting in a DCI-like situation.

Encouraging developments? 

Some positive steps have recently been adopted to further the fight for proper regulation of post-sales services, though a long road remains ahead. First, there is an incipient trend towards tightening home-state licensing controls. In 2019, France became one of a few countries, with Sweden and Italy, to regulate military training delivered on its territory, thought only to contractual obligations in relation to post-sale services assumed after the law’s entry into force. This approach still has to find its way in more European states. 

In respect of the Common Position itself, following amendment in 2019, the EU has taken some steps to address concerns regarding the lack of review of granted licences. The Common Position, which was previously silent on the matter, now provides that ‘where new information becomes available, each Member State is encouraged to reassess export’. Yet, it is unclear if this imposes an enforceable obligation on the Member State, if it can be legally enforced, and it certainly proved insufficient to prevent the continued operation of the Mirage contracts. 

As soft-law standards, BHR suffers from having to rely on domestic incorporation and enforcement mechanisms. Developments in some Member States, however, suggest that the application of these standards is increasing. For example, the 2017 French Duty of Vigilance law requires large companies to undertake comprehensive due diligence through a “vigilance plan” – and sets out penalties for failing to comply. This domestic regulation has a limited remedial scope and is relatively untested. The widespread adoption and application of such due diligence laws is necessary to fill crucial gaps in existing domestic post-export controls particularly for the post-sale arms industry.

Alongside isolated national initiatives, binding business accountability mechanisms are becoming more prevalent on a larger, international, scale. The European Commission has announced a move towards a Directive on sustainable corporate governancethat would include human rights due diligence. The application of EU directives in domestic legal regimes could bring both companies and home-state’s BHR responsibilities within the jurisdiction of national courts and the European Court of Justice. 

Further, in July 2018, the UN’s open-ended intergovernmental working group issued a proposal for a legally binding instrument that would regulate the activities of transnational corporations and other business enterprises under international human rights law, accompanied by an optional protocol that establishes a complaint mechanism. Unlike classic ex ante arms trade control mechanisms, these new developments are designed to apply throughout the entire commercial relationship, thus covering post-sale contracts. 

Much more to do

BHR standards undoubtedly reinforce the framework for business accountability but are currently insufficient to ensure adequate oversight of the post-sale arms industry. The amendments to the Common Position and domestic arms control regimes are in some ways encouraging but leave much to be desired.

In practice neither companies nor public authorities have demonstrated a commitment to proper regulation of the dangers of post-sale servicing relationships. To date, European states and companies have been able to avoid regulation. The Investigations bring these issues to sharp relief. It is hoped that increased public awareness and law reform demands by civil society can offer structural redress and appropriate scrutiny of the deadly liaisons formed by post-sale services currently invisible to the law. With sustained pressure on European actors, perhaps another Tajoura can be avoided.