Rafale row: Not all previous defence deals between India and other countries had an integrity clause

Allegations and counter-allegations have come thick and fast in the Rafale row, with three news reports taking centre stage in asking the most important questions regarding the circumstances leading to the procurement of 36 fighter jets by the Indian government, from French company Dassault. In one of these bombshell reports, The Hindu noted that the deal had “involved major and unprecedented concessions from the Indian government”, with critical provisions for anti-corruption penalties dropped. While this point has been highlighted by the Congress in its attacks on the BJP-led government that brokered the deal, the time is ripe to note that not all defence deals have had an integrity or anti-corruption clause attached to them. The integrity clause was codified in India’s 2006 defence procurement policy (DPP). Unveiled by then defence minister Pranab Mukherjee, the clause mandated that all defence deals amounting to or exceeding Rs one billion should have a pact that vouches for the fact that no corruption or bribery went into the inking of the pact. Amending the DPP 2005 with this new policy, Mukherjee had said the reforms, including the integrity clause, were brought about to “ensure greater transparency and probity in defence deals”. [caption id=“attachment_5118401” align=“alignleft” width=“380”] File image of a Rafale fighter jet. Wikimedia Commons[/caption] A report in The Hindustan Times on Tuesday noted that the non-adherence to the integrity clause was seen in the case of big ticket purchases as well, including the Manmohan Singh led UPA-government’s purchase of heavy lift transporters from the USA through the Foreign Direct Sale route (FMS). The C-17 aircraft cost the Indian exchequer close to $4.1 billion, but the deal did not come with either an integrity clause or a sovereign guarantee, a defence official has allegedly told the newspaper. A similar purchase of six C-130 heavy lift aircraft from the US for $ 1 billion also had no integrity clause, the source is said to have informed. The USA, however, is not the only country that India has allowed this concession for. Another senior defence official has allegedly told the paper that the Su-30Mki frontline fighters which were purchased in the 1990s and 2000s, and the S-400 missile defence shield, which were bought from Russia, both came from deals without integrity clauses. India, the source said, bought tanks, warships, and other equipment from Russia without either. The sources quoted by Hindustan Times were not the only ones who spoke on the non-centrality of such a clause. Air Marshal SBP Sinha, who headed the Rafale negotiations with France, on behalf of India, also told ANI that an “integrity clause” did not feature in earlier government-to-government contracts signed with America and Russia. “Till now, we have had government-to-government contracts with America and Russia. This is the third such contract, which is with France. Such a clause was not there in any of them,” said Air Marshal Sinha while speaking to ANI. Sinha also stated to The Hindu that paragraph 71 of the DPP states that classic pacts do not apply to government-to-government agreements, in the case of which both governments will rely on mutually agreed terms. He also said that some notes are being “selectively picked up” to prove a point but the fact is none of them are “linked to Indian negotiating team”. Congress president Rahul Gandhi had, on Monday, asserted that Prime Minister Narendra Modi had facilitated a “loot” in the Rafale deal by removing the anti-corruption clause, as stated in The Hindu report. “Every defence deal has an anti-corruption clause,” Rahul had said, seemingly oblivious to the fact that a government headed by his own party had not included such clauses in defence deals inked earlier. The UPA government, ANI further reports, had in 2013 had come up with a new policy which allowed the defence ministry not to follow laid down rules and sign inter-governmental agreements with “friendly foreign countries” like France could be argued to be, as per mutually agreed provisions between both sides. The question may also arise as to why a government-to-government deal, essentially one in which only the two governments are negotiators of prices, would require an integrity clause at all. In such a deal, the procurement process is assumed to favour both countries as both governments are expected to look after the interests of their countries. Governments choose this route, notes the Observer Research Foundation, to avoid the perceived malpractices of an open competition. Had the Indian government purchased the aircraft directly from Dassault, the French government would most likely have had to step in to provide both a sovereign guarantee  (a promise by a government to discharge the liability of a third person in case of default) and an assurance of integrity. However, it is not as if the matter arrives at a stop with acknowledging a diminished need for an integrity clause in the Rafale deal. In the case of this deal, the merits of a government-to-government understanding are made murkier by the government’s alleged insistence on Reliance Defence to be made offset partner. But the fact remains that the spotlight has only recently fallen on the debated clause. “In my long years with the Ministry of Defence, I don’t remember integrity pacts or sovereign guarantees coming from Russia or for that matter any other government,”  reiterates former head of the finance wing of the defence ministry, Amit Cowshish.