Firms' human rights records checked by Scottish Enterprise 5

Firms’ human rights records checked by Scottish Enterprise

Dozens of companies have undergone human rights checks by Scottish Enterprise following concerns over public money being awarded to arms firms through business grants.

We can reveal that new assessments were introduced in March and that 68 companies have already been checked by Scottish Enterprise (SE), which is the Scottish Government’s business agency.

All 68 firms passed the new checks but SE has refused to say whether any arms companies have been assessed yet.

Critics of the arms trade have welcomed the move but they questioned whether it is a “toothless PR exercise” that will not end “grants for arms dealers”.

SE says it has never supported the manufacture of munitions but millions of pounds in grants have been awarded to arms companies over the last decade.

The Ferret revealed in 2017 that nearly £7.5 million of taxpayers’ money had been given to defence firms since 2015.

Companies funded by the taxpayer include US arms multinational Raytheon, which makes laser guidance systems for smart bombs in Fife, weapons that have been linked to alleged war crimes in Yemen.

Italian firm Leonardo MW, based in Edinburgh, has received around £7.5 million in grants from SE since 2015 and it produces technology for F16 fighter jets.

These warplanes were used by Turkey last year to bomb the city of Afrin in Syria, an offensive described at the time by critics as “ethnic cleansing”.

Scottish Government hands £3m to arms firms profiting from Yemen war

We revealed in May that both Raytheon and Leonardo MW were among four defence firms profiting from Yemen’s conflict who were last year given nearly £3 million of taxpayers’ money.

SE did not keep human rights assessments on arms firms who were awarded taxpayers’ cash, it emerged last year, despite official guidelines stating that quangos should carry out checks and keep records of due diligence.

A copy of SE’s new Customer Due Diligence Procedure was obtained by the Scottish Greens through a freedom of information request.

It says: “One particular area of concern for Scottish Enterprise when doing business is human rights. The UN Guiding Principles on Business and Human Rights are based on a framework of state responsibility to protect human rights; business responsibility to respect human rights; and the requirement for remedy for negative human rights impacts.

“Based upon guidance from the Scottish Government this procedure sets out how Scottish Enterprise will undertake appropriate due diligence on companies specifically in relation to their human rights record, before entering a business relationship with them.

“This includes an assessment of whether an individual or company, including any parent or subsidiary, has been associated with human rights abuses anywhere in the world.”

Green MSP Ross Greer said: “While it’s long overdue I’m glad that, following our campaign, there will now be some kind of human rights check before companies are handed public money. What we need now is proof that the checks are more than an exercise in form filling.

“If arms dealers who profit from spreading death and destruction and who are implicated in alleged war crimes against children continue to receive public funds after having been subject to a human rights check, the process will be revealed as little more than a toothless PR exercise.

“Multi-billion dollar international arms dealers don’t need or deserve public money and the sooner the SNP accept that, the better.”

Andrew Smith of Campaign Against Arms Trade said the new guidelines were welcome but added: “Over recent years Scottish Enterprise has given money to companies like Raytheon and Leonardo that are arming dictatorships and fueling conflict around the world. If the new human rights assessments are to mean anything then they must surely put a stop to grants for arms dealers?

“There are important questions to be asked about the close-knit relationship between Holyrood and the arms industry and, if applied properly, we hope these assessments lead to change. It would be totally inconsistent for Scottish Enterprise to talk about human rights and due diligence while continuing to throw public money at companies that are profiting from war.”

A spokesman for SE said: “We help companies with employees and investment in Scotland to diversify their business. The recent introduction of our additional due diligence checks means we specifically assess a company’s human rights record before entering any relationship with them.

“We also carry out these checks on companies with an existing SE relationship if they make a new request for assistance. To date, we have carried out 68 of these checks and as yet none have given cause for SE to refuse assistance on that basis.”

The Scottish Government said it does not provide funding for the manufacture of munitions either directly or via Scottish Enterprise.

“The support provided is focused on helping firms to diversify and develop non-military applications for their technology and ensure Scotland continues to benefit from the thousands of jobs in the defence, aerospace and shipbuilding sectors,” a Scottish Government spokesperson said.

“We are very clear that, whilst it is a reserved matter, we expect the UK Government to properly police the export of arms and investigate whenever concerns are raised. However, it remains important to have appropriate defence and security capabilities maintained in Scotland.”

Scottish Enterprise’s Customer Due Diligence Procedure

This article was also published in the Sunday Mail on 9 June 2019.

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