Where does Canada stand with Saudi Arabia?
Doubts raised that end to LAV deal would incur penalties officials claim
Six weeks into the Biden presidency, time may be finally running out for the Saudi Arabialed coalition waging war in Yemen.
On Feb. 4, during an address at the State Department, the U.S. leader characterized the conflict in Yemen, in which a quarter of a million Yemenis have died since 2015, as “a humanitarian and strategic catastrophe.”
In his speech, U.S. President Joe Biden, who on the campaign trail had called Saudi Arabia a “pariah,” announced an end “to all American support for offensive operations in Yemen, including relevant arms sales.”
Signalling a sea change from the Trump administration, the U.S. also released a hithertoclassified national intelligence report indicating the de facto Saudi ruler, Prince Mohammed bin Salman, authorized the murder of a dissenting journalist, Jamal Khashoggi, whose body was sawed to pieces in the Saudi consulate in Istanbul.
In the past two years, activists in the U.K. and Belgium have won important court rulings ordering their governments to stop issuing weapons export permits to Saudi Arabia. Germany stopped exporting weapons to the country in November 2018, partly in retaliation for Khashoggi’s murder the month before.
Where does that leave Canada?
A multibillion-dollar contract to supply light armoured vehicles to the kingdom has been the source of controversy for years. Now, an international law expert and judicial activist is taking aim at the Trudeau government’s oft-repeated assertion that it cannot back out of the contract without incurring financial penalties.
Daniel Turp, a retired University of Montreal law professor and former Bloc Québécois MP and Parti Québécois legislator, believes the parameters of the contract are so defined that any judgment made against Canada for non-fulfilment of its conditions would likely be unenforceable.
That’s because, under the terms of the deal, as described in a Canadian government press release, the “contract is governed exclusively by Saudi law and subject to the Saudi judicial system.”
Turp interprets this to mean that, in the event of the Saudis seeking damages against Canada for delay or non-delivery of the armoured vehicles, the case would be heard in Saudi Arabia, by Saudi courts, and these courts would have no automatic right to collect money in Canada.
“It would become an issue of does Canada want to pay voluntarily,” maintains Turp, who is active on the file, has lodged Access to Information requests, and applied unsuccessfully to Federal Court in 2016 to have the vehicle sales halted.
A political hot potato
The light armoured vehicle (LAV) deal in question has been a hot potato for the Liberals because of suspicions and video footage indicating the Saudis may have used previously contracted Canadian LAVs in their six-year war in Yemen.
Canada has an extensive history selling weapons, including armoured vehicles, to the desert kingdom. About 3,000 weapons-equipped LAVs were shipped to Saudi Arabia under past contracts between 1993 and 2016, by a company known as General Dynamics Land Systems, based in London, Ont.
Another company, Terradyne Armoured Vehicles, based in Newmarket, manufactures smaller, plated jeep-like vehicles, known as Gurkhas, typically used in police or border patrol work. Terradyne shipped at least 159 of these to Saudi Arabia between 2014 and 2018, according to data collated by the Stockholm International Peace Research Institute, an NGO.
In both cases, contracts between Saudi Arabia and the Canadian manufacturers are brokered by the Canadian Commercial Corp., a Crown body, and are subject to regular export permits.
The current contract, which is for 742 General Dynamics Land Services LAVs, was signed by Stephen Harper’s Conservatives in 2014, but deliveries did not start until 2016, after the Liberals took power. Deliveries resulting from this contract are expected to continue until about 2024. Neither company responded to questions from the Star for this story.
The Yemen war has been characterized by widespread human rights abuses, with all sides accused of using hunger and the withholding of aid as a weapon. The war began in the aftermath of the Arab Spring, and Saudi Arabia and several Gulf countries intervened to support the country’s titular government against tribal factions.
The Saudi-led coalition has been accused of blockading ports, and of regularly conducting airstrikes that have targeted hospitals and civilians.
In Canada, the Liberals campaigned against the deal in the 2015 election, but have since invoked the penalties as their main justification for not cancelling the contract. Some observers have said this boils down to trust because the terms of the deal itself have been shrouded in secrecy.
Government officials, including Trudeau, have said Canada would also incur penalties for disclosing the terms of the contract. The Liberals’ accounts have, however, appeared inconsistent at times, with ministers variously estimating that in the event of cancellation, Canada would have to pay “a billion dollars,” “several billion dollars,” or the full value of the contract, at about $14 billion.
Responding to criticism, Global Affairs Canada issued a press release last April announcing it had renegotiated the contract with the Saudis, and that “under the improved agreement … Canadians’ exposure to financial risk will be eliminated where future export permits are delayed or denied if there is an infringement of the permit’s end use assurances.”
But in an email exchange with the Star, the ministry declined last week to comment on what these end-use assurances are, and whether they preclude the use of the LAVs on Yemeni territory.
Some observers imply Trudeau may not want to exit the contract, and is brandishing penalties as an excuse.
Anthony Fenton, a PhD student in political science at York University, who is researching Canada-Saudi relations, says that trade ties between the two countries go far beyond arms deals.
The Saudi Arabian Public Investment Fund, equivalent to a sovereign wealth fund, has invested in sections of the Canadian economy, including oil and wheat , according to Fenton.
Fenton also notes that Canadian companies like SNC Lavalin are invested in Saudi megaconstruction projects — including infrastructure initiatives such as the Crown Prince’s “Vision 2030” — and that the Saudis are willing to leverage this.
“The biggest penalty, in additional to whatever monetary (penalty) there would be in withdrawing (from the LAV deal) would be future loss of contracts — engineering services, consulting services, the whole litany,” Fenton suggests.
A game-changer
Debate between detractors and defenders of the General Dynamics deal has often focused on whether Canadian vehicles have previously been linked to documented human rights abuses. On the one hand, this may have happened.
Videos posted to social media appear to show Terradynemanufactured Gurkhas on the scene of a crackdown that targeted Shia religious minority members in the city of Awamiya in eastern Saudi Arabia summer of 2017, in which civilians were killed.
Canada’s Global Affairs department suspended export permits for the Gurkhas following this incident, but the permits were later restored.
Also, in 2011, Saudi forces, seen in LAVs, intervened in neighbouring Bahrain to help the local monarchy put down pro-democracy protests. Fenton estimates about 90 per cent of LAVs the Saudis own are of Canadian manufacture, and concludes that the vehicles used in this instance were likely Canadian.
Still, applying this standard of hard evidence specifically linked to Canadian vehicles misses the point, argues Cesar Jaramillo, who is director of Project Ploughshares, a Waterloo-based disarmament advocacy group.
“In various Canadian reports Canada has admitted that Saudi Arabia has illegally used French and U.S.-made weapons and Italian weapons in airstrikes and in naval blockades” in Yemen, says Jaramillo. “But then they say, not with our LAVs.”
“It’s like if you were selling to a drug cartel,” continues Jaramillo, “and you know they’re using similar weapons to yours to commit massacres, but your weapons are being used to guard the boss’s house.”
According to Jaramillo and others, the test that Canada should instead be applying is whether there is a future risk of misuse based on a Saudi pattern of behaviour.
In theory this standard is already written into Canadian legislation. In 2019 Canada acceded to the Arms Trade Treaty, a UN agreement, and as part of the lead-up to this Canada incorporated the provisions of the treaty into a domestic law, known as Bill C-47, in December 2018.
This law incorporates a “substantial risk clause,” stating that in cases where there is a substantial risk of weapons being used in human rights abuses, the minister “shall not” sign the export permit. Previous legislation was more nebulous and said only that in such circumstances the government should “closely control” the exports, which Jaramillo says could mean actually allowing the exports to happen
‘Case-by-case basis’
This year, Canadian civil society groups have expanded tactics to block the export of LAVs. In Hamilton in late January, a gathering of 20-plus activists representing groups including World Beyond War and Labour Against the Arms Trade briefly blockaded a depot belonging to Paddock International Shipping, a trucking company. According to the activists, LAVs that arrive from the General Dynamics Land Systems plant in London by rail are transferred onto trucks at this facility, then shipped to a port in Baltimore.
In a statement to the Star, Global Affairs said “Canada continues to monitor developments in Saudi Arabia and Yemen, and will take appropriate action should credible evidence be found regarding the misuse of any controlled Canadian good or technology, including to commit or facilitate serious violations of international human rights or humanitarian law.”
“After a thorough review by our officials, we announced last year that permits are now being reviewed on a case-by-case basis.
“These permits are not issued automatically and each of them are carefully scrutinized.
“The Minister will deny any permit application where there is a substantial risk of human rights violation.”
Many would argue that threshold has already been met.