Report finds failings in defense export supervision

A report by the state comptroller published Wednesday found failures in the supervision and enforcement of standards for Israeli defense exports, and described some of the shortcomings as “fundamental.”

By YAAKOV LAPPIN
IDF prepares to board 'Estelle' ship 370 (photo credit: Screenshot)
IDF prepares to board 'Estelle' ship 370
(photo credit: Screenshot)
A report by the state comptroller published Wednesday found failures in the supervision and enforcement of standards for Israeli defense exports, and described some of the shortcomings as “fundamental.”
State Comptroller Joseph Shapira said in his report that the Defense Exports Supervision Act standardized exports in accordance with international norms, but that the Defense Ministry’s Defense Export Controls Agency (DECA) is failing to use the full extent of the authority given to it by law to ensure proper enforcement.
Additionally, the law enforcement activities of customs officials on defense exports is incomplete, the report charged.
“The Defense Ministry’s role is to license activities for defense exports in as short a time as possible, professionally and efficiently, and to avoid harm to marketing and exports, while allowing Israeli exporters to compete in the world defense market,” the report stated.
Shapira noted that improvement has been made but stressed that there is still room for more, and called on the relevant authorities to address the failures in the licensing and supervision of exports as soon as possible.
Responding to the criticism, the Defense Ministry said DECA is carrying out a series of initiatives to meet standards. These included “aggressive inspections of the facilities of exporters,” a review of approved defense deals, and surprise inspections at companies. The ministry also intends to seek out companies involved in defense deals but not appearing on DECA’s registry.
In general, DECA keeps to the accepted time limits when licensing defense products, the ministry said.
Despite sending thousands of requests for licenses, each requiring in-depth checks, defense companies waited for replies for just 24 to 27 days in 2011 and 2012 on average, the Defense Ministry added.
The report also criticized the Defense Ministry’s Missile Defense Organization (MDO), which is tasked with managing the development of missile and rocket defense systems. While the body is praised for greatly contributing to national security, it is also criticized for failures in its management of personnel.
“In the 20 years since [MDO’s] founding, the Defense Ministry hasn’t made a serious effort to examine the structure and makeup of its personnel,” the report said. The structure and personnel are the result of “improvisations and circumstances, rather than analysis and planning,” the report charges.
The Defense Ministry said in response that the Administration for the Development of Weapons and Technological Infrastructure (that runs the MDO) is committed to “maximum flexibility in its activities, including in the field of personnel management.” It added that this flexibility has “proven itself in many past occurrences,” and listed the development of the Iron Dome anti-rocket battery as one prominent example.
The unique makeup of the MDO’s personnel, which includes young officers and experienced developers, creates a “special challenge” in management, the ministry added.
The Defense Ministry’s personnel department and the Administration for the Development of Weapons and Technological Infrastructure manage personnel together in the best possible manner, and employ an advanced computer system to this end, the ministry said.
In his report, the comptroller also examined the national defense budget, which constituted 15 percent of the entire national budget in 2010 and 2011.
It noted the Defense Ministry’s “failure to meet guidelines set by the government,” and “inconsistent supervision by the Finance Ministry of budgetary changes.”
“In 2012, steps were taken to improve the transparency and supervision of the defense budget, including the establishment of a terminal in the Finance Ministry for [oversight of] the Defense Ministry’s budget,” the report said.
The Defense Ministry, for its part, said civilian supervision of the defense budget is “extensive, and this is the case despite the security-driven secrecy that is necessary in managing it.”
Supervision and transparency have improved significantly in recent years, and oversight is now accessible to the Finance Ministry, the security cabinet, the committee of ministers for military acquisitions, the state comptroller, and the National Security Council, the ministry contended.
The Knesset’s Foreign Affairs and Defense Committee also enjoys greater defense budget oversight, it said.
Officials from the Defense and Finance ministries are engaged in an ongoing dialogue on all budget changes, the ministry stated.
“All budgetary changes are reported in quarterly and monthly reports, and detailed explanations are given as much as possible, where necessary,” the ministry said.
The errors highlighted in the state comptroller’s report are not significant and are small when compared to improvements, it added.