Blacklisting defence firms

Reports indicate that the government is embarking on a new blacklisting policy for defence companies that have allegedly crossed the Lakshman Rekha of ethical propriety. The Manohar Parrikar-headed Defence Acquisition Council is tipped to approve this policy for penalising firms suspected of bribing to win defence orders. Under the existing policy, an entire military-industrial complex is blackballed if one of its many companies or employees is suspected of unlawful activity. Under the new policy, the axe will fall only on the subsidiary company or the employee directly involved in bribery and not on the entire group. This is common sense.

The need for a realistic and level-headed policy has long been recognised by sober and experienced administrators. The time has come to undo the damage when AK Antony headed the Defence Ministry and institutionalised a populist streak. Indiscriminate blacklisting helped “Saint” Antony to hold on to his pristine image. But his trigger-happy approach left everyone displeased. India’s defence acquisition schedule went haywire and probe agencies dragged on with the cases. The new system of blacklisting proposes a product-specific ban instead of Antony’s blanket bans. In other words, if a company making bullets is banned, its sister company that manufactures rifles won’t be blacklisted just because it belongs to the same group.

The proposed policy is eminently realisable. But it will remain prone to misuse because the investigating agencies seem to lack the competence to probe cases with cross-border ramifications. It is also no secret that military-industrial complexes are highly resourceful and influential. They may be encouraged to take the risk of bribing decision-makers. If caught, only one company will be barred while the rest of the group firms can carry on with business. And even if a company is blacklisted, the probe will lead to nowhere. Changes in blacklisting norms may at best let some favourites off the hook. Investigating agencies need to be invested with the capability and confidence to go after the corrupt. No policy on blacklisting can be successful unless the fear of the law is instilled in the shady and the crooked.