Defence Ministry okays new blacklisting policy

Ajay Banerjee

Tribune News Service

New Delhi, November 7

The Ministry of Defence on Monday approved a new ‘blacklisting’ policy that will tackle corruption in defence deals and having a method to deal with foreign companies who pay bribes.

The Defence Acquisition Council (DAC) that met under the chairmanship of Defence Minister Manohar Parrikar okayed the new policy.

Its details shall be put out on the website of the MoD in a few days.

Sources said the MoD has decided to do away with having a system of ‘blanket blacklisting’.

The Tribune had reported details of this on October 26 on how the ‘blacklisting’ policy has been okayed. The DAC is the apex decision-making body of the MoD.

The new policy will have a pointed product-specific ban, aimed at punishing the corrupt among the foreign suppliers and not hold to ransom the country’s military and defence needs.

The new policy envisages that a person of a foreign company, if found to be indulging in corruption will not be allowed to deal in another case of the company’s subsidiary, sources said.

During the tenure of the Congress-led UPA (from May 2004 to May 2014), a ‘blanket blacklisting’ was followed and several new procurements are held up.

The MoD has decided to do away with ‘blanket blacklisting’ of foreign companies that were found guilty of offering bribes, a top official in the MoD told the Tribune.

‘Blacklisting’ a firm may not be a good option as it just forecloses options for India. There are no more than 4-5 equipment makers who are largely integrators of specialised parts produced by niche companies.

A sub-committee formed by the MoD will issue guidelines on the extent of blacklisting, its tenure and what all will be the procedure.

In 2015 a committee headed by former Union Home Secretary Dhirendra Singh, after talking suggestions, submitted a report on Defence Procurement Procedure (DPP) and suggested that misdeeds of an entity or its employees should not be visited on the equipment or system.

In August 2014, just months after the Narendra Modi government took over the MoD informally decided that ‘blanket bans’ will not help and now this has been firmed up in way of a policy.

The MoD banned the Bofors artillery gun in the late 1980s. Since then, there has been no artillery gun purchase. In 2013, the purchase of AgustaWestland helicopters was stopped midway. In both cases, suspected bribery charges emerged.