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France profits from lucrative Saudi maintenance contracts, repairing ships that ensure Yemeni children starve.


Mohannad Ali, aged 5, lies on hospital bed in Abs, Yemen. (Photo: Unicef)

Eva Thiebaud and Thomas Clerget
Mediapart

I’ve been sent to Jeddah in recent years to work on the Saudi navy’s frigates,” says Guillaume, an engineer who has spent several months in all in the country’s main port city, on the shores of the Red Sea. “It’s a strange life. You divide your time between a luxurious compound with a pool, traffic jams and working on the dockyard where you renovate warships.”

Another technician, Quentin, has also worked on the site repairing French-made ships which were sold to the Saudi military years ago. “Many things in Saudi Arabia are quite shocking,” he says. “Money flows … particularly to renovate these ships, which were in a deplorable state.”

Guillaume and Quentin – not their real names – are far from being the only ones who have gone through this experience. An investigation by Mediapart has revealed the scale of involvement of French firms– some of whom belong to the country’s largest groups – in repairing ships and equipment belonging to the Royal Saudi Naval Forces, whose ships are involved in the blockade of Yemen as part of the ongoing bloody conflict there. Though it is the sale of arms and weapons that makes the headlines, maintenance contacts are generally more discreet while being just as lucrative.

Like dozens of expatriates since 2014, these two men have been looking after warships that have been damaged by the passage of time and a lack of maintenance. Their work has been carried out in a purpose-built area in the military port at Jeddah. The dockyard has two dry docks for working on the ships, offices for the engineers and administrative staff, workshops, and warehouses to stockpile equipment. The works are being overseen by Naval Group – formerly DCNS – the leading French defence firm that both builds and maintains military craft and which is 62.5% owned by the French state.

It was back in 2013, before the Yemen war, that this group – which has 13,000 staff and an annual turnover of 3.6 billion euros – landed this deal to renovate a part of the Saudi fleet. The four frigates and two refuelling vessels – which also double up as command ships – involved had been delivered to Riyadh in the middle of the 1980s under the so-called Sawari I deal, and were ageing fast. Under the maintenance contract – called ‘Lex’ as in ‘life extension’ – the aim is to return them to their original state. “It’s a complete overhaul of the vessel,” says Guillaume. “The ship is completely gutted, then all the equipment is changed – the propulsion system, the machines, the weaponry…”

When the contract was signed the CEO of Naval Group at the time, Patrick Boissier, spoke to the French National Assembly’s defence committee of a “contract for the renovation of frigates for 750 million euros”. The newspaper La Tribune, adding in the involvement of other defence contractors such as Thales and MBDA, estimated the entire deal was worth around a billion euros. “The first contract agreed with this country since the one for multi-role refuelling aircraft in 2007,” crowed the entourage of the then-defence minister Jean-Yves Le Drian in Le Monde.

In a parallel deal the Saudi government also signed a contract for less intensive “modernisation” work on three frigates of a later generation that are still used by the French navy. These so-called ‘stealth’ frigates were delivered at the start of the 2000s under what was called the Sawari II contract. That deal has since hit the headlines for other reasons; it is said to have involved 3.2 billion francs (487 million euros) in hidden commissions which went to Saudi dignitaries and part of which is said to have ended up funding the presidential campaign of French prime minister Édouard Balladur in 1995. In 2017 Balladur was placed under formal investigation – one step short of charge being brought – for alleged complicity in the misuse of public money. (Read the background to the allegations here.)

But whether it involves a full-scale overhaul, modernisation or even simply keeping the ships in operational readiness, the maintenance of vessels plays an essential role in the waging of any war. “Maintenance is central to war,” says Aymeric Elluin, advocacy officer at Amnesty International. “That’s true too of training, technical assistance, exercises … everything that an army needs to uses its weapons.” Tony Fortin, policy officer at the independent armaments watchdog the Observatoire des Armements, says: “The technology has become very specialist, with the electronics and the programming. You need engineers to make it work and adapt it to an area or a given client.”

These maintenance deals also have an economic importance that goes beyond their own monetary value. “As they’re contracted over several years they’re of interest because they guarantee visibility for the companies,” says Guillaume. Tony Fortin adds: “Maintenance allows you to sell contracts over the long term and to maintain strong links with clients.”

The Naval Group renovation and modernisation contracts, which involve nine ships in all, have thus guaranteed several years of work for the companies involved. Once the deals were signed, things moved quickly on the ground. From 2014, the very time when the Yemen conflict was beginning to develop, initial work began at the port. The dockyard infrastructure was put in place between 2015 and the spring of 2016, with several French companies involved.

To help carry out its task Naval Group used a range of sub-contractors who are highly-experienced in maintaining and renovating military vessels. These contracts can be worth millions to the sub-contractors. They included Endel Engie, a subsidiary of Engie (the huge French utility company previously known as GDF Suez), who are specialists in general mechanical work, pipework and sheet metalwork. Mediapart understands that the company’s involvement was sidelined in 2018 but in the meantime it had set up an enterprise on the site called Endel Saudi Naval Maintenance

A French-supplied frigate hit by exploding speedboat off Yemen

Mediapart has learnt that subsidiaries of a second major French group, Vinci Energies, are also involved in the repair work in Saudi Arabia. One is Cegelec Défense et Naval Sud-Est, based at Toulon on the French Mediterranean coast, who are specialists in electrical work, instrumentation and also pipework and sheet metalwork. This major service provider is operating with the support of a company that is often involved in work in Saudi Arabia, Cegelec Saudi. The other Vinci subsidiary is Braillec Marine, based at Concarneau in Brittany in western France, and which specialises in electrical work, electronics and marine robotics. The French defence and aerospace group Thales, which has a 35% stake in Naval Group, and missiles systems group MBDA are involved with the ships’ weapons systems.

Other companies involved are less well known to the general public; these include SNEFCimat-Sartec and Sud Moteurs. Finally, some local sub-contractors use Pakistani, Afghan, Ethiopian and Malaysian workers to carry out much of the labouring. According to Mediapart’s information several hundred people work at the site, in offices and on the vessels themselves.

The modernisation work on the frigates has apparently already been completed. As for the oldest ships, the frigate Taïf and refuelling vessel Yunbu, they have been completely overhauled in the dry dock though only now is the work on them being completed – roughly a year-and-a-half behind schedule. Another frigate and refuelling ship,  Abhaand Boraida, are now due in dry docks, with work on them due to finish by the end of 2019. Naval Group has independently confirmed to Mediapart that the ‘Lex’ contract to extend the lives of Saudi naval vessels is still ongoing.

Once they are renovated the naval vessels may well pass each other on their way to the coast of Yemen. For Saudi Arabia, which is at the head of a coalition of Arab states, has been involved militarily in Yemen since March 2015 in a bid to halt the Houthi rebel movement, who by early 2015 had taken control of the Yemeni capital Sanaʽa. It has been a bloody war; according to the non-governmental organisation ACTED, some 62,000 have died in the fighting since 2016. But the humanitarian crisis is also claiming lives. The United Nations has issued many dire warnings about the situation in Yemen, where it says famine is threatening millions of civilians.

According to the UN this threat is caused in particular by restrictions imposed on maritime access to the country, which has hampered the flow of food supplies. In November 2017 the coalition decided to close all Yemeni ports. This blockade was relaxed after several weeks and permission was given for some cargo ships to dock. Since then the entrance to the Red Sea port of Hodeida, which is held by Houthis, has been closely monitored by the coalition’s ships.

The coalition justifies such measures by pointing to the need to stop potential arms deliveries from Iran. As well as keeping watch on the ports the coalition’s ships intercept anything that might resemble an arms shipment. According to a 2016 report by the UK-based investigative organisation Conflict Armament Research, several sailing vessels carrying rifles and missiles have been discovered. A number of fishermen have also perished as a result of this strategy. An article published by The New York Times in December 2018 gave details of six attacks carried out by coalition ships, helicopters and fighter jets in August and September last year which killed around 50 Yemeni fishermen.

The Houthis, meanwhile, have tried to counter the coalition ships by laying sea mines and through the use of ‘suicide boats’. In January 2017 the ship Madinah, one of the frigates provided by France in the 1980s, was patrolling to the west of Hodeida when it was hit by one of three speedboats packed with explosives that had been launched from the coast. The Saudi authorities said the attack killed two sailors and injured three more. The damaged frigate managed to make its way back to Jeddah and will now be used for spare parts for other ships in the fleet.

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The incident was a public demonstration of Saudi’s naval presence in the area. This could potentially have legal consequences for  French businesses working on warships in Jeddah. “Since 2015 it is common knowledge that violations of international humanitarian law, potentially constituting war crimes, have been committed by the Arab coalition in Yemen,” says lawyer Helène Legeay, a consultant specialising in disputes over war crimes and arms sales. “If, despite this risk, a company continues to deliver arms, or indeed to carry out the maintenance of arms used to commit violations, then complicity in a war crime is clear,” she says.The Observatoire des Armements and Amnesty International are campaigning in France for these maintenance contracts to be suspended. “One can indeed stop the maintenance of these arms from continuing. Even after it has been agreed, an export licence can be withdrawn,” points out Amnesty’s Aymeric Elluin. In addition to the suspension of the Saudi contracts, the NGOs are calling for real Parliamentary scrutiny of the French government’s actions over the sale and maintenance of arms and equipment.

Some Members of Parliament also support this stance. One is Sébastien Nadot, formerly of the ruling La République en Marche party, who helped set up a Parliamentary fact-finding mission on the issue at the end of October 2018, in the absence of a committee of inquiry. Members of the European Parliament also called last year for an embargo on arms sales from EU countries to Saudi Arabia. “This resolution was voted on several times and by more than 500 Euro MPs,” says Sébastien Nadot. He has himself lodged a formal complaint with the European Commission on the grounds that, he says, “under international treaties, arms sales to Saudi Arabia and the United Arab Emirates are currently illegal”.

Could the Saudis one day be able to produce these arms themselves?

When Mediapart asked the subcontractors in Jeddah about the issue of legality, they either sidestepped the issue or did not reply. Their contractor Naval Group, meanwhile, pointed out that they had been granted an export licence by the French government – while the government itself did not wish to respond to questions on the subject.

In fact, Naval Group’s practices are diametrically opposed to what the NGOs want to see; the French group has a strategy of integrating itself locally, which itself is a response to a Saudi policy of seeking to develop partnerships. The Saudi Crown Prince and defence minister Mohammad bin Salman, or MBS as he is often known, recently launched Vision 2030, a programme whose aim is to diversify an economy which is still deeply dependent on oil revenue. The development of the capacity to produce within Saudi Arabia itself has thus become a national priority, especially when it comes to armaments.

The Saudi monarchy is therefore keen to push joint ventures between Saudi and foreign groups. When it came to renovating the frigates Naval Group, via its local subsidiary DCNS Support KSA, worked closely from the outset with the Saudi firm Zamil Offshore, part of the powerful Zamil group. In December 2015 this partnership was further strengthened with the setting up of a co-enterprise called Zamil Naval which, Mediapart understands, employs around 150 people. According to Naval Group’s 2017 financial report, 55% of this company is owned by the French group and 45% by Zamil. “Joint ventures seek to favour the transfer of technologies and skills,” says Aymeric Elluin. “That is part of the deal – contracts are signed but on condition that joint companies are set up.”

Does this mean that Saudi Arabia might one day soon be able to produce its own high-tech systems and ships, such as the modern French frigates? The French technicians based in Jeddah are not convinced. They think that Saudi skills are still not good enough. Guillaume and Quentin were both astonished by the “deplorable state” the ships were in when they arrived. “Some equipment hadn’t worked for years. There were cats on board that were pissing everywhere,” says Guillaume. Quentin notes that the workers are often “foreigners who stay a few years in the kingdom just to earn some money and then leave”. This slows down the passing on of technical skills to Saudi staff.

The NGOs broadly share this view though they do have some concerns. “The transfer of technology takes time,” agrees Tony Fortin from the Observatoire des Armements. “For the moment Saudi Arabia has little autonomy in relation to the maintenance of armaments.” Amnesty’s Aymeric Elluin confirms: “The country remains very dependent on foreign businesses.” However, he adds: “But by putting in the resources, who’s to say that in time they won’t be capable of producing these armaments themselves, and to re-export them in their turn?” Lucie Béraud-Sudreau, a research fellow in defence economics and procurement at the British think tank the International Institute for Strategic Studies, says: “We must take into consideration the long-term stability of our partnerships with these countries.”

Such questions take on more importance given the speed at which events are moving on the Saudi side. As Mediapart recently revealed, Naval Group is sparing no effort to firm up the sale of five Gowind corvettes to the kingdom. The deal moved a step closer recently at the IDEX arms fair held in Abu Dhabi from February 17th to 21st (see poster above), when the military industrial group Saudi Arabian Military Industries (SAMI), which is central to the kingdom’s armaments partnerships strategy, announced the signing of a ‘strategic agreement’ with Naval Group which foreshadows the creation of a new co-enterprise.

According to Reuters, SAMI chief executive Andreas Schwer said: “Through design, construction, and maintenance activities the joint venture will contribute significantly to further enhance the capabilities and readiness of the Royal Saudi Naval Forces.” The contract is being seen as a prelude to the construction of new French frigates and corvettes in Saudi Arabia. Naval Group did not deny this when questioned by Mediapart but did not want to make a detailed comment. “The creation of a joint venture is part of the development strategy of Naval Group internationally,” the group said.

Nor is the export of the French group’s know-how restricted to Saudi Arabia. In its 2017 annual report Naval Group said it was undertaking industrial projects for “clients based on five continents – in particular in Brazil, India, Malaysia, Saudi Arabia, Egypt and now in Australia”. On the website of the Emirates-based newspaper The National on February 17th this year, the group’s CEO Hervé Guillou announced the completion of a new agreement with the United Arab Emirates to sell it two corvettes with the “gradual transfer of technology”.

When questioned by Mediapart Naval Group justified its strategy by pointing to the budgetary choices that the French state had made. “The National Navy makes up the core of our activities with two thirds of national orders. Nonetheless, the law on military project [spending] is not enough to guarantee the permanence existence of the French industrial and technological base in the domain of the navy. Faced with this change, internationalisation is a requirement,” it said.

“It is indeed necessary to work on exports,” says research fellow Lucie Béraud-Sudreau. “But does one have to make it a priority to countries whose behaviour appears to be in violation of human rights? One most also pose the question as to the economic dependence that these relationships can lead to.”

At what cost are French companies seeking to win overseas markets? Though such an approach may be successful financially – as the Naval Group’s excellent results in 2018 show – the impact of such a policy in other domains remains to be seen.

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Cover image: A severely malnourished boy rests on a hospital bed at the Aslam Health Center, Hajjah, Yemen, Oct. 1, 2018. ( Photo: Hani Mohammed)

The French version of this report can be found here.

If you have information of public interest you would like to pass on to Mediapart for investigation you can contact us at this email address: [email protected]. If you wish to send us documents for our scrutiny via our highly secure platform please go to https://www.frenchleaks.fr/ which is presented in both English and French.

READ MORE YEMEN NEWS AT: 21st Century Wire Yemen Files

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