大象传媒

BAE's ethical lapses

• Robert Peston
• 6 May 08, 08:07 AM

didn't in the past pay sufficient attention to ethical standards in the way .

That's the frank admission made by the defence giant's chairman and chief executive - Dick Olver and Mike Turner respectively - to a panel chaired by the former Lord chief justice of England and Wales, .

It's an embarrassing admission. And it's qualitatively different from the company's normal statements that it adheres to the law when negotiating giant defence deals.

- who include the former boss of coca cola, - have made 23 recommendations to ensure BAE does not come up ethically short in future

They include a requirement to draft and publish a code of business conduct. Other proposed measures include the creation of registers for gifts given to clients and much greater scrutiny of the shadowy advisers and fixers who facilitate big defence deals.

In the past, pragmatism has trumped principle in the defence industry. There has been a consensus among industrialists, politicians and Whitehall officials that defence companies can't be cleaner than clean if they want to win the biggest contracts and promote employment.

Lord Woolf has said that business won in a fog of dubious practices is business that's not worth having.

Since BAE has committed to implement Woolf's measures, there'll now be a very real test of whether commercial success and ethical conduct can be bedfellows.

So the implications for BAE are serious indeed. But there are also implications for all big British multinationals.

What Woolf proposes for BAE goes much further than what most companies do to ensure that they don't stray into the moral darkside. Is there any sensible reason why reforms that are right for BAE shouldn't apply to the rest of British industry?

As for the stench that hung over BAE's 拢40bn Al-Yamamah deal with Saudi Arabia, Woolf's report contains no material views or information. However he has reviewed its successor contract, the "Salam Project" between the UK and Saudi to supply Typhoon combat aircraft, which is worth many billions of pounds.

Lord Woolf says that "security obligations" prevented access to some relevant documentation. But on the basis of the commercial details provided to him, he feels that "the contract should not in itself create any risk of unethical conduct".

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