Rheinmetall, one of Germany’s biggest arms manufacturers, has seen its profits and margins rise quite substantially in the past year. Why? Rheinmetall managed to circumvent German law to export arms into conflict areas legally. However, the practice of exporting arms is not the end, but just the beginning of the company’s devious scheme to aid the most shocking conflicts on earth for profit. Rheinmetall uses its majorly owned joint venture in South Africa to export complete weapon factories to conflict areas to do with as they please.
Like our previous report on Rheinmetall’s business practices to circumvent and act independently of German law, prohibiting certain arms deals, this article is also based on the investigation of German national broadcast Das Erste in their documentary released in January 2018. It uncovered how Rheinmetall uses its subsidiary RMW Italia to export bombs to Saudi Arabia and the United Arab Emirates from Sardina without much opposition from either the German or Italian government. However, the company also exports complete manufacturing solutions, meaning entire plants to manufacture ammunition, into the same conflict areas.
Rheinmetall: Arms Trade Evolved
What’s scarier than arms exports into conflict areas? Giving them the means to just do it themselves unregulated. RDM (Rheinmetall Denel Munition) just outside the South African capital Cape Town does exactly that. The company is a joint venture of Rheinmetall (51%) and South African-owned company Denel (49%) manufacturing several kinds of ammunition and exporting said complete weapon solutions to the world.
This is a business practice that surely would not have been tolerated by either Italian or German government, however, Rheinmetall found the right environment to pursue this particular opportunity in South Africa, a country with a strong arms industry and notable corruption under President Jacob Zuma. Denel itself, which is part of RDM, has been in the spotlight of a controversy as Jacob Zuma apparently enabled private investors to profit from state companies such as Denel in recent years.
According to the information of the Das Erste, RDM successfully exported a whole ammunition manufacturing plant from South Africa to Saudi Arabia in 2016, without much of a public outcry, neither in South Africa or anywhere else in the world. Unsurprisingly, President Jacob Zuma even attended the official opening ceremony of the plant in Saudi Arabia.
Dangerous Implications in the Arms Trade
Rheinmetall doesn’t talk about who or where their customers are, but the fact is that RDM successfully exported 39 ammunition manufacturing plants outside of South Africa. The only places the Das Erste could pinpoint were Saudi Arabia, United Arab Emirates, and Egypt, all of which are in some way affiliated with the conflict in Yemen as well as several other conflicts in the region. The implications of this practices are enormous.
With the sale and export of the manufacturing plants, they become companies in the respective countries, losing all external oversight. This means that, from the point of delivery, nations like Saudi Arabia, that are already responsible for hundreds of airstrikes in Yemen, get more independence to produce their own ammunition in a similar quality as they would have previously imported. Except those imports are easier to track. As soon as they are manufactured by their own factories inside their countries, there is even less we can do to regulate nations that have provenly violated human rights in multiple ways from accessing ammunition and weapons.
No One Seems to Care
Rheinmetall has not yet faced much of a backlash for this, mainly because many people either don’t know or don’t care that one of the biggest arms company in their nation profits from highly questionable business practices and death of innocent people. It taps into and supports South African corruption by cooperating with Denel while all everyone seems to care about is profit and jobs for the economy. Rheinmetall currently plans to expand its business in South Africa and Italy alike to further push profits without regards to the “annoying regulations” imposed by its own government.
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