The ethical procurement of air cargo services

The use of businesses connected to armed groups and trafficking networks to transport humanitarian aid is a problem long privately acknowledged by aid workers in complex political emergencies and disaster relief operations. Until recently, it was largely seen as one of the inevitable compromises that have to be made in order to get aid through in high-risk conflict and disaster zones where few reputable commercial companies are prepared to venture. However, new draft procurement guidelines[1] published by the Humanitarian Aid department of the European Commission (ECHO) call for greater due diligence in contracting transport services. The ECHO guidelines focus particular attention on humanitarian air transport, often one of the largest single budget line items in aid operations.

EthicalCargo

The ECHO procurement guidelines cite EthicalCargo as a resource for addressing this important although under-discussed issue. EthicalCargo (see www.ethicalcargo.org) is a new project providing a ‘one-stop-shop’ to support humanitarian and peacekeeping actors make informed risk assessments when procuring air cargo services. Funded by ECHO and the Swedish International Development and Cooperation Agency (SIDA), the aim of the project is to reduce humanitarian agencies’ exposure to logistics and transport companies involved in illicit activities.

Run by former aid workers, the project recognises the humanitarian imperative – getting aid to those who need it most – while providing online tools and telephone hotline support to allow organisations to adopt a ‘transformative strategy’ when the only available transporter is a company with links to destabilising commodity flows.[2]As such, EthicalCargo does not recommend banning or blacklisting companies, but offers humanitarian organisations practical negotiation techniques which can influence the behaviour of air cargo companies that stand to gain more from humanitarian aid or peacekeeping contracts than they do from the occasional shipment of weapons to armed groups. Decision-making is supported by online databases and alerts to members (membership is free for humanitarian agencies), as well as sample procurement policies. Conflict-sensitive logistics is one way of implementing the Humanitarian Charter in practice, so that the provision of assistance does not ‘render civilians more vulnerable to attack, or … bring unintended advantage to one or more of the warring parties’.[3]

Air transport and destabilising commodities

Air transport plays a key role in illicit arms transfers and destabilising commodity movements such as narcotics and other valuable raw materials. The fact that the major African conflicts of the last 20 years have occurred in countries that are landlocked and have poor road networks means that transporting arms and minerals by air is often the only practical option.

Since the emergence of commercial air cargo companies using former Soviet aircraft following the end of the Cold War, non-governmental transport providers in Africa have become a focus for UN investigations and campaigning organisations such as Amnesty International. Media attention has focused on Viktor Bout, the so-called ‘Merchant of Death’ and inspiration for the Hollywood film Lord of War. Bout now faces trial in the US on arms-trafficking charges.

Air transport represents the ‘choke point’ for the trade in destabilising commodities: it is where arms-traffickers and narcotics cartels come to the surface, as all aircraft transporting such destabilising commodities have to be registered to individuals and companies with names, addresses and bank accounts. Air cargo companies all require an Air Operating Certificate; their planes have to be registered and insured, and are subject to safety checks by civil aviation authorities. That said, companies seek to avoid scrutiny. Falsified cargo details and the use of front companies for leasing or chartering planes are common attempts to hide the identities of those involved. Uncovering the links requires expert research.

“Gap-filling” customers

In May 2009 the Stockholm International Peace Research Institute (SIPRI) published a Policy Paper entitled Air Transport and Destabilizing Commodity Flows. The paper looked not only at the important role of commercial transport actors in arms-trafficking, but also their involvement in the full spectrum of destabilising commodities, their connections to humanitarian and peacekeeping organisations and the effect of European Union safety bans on their business operations.

The study revealed that ‘90% of all air cargo companies named in United Nations and other arms trafficking-related reports have been documented as also providing services for humanitarian aid and peace support operations between 2003–2009’.[4] This will not have come as a surprise to many. Air cargo operators display a willingness to operate in conflict zones; use rear-loading aircraft that can land on bush airstrips; and are willing to bend the rules to meet tight deadlines. These are all attributes sought both by humanitarian organisations and those transporting destabilising commodities.

Although humanitarian organisations are small (and unpredictable) customers for many of these companies, especially compared to the air-freight costs of peacekeeping operations, they are often important ‘gap fillers’. Once a company has flown to a conflict-affected area on other commercial business, humanitarian organisations are one of the few other customers available.

Tough contexts and negative consequences

In conflict-affected countries air cargo options for humanitarian organisations are often limited. Air cargo services in the Democratic republic of Congo (DRC), with its weak aviation control and largely unregulated export of conflict minerals, have been mostly supplied by companies with extremely poor safety records. They have also been implicated in arms-trafficking. In Sudan, strong government influence in the aviation industry has meant that UN agencies, peacekeeping forces and NGOs have had to use the services of operators documented by the UN as violating the arms embargo on Darfur.

While some cargo is moved by specialist humanitarian air transport services such as the UN Humanitarian Air Service (UNHAS) or ECHO Flight, a great deal is moved by the commercial sector. Initiatives such as joint safety audits of commercial operators are already in place in the field – adapting these to include ethical criteria would be a simple and effective way to minimise risk.

The contracting of suspect air cargo operators raises a series of issues.

• Humanitarian principles. Different organisations are signed up to a range of humanitarian standards, codes of conduct and commitments to accountability, the cornerstone of which is often impartiality and neutrality.
• Protection. A ‘Do No Harm’ approach to programming in practice means avoiding contributing financially to actors that facilitate or fuel conflict that endangers civilians.
• Arms control initiatives. Many organisations support initiatives related to weapons control.
• Accountability to donors. Both institutional and private donors expect their money to be used responsibly, and expect agencies to do everything they can to minimise corruption and any negative impacts of interventions.
• Safety. Cargo carriers involved in destabilising commodity flows often have very poor safety records, putting agency personnel and goods at risk.

The problem of limited information

While the contracting of suspect air cargo operators in some cases is due to the restrictive contexts described above, in other cases it is simply the result of limited information during decision-making. This is due to assumptions around the way that air charter companies (brokers) work, and a lack of specialist knowledge of the complicated ownership networks governing cargo operators, particularly when an agency organises its own charter flight directly.

Using a broker – a company that acts like a travel agent for the client, dealing directly with the air cargo operators – is a common way for humanitarian organisations, including their donors, to arrange for the transportation of relief items by air. While it makes sense to entrust such experts with the complicated details of chartering aircraft, it cannot be assumed that a broker will propose companies to the client based primarily, or at all, on ethical considerations. This is usually because the client has not made it clear what ethical considerations are important to them – the emphasis is usually only on price and availability.

If brokers are presented with a detailed ethical procurement policy by a client it is in their business interest to respond to it. Anecdotally, brokers dealing with aviation experts within a humanitarian organisation know not to offer ‘suspect planes’, whereas NGOs with less expertise may not know the difference and may only be presented with the cheapest option.

Non-specialists

When organisations enter into direct contracts with air cargo operators, particularly in countries of operation, these contracts are not necessarily made by aviation logistics experts or with the support of head office, particularly if the cost of the transportation is below a certain financial-reporting cut-off point. It is also unrealistic to expect even experienced aviation logisticians to be up-to-date with the complicated networks behind destabilising commodity flows. In these situations fast access to information from specialists such as EthicalCargo can make a key difference.

EthicalCargo can support organisations to communicate their ethical standards to brokers and to carry out due diligence checks on the kinds of aircraft they are being offered.

Justification for donors

One concern raised during EthicalCargo’s training sessions is that donors or auditors may not be prepared to accept ethical criteria as a justification for not choosing the cheapest option. Although this issue is different for different organisations, some things for procurement departments to think about include:

• The organisation is not normally under any obligation to explain to the bidder why they did not win the contract. Sensitive information can be communicated to the donor/auditor only.
• Ethical procurement policies make it clear to air transport actors that they need to satisfy high ethical standards. A bid is less likely to win if a company is unable to demonstrate convincingly that they can meet such standards. This is particularly true of large contracts with big companies.
• Open-source information is usually available to demonstrate why a certain operator would be considered high risk and did not win a contract.
• Actors involved in destabilising commodity flows typically fail to meet other standards such as safety, transparency in their business practices and environmental standards, all of which constitute less sensitive grounds for rejecting a bid.

Ethical procurement is a very practical example of an area where the Good Humanitarian Donorship (GHD) initiative could follow ECHO’s lead and establish donor guidelines and support for implementing agencies to realise GHD principles.

Facing the challenges

Different organisations have very different standpoints on ethical issues and humanitarian principles such as neutrality. As EthicalCargo does not make value judgements itself it is important that agencies take decisions based on their own criteria. This is particularly important as much arms-trafficking research is based on United Nations or European Commission investigations of sanctions violations. As these reports are the outcomes of political decisions by the Security Council, the information available is selective. Adopting EthicalCargo’s sample ethical transport procurement policy is not a condition for using its services – we want to encourage discussions within and between organisations about informed risk assessment in procurement.

Jon Fowler is the Training Manager of the EthicalCargo initiative, hosted at the Stockholm International Peace Research Institute (SIPRI). SIPRI is an independent international institute dedicated to research into conflict, armaments, arms control and disarmament. Its website is at: www.sipri.org.

[1] Available from http://ec.europa.eu/echo/files/about/actors/DRAFT_Procurement_Guidelines_Sept2010.pdf.

[2] Destabilising commodities are commodities that ’fuel, fund or facilitate conflict’, such as blood diamonds, conflict-sensitive minerals from unregulated mines, narcotics and weapons.

[3] See paragraph 2.4 of the Humanitarian Charter, Sphere, 2004.

[4] Air Transport and Destabilizing Commodity Flows, SIPRI Policy Paper 24, 2009.