Earlier this year the ABC revealed disquiet in the defence industry sector over the Australian government's apparent reluctance to approve exports of locally made military equipment to Israel since the beginning of the Gaza war. But apparently this concern does not extend when it's Australia acquiring military equipment from Israel.
An Israeli company whose technology was stripped from Australian Army equipment over possible data security concerns three years ago has been awarded a fresh defence contract worth $917 million.
Elbit Systems has confirmed it will provide "advanced protection, fighting capabilities and sensors" for new Korean-designed Infantry Fighting Vehicles (IFVs) being constructed in the Victorian electorate of Defence Minister Richard Marles.
In July last year, South Korean company Hanwha clinched the approximately $10 billion LAND 400 Phase 3 Project to deliver 129 of its Redback IFVs to the Army, beating a rival bid from German company Rheinmetall.
Originally Hanwha had partnered with Canberra-based defence company Electro Optic Systems (EOS) to produce a high-tech turret for its IFV, but the arrangement was broken off in favour of a joint venture struck with Elbit Systems in June 2022.
In a statement issued from its headquarters in the city of Haifa, Elbit Systems stated it had been "awarded a contract worth approximately $600 million [in US dollars, or $917 million] to supply systems to Hanwha Defence Australia for the Australian LAND 400 Phase 3 Project".
"This project aims to deliver advanced protection, fighting capabilities and sensors suite to the Redback Infantry Fighting Vehicles (IFV) for the Australian Army", the company said, while revealing the contract would be performed "over a period of five years".
"This milestone reaffirms our commitment to delivering advanced, mission-critical solutions to the Australian Army," Elbit Systems President and CEO Bezhalel (Butzi) Machlis said.
"Elbit Systems is dedicated to supplying cutting-edge defence technologies that will safeguard troops on the modern battlefield," Mr Machlis added in the brief company statement issued this week.
The company has not publicly disclosed where Elbit System's advanced turret systems will be produced and assembled but sources inside the LAND 400 Phase 3 program insist the plan is to do "most of the work in Australia".
In 2021 the ABC revealed army headquarters had issued a directive ordering a "cease use" of another Elbit product, the BMS Command and Control (BMS-C2) in favour of an interim Danish system that remains in use today.
At the time Elbit Systems "strongly denied" security rumours about its BMS product after military sources suggested concerns about the technology possibly compromising sensitive data had triggered a directive that it "not be configured or accessed" on certain Army systems.
A Defence Department spokesperson insists it "works closely with industry partners to ensure that all contractual obligations, including security requirements, are met".
A. Elbit Systems Ltd. ("Elbit Systems") is an Israeli corporation, 45.75% owned by the Federmann Group. Elbit Systems' shares are traded on the Nasdaq National Market in the United States ("Nasdaq") and on the Tel Aviv Stock Exchange ("TASE").
Elbit supplies hundreds of products to Israel's Defence Ministry, including unmanned aerial vehicles (UAVs), artillery, munitions and electronic warfare systems. Elbit Systems has ramped up its production in support of the Israel MOD and Israel's security forces. Elbit Systems had a record-breaking year in 2023, echoing the broader defense sector's surge in demand for weaponry following the Russia-Ukraine conflict. The company's order backlog hit an impressive $16.6 billion, indicating potential for even higher records in the coming year. Elbit's annual sales revenue for 2023 was around $5.5 billion.
Elbit Systems came under scrutiny primarily due to its status as the largest arms producer in Israel. Palestine Action campaign proved that the company supplies at least 85% of the drones used by the Israeli occupation army, along with other equipment and weapons used against Palestinians. At its subsidiary factories in the United Kingdom and the United States, the company has faced protests for its support of the Israeli military in the ongoing Israeli–Palestinian conflict. The company has also been divested from by international investment firms due to its involvement in the conflict.
On September 3, 2009, the Government Pension Fund of Norway's ethical council decided to sell the fund's stocks in Elbit due to the company's supply of surveillance systems for the Israeli West Bank barrier.[22] At a press conference to announce the decision, Minister of Finance Kristin Halvorsen said "We do not wish to fund companies that so directly contribute to violations of international humanitarian law".[23] The Norwegian Ambassador to Israel, Hans Jacob Biørn Lian, was called to a meeting at the Israeli Foreign Ministry where the decision was protested.
In January 2010, Danske Bank added Elbit to the list of companies that fail its Socially Responsible Investment policy. A bank spokesman noted that it was acting in the interests of its customers by not "placing their money in companies that violate international standards". The Danish financial watchdog DanWatch placed Elbit on its ethical blacklist in 2011. In 2014, one of Denmark's largest pension fund administrators PKA Ltd announced it will no longer consider investing in Elbit, stating "The ICJ stated that the barrier only serves military purposes and violates Palestinian human rights. Therefore we have looked at whether companies produce custom-designed products to the wall and thus has a particular involvement in repressive activities."
In March 2010, a Swedish pension fund, not wanting to be associated with companies violating international treaties, boycotted Elbit Systems for its involvement in the construction of Israel's West Bank barrier wall.
In December 2018, HSBC divested from Elbit following Elbit's acquisition of IMI Systems. HSBC cited IMI's manufacturing of cluster bombs, which violated the bank's ethics policy of not investing in companies linked to the manufacturing or marketing of cluster munition.
In 2019, Axa partially disinvested from Elbit Systems following pressure from the Boycott, Divestment and Sanctions movement.The move followed several years of campaigning by NGOs, including an April 2018 petition launched by SumOfUs that received 140,000 signatures. Axa "quietly reduce[d]" its investments in Elbit and Israeli banks.
In April 2021, the Australian Army announced that Elbit's battlefield management system would be withdrawn from use with short notice, effective May 15, 2021. The Australian Broadcasting Corporation reported that this was due to concerns regarding the Elbit system's security. An Australian Financial Review columnist stated that the security problems comprised "a 'backdoor' security vulnerability reportedly uncovered by the Australian Signals Directorate". The Australian Defence Magazine reported that the system had failed two security milestones in 2020.
In response to the 2023 Israel–Hamas war, protesters chained themselves to the entrance of Elbit's office in Cambridge, Massachusetts, on October 12.Later that month, protesters from Palestine Action US claimed to have completely shut down the company's operations in an incident resulting in nine arrests. In November at an Elbit location in Merrimack, New Hampshire, three protesters were arrested for vandalism. According to an NBC News report, the "Merrimack Fire Department was also called to the scene due to a report of smoke coming from the roof [...] at least one of the main lobby doors had been locked shut with a bicycle lock."
"First genocide in history where its victims are broadcasting their own destruction in real time, and in vain hope that the world might do something: (Blinne Ní Ghrálaigh, The Hague, International Court of Justice (ICJ). Jan 11, 2024.)
On February 5, Japanese trading giant Itochu Corp’s aviation arm announced it was suspending all work with Elbit under a Memorandum of Understanding (MOU) signed in 2023. “Taking into consideration the International Court of Justice’s order on January 26, and that the Japanese government supports the role of the court, we have already suspended new activities related to the MOU, and plan to end the MOU by the end of February,” the company said.
- Elbit was also on the Future Fund’s list of excluded investments due to its production of illegal cluster munitions. (The company was removed from the excluded list last year.)
- The company has also in the past manufactured white phosphorus munitions
- Israeli newspaper Haaretz has also reported Elbit Systems gave weapons to Myanmar’s military regime in 2022, despite the Netanyahu government claiming Israel had ceased providing weapons in 2018. That means Elbit was providing weapons while the junta was murdering more than 1,500 people, including 100 children, in a brutal crackdown that, according to Human Rights Watch, involved: "Mass killings, torture, sexual violence, arbitrary arrests, and other abuses against protesters, journalists, lawyers, health workers and political opposition members amounting to crimes against humanity. Military attacks in the country’s northwest and southeast have resulted in numerous war crimes."
- Elbit’s weapons have been extensively used by the IDF against Palestinians, with Israel advertising its weapons systems with footage of how they have been tested on Palestinians. Elbit products include surveillance systems, including equipment to prevent the movement of Palestinians between Jerusalem and the West Bank, attack and surveillance drones, so-called “smart” bombs and combat systems. The company is also currently involved in the forced displacement of thousands of Arab Bedouin Israeli citizens to accommodate its manufacturing plants.
But all of that doesn't stop pro-Israeli Australian Defence Minister Marles boosting his own electorate by awarding nearly $1billion Australian taxpayer funds to that rum lot. Elbit systems advertises their weapons as ‘battlefield tested’ on Palestinians. So much for Aust Govt’s ethical procurement process… literally giving our tax dollars to genocidal war profiteers!
Elbit Systems’ share price has gone up. The Future Fund has made a profit on its investment in Elbit Systems. Elbit supplies the IDF with bombs to kill civilians in Gaza. The beneficiaries of the Future Fund are retired and existing politicians and public servants. Ergo they are benefitting from war crimes.
The Future Fund responses to a media query about investment on Elbit included the following comment:
“The Future Fund has a clear framework for exclusions published on its website and does not invest in companies on its exclusions list. While Elbit had previously been excluded from the portfolio, it was removed from the exclusions list in April 2023 based on our regular review process and consideration of expert third party advice. The Board has its own investment strategy and ESG policy and operates independently of government."
In total, the Future Fund has more than $650M invested in 30 companies in the ‘Aerospace and Defence’ category as of October 31, 2023.
This includes $71.3M in Lockheed Martin, manufacturer of the F-35 fighter jets that Israel uses in the bombing of Gaza, and other weapons of mass destruction, such as sophisticated missile guiding technology.
The Future Fund’s investments in the weapons sector also include $43M in Northrop Grumman Corp, which produces a range of gadgets for killing people, such as artillery and mortar systems and battle tanks.
On the list is also $3.5M in Thales, a manufacturer of assault rifles, as well as sophisticated surveillance and weapons control systems, and well known to MWM readers as sponsors of ASPI.
The second largest investment ($72.4M) in the Future Fund’s weapons company portfolio is RTX Corporation (formerly Raytheon), which produces Patriot Missiles used by the Israel Defence Force.
The documents show the Future Fund has direct holdings in 30 weapons and aerospace companies including Thales, Lockheed Martin and BAE Systems.
Remarkably the Fund’s board has invested nearly half a million dollars into the Israel-based Elbit Systems despite the Future Fund being banned from investing in Elbit System since at least 2021 due to ‘exclusions related to military weapons-related Conventions or Treaties ratified by Australia’.
Lines attributable to Greens Defence Spokesperson, Senator David Shoebridge:
“The Albanese Government needs to introduce mandatory ethical investment rules for the Future Fund and that must absolutely include a prohibition on investing in weapon manufacturers.
“Elbit Systems is meant to be excluded from the Future Fund’s investment choices because of exclusions related to military weapons-related Conventions and Treaties ratified by Australia.
“The Future Fund's board needs to explain how it continues to invest in Elbit Systems despite the publicly announced direction it gave to withdraw those funds because of Australia’s international legal obligations.
“Elbit Systems is also deeply implicated in the current destruction in Gaza where a suite of its weapons are deployed from artillery pieces to drones.
“The majority of Australians want peace and justice, not just in Palestine, but around the world, yet the country's wealth is instead being funnelled into companies that fuel violence.
“The Future Fund is meant to benefit future generations. That rings very hollow when they are investing in companies making equipment that ends future generations."
Lines attributable to Greens Finance spokesperson, Senator Barbara Pocock:
“We’ve been looking at some of the investments the Future Fund has been making through an ethical lens and found some very questionable products including fossil fuel ventures, gambling and now this, weapons manufacturing that could be contributing to the deaths of innocent civilians.
“I think many Australians would be deeply distressed to find out that our sovereign wealth fund, our money, is being used in a variety of ways that conflict with basic moral and ethical principles.
“We need to review the investment guidelines that govern the Future Fund and put some restrictions in place so that Australians can live with a clear conscience, knowing that our investments are making the world a better place and not the opposite.”
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