Mardi 16 Juillet 2019  

N°94 - Deuxième trimestre 2011

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  M. / Mr Patrick Bellouard

OCCAR : What lessons can we draw for existing reinforced coopération ?


By Mr Patrick Bellouard
Director of the Organisation for Joint Armament
Cooperation (OCCAR)

On the 28th January 2001, the Organisation for Joint Armament Cooperation (OCCAR) obtained legal status. Ten years after, the Organisation has become a key player in armament programme management in Europe. The conference held on 1 June 2011 in Bonn, where are based the headquarters of the organisation, gave an opportunity to take stock of its achievements.

Positioning OCCAR in the provision of European defence equipment: some progress
OCCAR, an international organisation whose main mission is the management of collaborative defence programmes, was created by Germany, France, Italy and the United Kingdom 10 years ago, well before the Lisbon Treaty, in order to help the European Nations in this effort. OCCAR provides a framework for enhanced cooperation in anticipation of the Lisbon Treaty. Belgium and Spain joined the organisation respectively in 2003 and 2005.The principles were defined in 1993 (Franco-German declaration of Baden-Baden) and then included in a Convention signed by the four countries in 1998 which came into force in January 2001. The objectives of OCCAR, included in the Convention, are to improve efficiency in the field of programme management and cost reductions in armaments cooperation.
OCCAR aims in particular to develop new tools for programme management and more efficient procedures for awarding contracts, to encourage the development of transnational integrated industrial contractors, to co-ordinate armament requirements over the long term and technology investment programmes and to help to improve the competitiveness of the EDTIB and ultimately contribute to a European security and defence identity.
At this moment OCCAR manages eight collaborative programmes with a total financial commitment of Participating States of about €40 billion. If one looks at its overall performance, the ratio between OCCAR’s yearly administrative budget and yearly total budget is just over 1%, this means that OCCAR has managed to set up an extremely light structure.
After ten years of operation, development and improvement of its methods and management tools, OCCAR has become a mature organisation that is widely recognised as a centre of excellence for the management of collaborative programmes and as first choice for Nations wishing to start a new collaborative armament programme or a new phase within a programme. The extension of the responsibilities of OCCAR to the in-service support phases of the existing programmes (COBRA, TIGER, FSAF / PAAMS and soon A400M) or the management of new programmes (MUSIS, cooperative programmes between France and Britain following the Treaty recently signed...) demonstrates the confidence Nations have in OCCAR.
Confidence is built little by little, given the political, technical and financial difficulties and risks involved in these programmes. It is obvious that the Nations could further increase the benefits of cooperation through OCCAR if they would accept to enhance the empowerment of the organisation and remove a number of existing duplications between Nations and OCCAR.
Finally, the OCCAR cooperation model currently serves as a reference for the ongoing discussions within NATO for the restructuring of all its acquisition and support agencies. This approach was agreed upon at the last NATO summit in Lisbon. It should be noted that in some cases (including Eurofighter and NH90 programmes), it could be more beneficial to the Nations involved to simply integrate these programmes within the OCCAR organisation.

Armaments Cooperation in Europe is the only viable solution in the long-term
We are still facing a huge imbalance between the defence efforts of the European Union and the United States in terms of budgets. Although the population of the US is less than 2/3 of the population of Europe and has 25 % fewer military personnel, its defence budget is almost 2.5 the sum of the defence budgets of the EU countries, and when we look at Research & Technology, within the overall defence budget, the ratio is 6 to 1. (€75 billion / €12 billion).
With the financial crisis the situation will even get worse as the European national defence budgets are undergoing severe cuts of between 10 to 50%. Consequently, the imbalance of military capabilities will continue to increase, unless fundamental decisions are taken in Europe. The main risk is the inward reflex, each nation trying to save its own capacities and its own production instruments. It seems to me that this is not the right approach.
If European governments want to spend their already restrained defence budgets better, their only real option is to spend a larger share together. Cooperation offers economic and technological benefits. Joint research programmes allow access to knowledge at reduced cost through the sharing of information. Cooperation in the acquisition of defence equipment brings economic benefits through the sharing of development costs and economies of scale in production. In addition, if one takes into account the overall life cycle of equipment, further cooperation in the in-service phase greatly increases the economic benefits through the sharing of costs for the support, overhaul and, at the end of life, withdrawal of the equipment from service.
In military terms, cooperative acquisition is the most effective way to increase interoperability between allies. Changes in the global security environment after the Cold War created an increasing need for harmonisation of mission capabilities between allies for joint and coalition operations.
From the industrial point of view, cooperation in defence equipment allows the maintenance of technological skills and supports industrial restructuring by eliminating unnecessary duplication.
Advantages in international politics, such as the strengthening of the security relations and the improvement of the Common Security and Defence Policy context may also result from cooperation in defence equipment.
Of the total investment budget of the European Defence, approximately €41 billion, only €8 billion is actually invested in collaborative armaments programmes. With an average annual operational budget of €3 billion OCCAR represents almost 50% of the European defence investment engaged in cooperation, but less than 10% of the overall budget. So, there still remains a great growth potential for cooperation within the European Defence investment budget and thus also for OCCAR.

OCCAR and EDA : partnership and complementarity
In the area of the European defence cooperation, the European Defence Agency and OCCAR do not see themselves as competitors, but as natural partners, where OCCAR is situated downstream of the EDA in the capability development process. Within this process, the main task of the EDA consists of promoting cooperation between its member Nations, while OCCAR is better placed to manage the programmes that arise from this cooperation.
To formalise the already functioning practical cooperation between the EDA and OCCAR the Council of General Affairs and External Relations invited the EDA, in its statement of 10th November 2008, to establish an Administrative Arrangement between the two organisations.
In daily practice, this cooperation is already visible through two EDA category B ad hoc programmes for which the management has been entrusted to OCCAR, namely the ESSOR programme and the «Multinational Space-based Imaging System» (MUSIS) programme. Future opportunities for cooperation have also already been identified with programmes such as BIO EDEP (Equipment development and enhancement of protective equipment against biological hazards) or AEJPT (Advanced European jet system for training of future fighter pilots).
Alongside structuring «top down» initiatives from the European institutions, including the EDA, to strengthen the European industrial base and defence market, OCCAR contributes in a pragmatic «bottom up» way to the strengthening of this industrial base and defence market by collaborative programmes that the organisation manages on behalf of its customer Nations. Here one can observe good complementarity between these «top down» and «bottom up” initiatives.
Thus, more European defence cooperation is the only correct answer to the fragmentation and duplication of efforts in Europe. The capabilities of EU member Nations would improve exponentially if they would cooperate more.
OCCAR, a lean and flexible organisation, is a good example of enhanced cooperation in Europe, able to respond quickly to the needs of Nations in the management of Armament programmes. It offers excellent management of programmes throughout their life cycle and governance practices that ensure optimal use of resources and skills.    

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