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Dyno in dubious co-operation: Serves Malaysian arms industry

Side by side with Tenaga Kimia, Dyno's explosives factory in Malaysia, lays one of the major manufacturers of ammunition and grenades in the country, SME Ordnance. SME's customers are the national armed forces and police force, as well as armed forces in other countries. Now NorWatch can expose deliveries and co-operation between the two companies - such as ammunition tests, in spite of Dyno's solid statement that all its arms related production take place in Norway.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Side by side with Tenaga Kimia, Dyno's explosives factory in Malaysia, lays one of the major manufacturers of ammunition and grenades in the country, SME Ordnance. SME's customers are the national armed forces and police force, as well as armed forces in other countries. Now NorWatch can expose deliveries and co-operation between the two companies - such as ammunition tests, in spite of Dyno's solid statement that all its arms related production take place in Norway.


By Harald Eraker and Morten Rønning
Norwatch

Dyno owns 30% in Tenaga Kimia - together with, among others, SME Ordnance (SME). SME is owned by the Malaysian Defence Department, and manufactures ammunition for handguns and grenades. Among the products are AG-85 shells and 81 millimetre mortar shells.

People working in SME (formally known as Malaysian Explosives) that NorWatch has spoken with, made it very clear that the two companies are closely linked. We were told that not only does Tenaga Kimia (TK) supply SME with explosives; the orders for ammunition also come through TK.

- Recently, we received an order from TK for 1.5 million shells. We had to stop the production due to lack of the storing capacity, NorWatch is told by an SME worker.

This information surprises Dyno.
- The Tenaga Kimia statutes state clearly that the company manufactures explosives for civil use only, says information director Brad Larson with Dyno's explosives unit.

He promises that he will investigate further into the matter, which he describes as «a grey-zone issue».

Close co-operation
Contrary to the above, managing director of SME, Mohammad Zin, confirms that the company closely co-operates with Tenaga Kimia.

- We purchase raw materials, ignition systems (fuses) and chemicals from Tenaga Kimia, but this amounts to very little of the total, says Zin. On the other hand, he emphasises that the orders for ammunition come from the National Defence directly, contrary to what the employees have told NorWatch.

Tenaga Kimia chemist, Mr. Khor, adds that SME also purchases PETN explosives from Tenaga Kimia (which is something TK does not manufacture itself).

The two factories are in the same area, a former coal mine area. The testing field for ammunition is in fact placed beside the Tenaga Kimia factory, and not SME, which would be natural. Mr. Khor tells NorWatch, that the explanation for this, is that Tenaga Kimia has the equipment necessary for this kind of testing.

- We have the technology for testing on land as well as under water, and we have the space, says Khor.

It also became clear that, in spite of the fact that both factories have individual and extensively guarded gates, there exist road connections between the factories inside the area.

Marketing director of Tenaga Kimia, Mr. Kao, wishes to say as little as possible about what the company actually sells to SME. However, upon request from NorWatch, he does confirm that the company sold 100 000 metres of fuse wires to SME in 1996.

Export to Bosnia?
The Malaysian army and police are major customers of SME. NorWatch also spoke with members of the voluntary standing forces in the country. They told us that they use exercise explosives and smoke bombs produced by Tenaga Kimia. At the same time, SME exports much of its production.

One worker told us: «We have manufactured ammunition for, among others, the Philippines, Ghana and Bosnia».

If the workers' information is correct, Dyno's explosives plant serves an exporter of arms to war-torn countries, like Bosnia and the Philippines, where governments are at war with guerrilla groups.

- But how do you know where the goods are to be exported?

- Every time we get a new order, my superior tells me where the weapons are going, the worker explains.

According to SME, the deliveries to Bosnia is in fact ammunition supplies to the Malaysian UN forces. SME is not willing to say much about the destinations of the company's exports, but confirms deliveries to the USA and Canada.

A great deal of SME's arms technology are imported to Malaysia.

- Swedish company Bofors is one of SME's main suppliers of technology, says Mohammad Zin.

In 1992, Bofors signed a contract with the Malaysian Department of Defence for the delivery of production equipment. The contract is worth 12 million Swedish Kroner (Nearly 1.5 million $). German technology is also used, and the factory sends people to Germany to be educated.

Additionally, NorWatch is told that SME co-operates with Indonesian authorities on technological development.

Muzzled
As we visited Batu Arang, a little north of Kuala Lumpur, where the factories are situated, our requests to visit had been turned down by both Tenaga Kimia and Dyno. However, we were in contact with several groups in the area; both workers, neighbours, tradesmen and others. It was obvious that many of them were uncertain of what was going on the other side of the fence.

Neighbours told us that vehicles come in convoys at night to pick up ammunition. We ourselves met a convoy of 15 to 20 fully loaded military vehicles with red warning flags, marked «explosives». Others told of high activity in the testing field near Tenaga Kimia, where ammunition is tested once a week.

The workers were sceptical towards saying anything about what the companies are doing. They had made a pledge of silence when they were hired, and feared for their jobs.

«We purchase raw materials, ignition systems and chemicals from Tenaga Kimia»
Managing director Mohammad Zin with the arms factory SME Ordnance

Outside government control
As NorWatch spoke with some of the workers at night, an internal disagreement arose, and there was a hot-blooded discussion. Our interpreter told us later that they had been discussing whether or not they should say anything about Malaysian Explosives (SME).

Still, some of the workers chose to tell us about the close connection between Dyno's company Tenaga Kimia and the arms manufacturer SME Ordnance.

Information director with the Department of Foreign Affairs, Ingvar Havnen, tells NorWatch that Norwegian establishments abroad are excluded from the laws that regulate the export of arms from Norway.

As a consequence, Dyno's co-operation with arms exporter SME is outside government control.
 
Dyno in Malaysia
Dyno Industrier has a 30% ownership in the explosives manufacturer Tenaga Kimia, through the company's fully owned subsidiary Nitro Nobel in Sweden. The rest is owned by the ammunition manufacturer SME Ordnance (40%) and Jasa Mega (30%).

Tenaga Kimia also sells chemicals, raw materials and ignition systems.

The major owners of Dyno Industrier are Hydro Invest, Orkla and Folketrygdfondet.

Norwatch Newsletter 2/97

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