Dean Cheng discusses the development and purpose of Russia and China’s new and growing journalism institutions in general, and specifically how Xinhua is maneuvering to pose a challenge to traditional western news sources. We also discuss how China’s growing news and media market makes some traditionally understood methods of diplomatic signalling less clear. We also gripe a bit about journalism in the US.
Host & Production: Matthew Hipple
Music: Sam LaGrone
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The list of Damen’s current clients in the Western Hemisphere highlights one curious fact about this company: the Dutch company sells its equipment to both U.S. allies and foes alike. Certainly, Washington sees no fault in Damen’s decision to upgrade Mexico’s naval equipment. On the other hand, the U.S. government probably frowns at Damen equipping countries that Washington is at odds with, such as Venezuela (which was declared a national security threat by the White House this past March). Similarly, Damen’s shipyard in Cuba, a country that was on the U.S. State Department’slist of states that sponsor terrorism until this past May, is not considered a positive development in Washington.
Nevertheless, Damen has remained neutral in Western Hemisphere geopolitics, as it has dealt with any government willing to pay. This issue deserves further analysis by stating two obvious facts: the U.S. and the Netherlands have generally enjoyed good security relations over the past decades, and Damen is a privately-owned company, which means that the Dutch government has limited influence in the contracts and initiatives it chooses to carry out. With that said, it is bizarre that Damen chose to build a shipyard in a country that has been at odds with the U.S. for decades, and is also selling vessels to countries like Ecuador and Venezuela, which have become a thorn on Washington’s side for years (in the case of Caracas’ for a decade and a half). Certainly, Damen does not need to take into account U.S. foreign policy in its business decisions, but it is nevertheless important to keep in mind how the sale of military equipment can upset regional geopolitics, particularly if this equipment is sold to nations that have carried out aggressive foreign policies in recent years (i.e. Venezuela).
Damen is Important, But Not A Pillar
While Damen has made a name for itself in the Latin American and Caribbean market, the shipbuilding company has not fully cornered this market, as it still faces a number of competitors.
One of Damen’s major competitor is Navantia. The Spanish company has been trying to sell Peru its frigate F-538 model as well as attempting to sell Colombia (and Peru) its F-110 frigate. The company already has a strong presence in the region, best exemplified by a 2013 contract to upgrade the motor system of a Brazilian corvette, the “Julio de Noronha.” Government-to-government exchanges are also common as South Korea has donated one of its corvettes, the now-called “ARC Nariño,” to Colombia. The Donghae-class vessel served in the Republic of Korea Navy for 27 years before it was given to the South American state.
Navantia Warship. Source: Navyrecognition.com.
Finally, the know-how of Latin American military industries is improving. Case in point, the Peruvian shipyards Servicios Industriales de la Marina (SIMA) is currently constructing a new training vessel for the Peruvian Navy, the “BAP Union” – a project worth around $50-55 million USD. Moreover, with support from the Daewoo International Corporation and the Korea Trade-Investment Promotion Agency, SIMA is building a new multi-purpose vessel for its Navy.
These examples stress how competitive the shipbuilding industry is in Latin America. Not only are there several major companies trying to sell brand new warships, but governments are also donating surplus naval technology. Furthermore, regional shipyards are rapidly improving their knowledge when it comes to shipbuilding, as we now have modern shipyards in countries like Colombia, Ecuador, Mexico, Peru and Venezuela that are constructing their own vessels.
In fact, countries like Ecuador, Mexico and Venezuela want Damen to construct some vessels in their own shipyards in order for local technicians to learn from Damen’s experts. Certainly, none of these facilities are in a position to build a ship as complex as a carrier, but they can now construct smaller vessels, like patrol boats or support ships.
What this means for a company like Damen is that while it will continue to enjoy new contracts for the immediate future, it will have to continue developing more modern and improved equipment that its Latin American and Caribbean clients cannot purchase, maybe at a better price, from other suppliers, or even construct themselves in the not-so distant future.
A Need for Stronger Naval Forces
As transnational crime over the Caribbean Sea and other maritime crimes, such as illegal fishing, continue throughout Latin America and the Caribbean, it has become a major priority for regional states to have modern and capable navies and coast guards in order to protect their exclusive economic zones.
Certainly, it can be argued that the current purchases of some naval technologies are generally unnecessary, given that the region has enjoyed inter-state peace for decades (the last inter-state war in the region was in 1995 between Peru and Ecuador, while the last conflict with naval warfare was the 1982 Falklands/Malvinas War between Argentina and the United Kingdom). Moreover, while transnational crime remains a persistent problem, Latin America has enjoyed cooperation at the inter-state level for two decades (the 2008 Colombia-Venezuela incident notwithstanding). Given this period of peace, some may argue that these defense dollars would be better spent in social programs, especially since many Latin American nations, including Damen-clients like Honduras, are very poor and underdeveloped.
Unfortunately, the reality is different. First, Latin American and Caribbean nations must have some capabilities for deterrence as inter-state tensions continue, such as between Peru and Chile or even the aforementioned 2008 incident between Colombia and Venezuela. Second, transnational drug trafficking remains a major problem from Mexico to Argentina, particularly throughout the Greater Caribbean waters as cocaine is transported from Colombia and Venezuela to the U.S. and Mexico markets. Just last May, the U.S. Coast Guard and the USS Kauffman (FFG 59) interdicted almost 1,800 kilograms of cocaine in the Eastern Pacific.
USS Kauffman. Source: Mark D. Faram/Staff.
Hence, it is necessary for Latin American and Caribbean naval forces, including their coasts guards, to have fast and technologically advanced vessels for both internal and regional security – which in turn would diminish their dependence on U.S. security aid. In this sense, the involvement of companies like Damen and Navantia in the Western Hemisphere is a necessity (at least until regional states can build their own high-tech vessels).
Final Thoughts
In recent years the Dutch shipbuilding company Damen has made a name for itself as a provider of high-tech, fast vessels, from multipurpose boats to coast guard speedboats, for various Latin American and Caribbean states. Their clients include nations with small defense budgets like Honduras and Trinidad & Tobago, to major buyers like Mexico and Venezuela. Nevertheless, Damen has not cornered these region’s shipbuilding markets, as there are several other companies selling their products, such as the Spanish Navantia, in addition to regional states enjoying growing maritime defense industries.
Moreover, while Damen’s sales to the region have generally controversy-free, the incident over the overpriced vessels sold to Honduras highlights the potential for corruption, i.e. kickbacks, in countries renowned for lacking good governance. I have been unable to confirm if there were other similar discrepancies in Damen’s other contracts in the Western Hemisphere. Nevertheless, countries like Venezuela are known for their lack of transparency (case in point, the billions of petro-dollars spent by Caracas to purchase Russian military technology) while Mexico is infamous for its corrupt state-run oil company, PEMEX. Given these precedents, there are valid reasons for concern over Damen’s deals with its Latin American and Caribbean clients.
Ultimately, the question comes down to whether the region requires new vessels. Inter-state conflict may be scarce, but it remains a possibility given recent tensions between regional nations (i.e. Venezuela and Colombia, Peru and Chile or currently between Venezuela and Guyana). Thus, it is necessary for nations to maintain capable deterrent capabilities. Additionally, these states must have strong navies and coast guards to crack down on maritime crimes that range from illegal fishing to transnational drug trafficking.
In 2015, the waters along Latin American and Caribbean states are far from peaceful and Damen’s vessels, while not the cornerstone of regional navies, are an important addition to hemispheric maritime security.
W. Alejandro Sanchez is a Senior Research Fellow at the Council on Hemispheric Affairs (COHA) where he focuses on geopolitics, military and cyber security issues in the Western Hemisphere. His research interests include inter-state tensions, narco-insurgent movements and drug cartels, arms sales, the development of Latin American military industries, UN peacekeeping operations, as well as the rising use of drones (UAVs) for civilian and security uses in Latin America. Twitter: @W_Alex_Sanchez
Though shipbuilding is a competitive global industry, one company has become a major provider to the naval forces (coast guards included) of various Latin America and Caribbean states: Damen Shipyards Group. Damen is now a household name among Latin American and Caribbean navies as it provides multi-purpose vessels, patrol boats and speed boats. These sales have enhanced the capabilities of Damen’s clients as they face transnational threats.
While the defense budgets of Latin American and Caribbean states cannot be compared to those of the usual suspects (i.e. the U.S., Russia or China), a significant number of weapon deals have occurred in recent years between the Dutch-based company and these two regions.
Damen’s sale of technologically advanced vessels is a positive development for the region for a variety of reasons. Most notably, since Latin America and the Caribbean are enjoying a marked lack of inter-state conflict (the last war between two regional states was in 1995), the region’s security forces are now focused largely on transnational crimes, particularly drug trafficking. Thus, it appears that Damen’s clientele will continue to grow for the immediate future as the company is looked upon as a reliable supplier of vessels necessary to combat criminal activities that occur at sea, particularly in the Greater Caribbean region.
Recent Sales
In order to discuss Damen’s effect on the shipbuilding industry and naval defense sector in Latin America and the Caribbean, a brief enumeration of confirmed deals and equipment delivery is necessary. This will also give us a clearer view of Damen’s clients.
The Caribbean
Damen has a number of clients in the Caribbean whose naval forces are more akin to coast guards rather than traditional navies. One good example is the Bahamas, which formalized adeal with Damen in 2014 for a variety of vessels, including four Stan Patrol 4207, four SPa 3007, and one roll-off ship Stand Lander 5612. The shipbuilding portion of this multi-faceted contract is valued at around $149 million.
The company has already delivered the four 4207 patrol boats. Moreover, this past January the Damen Gorinchen shipyard in the Netherlands received the hull for the Stan Patrol 3007. It is important for the 3007 to become operational soon as this vessel is urgently needed by Nassau to combat narcotics trafficking, a further example of how Damen technology is being utilized for positive security initiatives.
Another one of Damen’s clients in the Caribbean is Trinidad & Tobago. This past May, the government in Port-of-Spain ordered 12 new vessels for its coast guard, including four type Stan Patrol 5009, two Fast Crew Supply 5009 and six Interceptor speedboats. The deal is worth $189 million USD. In early June, the “TTS Point Lisas” (GC 23), one of the FCS ships, was delivered to the Caribbean government.
Latin America
When it comes to the mainland, several Latin American states are turning to Damen for naval equipment. For example, the Colombian Navy purchased one of Damen’s Swath-type vessels, which was constructed in Singapore. Additionally, in 2014, Ecuador signed a deal with Damen to obtain two Stan Patrol 5009 for the country’s coast guard. The vessels are being constructed in Ecuador by the country’s shipyard, Astilleros Navales Ecuatorianos, under the oversight of Damen technicians. Additionally, Damen obtained a contract in early 2014 to construct a fourth Stan Patrol 2606 (the country already operates three), which will also be built in Ecuador.
Additionally, Mexico and Venezuela have purchased various types of Damen’s vessels. Just this past January, the Mexican Navy received the Coast Guard vessel Tenochtitlan-class “ARM Mitla” (PC-334), which was constructed as a joint project between the shipyards of the Secretaria de Marina (the Mexican Navy) in Tamaulipas and Damen. The “Mitla” is based on the Stan Patrol 4207 model. This is the second of two vessels that Mexico and Damen are building together following a 2014 agreement. The other vessel is a supply variant of the Fast Crew Supplier 5009. Like the “Mitla,” it is also being constructed in Mexico’s Sonora state. These developments suggest that Damen has become an integral part of the country’s naval shipbuilding. Apart from the aforementioned vessels, SEMAR and Damen jointly constructed three other patrol vessels based on the 5009 model.
Mexico’s new “ARM Mitla.” Source: Cuartooscuro / Milenio.com.
As for Venezuela, Caracas has ordered a number of new vessels for its Navy including a 2014 deal for 18 type Interceptor 1102 speedboats. The speedboats are being constructed in Cuba under the Havana-Caracas cooperation agreement. The first of these vessels arrived this past May and is currently undergoing testing. In addition, Damen has also constructed four support vessels for the South American nation based on the Stan Lander 5612 model. On February 2014, a new contract was signed for an additional eight vessels, a deal worth around $132 million USD. Finally, Venezuela’s military complex (UCOCAR) in Puerto Cabello is building five patrol boats based on the Stan Patrol 2606 model. The country’s navy already has one operational vessel based on that model, the “Pagalo” (PG-51).
Damen Interceptor 1102. Source: Damen.com.
Cuba’s Shipyards
It is important to note that Damen has a construction facility, Damex Shipbuilding & Engineering, in Cuba. The facilities, which were established in 1995, are located in the bay of Santiago de Cuba. Damen’s website explains that “the yard is equipped with one slipway provided with transverse parking facilities for new buildings and repairs and a lateral slipway for new buildings of up to 100 metres.” As previously noted, the shipyards have constructed vessels for Venezuela.
The Honduran Affair
It is important to stress that not all Damen deals have been scandal-free. This is best exemplified by a 2013 contract via which the government of Honduras purchased six Interceptor speedboats and two Stan Patrol 4207. The contract deal was reportedly worth almost $62 million. However in late 2013, the Honduran judiciary investigated it due to various irregularities, specifically the accusation that the vessels were overpriced – according to theHonduran newspaper La Prensa, the vessels were overpriced by some $29 million. The newspaper argued that the Honduran Secretariats of Defense and Finance created a paper company called “Servicios Maritimos S.A.,” which was utilized byFlorentius Antonious Florentius Kluck, a Dutch citizen and honorary consul, as the intermediary for the sale.
In spite of these accusations, the deal ultimately went through, and the Honduran Navy has begun to receive the vessels. This is an important deal for Honduras since drug traffickers utilize the country’s coast for transporting illegal narcotics, and thus it is especially necessary for small Central American country to have vessels that can locate and seize the infamous narco-speedboats. Nevertheless, the details of the deal themselves are problematic, as the question its transparency and whether the Honduran government could have obtained similar vessels at a cheaper price. Even more, even though the Honduran judiciary never passed judgment on the deal, scandals like the Honduran affair throw into question whether other contracts gained by Damen were due to shadowy middle men and nefarious deals.
W. Alejandro Sanchez is a Senior Research Fellow at the Council on Hemispheric Affairs (COHA) where he focuses on geopolitics, military and cyber security issues in the Western Hemisphere. His research interests include inter-state tensions, narco-insurgent movements and drug cartels, arms sales, the development of Latin American military industries, UN peacekeeping operations, as well as the rising use of drones (UAVs) for civilian and security uses in Latin America. Twitter: @W_Alex_Sanchez
In late May of this year, NATO, along with Sweden and Finland, participated in the Arctic Challenge Exercise (ACE) 2015. The aerial exercise, which included more than 100 aircraft and 4,000personnel, predictably ruffled a few feathers in Moscow; Russia responded by mobilizing their nascent but formidable ‘Arctic Brigade’for an unannounced inspection. Russia’s ambitions in the Arctic (and in general) are thinly – if at all – veiled. Russia unabashedly considers itself the preeminent actor in the High North. Recent remarks by U.S. Coast Guard Commandant Paul F. Zukunft seem to codify this self-assessment. On July 8th, Zunkunft conceded that the U.S. is “not even in the same league as Russia right now” (this assessment was based on a comparison between U.S. and Russian Arctic investment and infrastructure). The discussion of the changing Arctic landscape is hardly new, nor is it limited to re-freezing Cold War tensions. The United States, NATO, and their Nordic allies have a vested interest in building and sustaining a meaningful presence in the High North. While a good start, ACE and other exercises like it won’t be sufficient to secure not only these actors’ self-interested notions but also the idea of the Arctic (and its rapidly opening maritime corridors) as a freely accessible extension of the global commons. The U.S. and their arctic-minded allies should encourage NATO to make the Arctic a higher priority now.
NATO’s stance on the Arctic has, to this point, been non-committal. As recently as 2013, NATO outright rejected idea of establishing a strong direct military presence in the Arctic High North, citing laudable diplomatic hopes that cooperation would win out over confrontation in the region. It’s possible, but unlikely, that a lack of meaningful counterweight in the High North will lead to more cooperative regimes or greater adhesion to existing legal precedents. The Arctic is dynamic and should be treated as such. The following analysis provides just a few reasons to support a defined, consistent, and robust role for NATO in the Arctic.
Arctic actors, including many NATO member states like the U.S., Iceland, and Norway, have much to gain economically from a rapidly opening Arctic in terms of both resources and newly navigable shipping routes. The Arctic is often described as a vast storehouse of resources – oil and natural gas, other minerals, fisheries, and forests- and the prospect that climate change will permit increased exploration for, and exploitation of, these presumed resources has generated a great deal of interest, both public and private.[1] The High North has long been a lynchpin of the Russian petro-state. Indeed, as of 2013 eleven percent of Russia’s GNP, 93 percent of its natural gas, and 75 percent of its oil came from the Russian Arctic.
With access to these lucrative resources increasing and costs to exploit them decreasing, so too will conflict over access to those resources increase. In addition to tangible reserves, climate change has also opened previously impassable shipping lanes, some of which overlie disputed sovereignty claims. The national interests of NATO and allied actors with either Arctic real estate or interests would be best served by a consistent, cohesive NATO policy on the Arctic that would serve as a counterweight to Russia’s economic ambitions; a prospect that has thus-far eluded the alliance.
A sustained allied naval presence has been, over the past several decades, been the primary arbiter of freely accessible global maritime arteries as an extension of the global commons. This protection must extend to the Arctic, particularly as new shipping routes progressively open. The Northwest Passage just to the north of Canada could become an economically viable shipping route, passable most of the year, by mid-century. Russia’s rather extensive territorial claims in the Arctic encroach on the Northern Sea Route
Map of Arctic territorial claims (2015)
above Siberia, an issue of particular concern to the U.S. Thus far, efforts to resolve disputes over the High North have been cooperative and civil, but that civility has never been significantly challenged. As the Heritage foundation’s Luke Koffey and Daniel Kochis argue, “NATO should consider the implications of Russia’s recent aggressive military behavior; NATO is a collective security organization with five members that are also Arctic countries and two close allies (Finland and Sweden) with Arctic territory. NATO’s commitment to a consistent and robust presence in the High North would be the surest protection of continued rules-governed behavior if (and likely when) tensions rise. Rather than contribute to tensions in the High North (which, this author predicts, will be the narrative Russia will pursue in response to a more cogent NATO Arctic policy), NATO’s presence and prescience, if such a policy is meaningfully pursued, would be a stabilizing force that would ensure free access to newly navigable waters and accessible resources in accordance with international law and orderly management of territorial claims.
The practicalities of achieving the consensus necessary within NATO to move forward with such a step cannot be overlooked. Historically, the alliance has struggled with a general scarcity of consensus. U.S. leadership on the issue of the Arctic will be indispensable in convincing member states with no direct Arctic interests (and plenty of competing security concerns) to move forward with policy and action on the High North, as well as convincing fellow arctic actors that non-Arctic member states deserve their share of influence in NATO’s Arctic policies. Despite any challenges inherent in alliance operations, supporting a greater and more carefully defined role for NATO in the changing Arctic remains far preferable, in this author’s estimation, to a unilateral attempt to provide a counterweight in the High North.
A possible first step might be to cooperatively drafting a statement of intention on NATO’s intentions and intended role in the Arctic, officially acknowledging NATO’s interests and stakes in the region. Further, continued and broader participation in exercises like ACE send a clear signal to Arctic allies like Finland and Sweden, along with the international community at large, that NATO is prepared to face the unique challenges inherent in Arctic operations. The sooner that NATO can find cohesion and take action on their Arctic policy, the better. Already playing from behind in terms of investment and strategy, a comprehensive NATO Arctic policy and presence will provide the best chance to sustain not only for NATO members’ and allies’ economic interests but also the concept of the changing Arctic as an extension of the global commons.
Sally DeBoer is an associate editor for CIMSEC. She is a graduate of the United States Naval Academy and a recent graduate of Norwich University’s Master of Arts in Diplomacy program. She can be reached at Sally.L.DeBoer(at)gmail(dot)com.
Dean Cheng discusses the development and purpose of Russia and China’s new and growing journalism institutions in general, and specifically how Xinhua is maneuvering to pose a challenge to traditional western news sources. We also discuss how China’s growing news and media market makes some traditionally understood methods of diplomatic signalling less clear. We also gripe a bit about journalism in the US.
