Industry: Defense contractor funding could be more transparent

Estonia is spending €100 million a year on defense products for Ukraine, but the companies receiving the funding and the basis for selecting them remain unclear.
The Defense Week defense industry trade fair is being held in Tallinn for the second year. A third of the participants are Estonian companies, many of whose products have been used in Ukraine for years. The companies will not say whether the state has funded their products; that information is classified.
Each year, the state provides €100 million in funding for products proposed by Estonian companies, deemed necessary by Ukraine and approved by the Ministry of Defense and the Estonian Center for Defense Investments. The question is: On what basis were they approved?
"Overall, we can be satisfied with the criteria. As for how the decision-making process works, I can't say. It would certainly be good to know how decisions are made so that companies can prepare for future projects," said Kalev Koidumäe, executive director of the Estonian Defense and Aerospace Industry Association.
"The Ministry of Defense knows precisely what was bought from whom and where it went. There are no questions in that regard. In light of recent days, it should also be fairly clear why the identities of those companies are being withheld. Do I plan to do anything about that or change it? Not at this point," Defense Minister Martin Herem said.
Urmas Reinsalu, chairman of Isamaa, said the secrecy is unjustified, particularly after the decisions have been made.
"The [Riigikogu] State Budget Control Select Committee has repeatedly requested the documents showing how the funds were actually distributed among companies. But we have not received them," Reinsalu said.
Peeter Tali (Eesti 200), chairman of the Riigikogu National Defense Committee, also does not know how the money was distributed. He said the committee would examine whether it went to companies that manufacture their own products and test them in Ukraine.
"That allows them to improve and develop their products under wartime conditions. We have that expertise here. If we need to, we can produce for our own use. That was the political intent. Now we probably need to look into whether that intent has become reality or whether this is simply business," Tali said.
The National Audit Office did not examine the transactions in detail in its completed audit and cannot say what grounds there are for classifying the information.
"I want to emphasize that information cannot always be classified in its entirety. Some aspects may be classified and must be redacted and withheld from the public. But that does not prevent officials from discussing the overall framework of the project and the selection criteria publicly," said Ines Metsalu-Nurminen, a principal auditor at the National Audit Office.
Estonia's defense industry had revenue of €750 million last year. Two-thirds came from exports.
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Editor: Marcus Turovski, Johanna Alvin












