Part 2: Dutch naval yard at the Black Sea

Recently the Romanian government canceled the acquisition of corvettes, probably due to irregularities (see part 1). This is a setback for Damen – a major global conglomerate of ship wharfs and one of the biggest Dutch arms exporters – started to build a Romanian position already in the nineties, with the acquisition of the Galati ship wharf (near Moldavia in the Northeast). It made the Romanian wharf a cornerstone of Damen shipbuilding, based on standardised vessels for which consoles were build in Romania while assemblage took often place elsewhere.

Damen has built over 400 ships in Galati, included 29 military ships, with a cumulated turnover of more than two billion euros and an average annual profit of € 30 million. “Since Damen took over the shipyard in Galati, 29 military ships have been built for international customers, NATO and European member countries. We (Damen) built all the state-of-the-art ships for the Dutch Royal Navy” said Rino Brugge, General Manager of Damen Galati Shipyard.

In 2018 Damen also took over the Mangalia wharf in the South (near Bulgaria on the Black Sea coast). The Romanian government kept a majority (51%) stake. Mangalia is planned to be made a cornerstone for repair, maintenance and overhaul activities for the Romanian navy, in line with NATO standards. This ownership is central in Damen’s bid for the billion+ euro corvette deal the Romanian government has now put on hold. Damen offers to work closely with Boeing, Raytheon and General Dynamics in weaponizing the corvettes, said Chris Groninger, the Dutch managing director of Damen Mangalia Shipyard. Damen advertises itself as “the only shipyard capable of building military ships” in Romania, including design.

The role of Galati is large. “Romanians are present, participating in complex projects, such as the recent experience of working together with the US defense industry on the endowment project of the Mexican military navy,” a local Damen employee proudly stated in the local press. To create an even more positive image of Damen, it is stated that: “The success of the Galatian navalists, their vast international experience, will, of course, be transferred to Mangalia.” It is not only about selling four new corvettes for the Romanian navy; it is about a decades long process of exporting a whole military shipbuilding infrastructure from the Netherlands to Damen at the Danube and Black Sea. Currently Damen is trying win the production of twelve mine counter measure vessels in competition with two French groups. All three are involving Belgian counterparts, but Damen also wants the hulls to be build in Galati, which gives the Dutch a competitive advance.

This raises the question who is responsible for the export of the final products of the Romanian Damen wharfs. Vessels like those for the United Arab Emirates that were made in Galati involve knowledge from the Dutch Delft University, Wageningen research institute Marin and Damen itself. For the warships of the Arialah-class (fitted with a Bofors 57mm gun, Otto Melara 30mm guns) the Dutch government provided the export licenses in 2014 and 2015 for the ships as well as for the Thales Netherlands equipment to a value of € 110 million. According to the Official Journal of the EU annual reports on Arms Exports Romania only reported ships exported to a value of € 14 million in 2016 to the Emirates. Which means that the main responsibility was still resting with the Netherlands.

Recently, the last of four Damen built offshore patrol vessels of the Dutch developed OPV1400 design sailed from Galati to Bizerte in Tunesia. They can be equipped with a naval helicopter as heavy as the NH90. But the vessels are not so heavy armed as they were potentially suited for, and they came cheaper than expected. They are not fitted with 76mm gun, but – according to the South African well informed DefenceWeb – with a 20 mm cannon and two machineguns. The contract of the sale was signed in December 2016. In the Dutch export reports nothing is mentioned about the sale of this Dutch product. It is however mentioned in the Romanian export policy report (pages 31, 34 and 47) and to the EU both for a value of € 27 million. Apparently control over these exports slipped out of Dutch into Romanian hands.

In another case of construction abroad the control stayed with the Netherlands. The Dutch government reported a license for a € 330 million export of components for a patrol vessel (also reported as plural ‘vessels’). The modules are build in the Netherlands and Mexico. Recently a letter on the electro-optical and communication equipment for installation aboard this ship was sent to Parliament. The ship will be fitted with Harpoon Block II Missiles, RAM Missiles and MK 54 Torpedoes according to the Pentagon Security Cooperation Agency (but still called a patrol vessel by the Dutch authorities). The sale was disputed in December 2018 by the PVV, because of involvement of the Mexican navy in torture. Report and debate show this part of the Damen work is still under control of Dutch legislative and executive bodies. It would be worth a debate how to handle Damen designed ships in the Dutch arms export control policy.