Pooling, sharing and all that...
© 2012 FrontLine Defence (Vol 9, No 3)

Next to the nature of the future security environment, the preservation of existing military capabilities and the development of new ones is arguably the most vexing issue facing allied defence ministries. As Canada and its allies in the North Atlantic Treaty Organization (NATO) emerge from the Chicago summit, the question of how to maintain the personnel, equipment sets, and infrastructure relevant to the evolving strategic landscape arguably demands a fresh approach. Is the solution more coordinated action?

This article will offer a preliminary overview of how Canada’s traditional allies in NATO and the European Union (EU) are exploring the merits of cooperative capability development/preservation to mitigate the effects of downward pressure on their defence budgets. As will be seen, the mechanisms for building and maintaining critical capabilities through collective action are many, although it will be argued that other mechanisms also deserve consideration.

Why Collaborate?
The economic and political context in which most allies find themselves has taken a significant toll on their defence budgets. The global credit crisis and ballooning public debt have resulted in defence cuts among Canada’s European allies as governments struggle to re-align budgets to meet the EU’s deficit threshold of three per cent of gross domestic product. Despite high levels of NATO/EU activity in South Asia, the Indian Ocean, and mostly recently North Africa, defence continues to be an easy target for treasuries intent on realizing short-term savings. This casts doubt on the ability and willingness of allies and partners to maintain a full range of relevant capabilities within their respective national inventories.

In addition, force development decisions continue to be made in national capitals, and will remain so as long as armed forces are funded by the national tax base. Countries with significant defence industries are loath to entrust force development plans to supra-national bodies, as this might result in decisions that disadvantage domestic manufacturers and service pro­viders, with the attendant loss of jobs and research and development opportunities. Thus electoral pressure to keep bases open and industrial concerns from falling into insolvency will constantly weigh on the minds of politicians who might otherwise embrace cross-border collaboration.

Another obstacle stems from defence policies which do not change even as resources are squeezed. Without adjustments to the country’s level of ambition, defence ministries are left without the assurance that decisions concerning what equipment sets, skill sets, and infrastructure must be retained, and those which can be safely reduced or jettisoned entirely, are the right ones.

Fortunately, an increasing number of allies and partners are exploring innovative ways of addressing these problems in the hope of preventing an irreversible fragmentation of the collective defence effort. Much of this effort is taking place in Europe. It rests on the belief that multinational solutions hold the most promise.

Multi-nationalization... in Theory
The most detailed proposals on cooperative capability development to date may be found in the ‘Ghent Initiative’ – a series of discussions held between Swedish and German officials in late 2010. The talks established an informal approach to classifying capabilities according to the degree of mutual dependency created – or, put another way, the extent to which responsibility for roles and tasks can safely be ‘multi-nationalized’ without robbing allies completely of their ability to self-generate a capability.

The paper establishes three basic ­criteria for judging the efficacy of multi-nationality:

  • Does it enhance operational effectiveness such that the present capability can be sustained or further developed?
  • Will economic efficiency result, leading to a more efficient use of resources than would be the case in a purely national approach?
  • What are the political implications of bi-/multi-national collaboration?

It goes on to specify two instruments or mechanisms through which multi-nationalization can be realized. First, pooling resources might create synergies for all ­participants without corresponding strong dependencies. Partners contribute a modest amount of financial and/or material resources to a common project, thereby increasing the overall size and effect of the capability. A ‘pool’ is created when participants either 1) allocate resources to purchase a capability that is, in effect, commonly owned/operated, or; 2) contribute existing assets to form a larger stock to which contributors can have access.

It is expected that a rather narrow range of capabilities would be covered by this instrument, since countries will want to retain the option of employing the assets they contribute independent of the group.

Alternatively, role- or task-sharing begins with the identification of a job to be performed, followed by a self-selecting group assuming responsibility for it. It is distinct from pooling in that there is a much deeper level of coordination between the con­tri­butors. Whereas a partner can withdraw from a pooling arrangement without necessarily depriving those who remain of the capability, those who collaborate on a role/task basis concentrate significant resources in a given area – resources that would noticeably degrade that capability if they were suddenly absent. It follows, therefore, that those who share a task will accept a higher degree of internal as well as external dependence.

According to the Initiative, a “systemic analysis” of national inventories can identify which capabilities should be retained at the national level, lest operational effectiveness, economic efficiency, and politico-strategic autonomy become fatally compromised. This first category may include front-line units: combat arms, fighter squadrons, naval vessels, and combat support and service support forces. Mixing personnel from different countries in such units, with language/training differences as well as differing strategic priorities and risk-acceptance levels, is not considered practical. At best, interoperability (a perfectly worthwhile objective in itself) can be improved through common tactics, techniques, and procedures.

In the second category lie capabilities and support structures that may be co­operatively maintained without creating overly strong dependencies. It is in these areas that partner nations pool their human, material, and/or financial resources in a manner that ensures broad access to, say, chartered sealift or strategic airlift. The notion of ‘access’ is itself flexible in that the participants can choose to exploit extant assets, purchase and operate new ones, or embark on a completely new design/build program. The NATO-led Strategic Airlift Capability (using C-17 aircraft) and the European Future Large Aircraft project (which resulted in the design and construction of the A400M transporter) are examples of the latter two options.

In the third category (role- or task-sharing), mutual dependence is more pronounced but still considered acceptable. Capabilities falling within this category may include multinational training facilities, test ranges, educational institutions (such as staff/war colleges) to which partners can have ready access. They may also include initiatives that center on commonly-funded equipment sets and trained personnel. In contrast to pooling, these require the participation of all members most of the time in order to remain fully operational.

Canada was able to maintain a heavy direct-fire support capability at a fraction of the price of new vehicles by securing second-hand German (and later Dutch) Leopard 2 main battle tanks.

Multi-nationalization ... in Practice
Europe’s two most prominent security bodies – the EU and NATO – have each embarked on a campaign to assess the ­feasibility of deeper collaboration. Today, NATO is marketing cooperation as ‘Smart Defence’ although the Alliance has already enjoyed some success in achieving capability goals through collaboration. The ­programs to establish an airborne early warning and control (AWAC) capability in the 1980s, and the more recent Strategic Airlift Capability (SAC), are two examples. The latter was preceded by Strategic Airlift Interim Solution (SALIS), an arrangement by which a select group of allies obtained access to large commercial transport planes. The inherent flexibility of pooling agreements such as SALIS is demonstrated by the fact that membership has changed over time. Nations such as Canada were free to withdraw from the pool and seek alternate sources of airlift, leaving the capability intact for others to exploit.

EU members have in the meantime launched discussions on ‘permanent structured cooperation’ – an approach to capability development/preservation whereby allies and partners are encouraged to examine their national inventories and decide where interoperability could be improved, where capabilities could be pooled, and which tasks could be shared. Beginning in September 2010 the chiefs of staff of the Union’s 27 armed forces were then directed to whittle down a list of 300 possible areas in which collaboration might be possible and advise their respective ­ministers how a roadmap for pooling and sharing might take shape.

Collaboration à la carte
It goes without saying that these initiatives, fostered and coordinated at the institutional level, do not preclude arrangements between self-selecting groups of allies.

The November 2010 Lancaster House agreement between Britain and France envisions wide-ranging cooperation on the science and technology front (such as nuclear testing or the development of unmanned vehicles) and in operational areas (including cyber security and aligning the availability of each nation’s aircraft carriers). This illustrates how partners can realize a higher level of ambition (in terms of strategic and out-of-area capacity) than many other continental allies. It also holds lessons for NATO in that defence transformation does not require unanimity across the organization.

Important as these programs are, they do not, in and of themselves, indicate that the states of Europe are well on their way to achieving a high degree of strategic or operational autonomy. Operation ­Unified Protector in Libya did not bring all members into the field and furnished capabilities proved insufficient to accomplish the task of clearing the skies of Libyan aircraft or degrading the adversary’s air defences.

Specialized American strike aircraft, unmanned reconnaissance, and operational support in the form of logistics planning, aerial re-fuelling, and the provision of munitions played such a role that, in the words of ­Secretary-General Anders Fogh Rasmussen, “The fact is that Europe could not have done this on its own.”

Looking Beyond Ghent
Although not mentioned by the Ghent ­Initiative, capability goals may also be achieved through role/task specialization. In consultation with other partners, a country would dispose of the equipment, personnel, and infrastructure supporting a certain activity – leaving responsibility for that activity to its partners. (Ideally, it would re-invest the freed funds to maintain or reinforce another capability that another ally has renounced.) Choosing to develop ‘niche’ capabilities therefore signals an acceptance of the highest degree of mutual dependency.

A final mechanism worthy of mention may be termed ‘cascading’ – a term familiar to armed forces which have sought to download older equipment sets to reserve forces in order to make way for newer gear. When applied in an allied context, it envisions the acquisition of assets (by purchase, lease or donation) by countries eager to maintain a given capability but without the financial means to buy new. In essence, the vendor jettisons part of its stock of capital assets, but instead of seeing them put on the scrap heap, another ally steps in to acquire them, thereby preserving a potentially important capability for the collective.

Successful examples of cascading abound. Canada was able to maintain a heavy direct-fire support capability at a fraction of the price of new vehicles by securing second-hand German (and later Dutch) Leopard 2 main battle tanks. The purchase of four of the Royal Netherlands Navy’s modern M-class frigates by Belgium and Portugal allowed two small-budget allies to contribute to a key force development goals set by NATO: enhanced maritime security.

A Promising but Uncertain Future?
While there is a strong case for the internationalization of capability development/ preservation, some of the mechanisms listed above may be more useful than others. Pooling and sharing are often touted as the most promising, based on the perceived lower levels of political and operational risk involved. But Canada’s recent decision to withdraw from the NATO AWACS program – ostensibly for cost reasons – suggests that Europe’s enthusiasm for collaboration is not universally shared. For its part, cascading depends on some allies being too cash-poor to retain otherwise useful capability, and others to be simultaneously cash-rich enough to profit from it.

Although specialization has been proposed as another way of dealing with duplication of effort, recent experience has shown that it is politically and operationally risky. Among other things, it requires very high level of trust between partners that they will bring their assets to bear in times of crisis.

NATO’s operation in Libya may have undermined confidence in this option, as only a limited number of allies were willing to enforce a no-fly zone and interdict pro-Ghadaffi ground forces. In future operations the abstention of key allies may severely tax the resources of those that do commit, resulting in a longer and costlier campaign that would otherwise have been the case, and fostering resentment and suspicion behind the scenes.

Resources allocated for Canada’s defence have been plentiful of late. This is unlikely to last as the government has pledged to attack the federal deficit. DND may therefore need to take a fresh look at its investment plan. Is it affordable in the current fiscal climate? To what extend does it reflect purely national priorities? To what degree should future force development efforts take their cue from NATO?

As declining budgets compel allied nations to find innovative solutions to the capability development challenge, increased co-operation may have much to offer, albeit at some risk to national priorities and operational success. Since Canada will almost invariably operate in coalition, pooling, sharing, specialization, and cascading might pay dividends over the long term. At the very least, they could function as useful adjuncts to purely national efforts to keep the Canadian Forces equipped for full-spectrum operations.

David Rudd is a strategic analyst with Defence Research and Development Canada in Ottawa. The article is an excerpt of a larger study published in February, 2012 and does not necessarily reflect the views of DND, the Canadian Forces or the Government of Canada.
© FrontLine Defence 2012