The Federal Government is under fire for granting a licence to a Canberra company exporting a weapons system destined for Saudi Arabia, a country plagued by allegations of human rights atrocities committed as part of the controversial conflict in neighbouring Yemen.

Key points: According to documents seen by the ABC, Australian weapons manufacturer EOS has struck a deal which will see its sophisticated weapons mounts supplied to Saudi Arabia

According to documents seen by the ABC, Australian weapons manufacturer EOS has struck a deal which will see its sophisticated weapons mounts supplied to Saudi Arabia Foreign Affairs Minister Marise Payne this morning told a Senate estimates hearing a ban on the sale of weapons to Saudi Arabia was under review

Foreign Affairs Minister Marise Payne this morning told a Senate estimates hearing a ban on the sale of weapons to Saudi Arabia was under review Saudi Arabia is leading a coalition which has been accused of indiscriminate airstrikes on civilians in war-torn Yemen

The ABC revealed this morning the Australian Government is providing tens of millions of dollars to Electro Optic Systems (EOS), which has designed a remotely operated vehicle-mounted platform that holds cannons, machine guns and missile launchers.

The ABC has seen confidential EOS board minutes which describe signing a Letter of Intent (LOI) for the sale of 500 remote weapons systems (RWS) units destined for the Saudi Ministry of Interior.

Following the ABC's report, Foreign Affairs Minister Marise Payne this morning told a Senate estimates hearing that a ban on the sale of weapons to Saudi Arabia was under review.

During the same hearing, Senator Richard Di Natale repeatedly asked one of Defence's acting deputy secretaries, Tom Hamilton, whether there was any guarantee Australian weapons systems or component parts would not end up being used in the bloody conflict in Yemen.

Mr Hamilton said Defence followed a strict procedure on the granting of those licences, but became embroiled with the senator in a heated exchange:

Di Natale: Can you state categorically that those weapons will not be used in Yemen? Hamilton: Senator I can state categorically that our assessment process is followed for each and every permit and that includes an assessment of the overriding risk that they will be used to commit human rights abuses. Di Natale: I'm asking a specific question. Hamilton: Senator if we assess that they would (be used to commit human rights abuses) we would not approve the permit. Di Natale: Will they be used in Yemen? Hamilton : Senator I refer you to our process, we take a very robust and vigorous... Di Natale: I'm not interested in the process, I'm interested in an answer as to whether these weapons will be used in the conflict in Yemen. So you can't give me a no? Hamilton: Senator, I'm giving you an answer around the process that we follow to assess… Di Natale: I don't want an answer on the process, I want an answer on whether these weapons will be used in Yemen. I mean I'm sure you're aware that according to a number of reports, indeed the UK House of Lords have said that these are highly likely to be the cause of significant civilian casualties in Yemen, the arms sales from the UK to Saudi Arabia, so I'm asking you for just a simple yes or no answer: Will these weapons be used in Yemen? Hamilton: Senator, I refer you to my answer to my answer to your earlier question.

Richard Di Natale says the Australian people cannot rely on our military products export licence system. ( ABC News: Matt Roberts )

Senator Di Natale later said Australia could not rely on Defence's assessment process when granting export licences.

"If I had any confidence in your answer you would simply be able to say 'no, these weapons will not be used in the conflict in Yemen'. But you refuse to say that," he said.

"I don't rely on that process because you can't give me that commitment, and I don't think the Australian people could rely on that process."

Do you know more about this story? Email investigations@abc.net.au

The Government provided more than $36 million in financial assistance to EOS, and Defence Minister Christopher Pyne has spent years lobbying the Saudi Government on behalf of Australian defence companies — support acknowledged by EOS.

"Christopher Pyne MP has visited foreign capitals with me to provide assurance of Australia as a reliable defence partner and supplier to its allies," a statement from EOS chief executive Ben Greene last year noted.

"This effort and support is acknowledged."

Defence Minister Christopher Pyne with Saudi's then-minister of the National Guard in 2016. ( Twitter: @cpyne )

Secret document reveals details of deal

The ABC has seen confidential EOS board minutes which reveal the company agreed to provide the weapons systems for use by Saudi Arabia in lots of 20 units.

EOS has a business arrangement with US arms manufacturer Orbital ATK, via which the RWS is supplied to Saudi Arabia.

EOS's chief executive Mr Greene said the company provided their weapons system to "the USA", and declined to say whether the end user was Saudi Arabia.

He added: "Since you mention MOI, it is worth observing that in [Saudi Arabia] the mandate of MOI (Ministry of Interior) stops at the sovereign border, so by definition no defence items provided to MOI by anyone would be deployed to Yemen."

He said it was his understanding nothing produced by EOS would end up in Yemen.

"EOS has no involvement in Yemen, no equipment in Yemen, and we have no end-user of EOS equipment that is likely to deploy it to Yemen," he said.

The board minute also refers to EOS receiving funding in 2017 from an entity known as "PIC".

This is likely a reference to the Department of Defence's now defunct Priority Industry Capability Innovation Program, or PICIP.

Loading

A publicly available PICIP document reveals Defence provided EOS $3.7 million between 2013 and 2016 for the RWS system.

That is on top of the more than $33 million that the Australian Government's export credit agency, Efic (Export Finance and Insurance Corporation), provided to EOS last year in performance bonds connected to the RWS.

Last week the US House of Representatives voted to end American military assistance for Saudi Arabia and its allies fighting in Yemen.

On Saturday, a committee of the UK's House of Lords declared the British Government was on the wrong side of the law by selling arms to Saudi Arabia.

'Transparency needed' on Australia's weapons sales

A young survivor is carried away from the site of a Saudi-led air strike that killed eight of her family members in Yemen in 2017. ( Reuters: Khaled Abdullah )

The ABC's story has prompted calls from Australian human rights groups, including Save The Children and the Medical Association for the Prevention of War (MAPW), for a total embargo on arms sales to countries involved in the Yemen war.

"Our government has abandoned any sense of ethical responsibility," said MAPW president and Nobel Peace Prize laureate Susan Wareham.

"The failure to acknowledge the role of Australian weapons sales in perpetuating the human catastrophe in Yemen is unsustainable.

"All weapons trade with actors in Yemen must stop immediately."

The Australian director of Human Rights Watch, Elaine Pearson, said the Government needed to be more open about sales to Saudi Arabia.

"The Australian Government has been saying repeatedly: 'Trust us, we're abiding by the terms of the arms trade treaty, we're abiding by our human rights obligations'," Ms Pearson said.

"But the reality is we simply don't know, because there is no transparency.

"I think we'd like to [have] a bit more transparency about what weapons have been provided to Saudi Arabia, the quantities of equipment and how do we know that those weapons are not ending up on the battlefield in Yemen."

Loading

Former military officer and defence analyst Rodger Shanahan said the Government should always weigh the risk of selling defence items overseas.

"When you're exporting to an area — particularly (the) Middle East where there is a history of conflicts, and some of the nature of the conflicts can be quite murky — you have to be quite confident in yourself that materiel … that you export is not going to be used in conflicts where there might be some reputational damage suffered by Australian exporters," he said.

A spokesperson for the Department of Defence said all export applications considered by Defence were "subject to rigorous risk assessment processes that consider Australia's international obligations, including the Arms Trade Treaty, as well as considerations relating to foreign policy, human rights, national security and regional security".

"The Arms Trade Treaty assessment includes consideration of whether there is an overriding risk that the exported items could be used to commit or facilitate a serious violation of international humanitarian law or human rights law," the statement said.

Who are EOS?

EOS is an Australian defence and space technology company with ambitions to become the world leader in next-generation remote weapons systems.

It has spent years developing the Remote Weapons System, or RWS, with the US and Australian militaries.

Such systems are a collection of sensors, cameras and lasers set around a small cannon, heavy machine gun, missile launchers or a combination of all three.

They are built onto a swivelling mount that can be affixed to the roof of a military truck or the deck of a naval vessel and fired while the user is safely inside a vehicle.

It can find targets up to several kilometres away and once a target has been acquired, it can lock on and continue to fire with minimal human involvement.

Oshkosh Joint Light Tactical Vehicle (JLTV) fitted with the EOS R400 Dual RWS with M230LF 30mm cannon and 7.62mm machine gun. ( EOS )

In January last, EOS announced a $410 million deal to supply the RWS to an "overseas customer".

Both the Government and EOS declined to state who the customer was, saying it was not in Australia's national interest and due to commercial-in-confidence concerns.

In December, the ABC revealed that the customer was the United Arab Emirates.

At the time EOS said its equipment "has no role in Yemen" and that it was not the recipient of export licences that would allow it to export defence equipment to the UAE.

However, two days ago the UAE Armed Forces confirmed it was the customer at a press conference at the IDEX international arms fair in Abu Dhabi, and EOS released a statement confirming it was indeed selling to the UAE, and that deal was now worth $450 million.

"This announcement confirms EOS as the largest global provider of remote weapon systems," Dr Greene said in the statement.

Australia seeks to promote overseas arms deals

Australia's defence exports to Saudi Arabia and the UAE are likely connected to a plan announced by then-prime minister Malcolm Turnbull in January last year to drastically increase defence sales over the next decade, called the Defence Export Strategy.

Australia will spend $200 million between now and 2028 as part of a plan to become the 10th largest arms exporter in the world. It is currently ranked 20th.

The strategy states the Middle East is a "priority market" for defence exports.

