Liberals put on the spot by Streit sales in South Sudan and Libya

Defence Minister Harjit Sajjanhasopened the door slightlyto closing a legislative loophole that has allowed a Canadian company to sell armoured cars in countries gripped by civil wars.

The Liberal government, determined to restore the country's image as a peacekeeper, was put on the spot this week by some of the business dealings of the Streit Group, which has been criticized in two separate United Nationsreports.

CBC News obtained leaked documents and photographs about the company's activities overseas.

• Canadian firm shipped armoured cars to lawless Libya despite UN warning
• Armoured carsale to South Sudan should be investigated, rights groups say

Streit, which has a plant in Innisfil, Ont., north of Toronto, shipped hundreds of armoured patrol vehicles into both South Sudan and Libya trucks that were later outfitted with weapons and usedby the South Sudanese military andLibyan militias.

The practice in the arms trade known asdiversion when equipment is allegedly sold for a benign purpose but ends up being used for fighting is illegal under international law and specifically prohibited by an international arms trade treaty that the Liberal government has been eager to sign.

Human rights groups are calling for a federal investigation into whether any of the sales violated economic sanctions in South Sudanor the arms embargo against Libya.

UN investigators monitoring sanctions in both countries criticized the deals, and human rights groups in this country have said the sales have either directlyor indirectlycontributed to the escalation of violence and possible human rights abuses.

'Responsible role'

Sajjan would not address the Streit deals specifically, but in an interview that airs Saturday on CBC Radio's The House he said everyone operating in fragile states other governments, businesses and aid organizations needs to do their to utmost to prevent situations from spiralling out of control.

• Heavy fighting 'spiraling out of control' in South Sudan capital
• ISIS gaining strength in Libya, according to UN report

"This is one thing our government has been very clear on: We will be bring in regulations so that, you know, companies play a responsible role," he told CBC.

Last week, Global Affairs Canada said the Streitdeals fell outside of Canada's arms export regime because most of the vehicles were shipped from the company's branch in the United Arab Emirates.

But officials also said they're in the process of overhauling the system and new legislation will be introduced this fall.

The department would not, however, commit to closing the loophole that allows Canadian companieswith foreign officesto sell military-grade equipment outside of the country with less scrutiny than deals conducted from home.

Sajjan, who is currently touring Africa looking for places to establish a peacekeeping mission, has preachedthe necessity for Canada's defence and foreign policy to be oriented towards stabilizing fragile countries that might be on the edge.

"My thing is: It's about understanding (conflicts)," he told CBC News in an interview prior to his departure. "If you are going to be a responsible partner in the world, looking at conflict prevention, especially the work that needs to be done in Africa."

Political problem

Beyond the legislative and policy issues, the Streit Group controversy presents the Liberals with a political and image problem.

Prime Minister Justin Trudeaucampaigned on a promiseto make Canada a force for good and a champion of human rights on the international stage.

ANALYSIS|On Saudi arms deal, the new boss in Ottawa is just like theold boss

Human rights groups say it's hard to argue Canada is contributing to calm and stability through peacekeeping in trouble spots when it allows companies to sell military-grade equipment that can be used to intensify wars.

"These transfers that went forward in South Sudan and in Libya undermine the integrity to Canada's commitment to conflict prevention and as we move forward, we need to ensure we have tighter laws, regulationsand oversight mechanisms to make sure these sorts of situations aren't repeated," said Alex Neve, secretary general of Amnesty International Canada.

The Streit Group was asked repeatedly for comment last week, but didn't responddirectlyto CBC.

In speaking to UN investigators about the Libya case in 2014, Streit officials strenuously rejected the suggestion the companyhad violated any international or domestic laws.

• Canadian firm shipped armoured cars to lawless Libya despite UN warning
• Armoured carsale to South Sudan should be investigated, rights groups say