Select Committee on Defence Minutes of Evidence

Examination of Witness (Questions 240 - 259)



  240. Do you see how that can be strengthened?
  (Mr Byers) I think there are a number of ways in which we can improve our operation in this area. I am very keen that, for example, we use our posts and our embassies and so on in countries to look very closely that end user conditions are being satisfied and are being met. It may be something that we have not done as well in the past as perhaps we should have done. It may not have been seen as as much of a priority as I think it should be. There are particular parts of the world where we do require very strict end user requirements to be signed up to because of our concerns and I think in those areas in particular we do need to monitor very effectively that those end user requirements are being met. I think that is the way to do it.

Mr Rowe

  241. The number of cases in which this kind of difficulty arises presumably would be quite small. Would it not, therefore, be extremely helpful to have prior parliamentary scrutiny in those small number of cases in order to help the Department set the right kinds of conditions for the licence?
  (Mr Byers) I know that is an argument that is put forward and in terms of the consideration that the Government is giving to the proposals of prior parliamentary scrutiny I will make sure that continues to be one of the issues that we will bear in mind when we arrive at our conclusion.


  242. I think you began your remarks on this end user issue by saying that in the consultation document it was not as prominent as you would have wished. I have to say to you that it has been quite prominent in the evidence we have taken today. I think there was almost a meeting of minds between the DMA and the NGOs in certain respects on this issue, which was quite an interesting experience. I think if we take that evidence this morning and what you have said that, in fact, clearly there is more thinking to be done on the whole issue of end use, you would agree with that?
  (Mr Byers) I am very clear about this in terms of just looking at the Bill and the proposals that are coming from it. I made very clear when we published the Bill that end use is something that I would hope through this consultation period we could have a further debate on. I think there is room for improvement. There is a very helpful piece of work which has been done by Amnesty International and Oxfam, Destination Unknown. That is something that has a number of ideas and that is going to inform our thinking as well. There is a lot we need to do in this area because we all understand it is an area where there is potential for abuse and we have got to be very sensitive to that. We have got to have effective end use monitoring, otherwise the system falls into disrepute, and that is not going to help anybody.

  Chairman: That is very helpful. Two other issues flow from it, the brokering and licensed production overseas, which are also the two other areas which go beyond Scott and raise serious and important issues. I wonder, Roger, if you want to take the question on licensed production?

Mr Berry

  243. Yes. Licensed production goes beyond Scott, although Lord Scott had an interesting comment or two this afternoon. It also goes beyond the Government's original thinking on this. I certainly appreciate, as I am sure the Committee and many others will, that the Government has sought to address this issue given earlier representations and Committee reports. My first question in a sense is the Government does seem now to agree that there is a case for addressing this issue of licensed production overseas and I was wondering whether there were any particular examples that the Government had in mind that had persuaded them that this was an issue that needed to be addressed in one manner or another?
  (Mr Byers) I think it is the principle that needs to be addressed and I do not have any examples that I would want to particularly draw to the Committee's attention, although I have got a feeling that the hon. Member may have. I think we can probably all recollect some areas where things have not gone as we would have wished. It is an area that needs to be addressed. There are effectively two options in the consultation paper as to how we can address this. We are moving to a situation where we will have a far more effective regime in place, and I would welcome the views of the Committee as to whether you feel that is so. Once again, it is one of those areas where I think experience shows us that we could be in a potentially embarrassing position for the United Kingdom, as a country that cares about these issues, not to have an effective regime on licensed production in place. We need to use this as an opportunity to do precisely that.

  Mr Berry: I am very happy with that, thank you.


  244. Brokering is the other area. The proposal is to have a register.
  (Mr Byers) Yes.

  245. We got into—not semantics, they were more than semantics—quite a serious issue with the DMA this morning as to how you define a broker, would an agent of a company be a broker, and the whole area between brokering and being agents and so forth. Has the Department given some thought as to how to define brokering and who a broker would be?
  (Mr Byers) We have given a great deal of thought to it and we need to give more thought because it is not an easy definition to come up with. The report I got from the evidence session this morning was that examples were mentioned of people over the telephone talking and saying perhaps "I know somebody who may be able to help". It is something we are going to have to have very clear in the secondary legislation. It is not going to be easy. I think most of us know what we mean by someone who brokers a deal in that we know it when we see it. The question is how, in secondary legislation, we can put that down in a way which is going to be legally watertight. In a sense you are right, Chairman, there is a danger that it becomes an exercise in semantics but actually it is crucial in terms of having an effective regime to regulate the trafficking and brokering of arms. This is part of the Bill that I am particularly pleased that we managed to get in, as also licensed production. This is actually one of the reasons why the Bill has taken longer to bring forward than perhaps most of us would have wanted but in some important aspects it goes way beyond the White Paper. The political view that I took was we are probably only going to get one chance every ten years—or based on experience every 61 years—to have a Bill on export control, so let us try and get licensed production there, let us try and get trafficking and brokering. That is why it has taken us longer to be here than perhaps any of us would have wanted to see. That is by way of explanation. I think you are right, Chairman, I think we do need to be very clear about how we word this definition of what a broker is in this context.

  246. What about the position of extra-territoriality?
  (Mr Byers) I think there are two aspects on trafficking and brokering where I would very much welcome the views of the Committee and also those of the public more generally. One is whether there should be any restrictions in terms of the military list or whether it should be the whole military list that is covered. At the moment we are not saying that, we are saying it should be guns, ammunition, the major parts of the military list but not the whole military list. I would certainly welcome views on that. The second aspect is in relation to the extra-territorial point. As you know, there is a reluctance on behalf of Government to extend provisions in an extra-territorial way but precedents have been established to allow this to occur. It is possible for it to happen. The Government's mind is open on this and we would be very interested in hearing the views that the Committee and the wider public have got on that particular aspect.

  247. We have the American experience where they have actually had it in law and I think everybody sees it as having some kind of deterrent value if nothing else.
  (Mr Byers) Yes.

  248. We have got the precedents of land mines and, indeed,—
  (Mr Byers) We have, all coming in in recent years. The precedent is now there and there is a debate going on about how we should deal with it within this particular Bill.

Dr Godman

  249. You referred a minute ago to a definition of brokering. What is the experience of brokering in this field elsewhere amongst Member States of the European Union? What comparative evidence have you sought to obtain from elsewhere within the European Union?
  (Mr Byers) My understanding is that we are going to be pretty much ahead of the game if we set up a system in the way in which we intend to do it, so we are breaking new ground a bit in terms of how we define who a broker is in this particular context. We are on our own a bit because we are moving ahead of everybody else.

Mr Rowe

  250. Can I ask what benefit to brokers one would see? It seems to me that you have in a sense to establish a benefit of registration otherwise the incentive to not register and behave in a hole in a corner manner would be huge. I just wondered whether you had given any thought to the benefit that derives from being registered as a broker?
  (Mr Byers) I think what surprised me when we began discussions about trafficking and brokering, brokering in particular, was I thought there would be a very hostile reaction from the industry side itself and we have not had that. The industry has said it welcomes the possibility of having a system which is seen to be above board and where everybody knows exactly what is going on and we have a register of people involved in this particular activity. I think there is a recognition that there is a great deal of public concern, which the Government must reflect I think, on this whole area of brokering and trafficking, that something had to be done. What we are trying to do in the Bill and through the consultation is working with the NGOs and working with the defence industry itself to see if there is a way forward that everybody is happy to sign up to. Broadly speaking, as I say, I have been pleasantly surprised that we have not had the objections and the strong reservations that I thought we might get from the defence sector itself. I think there is a recognition here that it is in everybody's interests to have a structure within which this sort of activity can take place.

Mr O'Neill

  251. We did get a rather jarring note this morning from the representative of Rolls Royce who made the point that if we make it too difficult for British companies then foreign companies will be chosen. I think this is the kind of self-serving pleading that has bedevilled the proper treatment of this issue for a long time but it nevertheless is a concern that if we break new ground, if we do things that other people do not do, then we will get the bleating and the complaining from the defence industries that they are being disadvantaged internationally. Is the Government sufficiently bold and robust to withstand these kinds of special pleadings?
  (Mr Byers) I would hope so, although I have to say I think the industry itself recognises that this will not put them at a disadvantage if we get it right. You could introduce a system which would really be to their disadvantage but I think what we are proposing here, that there is going to be a register which you have to be on, and licences will need to be applied for, is one where most defence manufacturers are happy that we have got the balance about right. It meets the genuine concerns and legitimate concerns that people have got but does it in a way which does not mean that British business is put in an anti-competitive position. That is the balance that we are trying to strike now.

  252. Would you go a stage further and say that given there is always going to be a concern about the anti-competitive disadvantage at which you might place some of our people, that that would only exist for as long as there was not international acceptance of the kinds of proposals that we are talking about today and it is incumbent upon Government if such a line was to be taken and implemented in legislation to seek to pursue it amongst NATO allies and the European Union, or amongst the community that we see as our natural allies in these matters?
  (Mr Byers) I agree with that, that is absolutely right. One of the things that we have been talking to the Swedish Government in particular about, who have the Presidency of the European Union at the moment, is how we can get action on this whole area on a European wide basis. My own experience is if you wait for everybody to sign up you could be waiting a long time. It takes a Member State to be bold and robust enough to take the initiative. I think the fact that the UK Government has indicated that we are going down this route has actually strengthened our position enormously. I know in conversations that I have now been having with the Presidency in terms of getting action on a European wide basis we are in a far stronger position to achieve that because we have said that as far as the UK is concerned, we are going to go down this particular route. It is getting the balance right. The model that we have been working on is one which will address the concerns that people have got but in a way which most legitimate defence businesses will accept is right and proper.


  253. Two remaining issues on brokering, one which was made very forcefully to us this morning by the NGOs, and that is whether the process should be extended to the logistics of arms transfers, to the freight forwarders, the shippers, etc? Where do you stand on including them in the process?
  (Mr Byers) I think there are two possible situations here. One is when shipping is part of the overall contract in which case, yes, it can be considered as part of the requirement for registration and licensing. If, however, there is a sort of freestanding shipping company that is not party to the contract itself but is the one who then has the responsibility for delivering the goods, and I have seen the arguments because I have seen representations from some of the NGOs, and Saferworld in particular have raised this point directly with the Department, I am not convinced yet that we should be identifying the logistical aspect if it is a freestanding element. I will consider the case but, once again, I would be genuinely interested in getting the views of the Committee on that, whether it is going a bit too far to specify someone who is involved in transport within it. I think there may be difficulties there.

  254. I suppose a vivid illustration of it was the case of the movement of the airlift from Ukraine to Burkina Faso which the Foreign Affairs Committee pursued. That was a classic example. That would not be covered under the proposals for brokering, that type of transfer would not be covered?
  (Mr Byers) I have seen that particular example and my understanding is it would not be covered by the provisions as they presently are.

  255. It was a particularly blatant example of the kind of thing one would like to actually make illegal?
  (Mr Byers) To be honest, it has been drawn out as an issue since the consultation was begun whereas, to be frank with the Committee, at the moment I am not convinced that it is an issue that we should be addressing, although we can in practice address it if the Committee has views and, indeed, as we have heard from NGOs, as part of the consultation it is something we will have to consider.

  256. There is one other aspect, if I may, and that is the whole issue of enforcement and whether, in fact, this will require in some way further intercept powers. We are talking now about oral transfers, we are talking about e-mails, we are talking about transfers through all the modern IT equipment. Has the DTI received any advice from any of the law enforcement agencies in relation to the new proposals on, say, brokering as to the sufficiency of the existing procedural arrangements to detect breaches of what will become a breach of the law?
  (Mr Byers) In the discussions that we had within Government about bringing forward these proposals one of the aspects that clearly we do consider is that of effective enforcement. We are confident that the measures that we want to introduce are ones that can be effectively enforced.

  257. Would they require any extension on sensitive issues like intercepts?
  (Mr Byers) My understanding is that the provisions that would be needed for effective enforcement are already in place.

  258. So you do not think there is going to be a civil liberties issue arising by an extension of such requirements?
  (Mr Byers) Not that I can see.

  259. Let us deal with two other issues, intangible transfers and technical assistance. On intangible transfers we had the academics before us a little earlier on still staying that the Department had gone some way to meet the original concerns of the 1998 White Paper, that they had swept the whole of academic research within the provisions of the Bill, it had gone some way but still not enough. They would be happy if the concession made about information that was in the public domain was written into the Bill in one form or another if they could put the safeguards of the kind that in a way they feel the Department has met them on but has not met them in legislative terms. Do you want to go further on that?
  (Mr Byers) I know that they gave evidence earlier on today and certainly as part of the consultation we would want to look at that and we would want to look at their own representations that they have made. This is one of those areas where it is not a matter of great principle at stake, it is a question of making sure that we have a Bill which ensures the objectives that we want.

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