Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 40 - 59)

TUESDAY 30 JANUARY 2001

RT HON ROBIN COOK, MP, MR WILLIAM EHRMAN, MR TIM DOWSE AND MR IAN BAILEY

Ann Clwyd

  40. Can I just say, I think you exaggerate the influence of Members of Parliament on these decisions. I think Members of Parliament have little influence on the decisions. If we go back to arms to Indonesia in 1997, I do not believe if Parliament had had prior knowledge of the arms sale that Parliament would have approved it. The US Administration told us in the United States, when we were talking about these matters, that, even if it had been suggested to them, they would not put it to Congress because they knew Congress would throw it out. In a lot of situations like this, where exports to certain countries are contentious, prior scrutiny would give Members of Parliament that ability they do not have now.
  (Mr Cook) I hear what you say, Ann. I can assure the Committee that parliamentary views and the views of this Committee do weigh heavily with those who take the decisions. There was no decision in 1997 on exports to Indonesia. Are you referring to the decision taken earlier?

Chairman

  41. Can we pull this together by concluding with one question, do you accept that our statement, the authority to export arms is a different degree of sensitivity from other types of ministerial casework?
  (Mr Cook) It is probably fair for me to say it is amongst the sensitive decisions we take in the Foreign Office, but the Foreign Office is not a department with a large programme budget. I am quite sure that the DTI would not regard some of their decisions in industry to be any less sensitive in its direct impact nor the MoD on a whole range of decisions they take. Decisions we make can be contentious. If I look back over the last four years and the decisions I have taken as opposed to the decisions taken by my predecessors, out of those 10,000 a year applications we are looking at probably less than half a dozen that have become issues of—

  42. That is the point we made from the start, Secretary of State.
  (Mr Cook) It does rather undercut your idea that one type of casework is more sensitive than the other.

  43. I think it shows that there is a small collection, the threat of 10,000 licences is not a valid point, that it is, in fact, a small group of contentious licences which would be the subject of prior scrutiny.
  (Mr Cook) It is entirely valid so long as you are asking me to send you them all, that is what are you doing.

  44. We will seek to refine that. I will take that away. I think your admission of dealing with a small collection is exactly what our case is. That a lot of the practical issues you have raised in this respect are, therefore, if I dare use the word, exaggerated.
  (Mr Cook) I did not seek to exaggerate it. I merely point out that it is hard to see it quickening up the process we are trying to speed up and which the Committee criticises us for not speeding up.

Mr Khabra

  45. Secretary of State, whatever criteria you use to supply arms to countries in an area of conflict, such as India, Pakistan and China, how do you morally justify supplying arms at the same time to three different countries which have got issues of conflict in each of them? It is an explosive area and I cannot understand what criteria you use.
  (Mr Cook) I think later on we will be discussing some individual countries and individual applications. I have to be careful how I approach any particular individual country in an open session. To respond to the other question on both India and Pakistan we apply our criteria. In the case of Pakistan, as the Committee knows, we had an extensive and lengthy review of our arms exports policy which did result in a statement to the House, and it is on the record. Effectively what that resulted in was in us proceeding with those licence applications which are related to the naval side of the business but refusing a large number of applications which were from the military ground forces or, indeed, the air force, from either being relevant to the nuclear ambitions of Pakistan, to any confrontation on the border and the line of control with India or to internal repression. A large number were refused, and indeed the number of refusals will be stated in the Annual Report. In the case of India, we would consider very carefully any evidence that material for which an application had come in had been used in or near the line of control, and that is actually a current factor with us and I was looking at just such a case quite recently.

  46. What about China? There is another country where we have worries.
  (Mr Cook) China has a quite separate policy position in that there is an EU embargo on China.

Chairman

  47. If you do not mind, China is on our agenda later. I do not mean to cut you off but it is on our agenda. I would like to pull together this current exchange, could we take it that if we, the four Committees, come back with a refined proposal neither you nor your colleagues have closed minds on this issue?
  (Mr Cook) If the Committee wishes to put to me a refined proposal, I will of course consult with my colleagues. I cannot give you any undertaking about it changing their minds particularly on the issues of principle which I have referred to, but I will certainly make sure it is thoroughly considered.

  Chairman: May we turn to the second area which has been of very great interest and concern for this Committee and that is Scott, the Scott Report and legislation on the Scott Report and other aspects?

Ann Clwyd

  48. I do not think I need remind you, Foreign Secretary, of the Scott Report, since you read it from cover to cover. You will have also noticed some of the things Richard Scott has said in the last few weeks. January 2001 is slipping away and there is still no draft Scott Bill and he said at the time in his report that the use of war time powers and emergency war time powers after the emergency has long since passed could be an excuse for the pursuit of administrative convenience and that the Government should not continue to rely on those powers. Since they have actually been in force for the four years we have been in Government, could you tell us if parliamentary counsel has been given the drafting instructions and what is the timetable for the draft Bill?
  (Mr Cook) I could not answer your first question because this is a Bill of course for the DTI and I honestly do not know whether or not they have given instructions. I do not know if any of my Foreign Office officials can guide me on this. I am told they have.

  49. I think this Committee would like to look at the departmental drafting instructions rather than wait until the draft Bill, because I know NGOs have been consulted about the content of the Bill, and if we were able to do that it would enable us to look at the policy issues rather than waiting for the statutory language to give effect to that.
  (Mr Cook) I cannot speak for my colleague, Mr Byers, on that point. If material has been shared with NGOs, a priori I see no ground or principle why it should not be shared with the Select Committee, but I will take up with the DTI that proposal.

  50. Is it of concern to you that this draft Bill has been so long in the making?
  (Mr Cook) The first thing I would say is that the great majority of the recommendations of Lord Justice Scott have actually been implemented. It is true that to complete the picture we need to carry through the reform of the legislation. This Government produced a White Paper on that in July 1998 and invited comment on it and there was quite a substantial and prolonged discussion in response to that, and I am not sure it was a bad thing that that discussion went on for as long as it did because if we had closed it down earlier you would not, for instance, have had the commitment which was given by Stephen Byers only in September of last year that he would include arms brokering in the forthcoming legislation. We now have a commitment to produce a draft Bill, I am pleased that has gone to parliamentary draftsmen, and I hope the publication of that Bill will give us an opportunity in this session to scrutinise it, to debate it and, depending on the length of the session, there is always the possibility it could be introduced.

Mr Viggers

  51. It is normal, Foreign Secretary, for parliamentary draftsmen to give an estimate or timetable for the amount of time taken to produce the legislation, can you please tell us what the timetable is for this legislation?
  (Mr Cook) I have no idea because I am not the appropriate Secretary of State but we can try and get an estimate for you when publication might be.

  Mr Viggers: Thank you.

Chairman

  52. Somebody will give us that estimate?
  (Mr Cook) I can try, Chairman. It is not my department so it is not within my gift. It may be in confidence but we will try and give you some guidance.

  53. Prior scrutiny of legislation is actually now built into our procedures and in fact our four Committees would be very happy to undertake that prior scrutiny.
  (Mr Cook) I would welcome that myself.

  54. The sooner the better.
  (Mr Cook) I know from the experience we have had with the International Criminal Court Bill that prior scrutiny can be very valuable in producing the final Bill.

  55. Will it cover the issue of licensed production? I do not know if you heard a Radio 4 programme this morning, or you have been briefed on it, about licensed production in the Philippines?
  (Mr Cook) Yes, I listened to it with rising indigestion.

  56. Have you any idea whether the Bill will be covering the issue of licensed production? Our last report said we thought that it ought to be covered by legislation.
  (Mr Cook) It is a matter which is being considered by the DTI. I cannot myself say whether or not it is part of the instructions to parliamentary draftsmen. Since you raised this morning's programme, can I say that it was rather confused in what it was alleging. It did refer to kits which had gone to the Philippines for assembly. This, of course, is no loophole, kits which go for assembly are subject to the same licensing process as any completed weapons system, and those particular kits were licensed in 1992 for assembly in the Philippines. We are not aware of a licensed production facility within the Philippines and certainly the GKN Alvis plant at Subic Bay is an assembly plant, it is not a production plant and is not therefore a licensed production facility.

  57. So if, in fact, there was an application to send further kits of similar arms it would require a licence and would be subject to the full licensing procedures?
  (Mr Cook) Yes.

Mr Cohen

  58. The European Code of Conduct came under the UK Presidency in June 1998 and is a great advance and I pay tribute to you for that, but obviously we need to move on from there and tighten it up, and the Committee called for, and the Government agreed actually in response, that there needs to be a minimum level of transparency EU-wide. What real progress is being made to get that greater transparency? You have rightly said that our Annual Report has a lot of information, some of the others are not so good and often you just get policy statements. Are we getting any progress in getting that greater transparency across the EU?
  (Mr Cook) First of all, I thank you for what you have said about the Code, and actually I do think it is an immense break-through just to have a system in which not only have all 15 members signed up to the same criteria, particularly on human rights, but we have actually put in place a quite unique system of notification and denial on contentious cases in which any one of us can object if another country is taking up a contract which we ourselves have refused because of our criteria. That actually is a very surprising innovation which many people did not think we would get. It is working quite well and is promoting the same standard in application of human rights criteria and not simply individual standards. You are correct that few of the other countries come anywhere near the transparency we have shown. The way forward on this which we keep trying to urge is more requirements on reporting within the Code, because we have to produce an annual report and I think the annual report on the Code of Conduct has been circulated to the Committee, that is based on returns from each of the 15 nations, and the more transparent we can make that the more transparent is the reporting by each of those 15. However, I would not understate to the Committee that getting agreement among all 15 countries can be difficult, but we are on the side of transparency and it would actually be in our interest for everybody else to be as open as we are.

  59. I welcome that. I think there is a need for greater transparency in a denial system, at least there should be the figures of what has been denied and also the reasons given as well. There has been, from what I understand, a rise in consultations over this matter of denials. Is it happening that we are being under-cut when we deny an arms export and somebody else comes in?
  (Mr Cook) The figures are actually published in the annual report of the Code, they are in annex 1, and they show the number of notified denials. For instance, to take the case of the United Kingdom, in the last year we notified 26 cases where we had refused a licence within the terms of the EU Code. That of course does not cover all of our refusals, which were over 100, but those were the ones we refused in terms of the EU Code. Now if you take the same year, there were two occasions when we were approached by other countries who were interested in taking up the contract which we had declined, which is not bad actually out of the total proportion. I would say there are very few cases where one country proceeds to take up a contract which another country has declined, and where it does occur it is almost entirely because there is some difference of interpretation of either the Code or of the contract. For instance, they are required to consult us if the contract they appropriate is essentially identical, and sometimes on examination it does not turn out to be essentially identical, so what may appear as an under-cut is not really the same contract, but they are a very small proportion of the total and my general view is that the system is working well.


 
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