Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 25 APRIL 2001
MR MICHAEL
CROWLEY, MS
JULIA SAUNDERS,
MS SARAH
MEEK AND
DR IAN
DAVIS
Chairman
20. I can supplement that. Let us take the example
of a case we know. Take Foyle Air for example; do you think they
would actually have sought a licence to fly arms from Ukraine
to Burkino Faso in the safe knowledge that the UK would not have
granted a licence? (Dr Davis) No, but that is the whole
point: they probably would not have done but the fact that they
did not apply for it, it then becomes a criminal offence. If we
are able to catch up with them and there is enforcement, then
you have some means of prosecuting them.
Mr Cohen
21. In the case I gave, technically they would
say it was the shell company and they were in the background.
Are you going to say that every British individual should register
he has some connection with a company overseas doing arms dealings? (Ms
Meek) I think there are two answers and I will only give one
of them, which is where I feel more comfortable. It is not just
export controls in isolation; we are also talking about the movement
to reduce money laundering and trafficking in other goods, as
Ian has said, and it is part of the international movement to
have more transparency and openness and crack down on corruption.
If we are talking about also moving forward on corruption and
on criminalising other offences, this fits into that larger framework.
(Dr Davis) I am not too sure either because it would obviously
clearly require careful drafting. I would have thought there were
precedents in other areas of territorial regulations, both for
chemical weapons, the Misuse of Drugs Act and also the Sex Offenders
Act, which all have extra-territorial provisions. There must have
been these dilemmas within their provisions. Clearly this would
need careful drafting. I guess that our stock answer would be
that we would hope that the provisions did cover directors of
shell companies in foreign companies. Again, you get back to the
difficulties of enforcement. If you can criminalise that behaviour,
that may stop it.
Chairman
22. Before we go on to end use, can I just wrap
up on the issues of brokering? You quote the legislation in the
USA where there is a requirement to register and extra-territorial
legislation. Do you have any knowledge of the register and how
many brokers have actually registered under the US arrangements?
Is it a huge list? Have you any information that would be helpful
to us? We all agree that the government is saying there is going
to be a register. I wonder whether you think registration in this
field has been fruitful. (Dr Davis) I would like to
say that we have the information but we do not. We have information
on the number of applications each year for individual licences
within the system but not the number of companies that register.
23. If you have that information, we would be
grateful if you would send that in. (Dr Davis) Yes,
we will do that.
24. The second matter is this. Any government
and parliament would have to consider the regulatory burden of
any decision. You have sought to play that down if you extend
it to shipping by saying, "Oh, well, after the general licences
and the open licensing system, we are down to a handful of examples".
Your actual draft implies that almost every shipping agent in
the business of shipping arms would have to register and become
part of the licensing process. That does not sound like a minimal
additional regulation, I must say. (Dr Davis) Our information
from talking to shipping agents, and we ran a small workshop meeting
in New York on this in July, is that there are probably only around
20 to 30 shipping agents specifically involved in shipping arms.
We do not see that as a large regulatory burden.
25. If government ministers say that this is
a massive extension of a licensing process and therefore a very
considerable regulatory burden, as they argue in the rest of this
Bill, you would argue that in fact it is a modest one? (Dr
Davis) Yes. (Ms Saunders) I think it is weighing
up the burden against the actual human cost at the other end of
this chain.
26. I understand that. You are not weighing
it up. We have to weigh it up. (Ms Meek) The Government
produced estimates in its consultative paper on the sterling cost
of extending this licensing system to brokers. We are saying shipping
agents are only a proportion of brokers as a whole. If the Government
is realistic about their cost assessment, we are not talking about
a huge increase on that existing estimate.
Chairman: Could we turn to end use, which
is another major part of your submission?
Mr Viggers
27. There are some cases, are there not, recorded
against us where, after due and proper inquiry, arms have found
their way into countries not purported to be their final destination?
For instance, the Scott Report reports on arms finding their way
into Iraq, thought to be through Jordan, and there is a recorded
case of a naval cannon which should have gone to Singapore, which
found its way into Iran. This is the so-called end use where the
original purchaser is not the final end user, so this is the question
of end use. Ministers have made it clear that there is no specific
measure to cover such a foreign end user and Ministers have made
it clear that the draft legislation will not include provision
for end use. Sure enough, we have the draft legislation and there
is no provision for end user. Are you satisfied with that? What
would you do about it? (Ms Saunders) As you might expect,
the answer is: no, we are not satisfied with that. We feel the
responsibility for the country does not end when goods are waved
off at Harwich, or wherever they leave from. I think we can look
at the end-use question in two parts. The first part is about
the documentation required that guarantees end use and the second
part of it is the follow-through, the monitoring, the checking
out of the end user and then the checking that the weapons remain
where they are claimed to have gone. On the first part of that,
on the documentation, we miss an opportunity here to consider
if it is the right time to move towards a more standardised form
of end-user documentation which would help back up all the other
parts of this Bill, for example, with a fuller provision of information
about the named individual as the end user. These kinds of things
are not spelt out anywhere and there is no standard end-user certificate.
Most people think there is but in fact there is not. This is where
perhaps we should be looking at the international debate on this
issue. Under the Vienna Firearms Protocol there is a discussion
going in this direction. The next logical step is perhaps a standard
certification system. All of this is totally absent from the current
legislation or consultation document. I think that is a big missed
opportunity. Secondly, in thinking about the follow-up, there
is a mention in the consultation document about the increased
use of embassies but my understanding of that is that it is a
fairly ad hoc measure at the moment and not necessarily dedicated
to qualified people doing it at the other end. This is one area
where I feel that we should be moving into a much more systematised
method of reporting, so that when the end-user documents come
through there is a point at which for particularly sensitive countries
and sensitive goods—and we are not talking about everything—and
where there are obvious question marks, we have a system whereby
embassies do check on the end user and, secondly, once the goods
have gone, they have a period after delivery to go and check that
they are still where it is said they were. This is the point where
you can really get at diversion. I was disappointed to see that
that is not part of the current package of measures.
28. Dealing with these points in turn, you would
tighten up on the original drafting of the end-use certificate
and bring in a formal standard end-use certificate which you think
would be more watertight? (Ms Saunders) A number of
other countries have already done this. At one end of the scale,
Sweden has its own bank-quality certificate which is required
to be used prior to export. In Germany they have a system whereby
a named individual in the company that is exporting has to be
responsible—that is now putting the burden on the commercial
partner here—and one of the directors has to be responsible
for end use, and perhaps that is a rather interesting measure.
There is a variety of options one could discuss. For me the first
step would be to make sure there are standards which are required
during the licensing procedure to provide certain pieces of information
and importantly the routes and the brokers and shippers who are
involved in the transaction because this is often the missing
link. This allows diversion again.
29. Will you be putting forward suggested draft
clauses to cover this? (Ms Saunders) Absolutely, yes.
Chairman
30. I can understand why you want standardised
end-use certificates but that does not require legislation. We
can just prescribe them without legislation? (Ms Saunders)
Absolutely, and I do not think it would be something for primary
legislation. I am talking about the discussion of end use that
was held within the consultation document in that paragraph where
it clearly says that the Government indicated it will already
improve the system sufficiently. (Mr Crowley) I want
to follow up on something that Julia has said. Once there is evidence
of diversion or misuse by the stated end user, there has to be
provision in the controls for a revoking of that licence and an
insurance that no further related goods or components or training
or assistance will go to that company end user. That is not there
at present. (Ms Meek) Our reading of this Bill as primary
legislation is about the powers it gives government. One of our
concerns on end use very fundamentally is that we are not convinced
that within this Bill there exist powers for the Government to
take proactive steps on monitoring or even just to ask on an ad
hoc basis in examining end use. We would like to see those powers
put into the Bill and we will be able to provide drafting clauses
that effect.
Mr Viggers
31. Where you can demonstrate that there has
been abuse of contract, you would insert provisions which would
prevent a further supply of products to that supply chain? (Ms
Saunders) I think it is a case of shutting the barn door after
only one horse has bolted, rather than letting the entire stampede
follow, which I think is the situation we are in at the moment.
There is no clear cut-off point which can be reported back and
actually acted upon which would help enforce the decision that
an end use is no longer a reliable destination for arms.
32. Then your provision would presumably be
superior to the contractual provisions and overide the contract
and prevent further supply? (Ms Meek) Correct, because
that would be the responsibility of government, which I understand
is superior to that of individual companies.
33. I am just probing to see how far you go
on this. Would you also seek to work proactively to pursue the
company through whom the improper supply has happened? If you
discover that an end user is not an appropriate end user but an
illegal end use, would you then seek to retrospectively deal with
that issue and perhaps pursue the supplier through whom those
products are being provided? (Ms Saunders) That would
be a question of being able to prove that there was a reasonable
expectation the company should have been aware of the risk of
diversion or abuse. It is quite difficult to prove but perhaps
you might want to pursue cases for example of breaking of UN sanctions
and the Mil Tec case referred to earlier, which might be a case
where you would want to pursue that kind of thing.
34. In your very helpful briefing note to us
you said: "The most effective system would include provisions
whereby an end-use certificate takes the form of a legally-binding
contract which contains a list of proscribed uses and a prohibition
on unauthorized re-export." You are presumably putting forward
provisions that would cover that? (Ms Saunders) Yes.
Dr Starkey
35. Can I follow up the second part of this
which was your suggestion that follow-up checks should be carried
out by embassy staff. We have had a practical example of the difficulties
of this with the concerns about the misuse of British arms sold
to the Israeli Government used against civilians in the occupied
territories. There are two problems: firstly, that it is a rather
dangerous situation for our embassy staff to go wandering around
trying to check what is being used; and secondly, what was actually
sold to the Israelis is equipment which is embedded in other equipment
so it is difficult to decipher. What do you think is a practical
way in which that wish for embassy staff to help to deter diversion
of misuse of arms can be carried out? (Ms Saunders)
You refer presumably to high-tech and very complicated systems.
This is why you need qualified staff to do it. That would underline
that point. It would have to be somebody who knows what they are
looking at, what kinds of weapons and the kinds of systems. This
would be something for somebody with a military background, presumably
more qualified to do it than others. Secondly, the point about
sending British embassy staff into the firing line: I did not
actually have that in mind, you will be pleased to hear. This
is particularly relevant when there is diversion and it could
be if you have exported X number of tanks into a particular country.
I do not see that there is much of a problem in saying, "Where
are those tanks now?" This can be done in situations of peace
as well as war, of course. It would not be appropriate in every
situation. I would not say it is their job to go and count the
tanks whilst they are being used in an offensive but they may
well count them on a day when they are having their usual contacts
with the army of that particular country.
Ms Kingham
36. I want to follow up on this point. Going
back to the very beginning when you said that there was going
to be no blanket decision that a country's human rights record
should preclude it from receiving arms or arms exports and then
linking that back into the situation about whether weapons or
arms that are being sold could be misused in a country. I think
you are making quite large assumptions, and I read from Julia
Saunders' response here that the systems are in place or could
be in place actually to monitor either end use or diversion or
misuse of arms within a country and also linking that in some
kind of systemic way to a human rights situation within that country.
As we know, most conflicts nowadays are internal conflicts rather
than between states and ensuring that systems are there to monitor.
The situation in the Israeli-occupied territories has already
been mentioned. There is a similar situation with Morocco and
Western Sahara. How do you feel confident or what kinds of systems
would you recommend to put in place to ensure that the overall
human rights situation is monitored to ensure that misuse of weapons
within that country cannot take place and that in future something
could be done about issuing licences or enabling exports to go
to those countries that could not be misused for internal oppression
in a very practical and systemic way? (Ms Saunders)
I would not want to conflate the risk of diversion with human
rights monitoring in this argument because I think that Ms Starkey's
point was about the possible human rights abuse of weapons that
are exports, whereas I was saying that in terms of diversion that
is not necessarily something which is monitored during a war situation.
Most of the exports would go to a country's army and in most cases
British embassies would have standard continual contact with that
country. For example, I was in the Philippines recently and it
is clearly the case that the British embassy there has very close
relations with the Philippine army, which is regarded as an end
user to which we can export.
37. But there is no systemic way of doing that.
It depends on individual embassies and on contacts and the overall
foreign policy objectives of the British Government in those individual
counties. If you are arguing for this, it needs to be bolted on
in an systemic way to ensure that it can take place, surely? (Ms
Saunders) Yes, and I started off by arguing for that. I think
at the moment it is ad hoc. We would like to see something which
was more systemised.
38. Do you have any ideas of what that might
be? I completely agree with you. I am failing to understand how
that can be embedded into something like the legislation we are
talking about today in a very practical way. (Dr Davis)
Partly it could be embedded in the secondary legislation and it
could be set out in explicit criteria in the same way other aspects
of brokering and licence production have been, in the sense that
you have the rules set out in secondary legislation. There could
be secondary legislation set up for the purposes of end-use monitoring
and the use of embassies. Julia is right: there is sufficient
staff in British embassies in sensitive countries, military attachés
and the offices that deal with political security arrangements,
to make that assessment. It is just about creating the political
will and momentum to ensure that it happens. I think that could
either be in secondary legislation or it could be set out in the
same way as the Government's export controls. The Government has
made a political statement that these are the criteria that should
apply when licensing decisions are made and a similar political
statement setting out these objectives that our embassies will
undertake should also be drafted. Thirdly, there is also a role
beyond government and a role for Parliament and non-governmental
organisations. In the past we have argued for the end user to
be identified in the annual report for strategic exports because,
for example, at the moment you have an indication that shotguns
are going to Kenya; they could be going to a game reserve or they
could be going to the security forces. If that information was
made available in the annual report, then it would allow parliamentarians
and the public and NGOs to have an oversight which would contrast
and add to the work done in embassies. (Mr Crowley)
At a certain level we would just be asking embassy officials to
do what they normally do, or to change slightly what they normally
do. I assume that embassy officials would be monitoring the national
press and would have contacts with national human rights organisations
and contacts with the police and the security services in the
host country. If an incident of misuse of UK equipment, for example
misuse of tear gas or armed personnel carriers or sub-machine
guns, is reported, then again the embassy can relay that back
to the UK Government and then the licence can be revoked. From
limited resources, NGOs have managed on an ad hoc basis or in
instances to get concrete evidence that UK equipment has in the
past been misused. They have found tear gas canisters in Kenya
that have been used in a confined space. They have pictures of
armed personnel carriers in Indonesia that have been misused.
If NGOs with limited resources can do this, then embassies, which
are on the ground and are monitoring such incidents anyway, surely
can channel part of their resources to do this? As Julia and Ian
have said, it is all about political will. If this Government
really wants to ensure that there is an ethical dimension to its
foreign policy and that the export control is going to be effective,
then resources have to be put into end-use monitoring. Once evidence
does arise of misuse, then licences have to be revoked.
Mr Rowe
39. It seems to me that if you have a reputable
manufacturer who enters into a perfectly reputable agreement with
a perfectly reputable government, and then further down the track
that government gets involved in some kind of insurgency operation
where individual commanders behave extremely badly, you saying
that the licence be revoked. What effect do you think that that
kind of control would have on the credibility of the arms industry
as a whole? Do you think that people would be prepared to do business
if three years or five years into a contract the situation changes
on the ground in the way which even the government may not entirely
have predicted and the whole thing suddenly just goes up in smoke? (Ms
Meek) With end-use monitoring, you are talking about a point
in time; you are not trying to project what the situation can
be in three or five years. I would assume—and I cannot speak
on behalf of industry—that industry would like to be seen
as being as responsible and, as you said, as creditable as possible
and that therefore they would be willing to have consideration
of the evolving situation when they have a long-term life in the
country as the continued provision of equipment goes to that country
and they would be willing to work with government and parliament.
If the government felt that there was a situation emerging in
that country that precluded the further transfer of equipment,
then industry would be willing to accept that decision. That is
the case for other countries; they are allowed to suspend licences
until the situation changes.
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