APPENDIX 4
Submission from the UK Working Group on
Arms to the Strategic Export Controls Committees on Prior Parliamentary
Scrutiny
BACKGROUND
Significant progress has been made in opening
up the UK export licensing system to parliamentary and public
oversight. However, this oversight is entirely retrospective,
taking place after licences have been granted. The joint Quadripartite
Select Committee (QSC), the Defence, Foreign Affairs, International
Development and Trade and Industry Committees, has argued that
there is also a role for a Parliamentary committee in scrutinising
export licensing decisions before they are granted in order to
provide advice to ministers in difficult cases.
The QSC made its first substantive report on
the issue in July 2000. The Government response in December 2000
challenged the QSC proposals for a system of Prior Parliamentary
Scrutiny on the grounds that they might:
— confuse the relationship between
the Government and Parliament;
— impinge upon commercial confidentiality;
and
— hinder British companies' competitiveness
by slowing down the licensing procedure.
The QSC assessed this response and in March
2001 issued a second report on prior scrutiny that modified the
originally proposed system of scrutiny to meet the concerns expressed
by the Government. However, in July 2001 the Government, in its
response to these amended proposals (published after the Second
Reading of the Export Control Bill in the House of Commons) regrettably
upheld the position that such a system would be unworkable.
— The UK Working Group on Arms maintains
that prior parliamentary scrutiny of arms export licences is an
essential element in ensuring consistent application of the UK
criteria for arms exports, the EU Code and the purposes of the
Export Control Bill.
THE QUADRIPARTITE
SELECT COMMITTEE
(QSC)[3]
First QSC Report—July 2001
The rationale of the QSC for requesting a function
for parliament in the prior scrutiny of licence applications
was made in its first substantive report on the issue in July
2000[4]
stating that:
"the authority to export arms is of a different
degree of sensitivity to other types of Ministerial casework.
There can be few decisions of greater potential impact on the
conduct of foreign relations, and on the lives of people overseas
. . . We are convinced that accountability demands that Parliament
is engaged in scrutiny of arms export licences before as well
as after their grant . . . Issues of such importance warrant democratic
involvement."[5]
The QSC affirmed that the proposed system would
pose no threat to commercial confidentiality or the competitiveness
of British industry. The QSC also stated that the system would
not delay the granting of licences nor impede the granting of
immediate licences for national security reasons. The proposal
of the QSC suggested establishing a system that would:
— Establish "Stage 1" notification—all
licence applications would be notified to the Committee, including
OIELs and dual-use goods.
— Stage 2 notification—the Committee
would identify some licences on which it wished to receive notification
that Government was intending to grant a licence. It was expected
that this would be a small number of cases.
Government Response—December 2000
The Government response, in December 2000,[6]
challenged the QSC's proposal for a system of prior parliamentary
scrutiny on a number of areas. These, which were reiterated by
the then Secretary of State for Foreign and Commonwealth Affairs,
Robin Cook, during oral evidence in January 2001, focused on the
following areas:
— competitiveness of British industry;
— affecting the efficiency and effectiveness
of the export licensing process;
— breaching confidentiality between
UK exporters and overseas customers; and
— involvement of Parliamentary Committees
in taking decisions.
The response noted that Government felt "there
is no role for advance scrutiny of individual casework decisions
which are quintessentially matters for ministerial decision in
accordance with delegated powers conferred by Parliament",
however the Foreign Secretary, Robin Cook, also stated that Government
was concerned that prior scrutiny in one instance might become
common practice in other areas of ministerial casework, such as
aid decisions.[7]
The QSC assessed this response and in March
2001 issued a second report on prior parliamentary scrutiny which
suggested modifications to the originally proposed system of scrutiny
to meet the concerns expressed by government.[8]
Second QSC Report on Prior Parliamentary Scrutiny—March
2001
The second QSC report on PPS reflected continued
discussions within the QSC on the issue and a refinement of the
proposals put forward in July 2000. The main areas raised by the
QSC were in response to the Government's response of December
2000. These included:
— Principle and function: the QSC reiterated
its opinion that individual casework decisions by Ministers cannot
be automatically exempt from prior scrutiny and that none of the
issues raised by the Government to date had changed the belief
of the QSC that such a system was both necessary and workable.
The QSC stated its role would be advisory only and that decision-making
would continue to rest solely with Ministers.
— Stage 1 notifications: to exclude
from Stage 1 notification licence applications for exports to
NATO countries and other close allies, based on a list of criteria
to be agreed between the QSC and Ministers, licence applications
not circulated to other departments and licence applications for
dual-use goods.
— Stage 2 scrutiny and delay: estimations
of the approximate number of licences which might be required
for Stage 2 scrutiny were made, to address concerns that the involvement
of Parliament would considerably slow down the licensing process.
In addition, the QSC addressed the issue of delay by noting that
Ministers could proceed to grant a licence if there were well-founded
grounds for believing that a contract might otherwise be lost.
— Stage 2 confidentiality and advice
to Ministers: the QSC recognised that a public Stage 2 notification
system could work against the best interests of UK exporters and
proposed that such notifications should be made in confidence
and the confidence would be preserved until the licence was granted
and contract signed, except in serious instances, where the Committee
would be required to report to the House of Commons, although
details would be reported only with the agreement of both the
Government and the applicant. The QSC noted that it was up to
the Government to decide the level of classification put on information
given to the Committee. The provision of information to assist
the Committee in its process of reviewing licence applications
was raised by Government in December 2000 as problematic. The
QSC response suggested that the Committee and Ministers should
be able to agree on the level and detail of information needed
by the Committee to assist it in its work but that this was a
practical detail and should not make a system of PPS unworkable.[9]
The UKWG welcomed the QSC recommendations and
supported the practical system proposed
Government response—July 2001
The delayed Government response (published in
July 2001 after the Second Reading of the Export Control Bill),
was more earnest in its dismissal of the QSC's suggestions for
PPS than its earlier report, stating that the Government stood
by its conclusion from the 1998 White Paper on Strategic Export
Controls that PPS would not be right and would cause delays and
risk breaching the confidentiality of UK exporters and their legitimate
overseas customers and that there is no role for advance scrutiny
of individual casework decisions.[10]
The Government response sets out the range of
issues that the Government believes would be affected by a system
of PPS, including:
— Decision taking by Committees under
existing legislative powers being viewed as "problematic".
— Delays introduced into the licensing
process by including PPS, estimated as adding 10 days to Stage
2 notifications and reducing the ability of the Government to
meet its processing target of 20 days. Such a delay is viewed
by Government as reducing the competitiveness of UK industry overseas.
— Special reports on Stage 2 notifications
could risk the loss of a contract and/or alert overseas competitors,
which might encourage competitors to intervene on the contract.
In addition such public reports are seen as potentially damaging
bilateral relations with the proposed recipient country.
— The ability to take an informed decision
would be affected by the need to protect the confidentiality of
information, with the Committee unable to have access to sensitive
or technical advice on the material covered by the application,
the proposed destination or end-user.[11]
— While the initial Government response
to the QSC proposal of PPS focused on the functioning of such
a system, the second response more clearly dismissed out of hand
the existence of such a system as unworkable. The Government chose
not to respond to the technical solutions raised by the QSC in
March 2001, leaving it unclear if these proposals could find acceptance
within Government. It may be that on the technical side, the distance
between the QSC and Government is less wide than on the principle
of PPS itself.
ARGUMENTS AGAINST
GOVERNMENT RESPONSE
1. Relationship between Government and Parliament
The Government has expressed concerns that granting
a parliamentary select committee the right to advise the Government
during the export licensing process would raise issues of inconsistency
and unlawful sub-delegation and raise the risk of judicial review.
During the Second Reading of the Export Control
Bill (9 July 2001)—prior to the Government official response
to the QSC—the Secretary of State for Trade and Industry
Patricia Hewitt said:
"My Hon. Friend makes an important point
and I understand entirely the nature of the scrutiny that for
which she asks. Lord Scott made it clear in his evidence to the
Committee that some serious constitutional issues—impropriety,
even were involved in confusing the proper roles of the Executive
and the legislature and handling over decisions on individual
applications, which should properly be made by Ministers to a
parliamentary select committee." [12]
(i) During the evidence session on the Bill
Lord Scott said he was referring to the QSC Report printed in
December 1998 and stated that he has not read the QSC proposals
from their reports on Prior Parliamentary Scrutiny (July 2000
and March 2001)—therefore his comments were not based in
response to these reports. He stated that: "I can confirm
that I have not read that material and I reserve on this occasion,
as most, the right to change my mind."[13]
(ii) The UKWG has taken legal advice from
Matrix Chambers. The advice obtained 11 October 2001 states that:
— There is no constitutional impediment
which would prevent Parliament from legislating so as to give
itself a role in scrutinising arms export licences. (Paper 1,
Section 3, paragraph 29)
— Sub-delegation of the decision-making
function need not be an issue as long as explicit reference is
made in the Bill to the fact that such a role would be advisory
only. This should appear in the primary legislation to avoid any
issue as to the vires of such a provision in the Order
on the ground that it authorised sub-delegation where an Act of
Parliament had not provided for it. (Paper 1, Section 3, Paragraph
34)
2. COMMERCIAL
CONFIDENTIALITY
Prior scrutiny measures exist in other countries,
for example in Sweden and the USA, without risk to commercial
confidentiality. To limit the perceived risk to commercial confidentiality,
the QSC have suggested that proposed Stage 2 notifications be
made in confidence, which would be preserved until the licence
was granted and contract signed. In serious instances, the Committee
may be required to report to the House of Commons, but details
would be reported only with the agreement of both the Government
and the applicant. This would alleviate the Government's concerns
that such reports would risk the loss of a contract and/or alert
overseas competitors. It is a matter of fact that detailed information
on purchasers and types of equipment under consideration often
is reported by specialist publications, such as Janes,
well before licensing applications have been submitted. Representatives
from the defence industry have themselves admitted that commercial
sensitivities typically concern pricing data and detailed technical
specifications. Beyond requiring information on approximate value
where there are concerns about impacts on sustainable development,
this type or level of information would be largely irrelevant
to the QSC's deliberations.
The QSC noted that it was up to the Government
to decide the level of classification put on information given
to the Committee.[14]
3. COMMERCIAL
COMPETITIVENESS
Related to concerns of harming commercial competitiveness,
were concerns that including Parliament in an advisory role in
reviewing licences would delay the process beyond the target of
20 days per application by adding an additional 10 days on to
processing. However the current situation is that applications
for licences that are most likely to be of concern to Parliament
already exceed the 20-day target. As the QSC's consideration of
licences could occur concurrently with that of Government departments,
fears of additional delay appear unfounded. In addition, there
is scope for the Government to proceed to grant a licence if there
are well-founded grounds for believing that a contract may otherwise
be lost.
EXPORT CONTROL
BILL—REPORT
STAGE
In the Government's first response to the QSC
(December 2000) the Government indicated that the Export Control
Bill could be an opportunity to introduce Prior Parliamentary
Scrutiny:
". . . when the new primary export legislation
is introduced as proposed in the 1998 White Paper this will provide
Parliament with the opportunity to debate the whole field of export
controls and licensing powers including the delegation of powers
and the form of parliamentary scrutiny."[15]
However, the Government chose not to introduce
a system under the Export Control Bill. During the consultation
stage the Government argued that a system would not need to be
established through legislation. In April 2001 the then Secretary
of State for Trade and Industry Stephen Byers said:
"The model contained within the Joint Committees
proposals on 14 March could be introduced without primary legislation."[16]
Legal advice
The Government stated that the introduction
of prior parliamentary scrutiny would not require primary legislation.
However, as mentioned earlier, the legal advice obtained by the
UKWG from Matrix Chambers has indicated that in order to enshrine
the nature of the sub-delegation, prior scrutiny "should
appear in the primary legislation to avoid any issue as to the
vires of such a provision in the Order on the ground that
it authorised sub-delegation where an Act of Parliament had not
provided for it".
During the Report Stage of the Export Control
Bill, a number of MPs tabled amendments at the House of Commons
Report Stage to introduce the concept of prior parliamentary scrutiny
in primary legislation setting out clearly the advisory role of
the Committee, as recommended in the legal advice.
The Minister of State Nigel Griffiths re-affirmed
the Governments:
"The Government have made it clear that
they see Parliament's role as one of scrutinising decisions after
they have been taken and in inputting into policy, not taking
part in the decision making process itself."[17]
In addition to the previously cited arguments,
Nigel Griffiths raised the concern over attendance at Committees
and "the Clerk scrambling around to secure a quorum for a
meeting to quiz top civil servants."[18]
— The UKWG believe that the QSC has
played an important role in UK arms export scrutiny and that this
role should be strengthened with the introduction of a system
of prior parliamentary scrutiny.
December 2001
3 Defence, Foreign Affairs, International Development
and Trade and Industry House of Commons Select Committees. Back
4
Reports from the Defence, Foreign Affairs, International Development
and Trade and Industry Committees, Strategic Export Controls:
Further Report and Parliamentary Prior Scrutiny, 17 July 2000,
HC 467. For the February 2000 report, see HC 225, paras 82-85.
The trip to Sweden took place in November 1999 and to the US in
May 2000. Back
5
Ibid., paragraphs 80-81. Back
6
Reports from the Defence, Foreign Affairs, International Development
and Trade and Industry Committees, Strategic Export Controls:
Further Report and Parliamentary Prior Scrutiny, Response of the
Secretaries of State for Defence, Foreign and Commonwealth Affairs
and Trade and Industry, December 2000, Cm 4872. Back
7
HC 212, Qq 26-38. Back
8
Reports from the Defence, Foreign Affairs, International Development
and Trade and Industry Committees, Strategic Export Controls:
Annual Report for 1999 and Parliamentary Prior Scrutiny, 6 March
2001, HC 212. Back
9
Summary of HC 212, paragraphs 49-72. Back
10
Cm 4872, p 10-11. Back
11
Ibid. Back
12
Hansard 9 July 2001, col 544. Back
13
Reports from the Defence, Foreign Affairs, International Development
and Trade and Industry Committees, "Draft Export Control
and Non-proliferation Bill" 1 May 2001, Minutes of evidence
p 31. Back
14
Summary of HC 212, paragraphs 49-72. Back
15
Reports from the Defence, Foreign Affairs, International Development
and Trade and Industry Committees, Strategic Export Controls:
Further Report and Parliamentary Prior Scrutiny, 17 July 2000,
op . . . cie. Back
16
Reports from the Defence, Foreign Affairs, International Development
and Trade and Industry Committees, "Draft Export Control
and Non-proliferation Bill" 1 May 2001, Minutes of evidence
p 33. Back
17
House of Commons Hansard 8 November 2001, col 243. Back
18
Ibid col 440. Back
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