Examination of Witnesses (Questions 20-39)
25 FEBRUARY 2004
RT HON
JACK STRAW
MP, MR EDWARD
OAKDEN CMG AND
MR DAVID
LANDSMAN
Q20 Mr Hamilton: Can I briefly come back
to Aceh for a second, Foreign Secretary, bearing in mind what
you said earlier. I want to know how you react to the accusation
that the Government is turning a blind eye to the breach of end-use
assurances in Aceh?
Mr Straw: I would just say we
are not turning a blind eye to anything. You will be aware that
there is an application for judicial review in respect of arms
licences to Indonesia so I am constrained in what I can say but
we apply the consolidating criteria. We do not turn a blind eye
to anything. Why should we?
Q21 Mr Viggers: Comprehensive monitoring
is of course very difficult but there are occasional press stories
indicating that there might be breaches. For instance on 24 June
2003 The Guardian quoted the senior military spokesman
in Aceh who reportedly said that Scorpion armoured vehicles "will
become a key part of our campaign to finish off the separatists.
Maybe later the British Foreign Minister will have a fit."
And The Times newspaper of 22 May 2003 quoted the Army's
chief spokesman as saying about the British-built Hawk jets: "we
have already paid, so there is no problem. We use fighters to
defend our sovereignty." My question to you, Foreign Secretary,
is does the Foreign and Commonwealth Office have in place a system
of following the press, vetting the press and informing the local
post and encouraging the local post to enquire as to the accuracy
of the story?
Mr Straw: Yes is the answer and
on the decision to approve licences in 2002 for Scorpion armoured
vehicles and armoured personnel carriers, all the licences concerned
were scrutinised against the consolidated criteria. We would not
have issued a licence which was inconsistent with the criteria.
Let me say this: the security forces have a legitimate right to
adequate protection whilst carrying out their duties, as long
as they operate in accordance with international human rights
standards and humanitarian law. That is also consistent with the
common criteria. As far as the approval of in this case Hawk spares
following the declaration of martial law in Aceh in May 2003,
let me say this again: all the licences were scrutinised against
the consolidated criteria and the Indonesian Government has
consistently confirmed their assurances that British-built military
equipment would not be used offensively or in violation of human
rights. In addition, the Indonesian Government has confirmed that
there are no plans to use Hawk offensively in Aceh or in contravention
of the assurances.
Mr Landsman: Might I just add
to the Foreign Secretary's answer. There is no evidence that Scorpion
has been used in Aceh in recent times. From our researches we
have no confirmed evidence that any British-built military equipment
has been used in any way contrary to the Indonesian assurances
anywhere in the country in 2002 and 2003, and that all the high
level contacts with senior Indonesian personalities have confirmed
the assurances. They certainly have not said that the assurances
that have been given do not apply.
Q22 Mr O'Neill: Can we move on to the
EU Code of Conduct on arms exports. As I understand it, there
are two mechanisms, the denial notifications, which are the means
whereby you circulate refusals, and there are also the undercut
notices, where another country may have refused to grant a licence
but country B, as it were, decides that there are grounds to do
so. I realise that these are not legally binding but it has been
suggested that some potential customers play off one country against
another. Could you perhaps give us an indication as to how effective
these two mechanisms have been both as policy instruments and
in practice?
Mr Straw: I came to this system
pretty fresh when I became Foreign Secretary two and a half years
ago and I think I had a healthy scepticism about whether or not
this system, which is based on a political agreement (and it is
not legally binding across the European Union but it is in many
countries' domestic law) was going to be effective, but I have
been pleasantly surprised by the extent of co-operation between
European countries. I know there are stories about country X or
country Y trying to pull the wool or go behind the rules, but
I have yet to see evidence of that. Sometimes different judgments
are made on similar applications. We may have decided to agree
a licence whilst other countries have said they are not going
to and they have sent a denial notification. Sometimes the reverse
is the case and we have denied a licence and other EU countries
have and a third EU country decides to issue a licence. On the
whole, however, I think it works pretty well, although, as you
may know, there is a review now taking place because the consolidated
criteria are five years old. Certainly let me say—and I
am not presuming anything in terms of your own opinion—I
am not in favour of turning this into part of the acquis of the
EU, part of EU law, where that could all end up being subject
to QMV and adjudicated before the European Court of Justice. I
think it is better that this is seen to be an instrument of common
defence and foreign policy. I want to ask my officials here if
they want to add anything.
Mr Landsman: I cannot give you
a precise figure but we reckon there are about 15 or so undercuts
per year across the board, not very many, and that would suggest
perhaps a pretty considerable convergence in the interpretation
which each Member State will have to give to the Code of Conduct
and applying the criteria there on a case-by-case basis for each
application.
Q23 Mr O'Neill: I think it is significant
that the words "imprecise" and, in your case Secretary
of State, "surprise" were used. I kind of get the feeling
that there has not been a great deal of rigour applied. You say
there might be 15. Is there any particular country which is more
likely to undercut other people's denial notifications?
Mr Straw: In terms of undercutting
we consulted other Member States 20 times last year and we undercut
them five times. There is detailed information held on this and
if we have not already provided it to the Committee we can seek
to do so. As Mr Landsman has said, it is relatively low numbers.
I think we would have to provide information in a confidential
session because the denial notices and undercut notifications
are confidential. One Member State does make information available
about its denial notices, which is the Netherlands, but all the
rest of us do not, for our own reasons. In terms of total numbers
it is roughly proportionate to the size of the different countries'
defence industries. You will be aware of that distribution.
Q24 Mr O'Neill: I understand that next
year when we have the Presidency, the Code of Conduct will be
up for review. I presume that you are already giving thought to
that review. Can you give us any indication as to what you would
regard as the priorities into which you would wish to group the
various issues that will come within the composite?
Mr Straw: Let me say we are in
the market for proposals.
Q25 Chairman: Excellent! We are in the
market for helping.
Mr Straw: Thank you very much.
Very good. You always have been, by the way. Let me give you some
examples, if I may, and I give four. One is in respect of licensed
production overseas and we suggest the inclusion of text on licensed
production to the effect that Member States should carefully consider
what might happen to the finished products in licensed production
agreements in which their exports or technology or components
are the raw materials. We do this already but it is not fully
spelt out within the terms of the common criteria. There are arms
brokering licence denial notifications where a licence to broker
strategically controlled goods is denied, and we want those to
be subject to the same process as the export of export equipment
currently is, so for example if someone is refused a licence to
broker in the United Kingdom and then applies for a similar licence
elsewhere, the other country would need to consult us before issuing
it. That is very important. There are intangible technology transfers
and the Export Control Act, to which you referred Chairman, is
introducing controls on the export of military information and
designs and we think it should also be reflected in the common
criteria. Then there is the issue of transparency standards and,
as you have kindly acknowledged in previous reports, our Annual
Report on arms exports is by far and away the most comprehensive
in the European Union. It is the most thorough and transparent
system of arms control, I would suggest, in the world. We want
to raise transparency standards by including in the Code a provision
which obliges Member States to publish a publicly available report
containing information about equipment exported and not just a
breakdown of how many licences they issued for each destination
because what is the case, coming back to the burden of your earlier
question, is that whilst the criteria are common and I am satisfied
about their application, it is also the case that for most of
our EU partners they provide none of the information that we routinely
provide to this Committee nor, I am certain, do my colleague foreign
ministers, probably bar one or two, ever have to go through the
processes which we have to go through in scrutinising the applications,
not least because we know that if we do not do that (and it is
our duty) there is interrogation before the Quad Committee to
follow! This is all parliamentary accountability and it concentrates
the mind and it is a good thing and one supports the other, so
that our system is very transparent, and we want to see similar
transparency elsewhere and then in a sense it would be easier
to answer your first question.
Q26 Mr O'Neill: Can I ask one last question
and that is within the review—and I can understand the point
you make about the criteria—if you want to get the information,
do you think there will be a need for some form of stiffening
of the Code which is at the moment voluntary and which you have
been at pains (and I have some sympathy with the view) to point
out that we do not want to be cast in the role of "super"
regulators in a European context or to be unduly litigious, but
why should other people not go through the same pain and suffering
that we are trying to inflict on you today?
Mr Straw: I am a well-known masochist
anyway—
Q27 Mr O'Neill: Spread it around a bit.
That is where the sadism comes in!
Mr Straw: You and I are old friends,
Mr O'Neill, and you know I enjoy it! Let me say it is not voluntary.
It is the result of a Common Position within the European Union
(and that is a capital C, capital P) made within the relevant
pillar of the Treaties, and a Common Position is binding, so,
for example, we in a separate area (but it is a good illustration)
agreed last week to a continuation of sanctions on Zimbabwe initially
through a Common Position, some parts of which are put into force
by regulations under other pillars in the Treaty but in a Common
Position it is binding. That is absolutely right. I think colleagues
here would be in favour of that. What I am not in favour of, however,
is moving away from this area of foreign and defence policy being
settled other than by unanimity and nor am I in favour of making
this justiciable because that would then be drawn down the road
of detailed regulations of the kind with which you are as familiar
on your parent select committee. It is one thing to run the Single
Market that way because you need them but this one is a matter
of national sovereignty where we act collectively.
Mr Landsman: May I make a point
of clarification. The review of the Code of Conduct has actually
already started. Member States have been asked to send in their
thoughts already. We envisage these being discussed in the EU
over the coming months. At the moment we anticipate a final revision
decision coming in the autumn. If that timetable is kept to then
it is likely this issue will be completed before the UK Presidency.
Q28 Mr Evans: Following the Tiananmen
Square massacre and the brutality and the awful deaths of young
people that happened there, in June 1989 the EU introduced an
arms embargo on China. 15 years have passed since that time and
I understand the German Chancellor himself recently said that
he was keen on lifting the arms embargo. What is the policy of
Her Majesty's Government on that?
Mr Straw: The policy of the British
Government is to support a review of the embargo but we have not
come to any final view on the merits of lifting it until we have
had a full consideration of its effects up to now, and that has
been the position that we took at the December Council of the
European Union which was on 12 or 13 December which is where it
arose. It was very clear in terms of the conclusions which were
reached (which were reached unanimously) and I am happy, Mr Evans,
to provide you with those. It may be helpful, however, if I provide
some background with respect to the embargo. It is not a full
scope embargo. It is quite wide in scope but it is not a full
scope embargo. Our late and much lamented colleague Derek Fatchett
set out in a parliamentary answer on 3 June 1998 the UK's interpretation
of it. We do not issue licences for the export of any items which
contravene the interpretation and under our interpretation it
covers lethal weapons such as machine guns, large calibre weapons,
bombs, torpedoes, rockets and missiles, specially designed components
of the above, and ammunition, military aircraft and helicopters,
vessels of war, armoured fighting vehicles and other such weapon
platforms and any vehicles which might be used for internal repression.
There are other exports of controlled goods which are outwith
the embargo but within the criteria. Sometimes there is some confusion
about this. That explains why notwithstanding the embargo there
are still some arms exports from the UK and other European countries
which are permitted, subject to the criteria. One of the two issues
that is raised as part of the review—and again I emphasise
we have not come to anything like a final decision on this and
we are consulting widely about it—concerns the decision
to impose this arms embargo, taken, as you say Mr Evans, in the
light of Tiananmen Square. We have to ask has the human rights
situation moved on in a sufficiently satisfactory way since then?
The second issue is at the time when the decision to impose the
embargo was taken there were no consolidated criteria relating
to arms exports. These criteria are now in place and there is
substantial experience of their use in all European Union countries.
Then the question is: to what extent is the arms embargo overtaken
by this? To what extent would goods which are prohibited under
the embargo be prohibited in any case under the common criteria?
Those are the issues which we are seeking to examine with great
care.
Q29 Mr Evans: Is it more human rights
you are interested in as far as the review is concerned rather
than proliferation or stability?
Mr Straw: As far as proliferation
is concerned, there are other international instruments in place
which we are obliged by law to observe, for example in respect
of nuclear proliferation under the NPT. As you will be aware,
China in any event is a nuclear state under the NPT and I can
ask Mr Oakden to give you more information about that. We are
looking at it in terms of what has changed in respect of human
rights and what has changed in respect of arms control but also
there are wider strategic questions as well so we are looking
at it in the round and that is the way all members of the EU are
looking at it.
Q30 Mr Evans: There are a number of other
countries, and Uzbekistan springs to mind immediately, on the
human rights front where we do not have an arms embargo there
and we do against China. What is the difference there?
Mr Straw: The difference there
I suggest is an historical one. To come back to the point, Tiananmen
Square was an event which was shocking to the whole of the world
and it was felt there ought to be an international reaction. Although,
as I said at the time, we had legislation to enable us to impose
such controls, as did some of the other European states, there
were no consolidated criteria. Now what we do in respect of Uzbekistan
is quite an interesting point; we apply the consolidated criteria.
That is what we do in respect of a wide variety of other countries,
including Indonesia. So far as I am aware, although sometimes
people say there ought to be a full scale arms embargo with respect
to country X and country Y, generally speaking there is acceptance
that these are pretty robust. So that is one of the issues. As
I say, the other issue is a wider strategic issue.
Q31 Mr Evans: I am wondering whether
there is a timescale on the review?
Mr Straw: Not a specific timescale
on the review. There were some who were asking that it be completed
by next month but I do not think there is any chance of that because
there are some very detailed issues to weigh up. Whether it is
completed before the summer is an open question. Do you want to
come back on the wider WMD proliferation issues?
Mr Oakden: What we are trying
to do is to universalise particularly the additional protocols—and
this does not apply so much to China as to countries of proliferation
concern—so that you give the IAEA greater ability to inspect
actively the countries of concern.
Q32 Mr Evans: Foreign Secretary, can
I just raise one issue which we have been written to as a Committee
about from a company in the North West of England, not in my constituency
I hasten to add—
Mr Straw: Not in mine either?
Q33 Mr Evans: Not in yours. It relates
to whether all our EU partners are playing the game on this. It
is a company that was going for a contract on some equipment to
supply the Chinese armed forces and we refused them permission
to do so. It was a cockpit and aircraft exterior lighting system.
We said no and basically a French company came in and won the
contract. It is worth £20 million so you are talking about
a substantial sum of money here for an export order. The company
then relates other instances where the Germans have been getting
contracts when we have been denied them, and the Belgians also.
I am just wondering what confidence do we have that whilst we
tend to stick to the rules of what we sign up to how can we be
sure that other countries are not interpreting the rules somewhat
differently and getting away with stuff?
Mr Straw: I am aware of the complaint,
I assume it is from the same company although I will go into it
in detail in closed session if that is okay. Without mentioning
it, which we can only do in closed session, I cannot be absolutely
certain that we are talking about the same thing.
Q34 Chairman: It is the company you were
advised of before the session. We are talking about the same company,
I assure you.
Mr Straw: I have an explanation
I have to give to you in confidence. Of course we are concerned
about any such suggestions and I say to other colleagues around
the table they are not just from companies in the North West but
from around the UK. You asked me whether I can be certain that
other countries are applying the criteria. I have confidence that
they are. You can never be absolutely certain about this. You
cannot even under our system be certain and you will recall a
few years ago in my constituency we were the subject of a most
outrageous deception and corruption by a British government official
who was diverting ammunition contracts from a UK company in my
constituency to others abroad and taking money for this. Foxley;
you may remember the case. Even within the British system it is
possible for there to be examples of corruption and that caused
the loss of perhaps 300 or 400 jobs in my constituency. What happened
there was preposterous and it led to his conviction, as you will
recall. One cannot be absolutely certain about this but the more
we work with our European Union colleagues the more I feel comfortable
about it. To go back to a question I was asked by Mr O'Neill,
the proposals which we are making for strengthening the common
criteria should enable me to give you a better and more certain
answer on these subjects in future.
Q35 Mr Evans: And rigorous policing of
it because clearly that is going to protect our interests?
Mr Straw: It goes without saying
that my first duty on this is to apply these criteria but, like
every other member of the Commons, I also have a very keen interest
in the health of British manufacturing and I am assiduous in following
up any suggestions that British manufacturers, whether in this
field or the non-controlled goods field, are being worsted by
other countries not playing by the rules.
Q36 Rachel Squire: Foreign Secretary,
given the review of the EU arms embargo against China, will that
review look at not only possibly weakening and removing it but
also strengthening it and in respect not only of completed equipment
but also components? That leads me on to my next question. You
will be aware, I am sure, of the publicity that has been given
today to the publication of this report by Oxfam on the Control
of Arms Campaign in the UK about the sale of components to countries
where there is currently an embargo on arms equipment, as there
is with China. How do you justify the fact that the British Government
exports substantial quantities of parts and components for combat
aircraft and other military equipment to China, sometimes under
open licence?
Mr Straw: On your first question,
Ms Squire, the review looking into whether the arms embargo in
respect of China should be lifted or modified to make it lighter,
there has been no suggestion from any Member States of the European
Union that it should be reviewed with the idea of strengthening
it, so the result of the review will either be a status quo or
it would be some lightening of it or its lifting altogether. That
is the decision that was made. On your second point, it really
comes back to what I said a few moments ago—and there may
have been a misunderstanding about the nature of the embargo in
respect of China—it is not and it never has been a complete
ban on all controlled goods. The details are well-known, they
have been on the record since 1989 but, more particularly, there
were spelt out to Parliament in June 1998 by our late colleague,
Derek Fatchett and they cover the things as I have described.
Any other exports are subject to the consolidated criteria and
we apply those criteria in respect of any applications for exports
to China in the same way as we apply them in respect of any other
applications. So I refute entirely that suggestion—and to
be kind to Oxfam I think it is based on a misunderstanding about
the nature of the embargo regime for that country.
Q37 Chairman: Can I pursue that briefly,
if I may. The scope of the EU embargo, as you say, Foreign Secretary,
was not defined. If I can give credit to the UK Government, the
UK Government has defined precisely what it means by the embargo
against China whereas I do not think any other EU country has
been quite so specific, so congratulations on that one.
Mr Straw: Thank you very much,
but that was our colleague who did that.
Chairman: However, the UK Government
has decided, presumably for reasons of human rights considerations
or regional stability or proliferation or whatever, that licences
will not be granted for the export of military aircraft, that
is on the list that you mentioned, but you do grant licences for
significant components of military aircraft. Maybe I am as foolish
as Oxfam, I do not know, but I cannot understand if the Government's
policy is that they should not have military aircraft, for good
reasons, but it is all right, however, if they get the components
to make them.
Mr Straw: I suggest no one is
foolish, Mr Berry—not you or Oxfam. Nor am I suggesting
you are less than well informed, so let us be clear about that.
You may have a different opinion from me but you are entitled
to it; that is your job. I come back to the nature of the embargo
and the nature of the criteria. The embargo is about, as I read
it, complete equipment. There is a difference sometimes (and we
can come on to this, I am sure, in other respects) between whether
you provide the whole of an aircraft, for example, and there is
a difference when it comes to measuring things up on the criteria,
and whether you provide a fire control system for that aircraft
by way of spare part. I happen to think that if they have got
the aircraft already and they can buy the fire control systems
from somewhere else, since a fire control system is not an aggressive
piece of equipment itself then you have to do what the criteria
requires you to do which may not be mechanical but to apply judgments
on a case-by-case and common-sense basis. My judgment in cases
of that kind is to say "Well, I judge this on whether a fire
control system should be sold, albeit subject to controls and
not on whether I am selling the whole aircraft", because
what we are doing is agreeing to the sale of a fire control system
or, for example, in respect of ejector seats to aircraft which
already exist. I would need to have specific examples, and we
may need to go into this in detail in the private session, about
sales to China which are particularly worrying you; I do not have
the details in front of me.
Q38 Chairman: It is the general principle,
Foreign Secretary. The Government, quite reasonably, says that
the purpose of the criteria is that they should be applied to
weapons and weapon systems and to the components, and that the
criteria apply equally to components and the weapons. In this
case the Government has a policy—it is a government policy—that
we will not grant licences for the export of military aircraft
to China but we will happily grant licences for the export of
all sorts of components, not just harmless fire equipment and
stuff but important parts of machinery. It is partly this components
issue that the Committee has raised, as you know, ever since we
started meeting. I do not understand the logic of simply saying,
"You should not have a licence to export the final weapon,
but we are perfectly happy to grant licences to export components".
What is the rationale for that?
Mr Straw: I am afraid we will
have to agree to disagree about that. Mr Landsman is saying that
the embargo is there to prevent China acquiring new systems or
equipment. That is, I understand, the purpose of the embargo.
Components for existing systems are different and they are covered
by the consolidated criteria. As far as I am concerned, there
is a very obvious distinction as there is a world of difference
between them. There is an issue of the balance of proportionality.
You could argue—and some people may do so—that in
respect of a country where we are concerned about their strategic
record, or others which could get embroiled in respect of this,
that we should not even supply the most obvious, dual-use items
like common screws and bolts because they are going to be used
to put together the kit to put together the final equipment.
Q39 Chairman: Not screws and bolts, with
respect.
Mr Straw: If you accept that then
you do accept there is a distinction—
| 
