House of Commons - Northern Ireland Affairs

Select Committee on Northern Ireland Affairs Third Report

5 Additional measures to combat organised crime

180. The Committee was told in public session and in a number of informal meetings that there was widespread concern at the leniency of sentences in Northern Ireland for offences connected with organised crime, such as extortion, intellectual property crimes, money laundering, smuggling and oils fraud. The Northern Ireland Bankers' Association alluded to the "weak sentence policy of courts".[336] Sir Hugh Orde, Chief Constable of the Police Service of Northern Ireland, noted that the level of deterrent in Northern Ireland is often perceived as lower in Northern Ireland than in the rest of the United Kingdom.[337]

181. Sir Hugh welcomed a substantial increase in recent years in average sentences passed down for extortion from 18-36 months to 7-8 years, and he noted that the most recent sentencing guidelines for an individual found guilty of extortion in a defended case were for a sentence of 10-14 years.[338] However, he told us that it was his perception that sentences were lower in Northern Ireland than in Great Britain, and he called for a comparative review of sentencing in Northern Ireland and Great Britain and for a review of the appropriateness of legislation available to prosecute for organised crime offences.[339]

182. A number of witnesses were particularly concerned at the apparent leniency of sentences for fuel smuggling and other revenue crimes. Mr Tom Wilson, Manager of the Freight Transport Association Ireland argued that in the context of fuel laundering and smuggling, "penalties do not fit the crime",[340] and Mrs Val Smith, former National Chairman of the Road Haulage Association Ltd and Manager of Bondelivery Northern Ireland believed that "derisory sentences" were handed down to those convicted of fuel smuggling.[341]

183. Officers of HM Revenue and Customs expressed concern at sentences handed down to those convicted of revenue frauds[342]; they told us that on a number of occasions officers had expected custodial sentences to be passed but suspended sentences were handed down and that sentences in Northern Ireland are lighter than for comparable offences in England and Wales. A number of individuals, in both Dublin and Westminster, suggested to us in informal meetings that the problem lay with sentencing policy; some of the statutory provisions were very severe, but there was a tendency for the courts to feel that if a crime was not violent, this should be reflected in a lesser sentence. Accordingly, those convicted of serious revenue offences, such as oils frauds, might receive only a fine or a suspended sentence.

184. The Minister for Policing and Security, Mr Paul Goggins, MP, believed that sentencing in Northern Ireland was "on a par" with practice in England and Wales.[343] He welcomed the recent examples of what he saw as more appropriate sentences being passed down for crimes connected with organised crime in Northern Ireland.[344]

185. We endorse Sir Hugh Orde's call for a comparative study to be conducted into sentences in Great Britain and Northern Ireland. It is only on the basis of such a study that an assessment can be made as to whether the perception that sentences are more lenient on average in Northern Ireland is valid.

186. Sir Hugh welcomed the fact that he could ask the Attorney General to appeal against a lenient sentence, but asked that this right be extended to appealing against sentences in "either way offences", cases triable either in a magistrates court or a crown court. The Criminal Justice Act 1988 gives the Attorney General the power to seek leave to refer a sentence to the Court of Appeal for reconsideration if he believes it to be unduly lenient. The Attorney General informed us that the power of review is not intended to limit the exercise of a judge's discretion, but is designed to catch those sentences where a judge has failed to exercise his or her discretion within the correct range.[345] The Attorney General also noted that there was no significant difference between sentencing guidance applicable in Northern Ireland and that applicable in England and Wales.[346]

187. The Attorney General noted his decision in 2004 to refer a sentence passed in the case of Thomas Potts, arraigned for blackmail.[347] Mr Potts, an individual with a loyalist paramilitary background, was arrested following a police operation to uncover suspected extortion in relation to the development of a retail site in North Belfast. He was sentenced to three years in custody and two years probation. The sentence was increased by the Court of Appeal to one of seven years. The Court of Appeal's judgment noted that blackmail was a "particularly grave crime in Northern Ireland" and noted the "threat that paramilitaries in general and blackmail carried out in their name particularly, pose to the peace and good order of our society".[348]

188. In its judgment the Court of Appeal reiterated the terms of a previous judgment in a case referred by the Attorney General that

349

189. The Minister welcomed the fact that the courts currently did take into account whether a crime was connected with organised crime when passing sentence, but questioned whether a requirement for connection with organised crime to be made an aggravating factor in sentencing needed to be written into law.[350]

190. The previous Committee endorsed the sentence based approach to dealing with the problem of hate crime in Northern Ireland implicit in the draft Criminal Justice (No. 2) (Northern Ireland) Order 2004.[351] It hoped that the provisions for Courts to impose heavier sentences when an offence was aggravated by hostility based on the victim's actual or presumed religion, race or sexual orientation, would signal that there should be no tolerance of "hate crime". In his response to a suggestion that equivalent legislative provision could be made to impose heavier sentences for offences connected with organised crime, the Lord Chief Justice said that he did not think that this was necessary because he thought that it was a factor which judges in Northern Ireland already took into account when sentencing offenders, and that this was implicit in sentencing guidelines.[352] The Lord Chief Justice was also concerned that there could be practical difficulties in drafting an adequate definition of organised crime whilst remaining sufficiently flexible to address very different circumstances.[353] In fully respecting the independence of the judiciary and in recognising the dangers of commenting on specific cases, we acknowledge that it is no easy matter always to categorise a particular crime.

191. The Committee holds strongly to the view that politicians should not criticise individual judges and takes most seriously the points made by the Lord Chief Justice to the Committee. Nevertheless, the Attorney General himself has expressed a clear interest in these matters, as the senior Law Officer of the Crown. He is of course a Member of the Government, and it is the Committee's duty to hold the Government to account. We recognise the clear perception that exists in Northern Ireland that those found guilty of so-called "victimless" crimes (about which we have previously expressed our opinion) are not given sentences commensurate with the seriousness of their crimes. If this perception continues, it will have a detrimental effect on confidence in the administration of justice and on the process of upholding and enforcing the law in Northern Ireland. We welcome the exercise by the Attorney General of his right to appeal against unduly lenient sentences and recommend that his right to appeal against a lenient sentence be extended to appealing against sentences in "either way offences".

192. We note the judgment of the Court of Appeal that those convicted of offences connected with paramilitary violence should receive more severe sentences. We also note that paramilitaries are not just engaged in violent activities; they are also clearly involved in other crimes including oils and revenue fraud. While recognising the complexities that might be involved, and noting the caveat entered by the Lord Chief Justice in his Principal Private Secretary's letter to the Committee, we nevertheless feel bound to recommend that careful consideration be given to making connection with organised crime an aggravating factor in sentencing in Northern Ireland.

Regulation and licensing

Licensing for petrol retailers

193. The Northern Ireland Affairs Committee recommended in 2002 a licensing regime for petrol retailers with sanctions for breaching licence conditions, including the revocation of a licence.[354] The Independent Monitoring Commission also recommended that "the Governments of the UK and Ireland should introduce licensing regimes which would enable the closure of businesses which have been engaged in the illicit fuel trade, and would keep out of the industry all those shown to have been involved in that illicit trade".[355] The IMC noted that a robust licensing system would prevent "the transfer of licences from people or business deemed unfit to their associates who are apparently unblemished".[356] We were also told in informal meetings with individuals connected with the petrol retail industry that licensing was the only effective way to address the problem, making retailers accountable for malpractice. It was suggested that a robust licensing system would make retailers better able to resist the pressure of criminal gangs.

194. Officials from HM Revenue and Customs called for an inter-agency approach to dealing with oils fraud[357], speaking not only of the role for trading standards in petrol retail but also of the health and safety implications of illegal fuel deliveries which are accompanied by none of the standard safety procedures used for delivery of a very hazardous product. The officials told us that in Great Britain "it is very difficult for someone to get illegal fuel into legitimate retail sites because those sites are licensed".[358]

195. HM Revenue and Customs welcomed the announcement by the Department of Enterprise, Trade and Investment on 25 April of a consultation exercise on proposals for the licensing of fuel retail sites, with the Health and Safety Executive for Northern Ireland assuming responsibility for petrol licensing.[359] They believed that a more effective licensing regime would help to tackle supply of illicit oils. A system requiring comprehensive and auditable records of deliveries, stock and sales would assist HM Revenue and Customs in identifying illegal fuel as they would be able to carry out reconciliations of deliveries (and identify off-record deliveries), track individual deliveries and apply sanctions based on documentary evidence. Retailers who had been identified as contravening the conditions of their licence would be reported to the licensing authority who could take action.

196. We welcome the Government's decision to establish a licensing regime for the petrol retailing industry, but regret that it has taken so long to implement a recommendation made by the Northern Ireland Affairs Committee in 2003. We give notice that we intend to keep the implementation and operation of the proposed licensing scheme high on our agenda and we urge the law enforcement agencies to give sufficient priority to the licensing scheme to ensure that it is enforced.

197. Throughout the evidence that we have received on this subject, and indeed on others, the inability of trades to regulate and discipline their own members was all too apparent. Fundamental to combating crime of this nature is the agreement of Codes of Conduct which are rigorously enforced. But no organisation will feel able to introduce disciplinary measures unless it feels absolute confidence in the determination of the police to pursue criminals and the knowledge that the police has the unreserved support of all elected politicians, at all levels, in Northern Ireland.

LICENSING OF TAXIS

198. The Independent Monitoring Commission (IMC) drew attention to the use that has been made by paramilitaries of legitimate businesses, such as taxi and security firms, to fund their activities.[360] The IMC believed that such businesses "provide opportunities to move significant quantities of cash, including in parallel with but outside the normal accounts" and that such businesses had their roots in local communities, thus "securing a measure of protection".[361] It noted that although a licence is required to drive a taxi lawfully, none is needed to operate a taxi business.[362] It believed that paramilitaries controlled some businesses, and while the taxi drivers themselves may not be members of the paramilitary organisation "they may find themselves obliged to undertake tasks which benefit the paramilitaries such as the delivery of drugs or illicit tobacco".[363] Drivers were also often prevented from moving to work for other firms. The IMC argued that this activity raised questions about the need for regulation of taxi businesses and drivers "so as to increase the pressure on paramilitary groups by reducing, and ideally preventing, the opportunities they have to operate illegally in the normal economy".[364]

199. The Head of the Northern Ireland Civil Service told us that a consultation on revised taxi licensing legislation would start later in June 2006 and it was hoped that new legislation would be in force by March 2007.[365] The legislation is expected to provide for operator licensing and enhanced enforcement powers.

200. We are extremely concerned by the reports of the Independent Monitoring Commission on the involvement of paramilitaries in the taxi trade. While we welcome the official assurance that revised licensing legislation will be brought forward, this legislation is long overdue. We will continue to take an interest in this area and will examine the proposals closely.

DOOR SUPERVISORS

201. Northern Ireland does not come within the remit of the Security Industry Agency, and it is therefore up to local councils in Northern Ireland to regulate door supervisors through the entertainments licence. The Federation of the Retail Licensed Trade noted that licensees could come under pressure to employ particular individuals with paramilitary or other organised criminal links.[366] In the absence of any equivalent of the Security Industry Agency, it was argued that this pressure was often very difficult to resist.

202. Mrs Nicola Carruthers, Chief Executive of the Federation of the Retail Licensed Trade, reported that North Down Borough Council had set up a local committee of licensees, the council and the police to vet door supervisors, check their references and decide on registration of individuals.[367] However, she reported that the majority of local councils operated no form of registration.[368] The system in Belfast required police checks to be made of door supervisors, but it was then up to the licensee to determine whether the result of the police check should be a bar to employing that individual. It was argued that this system still left the licensee liable to pressure as the judgment on the suitability of an individual was left to their discretion. Other local councils operated no form of registration. Mrs Carruthers said that there was merit in taking the decision as to whether an individual door supervisor was suitable for employment away from the licensee and referring it to a third party.[369] The Federation called for compulsory training and compulsory registration of door supervisors.[370] In its Annual Report for 2006, the Northern Ireland Office notes that it is currently reviewing existing legislation governing the private security industry (door supervisors and security guards).[371] It intends to introduce legislation within the next two years.

203. We recommend the establishment of a system for training and registration of door supervisors. We note that the Northern Ireland Office is currently reviewing legislative provisions governing the private security industry, including door supervisors, in Northern Ireland. The Policing and Security Minister acknowledged that Northern Ireland did not have a properly licensed, well regulated, private security industry.[372] We urge the Government to ensure that this review is carried out as a matter of priority.

REGULATION OF CHARITIES

204. In its November 2004 Report, the IMC highlighted its concerns about the limited controls on charities on both sides of the border, and noted allegations that paramilitary groups illicitly used funds raised for ostensibly charitable purposes, and used charities to divert money obtained from criminal activities.[373] The IMC was concerned that "charitable status is abused by some, and that it may be a channel for the misuse of paramilitary funds".[374] The Department for Social Development reported on its assessment of paramilitary involvement in charities.[375] Some organisations associated with paramilitary groups had charitable purposes recognised under current legislation. However, anecdotal evidence indicated that funds from some charities with associations with paramilitary groups had been spent on matters not consistent with the charitable purpose and the proceeds of informal collections had not reached the named intended recipient. Police investigations had also highlighted cases in which bank accounts in the names of charitable organisations associated with paramilitaries had been used to launder money obtained from criminal activities.

205. Charities in Northern Ireland are not subject to the same degree of oversight as charities in England and Wales. There is no Charity Commission for Northern Ireland and no Register of Charities. The Department for Social Development has powers to certify to the Attorney General that legal proceedings should be considered in relation to a charity and to require records to be submitted where it has grounds to believe that charity property may have been concealed or misapplied, and powers to apply to the Courts in the event of an alleged breach of a charitable trust.[376] It does not have powers analogous to those of the Charity Commission in England and Wales. Under the present system, an organisation can obtain charitable status from HM Revenue and Customs purely on the basis of its stated aims. It can then declare itself to be a registered charity.

206. Professor Goldstock noted that there was no system of compulsory registration of charities in Northern Ireland and recommended that the Independent Private Sector Inspector Generals (IPSIGs) programme would be well-suited to augment oversight and regulation functions.[377] Officials from the Department for Social Development argued that the IPSIG model was not applicable to the charities sector on the grounds that the victims of malpractice included public sector bodies, such as HM Revenue and Customs, and the charitable sector was very fragmented.[378]

207. The PSNI does not keep information on the numbers of cases of fraud involving charities or the sums of money obtained from criminal activities.[379] However, the Department for Social Development highlighted ways in which criminals had sought to exploit charities, including sham charities that had been set up to avoid Stamp Duty and a charity that had been set up to receive large gifts of shares, attracting tax relief for the donor.[380]

208. The Government has announced its intention to introduce new charities legislation in Northern Ireland to establish a Charity Commission for Northern Ireland and a Northern Ireland Register of Charities.[381] The legislation is intended to provide a regulatory framework for all charities, make information on what charities do with their money available to the public, restrict opportunity for abuse by criminals and provide for better exchange of information between other regulators in the UK and Ireland and with the PSNI and HM Revenue and Customs.[382] It is expected that the Department for Social Development will publish a consultation on a proposal for a draft Order between May and August, and lay an Order in Council before both Houses in October.[383]

209. Officials from the Department argued that, under the proposed legislation, charities will be more tightly regulated than in the rest of the United Kingdom.[384] They said that the legislation would be more comprehensive in its coverage of charities than the equivalent legislation in England and Wales; it would also require more thorough accounting standards of charities and a public interest test would be required for registration of a charity.

210. We are astounded that it has taken so long to come to a sensible decision on the regulation of charities in Northern Ireland and we urge that there be no further delay in bringing forward the appropriate legislation. The Committee would be glad to play its part in the framing of such legislation, and in monitoring its implementation. We also believe that there is a case for the use of Independent Private Sector Inspector Generals (IPSIGs) in the charitable sector; we ask the Government to review its policy on this point.

ROAD HAULAGE LICENSING

211. The Transport Operator Licensing System, which is in force in England and Wales, requires road haulage operators to apply for a licence. An operator who has fallen foul of the law (for example by using illegal fuel) can be brought before a Traffic Commissioner who has power to revoke their licence. This system does not, however, extend to Northern Ireland. The Head of the Northern Ireland Civil Service, told us that proposals for an "identical" licensing regime would be published for consultation in 2007.[385]

212. Although we welcome the assurance that proposals for a licensing regime for the road haulage industry will be brought forward in 2007, we are disappointed by the delay in bringing forward the proposals, given that a road haulage licensing regime has been operating in England and Wales since 2000. We cannot stress too highly the importance of providing appropriate licensing and regulatory frameworks for key industries in Northern Ireland.

CRIME PROOFING

213. In its 2004 organised crime report, Europol makes the point that it is important to take steps to ensure that new or amended legislation, products and services are "proofed" - in other words tested to ensure that they do not have loopholes and therefore create yet further opportunities to commit crimes. Proofing of legislation in this way can make a significant contribution to combating organised crime. Under Section 75 of the Northern Ireland Act 1998, public authorities in Northern Ireland have a duty to have due regard to the need to promote equality of opportunity when carrying out their functions, and a duty to promote good relations. These duties have led to a comprehensive "proofing", or testing, of the policies of public authorities. We believe that it would be helpful to establish a "crime proofing" test of all policy initiatives and future legislation by both the Northern Ireland Office and Northern Ireland Departments. This would help ensure that they were not open to exploitation by those involved in organised crime. In this context, we welcome the creation of the Northern Ireland Civil Service Interdepartmental Group, the aim of which is to promote awareness of the threat from organised crime both in Government Departments and throughout the public sector. We recommend that this Group, in consultation with the Northern Ireland Office and the PSNI, take every necessary step to ensure that policy initiatives and proposed legislation are thoroughly examined to ensure that they are not capable of exploitation by criminal elements.

Reporting of organised crime

214. Much of the evidence that we have received concerning the extent of organised criminal activity has been anecdotal. In communities dominated by paramilitary and other organised criminal gangs, one of the largest obstacles facing the police can be a reluctance of victims to come forward to report crimes. The Federation of the Retail Licensed Trade noted one of the respondents to their survey, who had been a victim of extortion, had not reported the crime complaining "what would be the use?—absolutely no protection available from the police".[386] Witnesses from the CBI and the Federation of Small Businesses were, at best, lukewarm in their expressions of confidence in the police to deal with crimes, such as extortion, that were experienced by their members.

215. Mr Nigel Smyth, Director of CBI Northern Ireland, called for a dedicated telephone line to be set up by the PSNI to advise businesses that were victims of such crimes.[387] Sir Hugh Orde told us that the police needed to work in partnership with business and that it was also the responsibility of the business community to work with the police.[388] He told us that "every time we get a complaint we make arrests and we convict people for extortion".[389] He also noted the increase in average sentences being handed down for extortion.[390] We note that the PSNI announced the opening of a new dedicated telephone line for the reporting of incidents of extortion on 15 May 2006; the helpline 028 90 92 22 67 will be open on Mondays to Fridays from 8 a.m. to 4 p.m. The decision to open this line was made in response to the Committee's questions at the beginning of this inquiry. We are grateful for this prompt response but emphasise that this initiative needs wider publicity.

216. HM Revenue and Customs noted that the volume of information that was received through its Customs Confidential Hotline, on 0800 595 000, was still at relatively low levels.[391] Obtaining more information on criminal activities such as fuel smuggling from those in the petrol retail industry in particular was a priority for the organisation.

217. Mr Michael Laurie, Chief Executive of Crimestoppers, informed us that in 2004 38.7% of calls that they received related to crimes traditionally perceived to be associated with organised crime; in 2005 the figure was 50.7% of calls.[392] He noted that "the fear and knowledge of reprisal is well known and well documented thereby all sections of the community are aware of the consequences of it being known that they have helped the authorities".[393] This placed an additional responsibility on Crimestoppers call-handlers to ensure that the anonymity of callers was preserved from the outset. We note the impressive record of Crimestoppers in contributing to the arrests of 75 individuals in Northern Ireland for crimes connected with organised criminal activity during 2005, a 31% increase on the previous year.[394] We also note the very substantial contribution made by Crimestoppers to recovery of property and drug seizures in Northern Ireland; property to the value of £282,405 was recovered, and drugs to the value of £443,574 were seized following calls to Crimestoppers in 2005 .

218. Mr Laurie noted that it was commonly, but erroneously, perceived that Crimestoppers were part of the police, and stressed that the organisation was an independent charity that worked in partnership with the police. The organisation had recently secured funding for a publicity campaign to focus on its charitable status, its independence from the police and the guarantee of anonymity given to all callers.[395]

219. We commend the work of Crimestoppers and commend their initiative in mounting a publicity campaign to highlight their independence from the police and the anonymity that they offer to callers.

220. We urge the PSNI and HMRC to take further steps to publicise their confidential telephone lines.

Provision for Non-Jury Trials

221. Fear of reprisals is also a factor discouraging individuals from giving evidence in trials for crimes associated with organised crime. Since 1973, Northern Ireland has had Diplock courts which provide for trial for scheduled offences before a judge and without a jury where there is a perceived threat to witnesses. The Government intends to review the operation of these courts and will consult the Committee on its proposals. The Criminal Justice Act 2003 contains UK wide provisions for a trial to be conducted without a jury in a case "where there has been intimidation, or attempted intimidation, of any person who is likely to be a witness in the trial".[396] To date, these provisions have not been brought into force.

222. We believe that it is essential that adequate provision for non-jury trials for appropriate offences in Northern Ireland is maintained. It is only by maintaining them that many witnesses will feel able to give evidence against organised crime gangs. We therefore urge the Attorney General to assess with the prosecuting authorities whether the use of such trials would encourage more witnesses to give evidence.

336 Ev 154 Back

337 Q 168 Back

338 Q 124 Back

339 Q 168 Ev 101 Back

340 Q 70 Back

341 Q 119 Back

342 Q 357 Back

343 Q 534 Back

344 Ibid. Back

345 Ev 158 Back

346 Ibid. Back

347 Attorney General's reference (number 5 of 2004) Thomas Potts; Neutral Citation no. [2004] NICA 27. Back