Examination of Witnesses (Questions 80-91
MR OLIVER
SPRAGUE, MR
ROY ISBISTER
AND MR
MARK THOMAS
31 JANUARY 2006
Q80 Sir John Stanley: Is it not the
case that precedents already exist so far as UK legislation is
concerned, both in the area of terrorism and offences against
children committed by UK citizens overseas? In both those areas
are there not already clear precedents in UK legislation?
Mr Isbister: There is more than
that as well. Those are two examples, but I seem to recall—it
is a long time ago now—that when we were looking at this
there were more examples than that. If you want I can go back
and look at our old briefings et cetera and see if I can
come up with the additional examples.
Q81 Sir John Stanley: Finally, I
think you used the word "compromised" a moment ago;
are you saying to us that you are watering down your previous
position or not, your previous position being the same as the
predecessor committee of this one, namely that we consider that
extraterritoriality should apply in relation to UK citizens engaged
in trafficking and brokering in relation to all weapons on the
military list.
Mr Isbister: It is still our position
that that should be the case; however, if we can at least get
small weapons and light weapons, that is a better situation than
we have now, but we would still advocate that this should be applied
across the board.
Sir John Stanley: Thank you.
Q82 Robert Key: As part of their
effort to cut manpower, the Department of Trade and Industry two
years ago suggested privatising the Export Control Organisation—outsourcing
it was the way they put it. They then told us they had decided
not to outsource the work of the ECO. Did the Government make
the right decision?
Mr Isbister: Yes, very much so,
but I fear that we may not have heard the last of this. If you
look at the statement which was in answer to your question, Mr
Bruce, the Government did not exactly say that it was a bad idea,
they basically said that there were doubts about the level of
benefits involved in privatisation. That would suggest to me that
somewhere this is still a possibility, and when you put that together
with the staff reductions and the potential that has to mean that
the ECO is not capable of doing the same job it has been doing
for the last few years, then maybe you end up with a situation
of the Government saying well actually now there would be substantial
benefits in privatising because the ECO is not doing the job that
it could. I am very concerned about this and it is a crying shame
that you had the JEWEL review which, by all accounts, did a great
deal on improving the performance of the Export Control Organisation
and increasing efficiencies, and to follow that up with arbitrarily
introduced staff cuts coming in from outside would really seem,
from speaking to various people involved with this, putting the
future good work of the ECO at risk.
Q83 Robert Key: You said in your
memorandum to us that you were concerned that there were still
not resources available to police the systems that were adequately
tasked. Do you actually have the evidence for that?
Mr Isbister: It was interesting
what Brinley from the Defence Manufacturers' Association said.
I would agree basically that it is early days from what I understand
and it may be that there are internal stresses in the system or
maybe not, it may be that there are internal stresses that are
still being managed but may be not forever. The ASE Consulting
report which was looking at privatisation as an option spoke of
the possibility of meltdown of the system if the staffing cuts
went through, so I guess it is possible that we are on borrowed
time. There are two possibilities, are there not? One is that
processing times extend, which obviously the defence industry
would not be happy about, but neither are we. We want the system
to work quickly because of the EU information-sharing mechanisms.
If you are a purchaser and you come to the UK looking to buy military
goods, if the UK refuses the licence application then they circulate
that information to EU partners, who are then supposed to take
that into account if they get a similar request, and to consult
with the UK in that event. If the UK is just sitting on an application
and not dealing with it, and the potential buyer moves elsewhere,
then there is no denial, there is no need, there is no alert to
another state that this could be problematic. The other possibility
is that there are shortfalls in the quality of decision-making
and that could obviously have significant implications. One thing
that we do know that has happened is the change in policy on open
licences, for example the extension from two or three years for
military list or dual-use goods up to five years or even, currently,
beyond. I think that is a very worrying development.
Q84 Robert Key: Are you or perhaps
Mr Thomas aware of internal pressures in government that sometimes
lead to strange decisions being taken? For example, a whistle-blower
came to me last year about defence exports to a particular country.
He was himself a civil servant and he said that because the Foreign
Office had decided they wanted to be nice to this country, in
fact they had put great pressure on the DTI to allow a particular
export to take place, but the Ministry of Defence were fighting
hard, a rearguard action, to stop it happening. Have you come
across this sort of thing?
Mr Thomas: Certainly I have come
across a whole range of evidence of inter-department conflict
on arms licensing, as I am sure the Committee has, ranging from
Hawks to Indonesia, to Zimbabwe, to Howitzers to Morocco and Western
Sahara, to Tanzanian air traffic control systems. I could go on,
but we are running out of time. So certainly I have come across
that before and people I have spoken to who have had some understanding
of those activities have intimated that it is the DTI and the
MoD that have been the primary forces that have exerted pressure
for the licence to go ahead in some of those instances.
Q85 Malcolm Bruce: Mr Isbister, you
said you did not think we may have heard the end of the potential
privatisation of the Export Control Organisation. Given that you
do not want it privatised and the defence manufacturers do not
want it privatised, and it is essentially the delivery of public
policy, what on earth would be the case for privatising it now?
Mr Isbister: The only pressure
that I am aware of has been a pressure of economics.
Q86 Malcolm Bruce: Is there a danger
that the staff levels could be cut to the point where it cannot
do the job and we have to say because we cannot control licences
in the public sector we have to ask the private sector to do it
for us?
Mr Isbister: That is my fear,
that is a possibility.
Q87 Malcolm Bruce: Which would be
a preposterous piece of policy really, would it not?
Mr Isbister: If that happened,
yes.
Q88 Mr Hamilton: You raised earlier,
Mr Isbister, the question of open licences. This Committee has
raised that matter with government, and we were told that the
government carries out risk assessments relating to Open General
Export Licences which are "essentially undertaken in the
same way as that for individual licences, i.e. ECO and relevant
advisers from the rest of the licensing community will undertake
a risk assessment of the proposed licence, considering the countries
and activities involved, and taking account of the conditions
and limitations specified for the licence." What do you think
is wrong with that approach?
Mr Isbister: SIELs, the Standard
Individual Export Licences are valid for two years. That is what
open licences for military list goods were valid for, and now
they are saying that they are valid for five years. If we were
calling for a change we would probably call for a tighter time
period because a lot can happen in a short period of time.
Q89 Mr Hamilton: But if there are
regular checks throughout that period, then why not five years?
Mr Isbister: What would be the
difference between a regular check and a new licence application?
There are compliance visits carried out; I am not an expert on
what goes on in those compliance visits, which is partly because
I think there is not enough transparency in what goes on in those
compliance visits, but my understanding is that the people who
are carrying out those are doing a technical job, they are checking
that you are compliant with the terms of the licence. The decision
on whether it is a good idea to have the licence or not is surely
taken at a different level.
Mr Thomas: If you are going to
introduce a greater use of OIELs covering a five year period because
of staff cuts within the ECO and because of pressures being put
upon them, then are you not adding more work by getting people
to carry out more checks? It seems to be slightly contradictory.
Mr Sprague: I do not want to go
into the ins and outs of open licences, but one thing that is
quite apparent about them is that they are subject to a much lower
level of transparency in, for example, the Government's annual
reports than SIELs are. There is no data on volume or value, there
is no data on incorporation cases or what open licences are going
for incorporation, and the only way that we as NGOs and you as
Committee members—although you do have access to more information
than we do—can scrutinise the Government's policy in regard
to some sensitive country destinations is their annual report,
so a shifting towards open licences does have a problem in terms
of transparency and what is reported to us in the annual report.
Q90 Mr Hamilton: You would like to
see more restriction on these open general export licences.
Mr Sprague: I would like to see
greater transparency and explanation about what is in those licences
being put in the annual report. I know that we are in discussions
with government about improving the overall nature of the annual
report and the quarterly reporting, so I do not want to prejudice
those discussions but that is one thing we will be looking at.
Q91 Chairman: Mark, have you got
your thumb cuffs back? I did give an undertaking about Mark Thomas
holding the thumb cuffs, but I gave no undertaking as to my colleagues,
so I am anxious that you have them back. Thank you very much indeed,
it has been a really helpful session and we are very grateful.
As you probably heard me to say to EGAD and SBAC an hour ago,
we hope the transcript will be on the internet in about a week.
If there are any corrections let us know, but if having read that
there are points that you want to develop, further examples, feel
free to let the Committee know. We will be taking evidence from
Malcolm Wicks, the minister responsible for the Export Control
Organisation and from the Foreign Secretary, and I think on the
basis of what has been said this afternoon we probably ought to
have a look at HM Revenue and Customs as well and take evidence,
in the light of what you and the previous witnesses said. Thank
you very much indeed, we are very grateful.
Mr Sprague: Thank you very much.
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