Examination of Witnesses (Questions 180-192)
MALCOLM WICKS
MP, MR GLYN
WILLIAMS, MS
JAYNE CARPENTER
AND MR
DAVID WHITEHOUSE
13 MARCH 2006
Q180 Peter Luff: That is an application.
How are you contacted? If they say: "Hey, I have got a problem
and this might be something, I am a bit worried about this."
Just a telephone call to your helpline?
Mr Williams: It could be a telephone
call and we might then ask for that person to submit a rating
enquiry giving details in writing of who the end-user is and what
he wants and we can have a look at it.
Q181 Peter Luff: There is a dreadful
trade off, is there not, between speed to help enterprise and
efficiency. Are you satisfied that you are getting that balance
right because otherwise you could actually deter this car dealer
from making the application in the first place?
Mr Williams: Yes, we have twin
objectives, as we said in written evidence. One is to be effective
in terms of enforcing the Government's policy and the other is
to provide a decent service to exporters and getting the trade-off
right between those two is the challenge, which is why we spend
so much time trying to improve our performance turnaround times.
Q182 Peter Luff: The message would
be to anyone like this car dealer: if you are in any doubt, get
in touch.
Mr Williams: Yes.
Q183 Mike Gapes: Can I take you slightly
away from here but it is related in a way. We have talked about
globalisation. Where a British company has got overseas subsidiaries
how does the Government ensure that our companies have a proper
internal compliance process within their overseas' subsidiaries
so that you are certain that all aspects of that company are complying,
or do you have a problem because those subsidiaries might be subject
to the laws of other countries which might not be so rigorous—putting
it politely—in enforcing export controls?
Malcolm Wicks: This is one of
the more difficult questions. I do not just mean your question,
Mr Gapes—they are always difficult—but conceptually,
ethically this is one of the more difficult issues. We do not
feel that all overseas subsidiaries should be subject to UK jurisdiction
because this would mean applying, by definition, extra-territorial
jurisdiction which, as the Government has consistently maintained,
should only be applied in the most serious cases, and by that
we mean facilities which export into embargoed destinations, long-range
missiles or torture goods. I can see ethically you could argue
it the other way but it comes back to my earlier point about when
jurisdiction can reasonably end. My understanding generally of
British law is that we do not pretend that we can police the world
or police every UK citizen, but in special circumstances we feel
that we need to make exceptions. One obvious exception in another
area of policy is paedophiles and in this area it is about torture
goods and long-range missiles and embargoed destinations where
we do feel that we have a duty to police the UK citizen. I turn
to Mr Williams to make sure that I have that explanation approximately
right or not?
Mr Williams: Yes, that is correct.
Q184 Mike Gapes: Can I probe you
a little further on this? What you are telling me is that there
is no policy for the ECO to check the compliance procedures of
subsidiaries of UK companies?
Mr Williams: The short answer
is no, but I am not sure that I have grasped what you are driving
at. Companies that are based overseas, essentially we are checking
exports from the UK. We have powers in that respect.
Q185 Mike Gapes: A no answer is clear.
I prefer yes and no answers. There are exceptions apparently from
what the Minister has just said. Could you clarify the relationship
between the exception and the general policy that you are not
doing here?
Malcolm Wicks: The exceptions
are essentially that we feel that embargoed destinations, yes,
the really wretched regimes of this earth, the long-range missiles
and torture goods are so significant and so appalling that they
should be the exceptions. I can see that if I were in your place
I would say why long-range missiles and not this or that.
Mike Gapes: That is not my question.
Malcolm Wicks: It is a question
on my mind and again I think it is a very difficult question.
Q186 Mike Gapes: My question is how
do you know that the subsidiary is involved in these activities
unless you are going to check?
Malcolm Wicks: Again, it would
be by the various methods that we have been discussing and intelligence
we receive.
Q187 Mike Gapes: But there is no
automatic process whereby you would ask the parent company to
have a policy of compliance of any kind?
Malcolm Wicks: No.
Q188 Chairman: Can I briefly explain
the problem. Last week with Mr Luff's committee I visited Ashok
Leyland in Chennai in India and was advised that they had intended
to export military vehicles to Sudan but that they had decided
not to do so because Ashok Leyland is 51% owned by a UK company,
the Hinduja Group, and that Sudan is an embargoed destination.
They were essentially caught under that part of the brokering
arrangements to which, Minister, you have referred. However, if
they had sought, as indeed they do, to export military vehicles
to African countries other than the Sudan and Zimbabwe, there
would be absolutely no control over those exports whatsoever.
We are talking here about a company that is 51% owned by a UK
company and to some people this would suggest a kind of loophole.
Does that worry you?
Malcolm Wicks: The answer on,
for example Ashok Leyland vehicles, would be whether they required
a trade licence and the answer is if the goods were specially
designed or modified for military use.
Chairman: In the example I gave you there
was no question that they were not military vehicles. It was perfectly
clear that they were hoping to export military vehicles. It was
the military vehicles director who was providing the Committee
with this information, was it not, Peter?
Peter Luff: That is correct, from India.
Q189 Chairman: From India to Sudan,
so there is no question that we are talking about military vehicles
here. They were quite open about that and they were quite open
about the fact that they were not able to do it—and this
is to the Government's credit because under the Export Control
Act the brokering provision did kick in because there is an EU
embargo on Sudan. Good news in that Export Control Act 2002 works
and serious congratulations to the Government on that, as always.
The only problem is that that was the only thing that stopped
them exporting any form of arms to Africa other than the embargoed
destinations, namely Sudan and Zimbabwe. That means we have a
British company with a subsidiary overseas over which for most
part of its arms trade there are no controls at all.
Malcolm Wicks: Because they are
not going to those embargoed countries. Is that your point?
Q190 Chairman: If they wanted to
export to non-embargoed countries there would be no control by
the UK at all. I was advised that the Indian controls were not
as rigorous as our controls.
Malcolm Wicks: If they were embargoed
countries and if a UK person was involved then it is subject to
our jurisdiction. If it is non-embargoed then it has to be up
to the policy of that nation state, namely India.
Q191 Chairman: I thought you would
say that. I am suggesting that that does raise an important issue
about the role of British companies exporting arms from subsidiaries
overseas when the export control regime there is infinitely more
liberal than in the UK. Does this not present an issue? Is this
not, for example, why the Government wants an international Arms
Trade Treaty?
Malcolm Wicks: It is why we are
developing in the EU policies on this. It is an argument for some
general global or international agreement. It is also important
to recognise that in many of these situations it is up to that
nation to police these things just as it is up to our nation to
police the things that we are accountable for and can reasonably
have jurisdiction over.
Q192 Chairman: One final question,
Minister—you and your colleagues have been very generous
with your time—we understand that the Government will be
reviewing the export control regime next year. We will have had
the Export Control Act 2002 for five years and the Government
is reviewing it next year. We are very pleased about that and
we obviously welcome it. Could you say a little about the timing
of that and the scope and nature of the review that the Government
is thinking of undertaking so that we can make the best contribution
that we possibly can?
Malcolm Wicks: I welcome a serious
contribution from the Committee on that.
Chairman: Our contributions are always
serious, Minister.
Malcolm Wicks: Of course. I used
to say that when I chaired a select committee.
Chairman: And you were right!
Malcolm Wicks: And I was right
with this one and that one. We have not decided upon the details
of that review yet. We have just hesitantly entered 2006 but we
will do so and, being genuine, we would welcome your advice on
that. The minutes will note some of the advice I am seeking in
particular. One is how do we balance anecdote—I do not use
the word pejoratively—how do we balance the specifics which
inevitably excite interest? We have mentioned some specifics today—the
Ashok case, for example and so on—how do we balance that
against a more general empirical assessment of how well or badly
we think we are doing. That is one of the things I want to look
at in the review and the Committee might give us its judgments
on that one. The other one is possibly related to this very difficult
area ethically whereby our society says there are some things
so intolerable that, even though they may be geographically far
away from the UK, we are going to take some responsibility. Paedophilia
is one kind of example, and some of the weapons of torture equipment
is another. Many would urge us to add to that list, but how conceptually
do we make judgments about what should be on that list and what
is not? Therefore, related to that is this issue of jurisdiction.
To what extent do we feel that Britain can intervene with subsidiary
companies all over the world or to what extent do we feel our
controls are inevitably rather more limited than that just as
another foreign nation would have limited controls when it comes
to what happens to their subsidiaries in this country? They are
the more conceptual issues that I want to look at in the review
as well as of course the more important routine work on how well
we are doing as a piece of public administration.
Chairman: We would welcome that because
they are the kind of issues that we feel should be subject to
review as well. We promised you that it would last no longer than
an hour and a half but it has been one hour and 31 minutes. Minister,
we thank you for your time and for your thoughts and analyses
and also for those of your colleagues attending. We are very grateful
indeed. We will certainly attempt to produce a report that addresses
the issues that you have agreed with us should be addressed urgently.
Thank you very much indeed.
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