Motion made, and Question proposed, That the sitting be now adjourned.[Ms Diana R. Johnson.]
Norman Lamb (North Norfolk) (LD): My voice is fairly croaky, so I apologise if I have to give up halfway through.
It seems to be an opportune moment to be considering Zimbabwe. The purpose of the debate is to focus on the sanctions regime and the role of British companies in Zimbabwe, particularly Barclays bank. First, I will reflect on why it is important that we consider the sanctions regime. None of us needs reminding of the dire situation that faces the people of that country, not just now but over very many years. There have been years of human rights abuses. The economy is in abject ruin. There has been mass suffering, with allegations of massacres perpetrated by those close to the Government during the Mugabe regime.
Since the election, the opposition Movement for Democratic Change has claimed that 3,000 families have been forced out of their homes, and hundreds have been injured. It estimates that 10 to 15 of its supporters have been killed in Government-fuelled violence. Reports on the BBC are of hundreds of people fleeing across the border into Mozambique, and of 600 opposition MDC supporters camped out at the party headquarters in Mutare after attacks by ruling party militias, and so it goes on.
It is worth acknowledging that there are some positive signs in Zimbabwe and Africa in terms of the African response. First, there was the one-off arms embargo that was initiated by dock workers in South Africa, which then rapidly spread to other southern African countries. That was not initiated by leaders in Africa but by ordinary peopleoften trade unionists. Now there appears to be a growing regional consensus that there must not be any delivery of those armsthey appear to be on their way back to Chinaand that Mugabes attempt to steal the election must not be allowed to succeed.
Bob Spink (Castle Point) (UKIP): The hon. Gentleman is right; his debate is extremely timely. I congratulate him on bringing it to the House. Does he share my concern that although we welcome the initiative of the dock workers, it should really have come from the African nations themselves, in particular South Africa and Mozambique, which should have led the way? They are betraying their region in the world by not taking an earlier lead. They are spineless and cannot expect the international community to act unless they are prepared to do so themselves.
Norman Lamb:
I think that the international community has to act, but I share the hon. Gentlemans view about the weakness of the leadership, particularly from the South African President Thabo Mbeki, who appears to
have gone along with so much of what Robert Mugabe has perpetrated over recent years. However, I wanted to deal with some of the positive signs.
To everyones surprise this weekend, the Electoral Commission refused to buckle to intimidation and to overturn the seats won by the opposition. Subsequently, it confirmed that ZANU-PF had lost its majority in Parliament, and that is a remarkable development. There were reports yesterday that opposition parties are reuniting. Morgan Tsvangirai and Mr. Mutambara have confirmed that they will work together, which means that there will be an effective majority in Parliament against ZANU-PF. Last week, during the visit of Jacob Zuma, I heard from African business leaders that business is ready and willing to invest in Zimbabwe again. That is already happening in the expectation of change in that country. Africa Confidential confirms that expats and foreigners are starting to invest again in real estate and equities in the country in the expectation of change because they believe that change will ultimately happen. Those are all encouraging signs.
Let me focus on my real purpose, which is to look at the sanctions regime. European Union sanctions were first imposed in 2002 when there were fears that Mugabe was attempting to rig a presidential electionthat sounds familiar, does it not? Article 6 of the EU sanctions regime referred specifically to the freezing of accounts and other funds of individuals who were named in an annexe to the EU sanctions document. No funds should be made available to, or be for the benefit of, those people listed in the annexe. The targeted sanctions were designed to hit the regime and its supporters, not the general population. Of course, sanctions in the past have perhaps been counter-productive because of the impact on the innocent general population. The UK firmly backed that sanctions regime, which was intended to make a difference and to make life very difficult for those leading individuals in the Mugabe regime. There were very disturbing reports in The Observer and The Sunday Times last year that Barclays, in particular, was helping to, in the words of The Observer, bankroll Mugabes regime. The article in The Observer from last January also referred to two other British-based companies, Standard Chartered bank and Old Mutual. I will deal first with the allegations.
The Observer reported that any commercial bank operating in Zimbabwe is required by Government to reinvest 40 per cent. of its profits in Government bonds. The argument from the companies is that these are the terms on which we have to do business in the country, and so we have no choice. However, TheObserver reported that Barclays, Standard Chartered and Old Mutual had lent the Mugabe regime about £100 million by purchasing Treasury bills and Government bonds. It also reported that Barclays arranged finance facilities worth £110 million to Zimbabwean companies involved in tobacco, mining, sugar manufacturing and horticulture.
Later on that year, in November, The Sunday Times carried more serious allegations. It said that Barclays was providing agricultural loans, including to friends of Mugabe who had been given land seized during the land grab. Here is a British-based company, through a subsidiary, providing financial support to those who had benefited from the land grab. We have to remember that the land grab did not return land to the people of Zimbabwe. Those who benefited were primarily members
of the ruling elite, and many were very close to Robert Mugabe. The Sunday Times reported that loans totalling £750 million were made in the first half of 2007, mostly through a Government scheme to boost farm productivity. The scheme is the agricultural sector productivity enhancement facility, known as ASPEF. Again, participation is the condition of doing business in Zimbabwe.
In the first half of 2007, according to the report, there appeared to be a 17 per cent. increase in loans offered by Barclays. At least five Ministers received loans through the ASPEF scheme to benefit them and the farms that they had been given following the land grab. Some of the Ministers involved are on the list of 131 regime individuals in annexe III to the EU sanctions regime. The MDC, which is a party that we ought to listen closely to, given its bravery, says that loans under ASPEF are used as a
vehicle of personal wealth accumulation for the regime,
New allegations have emerged that at least twoI understand that it could be fourmembers of Mugabes regime who are on the sanctions list have received personal banking services from Barclays. They have been involved in the land grab strategy, which has wreaked economic havoc on the country, and one of them faces serious accusations of personal involvement in that process. Given that providing loans was specifically barred in the sanctions regime, the Government presumably condemn Barclays for doing that. I would be grateful if the Minister dealt specifically with that matter in her response.
How can Barclays bank, a British-based company, act in a way that is apparently in flagrant breach of the sanctions regime? Because it operates through a locally registered company, Barclays Bank of Zimbabwe Ltd. It is a public company, listed on the Harare stock exchange, and Barclays Bank plc, the UK-based company, holds 64 per cent. of the shares in it through a locally incorporated holding company, Afcarme Zimbabwe Holdings Ltd. We can see where the real ownership is.
Because that is a locally registered company, even if ultimately owned in majority by a UK-based company, it completely avoids the sanctions regime. Had the services in question been provided by an EU-based company there would have been a clear breach of the regime, but Barclays managed to avoid it. Surely it is scandalous that a British company, via a local subsidiary, is providing financial support and sustenance to a brutal regime and to key figures within it. We preach good governance in Africawe hear that constantly from the Government, and rightly soyet companies based in this country appear to be behaving reprehensibly.
After seeing the reports in The Sunday Times and The Observer, I took up the matter with the Foreign Office. I wrote to the Foreign Secretary at the end of last year and had a reply dated 7 December from Lord Malloch-Brown, the Minister of State. It confirmed that the Foreign Office was
currently looking at one specific case to assess if there has been a breach of Article 6
of the EU regulation that I have referred to. It appeared that an investigation was under way. I wrote again,
asking for an update. The second letter that I received was far more general and evasive, and said nothing about that apparent investigation. I was left completely unclear whether any process to discover whether there had been a breach was continuing. All that the second letter said was that the Foreign Office was committed to enforcing the sanctions regime, but I have already described how weak it is because it is so easy to avoid through locally registered companies.
I wrote again on 12 March, making a request under the Freedom of Information Act 2000. I asked for documents relating to the Foreign Offices investigation of Barclays bank and whether there had been breaches. I am still waiting. I informed the Ministers office last week that I had secured this debate and wanted to raise the matter, and said that it would be helpful if I had a reply before the debate. I was informed yesterday that it would not be possible to answer my letter, a month and half after it was written. Either deliberately or by default, the Foreign Office has ended up providing cover for banks such as Barclays that appear to be helping to sustain the Zimbabwean regime. Given the seriousness of the situation there, I find it extraordinary that the Foreign Office is behaving in such a way. All the questions that I asked in my letter could have been answered in a short time. There is no reason for this endless delay, and I condemn the Foreign Office for its failure to address my serious concerns.
Tony Baldry (Banbury) (Con): If the sanctions are an EU regime, who in the EU is meant to police them? Is the hon. Gentlemans assertion that Barclays has breached the EU sanctions regime and that there has been no penalty, or that Barclays has complied with the strict law of the sanctions but managed to evade the spirit of them, and that it should be condemned for that? I am not sure of the exact allegation that he is making.
Norman Lamb: I am grateful for that intervention, which helps me to clarify what I am saying. It appears to be very easy to avoid the sanctions regime by operating through a locally based company. Barclays may well have managed entirely to comply with the letter of the law by operating in that way, but the first reply that I received from the Foreign Office said that it was investigating a possible breach. I want to know what has happened to that investigation, because so far the Foreign Office has absolutely refused to tell me.
I am also interested in whether the sanctions regime has done anything effective to bring about change in Zimbabwe. One of my concerns, which was reinforced by speaking to an expert on the sanctions last week, is that it seems that there is no capacity to investigate alleged breaches of sanctions, either at EU level or, I suspect, at Foreign Office level. We impose sanctions and then do nothing to police them.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Meg Munn): The hon. Gentleman has just made the serious charge that the Foreign Office has refused to answer him. I think that he would like to put the record straight and say that that is not the case.
Norman Lamb: Will the Minister repeat that intervention? I did not understand it.
Meg Munn: The hon. Gentleman made the allegation that the Foreign Office had refused to answer him. I think that he would like to put the record straight. [Interruption.]
Norman Lamb: I think that others here are reinforcing my view that that is not what I said. I have not had a reply. The Foreign Office has failed to reply. It seems to meI repeat this chargethat it would have been perfectly possible to respond to the serious allegations and concerns in my letter. A month and a half later, it has failed to respond. Despite the additional chance that I gave it last week to respond before today, it has continued to fail. I hope that I will get a substantive reply, but I know this Governments attitude towards the freedom of information legislation that they themselves introduced. It tends to take several years to get any proper, substantive response to requests to central Government.
The Government presumably condemn what is happening with Barclays, because if loans were being provided to members of the regime by a company registered in the EU, it would be a clear breach of sanctions. Is Barclays a company that the Government in this country should be doing business with? Is it a company that other public bodies in this country should be doing business with? If these sanctions are to mean anything and if we are to be serious about what we say are our concerns about the outrages going on in Zimbabwe, surely the measures that we introduce must have some teeth, rather than being pure rhetoric, and empty rhetoric at that.
It must be said that Barclays in Africa has form. Of course, we know all about its record in South Africa under the apartheid regime. What is not so widely known, however, is that Barclays provided the finance for the sale by BAE Systems of a military air traffic control system to one of the worlds poorest countries, Tanzania. That deal is currently under investigation by the Serious Fraud Office. Barclays provided the loan finance at a time when all the allegations were in the public domain and concerns were being raised that it was a dodgy deal.
I would like to know a number of things from the Government. First, what is happening to the investigation that I was initially told about in the reply to me by Lord Malloch-Brown, the Ministers colleague, which was dated 11 December 2007? What is happening to that investigation into an alleged breach of the sanctions regime? When will I get a reply to my letter asking for information and documents under freedom of information legislation?
Secondly, what assessment have the Government made of the effectiveness of the sanctions regime? What capacity is there within the Foreign Office to investigate breaches or alleged breaches of the sanctions regime? What capacity is there at the EU level to carry out such investigations, because I am told that there is no effective capacity to investigate those sanctions? Are sanctions merely a fig leaf, to demonstrate to the world that we care, while we actually do nothing effective to bring about change?
I end by reminding hon. Members why the issue is so important. We are dealing with a brutal regime, whose leader has defied the international community and the results of elections, and who continues to wreak havoc
in his country, destroying it economically as well as perpetrating human rights abuses. My final question to the Government is this: what are we doing in an effective way to bring about change?
Kate Hoey (Vauxhall) (Lab): I congratulate the hon. Member for North Norfolk (Norman Lamb) on his speech, on securing this debate and particularly on the very interesting points that he made about Barclays, which I think we all found of great interest. May I also say, Mrs. Humble, that I too have a croaky voice, one that is probably slightly worse than that of the hon. Member for North Norfolk?
It seems clear to all of us that the international community has a responsibility to step in to try to protect any population that is being beaten up by its own Government. It remains true that, apart from a few honourable exceptions, most of the voices speaking out on behalf of Zimbabwes battered people come from outside Africa. There is still deep unwillingness on the part of leaders in the region to be frank and to name Mugabes tyranny for what it is. Any idea that Mugabe will somehow start to behave well as a result of these diplomatic and fraternal niceties is absolute rubbish. I believe that both history and the people of Zimbabwe will judge the leaders of Africa and will not look kindly on the way that, even now, some of those leaders are continuing to offer excuses for the regime and allowing the destruction of Zimbabwe to go on.
Since the election, Mugabes illegitimate regime has gone all-out in deploying a reign of terror on individuals and communities, out in rural areas and out of sight of any cameras, attacking people who voted for Morgan Tsvangirai and the Movement for Democratic Change. The military, the police and the secret operatives of the Central Intelligence Organisation have been unleashed, as well as the youth militia and so-called war veterans. ZANU-PF needs a lesson in arithmetic, because the age of most war veterans suggests that the war in which they supposedly fought took place long before they were born, in rather the same way that many on the Zimbabwean electoral roll seem able to cast votes long after they die.
The targeted measures imposed by the UK and other states in Europenot only members of the EUas well as by Australia, New Zealand and the United States of America, have achieved far more than they have sometimes been given credit for. The travel ban on Mugabe and his Ministers has been a huge embarrassment and irritation to the regime. That is why the only major demand made by ZANU-PF during the Mbeki negotiations was that the MDC should call for the lifting of so-called sanctions. Of course, sanctions is a word that has huge resonance in the region and its use has allowed Mugabe a propaganda machine to misrepresent those targeted measures.
The EU measures that have been in place since 2002 are very narrowly targeted at about 130 named individuals. They are not economic sanctions like the sanctions that were imposed on Rhodesia during the illegal regime there or on South Africa during the apartheid regime, and they do not affect the general population. They certainly cannot be blamed in any way for the chaotic mismanagement and meltdown of the economy. That is purely the fault of Mugabes regime.
There is strong suspicion that ZANU-PF would not even have agreed to participate in the Mbeki mediation talks if it had not believed that the process might have led to a lifting of the travel ban. Furthermore, it is significant that the communiqué from the Southern African Development Community summit in Dar Es Salaam that set up the talks:
appealed for the lifting of all forms of sanctions against Zimbabwe.
Of course, it also claimed that
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