Examination of Witnesses (Questions 60-69)
PROFESSOR MARK
PIETH AND
MR ROBERT
LEY
17 OCTOBER 2007
Q60 JOHN
BERCOW: So some not very brave
person is playing the man and not the ball, a pretty age-old tactic
by those under pressure who know they have lost the argument,
they have got something to hide, some of the ill-deeds are being
exposed so they think, "Let's take a pot shot at this guy
and see if we can undermine his credibility and perhaps force
him to quit, make it a bit unpleasant, and he might go away."
It is pretty low grade, is it not?
PROFESSOR
PIETH: Picking
up on your point a moment ago, I think in the light of the upcoming
Phase 2 bis we have really turned a corner and we are trying on
a very straightforward technical basis to plan for that event
now, and whatever there might have been, that is no longer an
issue. That is my sense.
CHAIRMAN: It
is helpful to know that and to have this on the record. To my
mind, and I suspect the Committee would agree with me, if this
pressure led to that kind of result in a situation where the British
Government, which is currently under review, is not playing by
the rules, it is the British Government who emerges in a pretty
shady way, not the OECD, so I think we would hope that our Government
would not behave like that, whatever their tetchiness might be
at the process.
JAMES DUDDRIDGE:
Just for the record, from what you are saying it did appear in
two United Kingdom journals, The Economist and the Guardian,
not in other foreign papers. It would seem very odd for people
external to the United Kingdom to place articles in the United
Kingdom press.
CHAIRMAN: I
think we know how journalists work.
Q61 ANN
MCKECHIN:
We heard earlier this morning, and you may have caught Gavin Hayman's
evidence on behalf of Global Witness making some criticisms about
the effectiveness of the National Contact Point in the United
Kingdom, and in particular his comments regarding the junior staff
and their relative inexperience. We have also had evidence from
The Corner House, which is a UK NGO, which complained that the
investigations by the NCP[16]
favoured business interests and continued to be "dogged by
bias and delays".[17]
I just wondered from your own assessments what your opinion is
of the UK National Contact Point in comparison with other members.
Is there a best practice model or are there other areas where
there is a much more robust approach being taken about these types
of complaints?
MR
LEY: I take
it that we have changed subject matter?
Q62 ANN
MCKECHIN:
Yes we have.
MR
LEY: And we
are talking about the OECD's Guidelines for Multinational Enterprises.
My impression is that in fact the UK is one of the better National
Contact Points. The Guidelines themselves are not legally binding
of course because they are recommendations from governments to
enterprises, but they do have a formal binding element. It is
Council decision that regulates the procedural follow-up and calls
upon countries to set up a National Contact Point and then provides
the procedural guidance as to how they should go about it. The
UK in this area has a pretty good record. This is an interesting
time in the annual cycle. Since the review was completed in 2000,
we have had an annual cycle of reporting in June to an Annual
Meeting of National Contact Points and there there is a sort of
collective peer review. It is nothing like what goes on in the
anti-corruption field, which has on-site visits lasting a week
with experts from different countries and the presence of several
Secretariat people enquiring intensely and interviewing all kinds
of people inside and outside government. This is a very different
kind of animal and it has to do with the priorities of the organisation
and the priorities of the members and the resources devoted to
it. The way we do this is via a collective peer review where each
of the countries' National Contact Points reports in writing and
then attends a meeting where they take it in turns to say what
they have been doing. It has a certain "show and tell"
side to it but it also has an enquiry side where they can learn
from each others' experiences and question what is going on, because
for the system to work well a National Contact Point cannot do
the whole thing on its own. There is usually another country involved,
sometimes several other countries, because multinational enterprises
are complicated things. The general impression I would say is
that the UK is not doing too badly.
Q63 ANN
MCKECHIN:
What surprised me from Gavin Hayman's evidence this morning is
that an involvement either by the police investigators in this
country or by the prosecution authorities in terms of how the
investigation was conducted did not appear to be integral to this
process. At the moment it appears to be conducted solely through
civil servants. Are there any guidelines by the OECD or discussion
about at what seniority level this investigation should be taken
within the Civil Service and to what extent police experts and
investigators should be called in to assist?
MR
LEY: I think
if we were to get into police and formal investigators and so
on we would be in a very different kind of environment. One thing
we have to remember is that very often the facts that are associated
with what we call, unfortunately, a "specific instance"—which
for normal people would be a "case" but we do not call
it a case precisely because it is not a legal proceeding, and
to keep faith with the business community it was important to
them that we called it a specific instance and not a case—the
events that give rise to complaints under the Guidelines are typically
in developing countries and most of the developing countries concerned
are not part of the Multinational Guidelines, so we have the 30
OECD members plus 10 other non-member countries now, but they
are mostly the more advanced ones—Chile, Brazil, Argentina,
and most recently Egypt, which is a novelty. What I am getting
at is that the investigation, if there is to be one, is in the
sovereign territory of another country and our National Contacts
Points' job is to try and gather information as best they can,
typically through their local embassies, and if possible with
the co-operation of the local authorities, but it cannot be guaranteed
because the local authorities do not necessarily welcome the presence
of investigating embassies, or NGOs for that matter, but the NGOs
do a pretty good job in gathering information too, and it is typically
through them that the cases emerge.
Q64 CHAIRMAN:
Just a final point, the Risk Awareness Tool that you introduced
last year, which obviously is of particular relevance to developing
countries, how do you promote this if it is giving guidance to
OECD-based countries operating in areas of weak governance? This
Committee has visited a number of these places and clearly it
is difficult, so how do you see this Tool working, how do you
promote it, how do you actually make it effective?
MR
LEY: It is an
excellent question and the answer is being discussed still, if
you will. The Tool itself was approved only in 2006 and since
then we have been exploring with countries and companies and NGOs
to see what would be the most effective way to go about this.
One thing that is new about it is that the potential clients for
this are businesses themselves. The idea of this thing is to provide
a guide or a set of questions that businesses can use to determine
what they are getting into, what they should be careful of, and
what questions to ask and of whom. The most interesting idea that
has come up to make it more operational would be to have a portal,
a sort of elaborate website that we could operate that would receive
information, not just passively, not just a collection of information,
but where businesses themselves would put the information up there
to explain what is involved in dealing with a particular country,
because they are not interested very often in being on their own.
There are areas of mutual interest and possible collaboration
within an overall highly competitive environment. The main drawback
here is that we do not have any money for this. It is like anything
new. We could create a sort of website but it would not have any
bite. We need some money from somewhere, probably not a lot of
money, but we need to have a full-time person who would both gather
the information and interact directly with the companies who might
be interested. The institutions that represent them—employers'
federations, chambers of commerce and the like—have shown
interest in this.
Q65 CHAIRMAN:
This presumably would work a bit like defence exports where companies
who are making components which are not directly for defence products
but could be adapted should be aware when they get an order from
a strange place? Is it the same sort of idea, to raise awareness?
MR
LEY: Yes.
Q66 CHAIRMAN:
It still requires companies to take that upon themselves, and
one of the problems we have found in this inquiry—and if
you were in the previous evidence session when we were taking
evidence from Afrimex you will know they had been identified by
the United Nations as maybe trading in conflict products, which
had been referred to the British Government for investigation,
and the company basically said they had received no contacts from
the British Government and were totally unaware of the existence
of OECD Guidelines. I think in all fairness to the witness from
Afrimex that was a genuine comment. To some extent he was saying,
"I am a small business; is it not up to somebody to tell
me these things?" How do we make that work?
MR
LEY: One of
the things that came out of the last Annual Meeting of the National
Contact Points is that two or three of our countries have done
special promotional efforts to small and medium-sized enterprises.
Italy was one, which will not surprise you. I think that is the
sort of thing where typically if you think of multi-national enterprises
you think of the top end of the market, but the middle-sized end
in many ways needs more hand-holding, they do not have the resources
necessary. Government does not have unlimited resources either
for hand-holding, but there might be a case for working through
some of the bodies that look after the interests of SMEs18 and
then perhaps also to target particular sectors. The extractive
industries is obviously one that has been particularly interested
and anybody working in Africa. The Canadians seem to be a bit
out in front in exploring what might be done here, and the US
have put the Risk Awareness Tool on their site for OPIC, the Overseas
Private Investment Corporation, which provides services to prospective
investors.
Q67 CHAIRMAN:
So it would not be unhelpful for us to recommend the British Government
look at Canada and the United States?
MR
LEY: Maybe look
at that, yes.
Q68 SIR
ROBERT SMITH:
You said you needed more resources to actually make a web portal
effective. What sort of resources? Is there a figure?
MR
LEY: One person.
They discussed this at one of the recent committee meetings and
the figure was €160,000. It would be on an on-going basis,
it would not be a one-off. There was an offer by the Dutch to
contribute to such a fund but they did not want to be the only
one. It is like lots of these things—you can get something
started and it would not take all 30 or 40 countries that are
interested in the Guidelines, another two or three would do the
trick, I am sure.
Q69 CHAIRMAN:
Can I thank you both very much for coming in. We very much appreciate
the work that you do, which we engage with quite a bit. Clearly
what you are going to be doing over the next six months is important.
As you put it Professor Pieth, it may be a bit rough but one hopes
the British Government can handle that and respond in a positive
manner. This Committee certainly shares the view that the Government
should be doing more, not just be seen to be doing more but that
there should be some outcomes like effective prosecutions in due
course to make clear that this is a serious undertaking. Speaking
personally, and I think on behalf of the Committee, I wish you
well. I think it is a proper undertaking and if it helps the British
Government get to where it ought to be, then that is a good outcome.
PROFESSOR
PIETH: Thank
you very much for the opportunity.
18 Small and medium enterprise (SME)
16 National Contact Point (NCP) Back
17
Ev 12 Back
| 
