Examination of Witnesses (Questions 100-119)
MR GARETH
THOMAS MP, MR
EDMUND HOSKER
AND MR
PIERS HARRISON
18 OCTOBER 2007
Q100 John Bercow: The first part
of your answer, in which you referred to the scope for discussing
other issues at a later date, was of interest but I was about
to reach the conclusion that you were providing an extremely good
answer to a question I had not asked. In the second part of your
answer, to be fair, you did then touch on the very specific point
that ECOWAS has raised and it is interesting and important for
us to learn that you are proposing what I think would be fairly
imminent conversations about ECOWAS concerns. The difficulty from
our point of view is that we want to get the evidence and have
it on the record and produce our report. I am all agog to know
what the outcome of your conversation will be. I fear that, as
of today, you are perhaps not going to give me the explicit answer
that I want to my question. Do you back the ECOWAS case or at
any rate do you accept it—no goods-only agreement by the
end of the year—or not?
Mr Thomas: If you will forgive
me, I do want to have the conversation with the negotiator from
ECOWAS rather than give you a specific answer at this stage. What
I would say is that a series of other suggestions have been touted
as possible alternatives to completing Economic Partnership Agreements
by the end of the year: GSP PLUS[10];
trying to get an extension to the deadline. Neither of those options
is particularly attractive. For example, there are two reasons
why I would have a problem supporting the idea of GSP PLUS. First,
it offers worse market access than the Commissioner's offer of
duty and quota free access (a series of products not included).
Second, GSP PLUS has thus far only been given to countries which
achieve high human rights standards and I am not sure we would
want to support driving a coach and horses through the incentives
for good governance. That is my problem with GSP PLUS. On the
idea of simply extending the deadline, that is relatively unrealistic
too; in fact I think it is very unrealistic. It is developing
countries who are not part of the Cotonou Agreement who first
raised objections through the World Trade Organisation and if
there were any attempt by EU and the ACP to extend the deadline
we would see further challenge by those countries in the WTO.
Q101 John Bercow: If you have your conversations
at which you hinted a few moments ago and you felt able to send
a note to the Committee of any further or better particulars or
any outcome, whether an agreed and consensual outcome or not,
as the case may be, for the record, that would be helpful. May
I ask you in this context how EU development ministers at your
September meeting reacted to your view that some issues should
be left off the negotiating table until later? I should be very
interested to know what their reaction to that was. Relatedly,
would you be good enough to provide us with a copy of the letter
you sent to EU trade ministers which is mentioned in your statement?
Mr Thomas: On the question of
a letter following the conversation, if I can provide information
without compromising the negotiations, then of course I will provide
further information to the Committee. I shall certainly look at
providing a copy of the letter I sent to trade ministers. We published
pretty much the version of what was in the letter on our website[11].
Q102 John Bercow: I am a bit suspicious
of the use of the words "pretty much". I want an unexpurgated
version; I do not want some sanitised download.
Mr Thomas: It certainly was not
sanitised, to my recollection. I shall certainly look to provide
the letter to you and the Committee. I am trying to remember the
other point you made.
Q103 John Bercow: At the September
meeting how did they react?
Mr Thomas: You will remember that
back in March 2005 the Government published their view of what
Economic Partnership Agreements should look like. We have been
seeking to achieve the different objectives in that agreement
since that point. It would be fair to say that at the time it
was first published we were in a relatively small minority of
people who felt the same way about Economic Partnership Agreements,
indeed the Commission since has moved substantially towards the
position that we took and adopted, making an offer in March for
duty and quota free market access, albeit with transition periods
for a couple of products. In terms of the level of market opening
required from ACP regions, again we said we wanted the maximum
time for market opening to take place and certainly for some products
there have been periods of up to 25 years for markets to be opened
and for some products they will not have to be opened at all.
The specific concerns I raised at Madeira did see support from
a number of member states and we welcomed their support. There
is a lot of continuing dialogue between development ministries
about Economic Partnership Agreements and the progress, given
how close to the deadline that we are.
Q104 Sir Robert Smith: Your approach
to the request for a delay or a postponement is to engage constructively
and find out what the other side is wanting out of that negotiation
and what the problems are. Does that contrast with the EU approach
which I understand is just to write back and say no?
Mr Thomas: We have made clear
to the European Commission that their suggestion that GSP[12]
will be the only thing on offer, if an Economic Partnership Agreement
is not concluded by the end of the year, is not acceptable to
us. We do not want any of the ACP countries to be in a worse position
in terms of market access than they are at the moment post December.
That is also one of the reasons why we do not support GSP PLUS.
Q105 Ann McKechin: I am going to ask
the Minister about the World Trade Organisation which is, as you
will know, a frequent area of conversation between us. We have
seen many attempts over the last few years to resurrect these
talks and all have ended up in failure. The US presidential mandate
has now just about expired. The latest rumour is that Brazil,
India and South Africa, along with some other South African countries
have come out with an alternative draft which has met with a very
sceptical response from both the EU and the US. In light of this,
is it time to accept that the Doha as a truly development-focused
round is probably as dead as a Dodo?
Mr Thomas: Absolutely not. I can
understand the scepticism but what we have seen, fortunately not
in the media, is a considerable amount of activity between capitals
discussing the negotiating texts on agriculture and NAMA[13]
that Ambassadors Crawford and Stephenson published in July. A
lot of work is being done in Geneva pouring over the details of
those texts; those texts about what are, in the jargon of the
negotiation, called landing zones, setting out a broad range in
which agreement will be required. What we are hoping to see shortly
is further texts narrowing the area of disagreement in the agriculture
and NAMA negotiations, but also texts of possible agreements in
other areas of the negotiation as well. I do not think it is right
to say they are as dead as a Dodo; quite the opposite actually.
A lot of activity is taking place. All the major players have
recognised that we are in a critical moment and that we do not
have that much time left if we want to secure an agreement by
the American presidential elections. One of the specific things
that I have been doing as well is to seek to ensure that we stay
very closely in contact with the least developed countries group
and indeed the African group to make sure that the concerns and
needs of those groups are very much reflected in our position
and our lobbying work in and around Geneva, in and around Brussels
and our discussions with other Member States too. What has been
interesting is the continuing enthusiasm of the LDCs[14]
for progress in the Doha Round. They recognise that however important
the Economic Partnership Agreement discussions are, they stand
ultimately in the long run to benefit most from a positive development-friendly
Doha Round.
Q106 Ann McKechin: Can I take it from
that that the aid package for the least developed countries which
was discussed in Hong Kong is still on the table in terms of the
text? Have you had any discussions with the G20 group in India
about this text which apparently is now causing some degree of
heartache, with the American spokesman saying it could signal
the end of the Doha Round, while the EU Trade Commissioner said
that the alternative papers are not needed? It does not seem to
me as though they are necessarily having a terribly good time
at negotiating texts, if you are saying people are being asked
to bring them forward.
Mr Thomas: On the package of measures
which were discussed in Hong Kong for developing countries, that
is still very much on the table. Obviously it is dependent on
getting an agreement more generally. We still want to see improvements
in that package which reflects an interest of many members of
the Committee. You may be aware that what was committed to in
terms of duty and quota free access was 97 % access for LDCs.
We want a timescale to get to 100 % for example and we are still
pursuing that.
Q107 Ann McKechin: When you say "we"
do you mean the EU or do you mean the United Kingdom?
Mr Thomas: The UK in particular.
In terms of the very specific discussions around the conversations
which have taken place in South Africa, we need to wait and see
how things actually develop in the negotiations in Geneva. Comments
have obviously been made in media terms. We will wait to see how
things develop. There have been many comments in the past about
the Doha Round. It is still going and there is new energy in the
round at the moment.
Q108 Ann McKechin: Would that be
energy within the EU to be more flexible in its own negotiating
stance, particularly on agriculture, which has been one of the
barriers over the last few years.
Mr Thomas: We are very clear that
at the appropriate time further flexibility will have to be shown
by the EU. We believe that Commissioner Mandelson, because of
the reforms that there have been in the past to the Common Agricultural
Policy, has that flexibility, but there will also have to be flexibility
shown by all of the other key players in the negotiations too.
Through the contacts that the Prime Minister has, that the Secretary
of State for International Development and indeed the Secretary
of State for Business, Enterprise and Regulatory Reform has with
all those key players that point is made.
Q109 Ann McKechin: On the question
of the UK National Contact Point we seem to have received contradictory
evidence. The Government's interim progress report on the UK Action
Plan 2006-07 says "Since the new NCP[15]
has been in place, six new cases have been brought to its attention,
which represents a significant increase over the short term."[16]
However, your own department's evidence to this inquiry says there
have been four new cases, which is in line with the average. Could
you clarify how the discrepancy has arisen and which you believe
is the correct figure?
Mr Thomas: Let me say first of
all on the National Contact Point that following some of the concerns
which have been expressed about the National Contact Point we
have taken steps to strengthen the contact point. Additional staff
have been brought in from the Department for International Development
and from the FCO[17]
and an independent steering board is to oversee the workings of
the National Contact Point. That independent steering board has
met twice already. OECD[18]
Watch, which is one of the groups which takes particular interest
in the National Contact Point, has praised the UK for the improvement
in arrangements and is suggesting that the reformed NCP should
be a good model for other countries to adopt. Let me bring in
Mr Harrison to try to resolve the particular point about the four
and the six cases.
Mr Harrison: The interim report
was written in March and I do not know whether the six cases were
six new cases.
Q110 Ann McKechin: I am quoting from
the report, "six new cases", "Since the new NCP
has been in place; six new cases have been brought to its attention,
which represent a significant increase over the short term."
Mr Thomas: Let me take that back
and give the Committee an assurance that I will go back and check
the reason for the discrepancy and drop a note of explanation
to you[19].
Q111 Ann McKechin: That would be helpful.
You pointed to changes in the NCP practice to try to improve it.
From the evidence we took earlier this week certainly the OECD
officials said that the UK represented one of the better practices.
However, evidence we took from Global Witness seemed to indicate
that perhaps staff who were dealing with cases were at a relatively
junior level; some concern about whether or not they had sufficient
seniority to progress cases and also that there did not seem to
be any direct contact with either police or the Serious Fraud
Office in terms of the way in which investigations were conducted
or with the Crown Prosecution Office, if there should be potentially
criminal prosecutions, on whether or not these could be taken
forward. I just wondered what analysis has been made of what resources
this Contact Point requires.
Mr Thomas: Whilst I am encouraged
by what the OECD officials have said and indeed what OECD Watch
have said, we are certainly not complacent about the progress
of the NCP. We have agreed to lead, jointly with Canada, a survey
of best practice across all the national contact points and there
are opportunities for us to learn from what others are doing as
much as to help other countries with their implementation arrangements
too. On the question of the range of officials who are involved,
I am not quite sure what Global Witness were referring to because
a whole range of officials at a whole variety of levels have been
involved, not only in the National Contact Point arrangements
but a whole series of other processes too. Indeed we have said,
for example on conflict resources and on anti-corruption, that
we will increase the engagement of all staff in this area. These
were commitments which were made in the White Paper which was
published by Hilary Benn and we have been working to do just that.
Ministers continue to have oversight and to engage in this area
of work. In terms of the relationships between the police and
the Serious Fraud Office, I know there has been some concern about
lack of clarity between institutions and that there were some
concerns that there were overlapping mandates between some of
the institutions involved. I hope that the Committee will accept
that the establishment of the dedicated anti-corruption unit run
by the City of London police should largely have resolved that.
A memorandum of understanding has been signed between the various
players to help address some of the concerns you have just raised.
Q112 Chairman: May I add a comment
to that? Having been involved on a number of occasions in expressing
concern about the Government's lack of response, the last two
or three years have seen some significant improvement, as you
have described. We initially had no prosecution capacity and that
was almost an excuse; a number of other areas have also moved
forward. Nevertheless people are looking for a successful prosecution
as the final proof that we really are doing something about it
and we might come back to that.
Mr Thomas: Perhaps I could just
raise that one of the concerns has been about the ability to compel
companies and individuals to produce documents and answers at
an early stage. Members of the Committee may have seen that the
Attorney General announced on Friday 12 October our intention
to bring forward amendments to the Criminal Justice Bill before
Parliament at the moment proposing an extension of powers to strengthen
the SFO's[20]
ability to investigate and prosecute.
Q113 Chairman: It would obviously be
a welcome development if that were proactively followed up. When
we were doing our Conflict and Development report and sought
on the back of that to pursue the matter further, we were frankly
concerned about some of the things we heard. There were two companies
in particular which had been identified by the United Nations
Panel, Alfred Knight and Afrimex who were alleged to have been
engaged in activities in the DRC[21]
which could have been actively supporting conflict and in breach
of the guidelines. If I recall, and it is on the record, in the
case of the witness from Afrimex who came to see us—and
he did have the courtesy to give evidence which I have to say
Alfred Knight did not—he said that they had made payments
effectively to a rebel group. This was on the record. He did subsequently
write to the Committee and his written evidence was published
where he sought to clarify some of his evidence but no action
was taken. In evidence to us he said that, in spite of their being
identified by the United Nations, at no time did anybody from
the DTI have any contact with the company and he had never heard
of the OECD guidelines. I think you will understand that when
we heard that it suggested to us a less than diligent response
from the government department. What that raises is, as things
stand, given no investigation has taken place, whether the Government
are satisfied that these two companies do give no cause for concern.
Do they really regard those as closed cases, given that in neither
case does there seem to have been any active investigation of
the allegations which were made about them?
Mr Thomas: On Afrimex, it did
take longer than the initial three months to conduct the initial
assessment and my advice is that was because the National Contact
Point wanted to seek some legal and specialist accounting advice
to help them with that assessment. That initial assessment has
now been done. Work is still going forward in the case. I am told
that we are optimistic that the National Contact Point can conclude
on the Afrimex case within the one-year target that the NCP has
to report. In terms of Alfred Knight, the NCP has not received
a specific complaint to this date. If a specific complaint is
received, then of course the NCP will be able to investigate and
move forward. At this time my understanding is that no specific
complaint has been received by the NCP.
Q114 Chairman: In the case of Afrimex,
are you aware that Global Witness told us yesterday that they
are formally complaining to the National Contact Point and are
looking for a judgment, basically saying that they do not think
it has been adequately investigated? Is the answer you have just
given us effectively your response that you will connect with
that complaint?
Mr Thomas: I need to see the detail
of what Global Witness are saying. As I said in answer to your
first question on this area, we recognise that the initial assessment
took longer than anybody would have wanted. I believe there is
a reason for that. The investigation is now proceeding and we
hope that we will conclude on the Afrimex case within the one-year
target.
Q115 Chairman: Will that be published
and reported on in the public domain?
Mr Thomas: Indeed.
Q116 Chairman: On the case of Alfred
Knight, I am slightly concerned at your reply and that actually
the Government's response to our report in fact was "If such
a complaint, backed by evidence, was forthcoming the NCP would
consider the case on its merits".[22]
If I may say so, I do not think that is good enough. When the
United Nations has identified a company, when really quite startling
evidence is put on the record in front of our Committee, I would
have thought that it was the responsibility of the Contact Point
to make some proactive investigation not wait for somebody else
to come along with a complaint. With the greatest respect, the
Committee does not have that capacity. We felt we had done a service
putting it in the public domain. We tried to get the company to
give evidence. The fact that they went to considerable trouble
to avoid giving evidence was indicative that there might have
been something to investigate. I say that in spite of the fact
that my understanding is that on an international basis Alfred
Knight is a highly respected and highly reputable company, one
of the leading assay companies in the world, but in the context
of its activities in Rwanda, there were some very definite questions
that have not been answered. Am I not right in saying that that
is part of the concern, that we do not appear proactively to go
out trying to see whether or not there is a case to answer, that
we expect somebody else to do it for us?
Mr Thomas: I shall obviously reflect
on what you said and I respect the Committee's work in providing
a forum for concerns to be raised. Equally I hope you will recognise
that there has to be a process outwith Parliament. That process
is encapsulated within the National Contact Point and does require
us to receive complaints and to date we have not received such
a complaint.
Q117 John Bercow: I must say I do
find this a slightly circular debate. The Chairman and I have
not discussed this matter, but would you regard it as an appropriate
trigger for an investigation if this Committee, on the strength
of what has been told to it so far, were to write to the National
Contact Point, highlight the fact of what we have been told and
ask them to regard this as our complaint and our request that
these matters be investigated. Is it as straightforward as that?
Mr Thomas: What I shall do as
a result of appearing before you this afternoon is go back and
reflect on the concerns you have raised now in echoing the Chairman's
point. I shall write back to the Committee on this point.
Q118 Chairman: May I just repeat
on the record that we made numerous attempts to accommodate senior
directors of the company to give evidence and they made strenuous
efforts to avoid doing so? We did not resort to seeking the authority
of the House to bring them before us and that is on the record
too.
Mr Thomas: I am advised that in
answer to Mr Bercow's point, if the Committee were to write formally,
that would constitute a complaint which the NCP would then take
forward.
Chairman: You can take it that we will.
John Bercow: That in itself is helpful.
It underlines the merit of having in the body of the room for
the purpose of proffering advice people we are not supposed to
know.
Q119 Sir Robert Smith: On the wider
issue of anti-bribery and corruption the OECD's working group
is undertaking a review of the UK's position and is due to visit
in March 2008 as part of that second review. In March this year
the then Trade Minister said "we welcome the opportunity
to demonstrate the degree of our commitment to all aspects of
the fight against international corruption."[23]
Yet the Government have not implemented the OECD Working Group's
previous recommendation, including a new offence of foreign bribery
and addressing issues linked to corporate liability. So if they
have not addressed the previous review what is the real value
of a further review and visit?
Mr Thomas: With respect, the Working
Group of the OECD found that of 20 recommendations which had been
made by the review team, 17 had been either fully or at least
partially implemented. It is not fair to say that no progress
has happened. Of three areas in particular where we do not have
the progress that we would have wanted, one is the issue around
the corruption law and getting the simplified legislation on the
statute book. The second, as you say, is the corporate liability
and the third is an issue in terms of amending the code of conduct
for Crown prosecutors. We are obviously seeking to take forward
those areas to make progress. I should want to put very much on
the record that 17 out of 20 recommendations by the OECD review
have either been met in full or at least partially.
10 Generalised System of Preference Plus (GSP Plus) Back
11
Ev 36 Back
12
Generalised System of Preference (GSP) Back
13
Non-agricultural Market Access (NAMA) Back
14
Least Developed Countries (LDCs) Back
15
National Contact Point (NCP) Back
16
DFID, Combating International Corruptiocombating CorruptionUk
Action Plan For 2006/07-Interim Progress Report, March 2007,
p 1 Back
17
Foreign and Commonwealth Office (FCO) Back
18
Organisation for Economic Co-operation and Development (OECD) Back
19
Ev 36 Back
20
Serious Fraud Office (SFO) Back
21
Democratic Republic of Congo (DRC) Back
22
International Development Committee, First Special Report of
Session 2006-07, Conflict and Development: Peacebuilding and
Post-conflict Reconstruction: Government Response to the Committee's
Sixth Report of Session 2006-07, HC 172, p 10 Back
23
HL Deb, 20 March 2007, col 81WS Back
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