Examination of Witnesses (Questions 120-139)
MR GARETH
THOMAS MP, MR
EDMUND HOSKER
AND MR
PIERS HARRISON
18 OCTOBER 2007
Q120 Sir Robert Smith: You say you
are working towards the other three.
Mr Thomas: Indeed.
Q121 Sir Robert Smith: When do you
expect to have actually met those?
Mr Thomas: The Committee will
be aware from its previous work of the difficulties that there
have been around the Corruption Bill. We have gone back to the
Law Commission to ask for their assistance in producing a draft
Bill. We are expecting the Law Commission to report in early November
on their initial ideas with a period of public consultation on
their ideas starting in December. We have said that we would ask
the Law Commission to bring forward a draft Bill by October 2008
and we are still optimistic that we can get to that point.
Q122 Chairman: Yesterday we had OECD
officials and Professor Pieth in front of us and there had been
some suggestion that the British Government were not pleased with
Professor Pieth and that he might not be re-appointed to his role
as Chairman of the anti-bribery working group. Is there any truth
in that? Or to put it the other way, does the Director-General
and the Chairman of the anti-bribery working group have the UK's
confidence?
Mr Thomas: Mr McCartney, who was
my predecessor, wrote to the particular newspaper which published
those allegations at the time making clear that the allegations
were not true. Both the Secretary General and indeed the Chairman
of the OECD working group on bribery do have our confidence. We
have not been involved in any attempt to remove the Chairman of
the OECD working group on bribery at all. He was re-elected in
January this year by consensus. We made no effort at all to remove
him and I do not see that happening in January next year either
when he will be up for election again.
Q123 Chairman: What were you saying
about the Secretary General?
Mr Thomas: On the Secretary General,
we have made clear to him directly that we have confidence in
him. He has also made clear that he does not believe the UK Government
were responsible for the article which appeared to be attacking
him and which appeared in the media at the time.
Q124 John Bercow: When is his post
the subject of re-appointment or re-election?
Mr Thomas: We do not know. We
would have to come back to you.
Q125 John Bercow: I think you have
given a pretty explicit answer, but for the avoidance of any doubt
and just to close this particular piece of business, were his
position to be the subject of a vote at any time in the foreseeable
future, can we take it from what you have said that Britain would
be voting for his continued occupancy of that post?
Mr Thomas: We have seen nothing
to date to warrant us not supporting him. Let me be that clear.
If some sort of disaster were to happen tomorrow or further down
the line, then we would reconsider our position, but nothing to
date has led us to have anything other than full confidence in
him.
Q126 John Bercow: Britain had no
hand in this rather low-grade down-market scurrilous tittle-tattle
about him in the media and you would utterly deprecate such.
Mr Thomas: Mr McCartney made that
clear at the time and, given the evidence that the Committee took
yesterday, I have asked my officials to check and nothing which
has been said to me gives me any reason to doubt the veracity
of the letter which was drafted at the time; quite the opposite.
Chairman: To be fair, Professor Pieth
said that he was unaware of any such.
Q127 Ann McKechin: May I ask you
quickly about the OECD Risk Awareness Tool? What assessment have
your department made of the impact of the Tool? To what extent
are you actually contacting UK companies working in zones of weak
governance to tell them about this facility? There was mention
at the evidence hearing yesterday that the US and Canada seemed
to have been an example of good practice on how they are promoting
it. They also said that there was an idea of running a web portal
provided members of OECD were prepared to meet the relatively
modest running costs which might be behind that. To what extent
have the UK analysed the use of this methodology?
Mr Harrison: I believe it is part
of our OECD guidelines promotion but I cannot comment on the detail
I am afraid.
Mr Thomas: I will take that point
back and drop you a note on the detail of what we are doing[24].
Chairman: Before we move on to the next
section which relates to national resources, Sir Robert Smith
would wish to make a declaration of interests.
Sir Robert Smith: I did declare on the
Register of Members' Interests that I have a shareholding in Shell
and RTZ and also a relevant interest as Vice-Chairman of the All-Party
Group for the UK Offshore Oil and Gas Industry.
Q128 John Bercow: What progress are
the Government making in reaching an internationally agreed definition
of "conflict resources"?
Mr Thomas: I suspect you will
know that we have put substantial effort into trying to get agreement
at the UN to ensure that the issue is progressed and kept alive.
There has been considerable disagreement among members of the
UN as to what such a definition might look like. We argued very
strongly in favour of a UN Secretary General report on conflict
and natural resources to keep alive the scope for progress on
what a definition might look like. That debate took place in June
at the UN Security Council and I regret to say was blocked by
other countries. In order to try to keep the issue alive we are
currently pursuing the idea of a group of friends within the UN.
We have a group of officials working across the piece on this
issue. I do not have any immediate good news to offer the Committee
on this issue other than the fact that it continues to be a priority
for the Government. We continue to work towards trying to get
a definition, but the complexity of the issues in terms of searching
for a definition has meant that there has been no international
agreement so far.
Q129 John Bercow: You can see that
there has been no agreement but you give the impression that the
department is a veritable hive of activity on this important matter.
I have to put to you a contrary view which was very eloquently
articulated to us by Gavin Hayman on behalf of Global Witness.
He said that the UK had been lazy, absurdly passive and missing
in action. He told me in the Committee that Belgium and Germany
had taken the lead. What do you say to him?
Mr Thomas: What I would say to
him is that one does not have to be publicly out in the lead in
order to be doing a lot of work to try to make progress. We have
led a whole series of issues where other countries have been in
support of initiatives in the UN. Similarly, when other countries
are taking the lead, sometimes it is appropriate for the UK to
recognise that leadership and to support the work of those other
countries. That is what has been happening in this case. We will
continue to work with those countries. We are actively looking
at whether or not a group of friends is appropriate within the
UN to try to move the issue forward. We are talking to other stakeholders
and we share the frustration of a whole range of other organisations
that we have not yet been able to reach agreement on a definition.
It is not fair to say we have been inactive or absent from the
action, it is simply the case that other countries have been taking
the initiative and lead on this issue and we have been working
in support of them.
Q130 John Bercow: At the very least
there is a communication issue here because Mr Hayman, on behalf
of Global Witness, is obviously an interested player in this field
and even if your officials have been very active, this is a fact
which has not communicated itself to Global Witness. I wonder
whether there might at least be a case for some communication
there. Hearing this litany of critical adjectives flowing spontaneously
from Mr Hayman's lips, I did ask him what might be the cause.
If I remember correctly, he said he thought some of the officials
involved, though very agreeable people, were relatively junior
and by implication perhaps lacked either experience or pushing
power. I just wonder whether you think there might be some force
in that criticism and whether, at least as a result of the well-meaning
criticism from somebody who wants to see the Government make progress
on this point and who has no other agenda, the issue might bear
scrutiny. Would you consider doing anything which might be necessary
to reinvigorate existing efforts?
Mr Thomas: I take your point about
communication. I do not accept the point about seniority. There
is surely, I would suggest, no more important a forum for the
UK to make the case for a definition than the Security Council.
We were active in the debate which took place in the Security
Council in June and pushed very strongly there for the UN Secretary
General to be tasked to bring forward a report in this area. Other
countries blocked such a report being brought forward. I do not
think it is a fair criticism to say that the UK has not been active.
Obviously the preparation for such a debate in the Security Council
involves a whole range of officials in preparation for that work.
Clearly we need to have further conversations with a whole variety
of people, not only about what the UK is doing, but also how best
to try to remake the case for an agreed definition. I emphasise
again that we share the frustration that we have not been able
to make more progress on this and it continues to be something
we are working hard on.
Q131 John Bercow: What are the prospects
for a UN General Assembly resolution or another form of international
recognition of the Extractive Industries Transparency Initiative
as a global standard in the extractive sector?
Mr Thomas: That is potentially
another route to try to make progress in terms of conflict and
natural resources. We are working to secure such an international
standard. At the moment we are working to expand the number of
countries who are taking part in the Extractive Industries Transparency
Initiative and also to broaden the depth of the work under EITI.
There are some 28 countries involved in EITI already and I have
taken part in a number of international meetings, building the
case then for the Extractive Industries Transparency Initiative.
We are not yet there in terms of having the level of international
commitment to EITI to get it through the UN, but we continue to
be optimistic that we will be able to do so. We continue to make
the case for that to happen.
Q132 John Bercow: When might that
happen in your view?
Mr Thomas: If you will forgive
me, I am not going to speculate on such a time. Nevertheless we
are putting a lot of effort into the EITI and we are also seeking
to broaden the concept of transparency from just the existing
EITI arrangement into a series of other sectors where corruption
is a particular problem; the construction industry, for example,
and medicines, where initiatives have been discussed informally
and are likely to be launched shortly. The key thing is to establish
the principle of how to make progress in this area and then we
can go from there.
Q133 John Bercow: That was a wonderfully
Sir Humphrey reply that you were not going to speculate. I can
almost hear him in the background saying "Minister, that
would be very brave" and you judging on the whole that it
would be politic not to take that course, but we will not hold
that against you. You are an experienced hand and you do not want
to be tied down or indeed up for that matter.
Mr Thomas: That is slightly unfair.
We are making progress on this issue. On the timescale point,
I would not want to misinform the Committee either. It is the
best of motives, with respect.
Q134 John Bercow: I accept that and
I accept from what you are telling me that there certainly is
progress. I do not seek to sniff at that. By March 2007 there
was an intention that a further five countries should have implemented
the initiative. Was that target met?
Mr Harrison: Yes, it was.
Q135 John Bercow: Who are they?
Mr Harrison: The countries which
have reported on EITI are Azerbaijan, Nigeria, Kazakhstan, Gabon,
Mauritania, Kyrgyzstan ... forgive me if I search for the other
one.
Q136 John Bercow: You have six so
far. I would not Mr Harrison to be guilty of understatement. We
do not want the record to be understated. Is it the case that
the target has been exceeded?
Mr Harrison: Yes. In the EITI
now a system of validation has been set up. Each of the 28 countries
which has committed to implement is now going to be assessed on
whether it reaches compliance status or candidate status and that
is going to be an independent assessment of their reporting.
Q137 John Bercow: Did you mention
a number of the "'stans" there?
Mr Harrison: I mentioned Kazakhstan.
I mentioned Kyrgyzstan.
Q138 John Bercow: Not surprisingly,
no mention of Uzbekistan.
Mr Harrison: No, they have not
agreed to implement the EITI.
John Bercow: Probably too busy boiling
people I suspect.
Q139 Chairman: We come to the last
but not least important question which hinges on the credibility
of the British Government's anti-corruption strategy; I have to
say, on Professor Pieth's evidence yesterday, not only the British
Government's anti-corruption strategy but potentially the credibility
of the OECD's anti-corruption campaign, namely the suspension
of the BAE-Saudi case. I read every time almost with incredulity
that the Attorney General's explanation was "It has been
necessary to balance the need to maintain the rule of law against
the wider public interest".[25]
That is a fairly devastating statement from a law officer. The
consequence of that is that the British Government, in spite of
the progress which I acknowledge in terms of what you are trying
to do in anti-corruption and prosecution, have not prosecuted,
have abandoned a very high profile prosecution and stand accused
really of breaching the obligations of the OECD Anti-bribery Convention
according to Transparency International. Corner House say that
the UK's anti-bribery policy is "nothing short of a shambles—legally,
institutionally and politically."[26]
How do you respond to that? I accept by the way that this case
is not central to this Committee, it is something which has happened
since we became concerned and it is a very high profile case.
It raises the question of whether or not the British Government
and for that matter the OECD is serious about prosecuting significant
cases of bribery and corruption. May I just tell you what Professor
Pieth said to us yesterday? He said that the case raised serious
concerns, that it might be the tip of the iceberg and it called
into question the credibility of the organisation, by which he
meant the OECD. These are pretty strong statements about where
the British Government stands on dealing with anti-corruption
issues.
Mr Thomas: You will not be surprised,
but I do believe that the Serious Fraud Office director took his
decision based solely on the ground of national security. I do
not think the case should detract from the substantial other work
that has taken place to build our capacity to take action on corruption
and bribery. A series of other investigations is taking place.
We would not have established the anti-corruption unit with the
City of London police in the way that we have done, if we were
not serious about these issues. I would encourage the Committee
to recognise the wide range of other work which has taken place
in this area.
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25
HL Deb, 14 December, col 1712 Back
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Ev 47 Back
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