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5 Nov 2009 : Column 342WH—continued
Thirdly, the Government's position on no re-export clauses was originally set out in some detail in a letter dated 19 February 2009, which was sent to the Committee by the Economic Secretary. We do not favour making export licences for supply to licensed production facilities subject to the condition that the underlying supplying contract has a clause preventing re-export without the permission of the UK authorities. That would impose an administrative burden on both us and the exporter and, because both the goods and the re-exporting entity
are outside the UK, it would be difficult to enforce in practice. The Committee stated that such a requirement
"would send a clear message to both parties to the contract that re-export to certain countries is unacceptable."
That may be so, but it would not necessarily increase our real-world powers to prevent such transfers.
I was grateful to the Committee for its kind offer to protect my interests in the event of my responding to a hypothetical situation when something went wrong with a re-export case. However, the purpose of such a clause would not be to provide a fig leaf for Ministers. We need to think about what it would achieve. For example, we need to look at the situation in relation to a contract including a clause for a British company to export to a company from, say, Poland. In those circumstances, if there was a breach of the clause by the Polish company, what action could be taken by any party? It is unlikely that the original party, having included the clause in the contract, would make a voluntary decision to enforce action against the Polish clause.
Roger Berry: Does the Minister not agree that there is a simple sanction? If there is an export to a Polish company, part of the licence is a non-re-export condition saying, "You've got this kit. You will not re-export to an EU or UN embargo destination and, if you do, we'll license no further exports to you in future." Is that not clear?
Ian Lucas: That sanction would not be taken under the terms of the contract by the exporter from the UK. There would not be an effective clause in the contract that could be activated by the UK Government. The UK Government would not be in a position to take legal action against the company from abroad, for example, under the terms of the contract.
Roger Berry: I accept that being able to take legal action is the first-best solution, but would the Government not be left with a second-best solution, which is that, if it is clearly understood that if the Polish company that is getting the arms export re-exports to an embargoed destination, no further licences would in future would be granted by the UK where that company is the initial end user? Is that not straightforward?
Ian Lucas: I understand my hon. Friend's point but, carrying the argument a little further forward, it would mean that the detail of every contract made between an applicant and a purchaser would have to be made known to the UK Government. The clause would have to be produced to the UK Government to evidence the further action that my hon. Friend is suggesting.
Roger Berry: If it were a condition of every licence for export from the UK that the initial end user could not re-export to an embargoed destination, and if the UK found out subsequently that there had been re-export to an embargoed destination, surely it could take the appropriate action. Legal action would be preferable, but the other action would simply be that the re-exporter would not get an arms export licence in future. Surely it is that simple.
Ian Lucas:
If an export licence has no such clause in the contract now, and the product ends up in an embargoed country, that would clearly determine consideration of
any further application involving that company, even without a clause in the contract. In other words, the issue is the fact that the product ended up in an embargoed country, and the FCO would take that into account when considering any future application from the company that had transferred the item to an embargoed country.
Roger Berry: Does the Minister agree that administratively it is not a big problem to insert such a non-re-export clause, and that it might deter people from behaving in a way that we do not want? What on earth is the disadvantage of simply inserting a non-re-export clause as normal procedure?
Ian Lucas: The only disadvantage is that although that might send a clear signal, it would suggest a legally enforceable basis for the proceeding.
Mr. Hancock: The evidence to the Committees made it clear that the lack of such a clause was a drawback, as was apparent in the case of India transferring planes to Burma. The Indians simply turned around and said, "There was no clause in the contract. Too bad. Go away." What the hon. Member for Kingswood (Roger Berry) said is logical. The evidence suggests that such a clause is necessary if we are to have some stick; having no clause will leave us in our current hopeless situation.
Ian Lucas: My understanding is that the transfer to Burma did not take place, although that may not be relevant in the context of the hon. Gentleman's comment. I understand his point, which is that such a clause would make the position-
Ian Lucas: I was going to say "more overt", but I am grateful to the hon. Gentleman for helping me out. I understand the point, but I am reluctant to incorporate a clause simply to send a message-a message that implies some sort of legal basis but does not provide the foundation for any action. Before I became engaged in that discussion, I was going to say that the Government are prepared to consider the matter further, that our discussion has been useful, and that I will return to the Committees by the end of the year.
Reference was made to the international arms trade treaty, and it is important to recognise the important role that it will play in taking Government policy forward. We are playing a leading role in working towards a globally agreed, robust arms trade treaty. Since introducing the initial resolution at the United Nations back in December 2006, in which we called for work on such a treaty, we have worked closely with international partners, civil society and the defence industry. On 30 October, UN member states voted overwhelmingly in favour of an arms trade treaty, and that vote mandates preparatory committee meetings in 2010 and 2011 to work towards a UN conference in 2012, when the text of an arms trade treaty will be finalised. Clearly, a lot of work must be done in those committees to make the treaty a reality, but as my right hon. Friend the Foreign Secretary said:
"This groundbreaking achievement is a defining point in the work that has been led by a global coalition including the United Kingdom over the last three years towards a treaty that will save lives, safeguard human rights and support development across the world."
I shall try to deal with some of the other points that were raised during our extensive debate. It was a pleasure to listen to the right hon. Member for Tonbridge and Malling (Sir John Stanley), despite his image of me in the bath, which was not the most flattering, but perhaps that is because I see myself on such occasions. I am concerned about the two months' notice of delegated legislation to which the right hon. Gentleman referred. I am not aware of the rationale for the Department's response, but I will look into the matter and return to him with the detailed rationale and details of the difficulty that justified the Department's response.
There was much discussion about specific countries-mainly Sri Lanka and Israel-from my hon. Friends the Members for Ilford, South (Mike Gapes) and for Birmingham, Northfield (Richard Burden). It is extremely important that when decisions are made on export licensing, the overall position relating to individual countries is taken into account. It is important that the specific circumstances at a specific time are assessed, which necessarily involves considering the history-perhaps not just the recent history-of trouble spots and countries.
Reference was made to correspondence from my right hon. Friend the Foreign Secretary on both Sri Lanka and Israel. The position of Her Majesty's Government does not change in terms of the rules and principles that are applied, but those rules and principles must be reconsidered in the context of events at any particular time. That is the context in which Government policy goes forward. I assure right hon. and hon. Members that the Government take account of Operation Cast Lead and events during the past year in Sir Lanka when assessing individual cases.
Mike Gapes: Will the Minister take this opportunity to answer my specific question about whether the Sri Lankan armed forces used equipment supplied by the UK-licences have now been revoked-in the recent conflicts?
Ian Lucas: I am afraid that I cannot give my hon. Friend a specific response on that individualised and sharp point.
Mike Gapes: Perhaps the Minister will write to me.
Ian Lucas: I am happy to do so, and I was going to say that. I am happy to return to my hon. Friend on that point, when I am in a position so to do.
Some of the points raised by the right hon. Member for Tonbridge and Malling were raised by my hon. Friend the Member for Kingswood. I hope that some of them have already been covered. The right hon. Gentleman made several points relating to individual countries, to which I have referred. In respect of Libya, I can make it absolutely clear that the Government do not and will not use licences in any way as sweeteners to develop a relationship with a country. That is the case with any country, but Libya was the one to which he referred. It is central to having a proper regime that such an approach is never undertaken.
My hon. Friend the Member for Birmingham, Northfield referred to the extremely difficult-perhaps tragic is a better description-position in Israel and Palestine and
the circumstances that have led to so much suffering for both communities over many years, but particularly in the past year. I pay tribute to the long years that my hon. Friend has spent working on the issue and taking a close interest in the position of the UK Government and our involvement in the process. The Government have made it clear that we regard it as extremely important that when we have any form of relationship in terms of selling items that require export licences to Israel, we consider the situation very closely.
When we were considering the position earlier this year in determining licences, we did make a number of changes in our approach, because of the information that we talked about. The activity of the Israeli Government was something that we had not previously anticipated. For example, in respect of the Saar-class Corvettes, we had not previously been aware that there had been any circumstances in which those had been used in a military context. When we learned that they were being used in that way, we revoked the licences. That will, of course, be taken into account when determining future licences and is an example of the way in which we will take into account changes that occur over a continuing period.
Jeremy Corbyn: Could the Minister help us and say why that change of heart took place? I ask that because the use had been to continue the illegal activities of Israel anyway in controlling Palestinian movements. That was not new; it has been going on for a very long time.
Ian Lucas: The specific usage of the naval vessel concerned was something of which the UK Government had not previously been aware. It was on the basis of that change that the action took place and the change of policy was undertaken.
Richard Burden: I do not expect the Minister to know the answer to this question now, but perhaps he could write to us after the debate; I do not know the answer to it. In relation to the Saar Corvettes, were they used off Lebanon in the Lebanon war, and were any checks done as to whether they were used off Lebanon?
Ian Lucas: I will certainly look into that matter and I am grateful to my hon. Friend for raising it at this juncture.
I was asked about monitoring by embassies in relation to end use. The Government's position remains that the best means of ensuring that goods are not diverted is to conduct a rigorous assessment at the licence application stage. That includes careful examination of the information on the proposed end use and end user of the goods. UK diplomatic posts are regularly asked to check the accuracy of information in the end-user documentation submitted in support of an application. The question of the end user is therefore taken into consideration right at the outset, when the application for a licence is determined. That is a major factor in a number of applications. On a number of occasions, we see licences turned down not because of information relating to the person who is stated to be purchasing, but because there are concerns about the end user of the item. We do consider that and we treat it extremely seriously.
Roger Berry:
I know that officials in the relevant Departments are scrupulous about the efforts that they make in assessing as much information as they can get
before a licensing decision is made or recommended. There is no question about that and I am sure that advice from embassies and high commissions is part of it. However, does the Minister not foresee any circumstances in which it would be useful to have some end-use monitoring after the licence has been granted? I am thinking of, for example, exports to destinations that we all know are-how can I put it?-more sensitive than others.
Ian Lucas: End use will always cause issues within decisions made on applications. Clearly, having as much information as possible is useful to that process. I can assure my hon. Friend that, as he said himself, a very rigorous process goes on at the moment and that the embassies and Foreign Office staff are very closely involved in that process when applications are made.
I was asked about transit and transhipment. During the review that has taken place relating to that issue, and following concerns raised by key stakeholders, we have strengthened controls on transit and trans-shipment. The controls have been aligned with the new three-tier trade control structure, which varies the level of control, depending on the risks associated with the goods and destinations. I will write to hon. Members on the number of goods seized in transit, because I do not have full details of the numbers today.
We heard about the visit to Ukraine. I can confirm that Her Majesty's Revenue and Customs is still conducting an inquiry into the circumstances of the matters raised as a result of that visit. I can assure members of the Committees that I will explore exactly where that investigation is at present. It is clearly in everyone's interests that matters be brought to a conclusion as quickly as possible. I shall come back to the Committees on that matter as soon as I can.
I heard the concerns of the right hon. Member for Tonbridge and Malling relating to China and the attendance at the defence systems and equipment international exhibition. The attendance at DSEI does not in any way undermine the embargo that exists between Her Majesty's Government and China. Although I am not aware of the precise circumstances, that invitation does not in any way undermine the embargo.
We heard reference to the position in Guinea and the very unfortunate regime in existence there. That example shows how an embargo is crucial when dealing with countries of that nature and how we must be extremely rigorous in our approach when dealing with any suspicion whatever of items being passed on to countries with very questionable human rights reputations.
Mr. Clifton-Brown: The Chairman, the hon. Member for Kingswood, made a very interesting point at the beginning of the debate about arms being re-exported to countries that are under an arms embargo-it could be an EU, UN or area arms embargo. In considering the re-export issue, would it not be possible to insert in every single licence contract a provision that every possible effort should be made to prevent arms being re-exported to areas of the world where any type of embargo is in existence?
Ian Lucas:
It certainly would be a thought. I hesitate to return to the discussion that I had with my hon. Friend the Member for Kingswood earlier this afternoon,
but similar points would arise concerning the enforcement of contracts. We are happy to consider any device that shows the strength with which the Government are prepared to ensure that embargoes are respected, known about and kept by all parties-certainly UK parties. It is certainly an approach that we may wish to consider.
I have tried to deal with the issues that my hon. Friends and hon. Members have raised today. The subject of the debate is clearly an area that benefits from continued dialogue between the Government and the Committee. A number of valid points have been put forward. The arguments that the Committee has made in the past have been taken on board and, under this Government, there has been huge progress in ensuring transparency in export control, which I am particularly proud of. I am keen to continue to engage with the Committee. There has been much food for thought in the debate, and a number of very powerful arguments have been put forward.
Jeremy Corbyn: On the point I raised about torture, the Government gave a somewhat guarded response to the issue in their response to the Committee's report.
Ian Lucas: The Government have been clear about the strength of their position on torture-they are not prepared to countenance torture or to be involved with items used for torture. The position of Her Majesty's Government is very clear and I am certain that it will be maintained by any Government whatever their political colour.
As I said, I greatly value today's debate. I will reflect on the arguments that have been made in any decisions that I take. I am grateful to all Members for their contributions, and I will come back to them with written responses to the specific items that I have not been able to deal with.
5.23 pm
Roger Berry: I thank the Minister for his responses, and we look forward to the further written ones. May I say two more things?
First, I am very grateful that the Minister will consider the non-re-export clause. He offered a response by the end of the year. I do not want to discourage him from doing that, but I am sure the Committee would think that the right result is better than the speed of the result. We think that we have made a powerful case and I hope the Minister will take the time needed to consider it.
Secondly, on behalf of the Committee, I wish the Minister and his officials well in progressing with the arms trade treaty. Such a treaty is the chance of a lifetime and we are all conscious that Ministers and officials are working very hard, and that the UK has shown leadership. Our prayers are with them. It is a terribly important matter, and we very much hope that they are able to secure the strongest, most effective arms trade treaty that is humanly possible.
5.24 pm
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