Examination of Witness (Questions 20-39)
IAN PEARSON
MP, MR JOHN
DODDRELL AND
MS JAYNE
CARPENTER
21 JANUARY 2009
Q20 Mike Gapes: Perhaps you could
give us more information, if you have it. That takes me to my
second question. On 7 October, our then Clerk wrote to the Foreign
and Commonwealth Office on the Quarterly Report on Arms Exports
requesting a reply and received a reply from the parliamentary
team dated 20 November. The question we asked, and this was in
October and the reply came on 20 November, was: We would be grateful
for a note on the Israeli naval and land blockade of Gaza and
whether the Government is prepared to export arms that can be
used to enforce the blockade. The reply said: We would be grateful
for further time to formulate a detailed response. We will aim
to respond to the Committee by 8 December. We are still waiting;
seven weeks after 8 December this Committee has still not received
the information that was requested at that time. That information
is very pertinent because the upsurge of the conflict began in
December. Clearly the blockade and the naval aspects of it are
a very important part of what has been happening over the recent
weeks. When are we going to get that reply? More importantly,
will we have a more prompt response to our request for information
about what has been happening during the actual conflict than
waiting several weeks or perhaps months before we get that information?
Ian Pearson: Mike, you have made
your point. It is up to the Foreign Office to reply. You are Chairman
of the Foreign and Commonwealth Office Select Committee. I am
sure you are taking it up with them.
Q21 Mike Gapes: Minister, that is
not good enough. The Foreign Office does not reply just in and
of itself; there are government departments involved. They have
to get the information from the Ministry of Defence and from your
own department and they need to co-ordinate the response. You
know very well that they respond on behalf of the Government collectively,
so it is no good trying to pass the buck on to another government
department. This is a serious issue.
Ian Pearson: If I had a chance
to finish what I was saying, it is that it is the Foreign Office's
responsibility to lead in producing a reply on this. I will personally
chase it up with them and see that you get a reply as quickly
as possible.
Mike Gapes: We would like a response
on the other issue quickly as well, please.
Q22 Linda Gilroy: This is a general
point following on from what Mike has just raised. You said in
response to the first question on this series of questions that
apart from the fact that there were some obvious ways in which
you would be proactively monitoring what has been happening in
a very distressing conflict of recent times, you were not prepared
to share openly with the Committee exactly what the nature of
that would be. Clearly we all need a very high level of confidence
that that is going to be done on almost a case-by-case audit of
every licence that has been issued in recent times under the consolidated
criteria. Would you be prepared to share with the Committee more
detail of how that will be done on a private basis, if necessary?
Ian Pearson: We always seek to
be as open and transparent as we can in providing information,
in particular information to the Committee. We do have a number
of sources, including intelligence sources, where it might be
difficult to actually put that information into the public domain,
but we will do as much as we sensibly can to make sure that information
is available to the Committee. Certainly I can guarantee that
we will look at all the sources at our disposal and make sure
that we factor those into licensing decisions and that those licensing
decisions remain consistent with the consolidated criteria.
Q23 Richard Burden: Minister, could
you clarify something that has been bothering me. The argument
you have been advancing is that whilst Israel has the right to
self-defence and it would be perfectly acceptable within the consolidated
criteria to supply arms equipment for self-defence purposes, on
a case-by-case basis you want to be assured that those arms are
not being used for internal repression or external aggression.
What I do not understand is that if that is the position in relation
to Israel, why is it that in relation to the Palestinians there
is an arms embargo and that this week the Prime Minister has said
that without exception any arms going into Gaza should be intercepted
even with the use of the Royal Navy to help with that. Why is
it not said in relation to the Palestinians that arms that might
be used for self-defence, for example small arms or maybe something
to stop a tank coming into Gaza, might be licensed but arms that
could involve rockets being fired into Israel would not be licensed?
Why the difference? Surely if there is an arms embargo on one
side, there should be one on both sides, should there not?
Ian Pearson: The difference, as
I understand it, is that there is a UN resolution which has been
agreed upon and the UK acts in accordance with supporting UN resolutions.
You will be aware of that. It is something that the FCO lead on
rather than my department. There is a difference. I understand
how we might have difficulties with this but I do not think anybody
is suggesting that the UK Government as a matter of policy should
be arming Hamas.
Richard Burden: I am not suggesting that.
I am just suggesting that if there is an arms embargo on one side,
should there not be an arms embargo on both sides?
Chairman: We have had quite a lot of
discussion on this issue. I think the concerns of members of the
Committee of all parties have been clearly expressed. The only
other thing I would say is that obviously we would appreciate
as quick a response as possible to the specific questions that
have been asked.
Q24 Mike Gapes: I want to switch
the focus to broker registration. Mr Doddrell, in evidence to
our Committee, said that the Government was not yet fully convinced
at that stage of the benefits of a registration system and that
although in principle you are not objecting to it, there is still
no proposal for such a register. Why are you not yet convinced,
or was that last year and are you now convinced?
Ian Pearson: There are a number
of things I want to say on this, and John can obviously speak
for himself. The first thing I want to say is that the responses
to the consultation document for the 2007 Review of Export Controls
were quite mixed—some strongly in favour of a scheme and
others opposed or cynical about the value of actually having a
register. The second thing I want to do is to make a distinction
between a register and a pre-licensing registration system. In
practice, we already have a register of traders because we have
a comprehensive database and can use it at any time to show who
is using trade control licences. We can use this information to
direct our awareness-raising or compliance-visiting activity.
What we do not have is a pre-licensing registration system under
which traders have to be vetted before they can be registered.
I have looked at this. At the moment, I am not fully convinced
that a pre-licensing registration scheme at this stage would be
the right way to go and whether it would justify the additional
bureaucratic burdens that would be involved in doing this, particularly
in view of some of the other steps we are taking at the moment.
I would prefer us to look at how well the initiatives that we
are currently pursuing are working, such as clamping down on those
who misuse open licences and focusing our awareness activity on
traders at work, before considering this further. I am not saying
that I would rule it out but at the moment I am not convinced
that it is absolutely necessary.
Q25 Mike Gapes: You mentioned bureaucratic
burdens. Are these bureaucratic burdens on the Department because
you would have to have more people monitoring this or is it business
burdens?
Ian Pearson: It would be both
but there certainly would be burdens on legitimate businesses
that would have to comply with this, and we would have to see
whether we think it is proportionate or not to place those additional
burdens on them.
Q26 Mike Gapes: Have you done any
assessment of what kind of burdens you are talking about or is
this just some unquantified fear which has not really been assessed?
Ian Pearson: John Doddrell might
want to say something on that in detail. If you are going to have
some sort of pre-licensing registration system, it clearly is
going to involve some additional burden on companies. I would
really like to see how some of the other measures that we have
announced and are taking forward are going to work out before
deciding whether it is important.
Mr Doddrell: The difficulty about
a register is that it is another hoop which an exporter has to
go through before they can apply for a licence. There are detailed
questions that need to be worked out about what the registration
process involved, what the requirements would be on information
to be provided by the trader or the exporter in order to become
registered. All of those sorts of things would need to be looked
at very carefully. There is a question of how far you draw the
register. Is the register to be limited to traders and brokers
or is it to be extended to exporters as well? Even if you limit
it to traders and brokers, you are not only catching the people
who are doing the illicit arms dealing or are verging on the edge
of the grey arms market; you are catching a lot of very legitimate
businesses with rather big names like potentially Rolls-Royce
or British Aerospace who are involved in moving arms equipment
around from one country to another. So potentially you are talking
about a significant burden here on business. We as a department
would need to be absolutely convinced that that was justified
before going ahead with the register.
Ian Pearson: Just to labour the
point, we do have a de facto registration scheme at the
moment for companies that have applied for licences.
Q27 Mike Gapes: If you have that,
then surely you just need to add some kind of vetting system on
to your existing SPIRE system, and that therefore does not put
extra burdens necessarily on business; it just requires you to
put some more resources up to carry out this necessary process.
Ian Pearson: In effect, we assess
every licence application anyway, do we not?
Q28 Mike Gapes: The question is how
rigorously?
Ian Pearson: I would maintain
that we have a thorough examination of each and every licence
application. We should not forget here that in the UK we have
one of the best and strictest export control licensing arrangements
that would be found anywhere in the world. While it is absolutely
right for the Committee to want to probe us and to press us to
strengthen it, we should not underestimate the very real strengths
of the UK system at the moment. We can hold our heads up high
compared with other countries.
Q29 Chairman: Given that the Department
has said in the past that it can see clear advantages into such
a system, this is still under consideration, is it not?
Ian Pearson: It is under consideration.
As I have said, we have not ruled it out but officials would need
to convince me that it is a proportionate thing to do and that
the advantages of doing it would exceed the disadvantages in terms
of the burdens that would be imposed on businesses.
Q30 Chairman: Officials recognised
that there is the case here some months ago. They are still looking
at it?
Ian Pearson: Yes.
Q31 John Bercow: I listened to Mr
Doddrell's response to Mike a moment ago and it did strike me
as an absolutely impeccably Sir Humphrey response, if I may say
so, and I do not mean that discourteously. It did strike me as
a response in which the only words not stated but were implicit
were "long grass". I gained the very distinct impression
that any such idea was heading for or had already arrived at the
long grass. My concern is just for a degree of clarity and specificity.
If the situation is that quite frankly you think the whole thing
is not worth it, that it is too expensive and it is going to upset
business and it is not worth the candle, that may well dissatisfy
the Committee but a blunt statement to that effect would at least
have the advantage of candour. If the reality is that you want
to preserve the fiction that the matter is under review, you are
always open to persuasion and you are listening to the arguments,
what I really want to know is this, Minister or from Mr Doddrell:
is active work on the complexities being undertaken? Is work being
done by officials looking at what Mr Doddrell described as the
range of operational details that would need to be covered in
order to draw a full model of how such a system might work in
practice? Is such work going on or not?
Ian Pearson: Yes, it is going
on. My understanding is that officials will, at the appropriate
time, produce a submission to me and I will take a view as to
whether I think it is worthwhile pursuing or, as you say, can
it and say that we are not going to do it.
Q32 John Bercow: Therefore at a subsequent
meeting if the same question were posed, we would be advised of
some more detailed work that had been undertaken and precisely
what conclusions could be drawn from it? We would get the impression
at that point, would we, that the decision was not in abeyance
or relegated to the long grass but distinctive and probably final?
Ian Pearson: Yes, work is going
on. As I have indicated, I would like to see how some of the other
things that we are doing actually pan out because that would affect
our decision as to whether we think that there is a balance of
advantage in having a pre-licensing registration scheme or not.
If we think that there are other policy instruments that can obviate
the need for something like this, then obviously you would expect
us to take those into consideration.
Q33 John Bercow: The work currently
under way, and I am quoting Mr Doddrell, has been under way since
2007 but it is so immensely onerous and burdensome and long term
that in 2009 a conclusion has not been reached. Will a conclusion
have been reached by this time next year?
Ian Pearson: Possibly.
Q34 John Bercow: I said "long
grass", Minister. It is extremely long grass!
Ian Pearson: Can I explain why
I say "possibly"? I do want to ensure that there is
sufficient time for us to assess the impact of us putting some
small additional resources into this area so that we can clamp
down on those who misuse open licences and those sorts of areas
will have effect as a policy. You cannot simply say: we will assess
this in one month or two months. You need to give it a time period.
Q35 John Bercow: You are in no danger,
Minister, of being accused of excessive haste in this.
Ian Pearson: Thank you for that,
John, but, as you know, I have always believed in confronting
decisions and making them and I will be perfectly prepared to
make a decision in this area. Some of these things have a natural
timescale in which it is appropriate to make a decision. When
it is the appropriate time, I will not shirk it; I will make it.
Chairman: We have had to wait in some
other areas for decisions. We prefer the right decision and a
little waiting than to have the wrong decision tomorrow morning.
Thank you for that.
Q36 John Battle: I am afraid mine
is that question: is work going on, and I am tempted to say is
real work going on, to quote the Prime Minister, and, rather than
just looking at an in-tray, are things moving on? The reason is
that as a Committee in our last report we have welcomed the Government's
intention to introduce end-use controls through the EU if possible.
I gather that has not proved possible. The Government did suggest
that they could be introduced independently in the UK. Could you
update us on the EU negotiations? Have they fallen fallow now
and are you making preparations to introduce a system into the
UK? Are you looking at it and are people working on another monitoring
system and preparing industry for it? How far has all that shifted?
Ian Pearson: As a Government,
we have always taken the view that the best thing to do is to
go down the EU route because that ensures there is a level playing
field and that we have other countries involved in doing the same
thing. We do need to get this right. We have been working on a
proposal to extend the scope of the EU military end-use control
that was introduced in 2000. Once finalised, this will be put
to the Commission and other Member States. John or Jayne may want
to say something about how the particular work that we have been
doing internally has been taken forward. I would say that getting
agreement in Europe is not a simple or straightforward process
in many of these areas, but it is our preferred route. We would
certainly consider introducing a national control if we were convinced
that going down the EU route was very unlikely to be able to produce
the sorts of results that we would want to see in the short to
medium term, but for the moment I think our view is that this
is still worth engaging on. Jayne will say more about the detail
of this.
Ms Carpenter: There are two potential
end-use controls that we are pursuing in Europe: one is the military
end-use control and the other is the torture end-use control,
as you know. The position on each is slightly different. On the
torture end-use control, we have actually had some discussions
within Europe which have been generally supported. In fact, there
was a meeting in Brussels last week where we raised this with
other Member States. We have begun the process of trying to get
support within Europe. Initial indications are that there is a
good deal of support but, as you know, the European process is
fairly slow-moving, so we need to let that run for at least some
time before we take a decision as to whether to consider an alternative.
On the military end-use control, again we are pursuing that in
Europe but we are less far forward with the specific proposal
on that than we are with the torture end-use control. That is
really because in looking at the ways in which we might propose
enhancing the military end-use control, it has become evident
that there is quite a lot of complexity in terms of the sorts
of goods that we would need to cover, the sorts of destinations
that we would need to cover and the sorts of end-use we would
need to cover. Broadly speaking, what we are proposing to do is
to put forward a proposal which builds on the current military
end-use control by including whole pieces of equipment, whereas
the current military end-use control only covers components and
production equipment for military items. That would, for example,
enable us to catch whole vehicles, which would not otherwise be
controlled. The current control does not cover police and paramilitary
use or use by security forces, so we would be seeking to extend
its coverage to those end-users as well. We are also looking at
the possibility of extending the use of end-use control beyond
embargoed countries to which it is limited at the moment. 201[1]
That is, very broadly speaking, the sort of proposal we are looking
at.
Ian Pearson: May I add one point
to this in that I think there has been a significant amount of
focus on this since the issue arose of Land Rovers that were then
militarised and exported from Turkey to Uzbekistan. We are all
familiar with that. I was asking officials if they could tell
us about other instances that we need to be aware of. In general,
I believe that we ought to be looking at where the problem is
and how do we provide a solution, rather than providing theoretical
solutions to problems we are not sure exist. I have agreed to
give the Committee information. If the Committee has information
about where it thinks that there are particular problem areas,
I think that would be very helpful to us because we are not aware,
as far as I understand it, of significant problems that have been
raised since that episode. We would welcome any information that
is available, whether it is from the Committee directly or from
others who hear our proceedings.
Q37 John Battle: Just to follow that
through, we were promised information on Europe, for example,
which we now have, by the end of 2008. I think the information
you have given is helpful and it creates a little bit of a sense
of a conversation of things moving on a bit. I appreciate the
difficulties involved in Europe but we need the updates; we need
a better feed-back to create a sense of dynamism in the whole
thing. As a last point, you mentioned the military, you mentioned
torture, but there was also going to be a report back to us on
end-use controls of non-military goods. You were going to have
a consultation on it and report back to the Committee before the
end of the year and again suggest a system for those as well.
I know there is consultation in progress. How is that going?
Jane Carpenter: What we are proposing
under the military end-use control would actually cover non-military
goods i.e. goods not on the military list or dual-use list.
Q38 Mr Bailey: Could we cover the
issue of re-exports. Basically the position in this Committee,
as you know, has been in favour of such restrictions. I think
it is fair to describe the attitude of the ministers and former
ministers as being that they have genuflected in the direction
of that but will not make a decision to alter current policy.
The former foreign secretary said that it might have been desirable
and another minister said, "I am seriously thinking about
the practicalities of this," but it has not happened. What
are the legal or practical difficulties that have prevented them
from taking this decision? Why are those practical or legal difficulties
not relevant to the other 11 EU countries that to a greater or
lesser degree do have restrictions on re-exports?
Ian Pearson: First let me say
something in terms of the Government's view and then address directly
the problems that you raise in terms of answering the question
what are the legal difficulties. The Government's view has always
tended to be that any risks posed by a country of ultimate disposal
or end user will be factored into our risk assessment under the
licence application. We have not necessarily believed that we
need specific re-export clauses because we can and do, in fact,
refuse applications because of concerns about re-export. Our view
has always been as a government that the introduction of a no
re-export clause on licences is not necessary or feasible and
would be onerous to operate and virtually impossible to enforce.
The comments that you quote from some government ministers reflect
that there is I think a commonsense view that this would be a
desirable thing to do but in practice there are some very serious
practical legal barriers. You mentioned a number of countries
that do have a no re-export clause. I would say in response that
I would be interested to see any assessment about how legally
effective they think they are and how operationally useful they
think they are as policy instruments compared with the sort of
policies that we have at the moment. Our view is that the key
difficulty in including a no re-export clause as a licence condition
is determining, first, to whom it would apply and, second, against
whom any action would be taken. If it is to the exporter, then
it would be wholly exporters responsible for events outside their
control. If it was to the overseas customer, then the obligation
would be unenforceable as it would be beyond the UK's legal jurisdiction.
Both those instances present really quite difficult obstacles
to having an enforceable clause. If the Committee thinks those
difficulties could be overcome, we would be interested to hear
the practical ways in which they think it would be possible to
do so.
Q39 Mr Bailey: I accept that it would
be quite an interesting exercise to see how, if you like, this
process works with other countries, but I do not want to be sidetracked
down that particular path. As of this moment it might be interesting
to know, given the fact that you have said these issues are factored
into the granting of an export licence, what monitoring is done
to ensure that once that export licence has been granted there
has not been, if you like, re-export of the items in question.
Can you give any sort of figures or at least outline what process
is carried out to ensure that this does not happen?
Ian Pearson: On the first point,
we do pay particular attention to some countries where we have
strong concerns of the possibility of re-export. Indonesia might
be one example we would cite as a country where if we were to
export goods to a company in that country we would have concerns.2[2]
That is why, where we have those sorts of heightened concerns,
we have to factor them very closely into account in terms of the
decisions that we take. We will also use the information that
we have available on the nature of the company and the past practices
of the company in question to which export is being made, and,
I repeat, we can and do refuse applications because of concerns
about export. On the second point in terms of monitoring previous
decisions, perhaps I could ask Jayne or John to say something
about the detail.
Ms Carpenter: Before the licence
is issued, it is part of the assessment process to ask UK diplomatic
posts overseas to comment on the applications. That can include
asking them to check the accuracy of the information in the application,
looking at the documentation, and physically going to see where
the end-user entity is and what sort of operation they have set
up. All those checks are already done as part of the assessment
process. The use of military equipment overseas in destinations
of concern is also monitored by UK diplomatic posts, so people
from the embassy keep an eye on the equipment that is being supplied
from the UK and how it is being used in that destination and they
report back to the FCO on that. We also take account of a variety
of different reporting mechanisms on end use which include NGOs,
human rights organisation reports, media reporting, intelligence
reports. Posts overseas have standing instructions to report to
us or to the FCO any misuse of UK-supplied equipment, so there
is a certain amount of end-user monitoring being done. Given that
we issue 10,000 or 12,000 licences a year, there is a limit in
practical terms to the extent to which we can monitor the end
use of every exported item, but there is some end-use monitoring
already being done.
1 1 Clarification from witness: This statement
refers to the military end-use control. Back
2
2 Note from witness: This statement should refer to Malaysia
rather than Indonesia. Back
| 
