Scrutiny of Arms Export Controls (2011): UK Strategic Export Controls Annual Report 2009, Quarterly Reports for 2010, licensing policy and review of export control legislation - Foreign Affairs Committee Contents

3  Promoting arms exports

The Government's policy

7. The promotion of arms exports is a key part of the Government's business strategy. While in opposition, the current Defence Secretary, Dr Liam Fox, said that he would make it his policy to "maximise the UK's share of global defence exports"[5] while the Defence Equipment Minister, Mr Peter Luff , has reportedly said that, "There will be a very, very, very heavy Ministerial commitment to the process. There is a sense that in the past we were rather embarrassed about exporting defence products. There is no such embarrassment in this Government."[6]

8. The Government's emphasis on arms exports was reiterated during our oral evidence on 24 January 2011. The BIS Minister, Mr Mark Prisk, told us that arms exports were "an important part of the overall wish to see an increase in the export of manufacturers' goods and services".[7] The FCO Minister, Mr Alistair Burt, told us that "there are no worries about expanding the opportunity for exports."[8]

9. In February 2011, the Prime Minister led a delegation of senior arms exports executives, to the Middle East. At the same time, the Defence Minister, Mr Gerald Howarth, accompanied British company executives to an arms fair in Abu Dhabi.

10. This emphasis on arms exports has led to concerns among some non-governmental organisations (NGOs) that the Government might prioritise sales to the detriment of controls. The UK Working Group (UKWG) wrote to us expressing concern that "prioritising the establishment of a more commercial culture could come at the cost of conflict prevention and by a reduced emphasis on responsible arms transfer controls" and it was "not clear how the Government intends to reconcile these potentially competing sets of priorities."[9]

11. We asked UKWG to elaborate on its concerns over the promotion of arms exports. Mr Rob Parker of Saferworld highlighted that, while "we don't actually have a problem with promoting arms exports per se, there were specific concerns over the role of diplomats in promoting arms exports. Mr Rob Parker told us that:

    In some contexts, the UK's diplomatic and political leadership and pressure would best be used in promoting the kinds of political and social development and reform processes that address the drivers and the causes of conflict.[10]

He went on to say:

    If the same personnel who should on the one hand be providing Her Majesty's Government with an analysis of, say, the human rights situation on the ground in a country that is requesting UK arms and on the other hand they are being asked to promote UK exports, we would say that there is potentially a risk if that is not clear.[11]

12. He stated that this would potentially leave the UK in breach of its commitments under the EU Council Common Position, 2008/944/CFSP, which defines common rules governing the control of exports of military technology and equipment to all destinations.[12]

13. In written evidence, the Campaign Against the Arms Trade (CAAT) highlighted that:

    The Government's arms sales unit, the UK Trade and Investment Defence and Security Organisation (UKTI DSO), has a list of priority markets for 2010/11. These are Algeria, Australia, Brazil, Brunei, India, Iraq, Japan, Kuwait, Libya, Malaysia, Mexico, Oman, Pakistan, Saudi Arabia, South Korea, Turkey, the United Arab Emirates and the USA.[13]

CAAT noted that this list:

    worryingly, include[s] countries that give rise to grave concern on human rights, conflict or development grounds including Algeria, Iraq, Pakistan and Saudi Arabia. UKTI DSO is also working hard to promote military exports to Angola and Vietnam.[14]

14. All of our witnesses from NGOs stressed that the Government's view on the desirability of promoting arms exports had not yet been translated into substantial changes of policy. Mr Rob Parker of Saferworld commented that "it's perhaps not a policy change, but a continuation with a bit of refocusing"[15] and Mr Oliver Sprague of Amnesty noted "that many of the issues that were of concern to the previous Government remain as a focus of this Government."[16] He went on to highlight that

    we are very early into the new Administration. I think that there have only been two quarterly reports published as yet, so it's actually quite difficult to look at specific cases of licensing to see whether there has been a shift in practice in licences.[...] It's certainly too early to tell.[17]

Mr Hayes of EGAD also noted that, "It is early in the new Government to be able to determine whether there have been any substantive changes."[18]

15. The FCO Minister, Mr Alistair Burt, agreed with our witnesses that this Government had yet to adopt a radically different position from its predecessor, and he doubted whether, despite a more "commercial" outlook, there would be a fundamental change in attitude. He said that "The Government's approach to strategic export controls will remain firmly based on a case-by-case assessment."[19] He also assured us that "the Committee will see that our approach to arms controls matters will be very similar to that of the previous Government."[20]

16. We questioned the BIS Minister, Mr Mark Prisk, about the concerns expressed by NGOs, including Amnesty and CAAT that the UK Government was promoting arms sales to states which posed concerns on human rights, conflict or development grounds. He told us that ultimately this would be "a judgement call based on the information [the Government] has", and while he did not explicitly rule out arms sales to states such as Libya or Algeria he was confident that the Consolidated Criteria regulating arms exports would prevent arms sales to 'undesirable' areas.[21] He said that "the appropriate approach is to make sure that we look at the risk in each country on a case-by-case basis and use that judgement accordingly."[22] The FCO Minister, Mr Alistair Burt, echoed this statement. He told us that "it is the criteria for arms export that trump everything" and "there is a firm belief that the robustness of the criteria will ... ensure that we do not run into trouble or put other people into trouble."[23]

17. We also asked the FCO Minister, Mr Alistair Burt, how diplomats would cope with the competing set of priorities between supporting arms exports and raising concerns over human rights violations. He doubted that "any diplomat or Minister want[ed] to be placed in a position in which they could be accused of taking a decision for the wrong reasons, if something subsequently went horribly wrong". He also hoped that a "sense of responsibility would also be a significant driving factor in decisions that colleagues were being asked to make." [24]

18. We conclude that the validity of the Ministerial evidence we took on 24 January and the wisdom of some of the export licences previously granted need to be assessed against the Government's subsequent abrupt changes in export licensing policy following the recent uprisings against authoritarian regimes in North Africa and the wider Middle East. We look at these issues at more depth later in this Report [chapter 10]. We recommend that the Government in its response to this report sets out how it intends to reconcile the potential conflict of interest between increased emphasis on promoting arms exports with the staunch upholding of human rights.

The Treaty on US/UK Defence Trade Cooperation

19. The Treaty on US/UK Defence Trade Cooperation, which was ratified in the UK in early 2008, was eventually ratified by the US Congress on 30 September 2010. The Treaty aims to streamline defence export procedures between the two countries. Essentially, under the Treaty exports from the US to the UK will mirror the current practice for authorising UK defence exports to the US, namely, the majority will be undertaken through open, as opposed to individual, licensing arrangements.[25] The UK's existing export control system will remain in force alongside the Treaty and UK arms exports to the US under the Treaty will still need to meet the Government's export control criteria. EGAD told us that the US is "a big and increasing market" and the indications are there would be increased sales to the USA.[26]

20. However, in written evidence, EGAD complains that there is uncertainty amongst companies in the UK and USA as to what steps they need to take to benefit from the Treaty.[27] In oral evidence, they said that the Treaty would not bring major benefits to British businesses for three main reasons. First, regulations needed to be implemented to bring the Treaty into force. Mr Hayes of EGAD complained that, "until we know the detail of these regulations ... it's difficult to brief industry."[28] Second, the Treaty negotiations had taken so long to be concluded that the position regarding exports to the US had improved "almost beyond recognition." The Treaty was described as "a solution to a problem that has largely gone away."[29] Third, the Treaty had limited scope and would be applied only to "material usable for a UK Ministry of Defence contract."[30] Overall, EGAD suggested that the Treaty would be of "value to ... maybe two or three UK companies" and would bring "a narrow benefit to a narrow population."[31]

21. We asked the BIS Minister, Mr Mark Prisk, about the benefits the Treaty would bring to British exporters. He called the Treaty a "stronger opportunity to press the case for good UK manufacturers."[32] The Head of the Export Control Organisation (ECO) told us that BIS was currently in the "implementation phase of the Treaty ... precisely to try to maximise the benefits" and the process would be completed by the middle of 2011.[33] EGAD sounded a note of caution over this timetable. They told us that they were preparing workshops to advise UK industry, but they had been informed that joint events would not be held until April/May 2011 "at the earliest."[34]

22. The FCO Minister, Mr Alistair Burt, wrote to the Chair of the Committee on 10 February to clarify the Government's policy over implementation of the Defence Cooperation Treaty. He stated that:

    I am aware that UK Industry representatives raised concerns with the CAEC about the length of time it has taken to adopt the Treaty and the possible benefits to industry of the Treaty during their evidence session of 1 December 2010. Officials at the MoD (who lead on the issue) are currently engaged in discussions with the US State Department about the implementation of the Treaty. We will keep the Committee updated with the progress of the necessary implementation work as it progresses.[35]

23. We recommend the Government sets out in its response to the Report what specific steps it is taking to ensure that UK exporters take full advantage of the potential benefits of the Treaty on US/UK Defence Trade Cooperation. We further recommend that the Government sets out the respective roles and responsibilities of the British Embassy in Washington and the British Consulate-General in New York in obtaining the maximum benefit for UK industry from the Treaty.

5   "The Strategic Defence and Security Review: A Conservative view of Defence and Future Challenges", Speech to Royal United Services Institute, 8 Feb 2010 Back

6   Defence News, Ministry of Defence, 24 June 2010, and "UK plans arms export drive to offset cuts", Reuters UK, 23 June 2010 Back

7   Q 74 Back

8   Q 124 Back

9   Ev 54  Back

10   Q 2 Back

11   Q 5 Back

12   EU Council Common Position 2008/944/CFSP defines common rules governing control of exports of military technology and equipment and replaced the Code of Conduct on arms exports in June 1998. See also the EU's 12th annual report on arms exports ((2011/C 9/01). The EU Council Common Position is reproduced as Annex 2 of this Report. Back

13   See HC Deb, 28 June 2010, col 418-9W and Ev 35 Back

14   Ev 39 Back

15   Q 1 Back

16   Q 1 Back

17   Q 5 Back

18   Q 47 Back

19   Q 123 Back

20   Q 123 Back

21   Q 124 Back

22   Q 69-70 Back

23   Q 124 Back

24   Q 125 Back

25   Defence Committee, Third Report of Session 2007-08, UK/US Defence Trade Cooperation Treaty Back

26   Q 40 Back

27   Ev 40 Back

28   Q 48 Back

29   Q 50 Back

30   Q 48 - Q 51 Back

31   Q 51 Back

32   Q 80 Back

33   Q 83 - Q 85 Back

34   Q 48 Back

35   Ev 42 Back

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Prepared 5 April 2011