House of Commons - The FCO's Human Rights Work 2010-11

The FCO's Human Rights Work 2010-11 - Foreign Affairs Committee Contents

3 FCO commercial work and human rights

Complementary or conflicting objectives?

92. Probably the most widely-noted aspect of the Government's foreign policy—at least until the events of the 'Arab Spring'—has been the greater emphasis being given to the pursuit of UK commercial interests. The Prime Minister has said that the UK must "plac[e] our commercial interest at the heart of our foreign policy",[135] and the Foreign Secretary has described supporting British business as an "existential mission" for the FCO.[136] Mr Hague told us in September 2010 that he had "made clear that Ambassadors and High Commissioners [would] be expected to meet challenging targets for UK exports and inward investment to the UK".[137] Kate Allen told us that "greater emphasis on trade issues" was probably the major difference between the current and previous Governments.[138]

93. The 2010 FCO Report included a section entitled "Human Rights in Promoting Britain's Prosperity". Although some of the issues covered in this section were discussed at various points in the FCO's 2009 report, the inclusion of a section with this title was an innovation, and clearly intended to send a message about the Government's priorities. In this section of its report, the FCO said that it was "committed to supporting better business environments in host countries and promoting more responsible business practice as a central strand of our human rights policy".[139]

94. The Foreign Secretary has argued consistently that pursuing UK commercial interests and promoting human rights overseas are not incompatible. Indeed, he has suggested that pursuing commercial interests may in some cases enhance the UK's ability to secure human rights improvements, by acting as a source of leverage. Giving evidence in February 2011 for our inquiry into The Role of the FCO in UK Government, he told us that "a foreign policy that did not have that commercial emphasis [...] would be in a weaker position to bring about all our other goals".[140]

95. Giving evidence to us, Jeremy Browne acknowledged the possibility of "short-term tensions" between commercial and human rights objectives.[141] However, he suggested that over the longer term the two tended to go hand-in-hand—both because countries' increased openness to international trade and other forms of international economic interaction tended to encourage improved human rights standards, and because those pursuing their own commercial interests from outside would tend to come to the view that it was in their own interest also to pursue improved human rights in the country concerned.[142] Mr Browne further suggested that the kinds of commercial sectors where the UK was most likely to be pursuing and attracting international interest, such as advertising, were most likely to be found in more open societies.[143] Mr Browne acknowledged that Singapore perhaps represented a counter-example to his general argument, and that its application to China was a "complicated question".[144]

96. Mr Browne told us that whether the FCO raised human rights concerns with an overseas state was not affected by the scale of the UK's commercial interest there.[145] He also said that the FCO continued to raise human rights concerns even where its interlocutors made it clear that this might prejudice the UK's prospects of securing commercial gains.[146]

97. Our witnesses, overall, were sceptical about the FCO's claims that its pursuit of UK commercial interests need not conflict with its promotion of human rights overseas. Human Rights Watch said that the two aims "can be mutually supportive in many cases and especially over the longer term, but in the short term the two objectives can conflict".[147] Amnesty described the two aims as "potentially at odds",[148] and said that it "look[ed] forward […] to evidence to support the UK Government's assertion that UK work on trade and security around the world also has a concrete impact on enhancing human rights".[149]

98. Our witnesses highlighted two broad areas of potential inconsistency between commercial and human rights objectives:

Oxfam argued that trade could only fulfil its potential to help people enjoy their human rights if it were fair and sustainable trade.[150]
Amnesty was concerned lest the FCO might increasingly focus its human rights work on countries with which the UK enjoyed or sought strong commercial ties, and neglect human rights work elsewhere.[151]

99. The organisation PLATFORM argued that investment in the fossil fuel sector in undemocratic countries, including by the UK, tended to contribute to increased human rights abuses, because of its impact in strengthening the regime in power. PLATFORM argued that the FCO had allowed UK oil interests to override human rights concerns in Algeria, Democratic Republic of Congo, Libya, Oman and Nigeria.[152] PLATFORM highlighted Azerbaijan and Turkmenistan as cases where the UK had significant oil and gas interests but where human rights standards were deteriorating.[153] Human Rights Watch argued similarly that "commercial interests in oil and gas from Central Asia weaken[ed] the UK's willingness to push human rights concerns in that region".[154] Human Rights Watch said that the tone of the section on Turkmenistan as a "country of concern" in the 2010 FCO Report did not "convey the full gravity of the abuses perpetrated by the Government of Turkmenistan", and was such as to suggest that "considerations other than human rights influenced the assessment".[155]

100. The FCO's new "Charter for Business" was launched in May 2011, setting out the department's commitments to business. The document makes no mention of the FCO's claimed role in promoting responsible business practice and assisting businesses to address the potential human rights implications of their overseas operations.[156]

101. We are not as confident as the FCO that there is little conflict between its pursuit of both UK commercial interests and improved human rights standards overseas. We recommend that, in its response to this Report, the FCO set out examples from its countries of human rights concern of a significant UK international commercial relationship or presence being associated with improved human rights standards in recent years.

102. Given the FCO's claims about the continued importance of human rights in its work and the complementarity of human rights and commercial objectives, we were surprised and disappointed to see that the FCO's new "Charter for Business" made no mention of the FCO's role in helping businesses address the potential human rights implications of their overseas operations. We recommend that, in its response to this Report, the FCO explain why this omission was made.

103. Oxfam highlighted the potentially difficult position of staff at FCO overseas posts in juggling their human rights responsibilities with their newly emphasised role in promoting UK commercial interests. Oxfam commented that staff were "being put under enormous pressure to support UK industry, and at the same time […] expected to report human rights and other abuses that will make those sales harder".[157] Amnesty felt that FCO staff, both overseas and in London, did not adequately understand the human rights impact of UK companies operating in the countries for which they were responsible. Amnesty told us that the FCO's Toolkit on Business and Human Rights, a staff guidance document produced jointly with BIS, UKTI and DFID, was "not sufficiently supported by training and awareness-raising".[158]

104. We recommend that in its response to this Report the FCO set out the training and guidance that it gives to its staff on how to balance their responsibilities to promote both trade and human rights. We further recommend that the FCO inform us specifically about the steps that staff are directed to take, and the support available to them, in cases where they feel that they face a conflict between promoting UK commercial interests and upholding the FCO's human rights policies.

105. Increasingly the UK has international economic competitors that do not necessarily share its human rights concerns.[159] Jeremy Browne raised this with us as a significant obstacle to the FCO's attempts to pursue both UK commercial interests and international human rights. Mr Browne said:

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We note, however, that the OECD has pointed out that UK companies may sometimes find themselves in competition with companies based in countries where higher standards in human rights protection are needed to secure export credit guarantees.[161]

106. This difficulty raises the issue of 'internationalising' standards for human rights in business, as well as standards in other related areas of business practice. The 2010 FCO Report referred to a number of the nascent international codes, sets of standards and other regimes in this field.[162] In 2010-11, important developments were underway as regards two of the relevant regimes:

In mid-June 2011, the UN Human Rights Council (HRC) endorsed the Guiding Principles on Business and Human Rights presented earlier in the year by Professor John Ruggie, Special Representative of the UN Secretary-General on business and human rights. The HRC established a Working Group to take forward promotion and implementation of the Principles.[163] The Principles represented the culmination of six years' work by Professor Ruggie (whose mandate ends in July 2011), and were based on the "Protect, Respect, Remedy" framework he first elaborated in 2008.[164] Oxfam told us that it supported Professor Ruggie's framework and regarded the Principles as "a significant step towards strengthening corporate accountability for human rights abuses", although they could be stronger in asserting states' and companies' obligations.[165] In the 2010 FCO Report, the department said that it was "keen" to see the HRC adopt the guidelines,[166] and the Foreign Secretary welcomed the HRC's decision to do so.[167]
Negotiations are underway to update the OECD Guidelines for Multinational Enterprises, to which the UK subscribes. The Guidelines set out voluntary standards of corporate behaviour and provide for National Contact Points to promote the Guidelines and investigate complaints about alleged violations. The UK National Contact Point is in BIS. The FCO Report said that the department wanted "to see the guidelines expanded to include practical guidance to assist companies respect human rights, including in their supply chain, and to improve the effectiveness of National Contact Points and of the complaints procedure across the OECD".[168] Oxfam told us that it welcomed the UK's position in this respect.[169]

107. We recommend that the FCO give higher priority to working to internationalise standards for human rights in business behaviour. We conclude that this is essential if the UK's efforts to promote human rights internationally are not to be undercut by the behaviour of other countries and their companies. We recommend that in its response to this Report the FCO update us on the negotiations to revise the OECD Guidelines for Multinational Enterprises. We further recommend that the FCO set out its plans to engage with the Working Group established by the UN Human Rights Council in June 2011 to take forward work on Professor Ruggie's Guiding Principles on Business and Human Rights.

108. A further avenue by which human rights standards may be inserted into business practice is through national action to hold companies to account for their behaviour abroad. This raises the issue of extra-territoriality. Amnesty told us that the Government "should consider and implement a wider range of measures to hold UK companies accountable for human rights abuses abroad". It went on: "Given the number and range of transnational companies based in the UK and the capacity of these companies to have significant impacts on human rights globally, the fact that there is only sporadic regulation of the extra-territorial impacts of corporate activity contributes to a serious regulatory failure".[170]

BRIBERY ACT 2010

109. Policy regarding bribery overseas raises many of the wider issues engaged by the FCO's efforts simultaneously to advance both UK commercial interests and human rights and good governance. Our attention was drawn to the bribery issue most recently by former British diplomat Sir Edward Clay, who argued in his evidence to our inquiry into The Role of the FCO in UK Government that pursuing both goals might give rise to a conflict for officials working in FCO overseas posts in countries where bribery is common, and that this conflict might become especially acute in the context of the 2010 Bribery Act.[171]

110. The 2010 FCO Report included more extensive coverage of bribery than its predecessor, which did not refer to the term. The Report said that:

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111. The UK Bribery Act 2010 came into force on 1 July 2011, after the Ministry of Justice (MoJ) issued further guidance on the legislation at the end of March. The Act is intended to implement the UK's obligations under the OECD Anti-Bribery Convention to criminalise the bribery of foreign public officials. The FCO Report described the Act as a "clear signal of our commitment to ensure that the fight against bribery and corruption supports UK companies".[173]

112. When we questioned him on the issue in late May 2011, Jeremy Browne told us that the FCO was still assessing the implications of the Bribery Act.[174] In subsequent correspondence, Mr Browne told us that FCO overseas posts were being instructed to "underline publicly that HMG will neither support nor condone bribery by UK companies or individuals"; provide "accurate, clear and up-to-date information on the [Bribery] Act to UK companies present overseas"; "build up a good knowledge of local business conditions", so as to understand the concerns companies may have about bribery and corruption; ensure information on bribery was available through UKTI business information; and respond to complaints by companies of corruption by local officials. In his letter, dated 10 June, Mr Browne also said that the FCO was still assessing the detailed implications of the legislation for FCO staff overseas, especially locally-engaged staff, and would share with us the guidance it planned to issue once the assessment process was complete.[175] The FCO issued the guidance to its staff on 26 June and published some of it on 12 July in its response to our Report on the Role of the FCO in UK Government.[176]

113. Liz David-Barrett, Research Fellow at the Oxford University Centre for Corporate Reputation, suggested that, without other conditions being in place, national anti-bribery legislation tended to cause the companies covered by it to withdraw from corruption-prone countries, leaving the field clear for firms not covered by such legislation, and thus potentially failing to achieve the objective of corruption-free economic development overseas. Ms David-Barrett based her argument primarily on the evidence available about the effects of the US Foreign Corrupt Practices Act, which has been in force since 1977. Ms David-Barrett recommended that the UK Government use its powers under the Bribery Act to pursue cases concerning alleged bribery overseas against companies carrying on business in the UK; and do more by way of advice and assistance to support UK companies that do business in corruption-prone countries.[177] She further urged the FCO to exert pressure on non-parties to the OECD Convention to enforce anti-bribery laws to the same standards as the Convention. Ms David-Barrett noted that China, India and Russia had all recently begun moves towards introducing national legislation prohibiting foreign bribery.[178]

114. We conclude that it is a matter for concern that less than two months before the Bribery Act 2010 was due to enter into force, the FCO was still assessing its implications for its own work. We welcome the fact that the FCO has now issued guidance to its staff on the Act.

115. We recommend that in its response to this Report the FCO inform us of any work it is doing to encourage non-parties to the OECD Anti-Bribery Convention to introduce national legislation—of equivalent standard to the OECD Convention—against bribery overseas. We further recommend that the UK Government uses its powers under the Bribery Act to pursue cases of alleged bribery overseas against both UK and foreign companies carrying on business in the UK.

Arms exports

116. Government arms export policy is scrutinised in the House of Commons by the Committees on Arms Export Controls (CAEC): ourselves working together with the Business, Innovation and Skills, Defence, and International Development Committees, under the chairmanship of a Foreign Affairs Committee Member, Rt Hon Sir John Stanley. CAEC produced its most recent annual report in April 2011, and we have no wish to duplicate here work we have undertaken as part of that body.[179] However, a considerable share of the written evidence we received for our present inquiry concerned arms exports, with strong criticisms of the Government's current policy and practice being made by Amnesty, Human Rights Watch, Oxfam, Saferworld and the Campaign Against Arms Trade (CAAT); and matters have moved on somewhat since publication of the 2011 CAEC Report.

117. The CAEC Report pointed out that the Government's policy on arms exports had been brought sharply into focus by the 'Arab Spring' wave of uprisings and demonstrations which began in Tunisia and Egypt in January 2011, spread to other countries in North Africa and the Middle East, and in some cases had been met by an armed response resulting in the death or injury of civilians (see paragraph 166). The Report set out country-by-country examples of export licence approvals since January 2009 of arms that could be used for internal repression by authoritarian regimes in North Africa and the Middle East.[180] The Report also referred to the Government's stated policy on arms exports in relation to internal repression, as set out by FCO Parliamentary Under-Secretary Alistair Burt MP in mid-February, namely that the Government "will not issue licences where we judge there is a clear risk the proposed export might provoke or prolong regional or internal conflicts or which might be used to facilitate internal repression".[181] The CAEC Report also gave details of the arms export licences which the Government had revoked since January 2011 in light of that policy, in relation to Bahrain, Egypt, Libya and Tunisia, in response to developments in the region. The Report welcomed the revocations, but noted that they represented a "vigorous backpedalling" on previous policy.[182] The CAEC Report concluded that "both the present Government and its predecessor misjudged the risk that arms approved for export to certain authoritarian countries in North Africa and the Middle East might be used for internal repression".[183] The CAEC Chair, Sir John Stanley, commented that the number of revocations, 156 by the time the Committees concluded their Report, "reflect[ed] the degree of policy misjudgement that [had] occurred".[184]

118. On 18 February 2011, Mr Burt announced that the Government was conducting a review of arms exports to the wider Middle East region.[185] The CAEC Report recommended that, with respect to equipment that could be used for internal repression, the review be extended to cover exports to authoritarian regimes worldwide.[186] The Report also recommended that the Government set out "how it intend[ed] to reconcile the potential conflict of interest between increased emphasis on promoting arms exports with the staunch upholding of human rights".[187]

119. A number of our witnesses drew attention to the extent of recent Government "backpedalling" over arms exports. CAAT cited Libya as a case in point. It noted that the UK's arms embargo against Libya had been lifted in 2004 not as a result of any improvement in Libya's human rights record, but as a result of the wider political rapprochement between the West and the Gaddafi regime. CAAT commented that "Libya was immediately seen as a major marketing opportunity". A Defence Co-operation and Defence Industrial Partnership between the UK and Libya was signed in 2007, and Libya was included on the list of the UKTI Defence and Security Organisation's priority markets for 2010/11.[188] Export licence approval was granted in 2009 to supply Libya with a considerable number of arms or arms components that, in the view of CAEC, "could be used for internal repression".[189] The total value of licensed arms exports from the UK to Libya in 2008-10 was £67.2 million.[190]

120. On 22 March, FCO Minister of State Lord Howell of Guildford said in the House of Lords:

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121. In February 2011, during the early stages of the 'Arab Spring', the Prime Minister visited a number of Middle Eastern countries including Kuwait and other Gulf states. He was criticised by some for using his visit to promote British arms exports (his entourage included representatives of eight leading UK arms suppliers).[192] Speaking in Kuwait, Mr Cameron defended the Government's policy on arms sales to the region:

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122. Human Rights Watch told us that "recent developments in the Middle East and North Africa [...] have served to expose specific weaknesses in UK arms export policy and practice in a dramatic fashion".[194] Saferworld told us that the FCO was to be commended for the speed with which it had revoked arms export licences in response to recent events, but added that "the fact remains that rigorous application of existing criteria would probably have meant that these licences would not have been issued in the first place". Saferworld noted that the recent revocations set a precedent in that licences were revoked because of the risk of abuse of British-supplied equipment rather than because there was evidence that it had been abused.[195]

123. Giving evidence to us on 16 March as part of our rolling inquiry into Developments in UK Foreign Policy, the Foreign Secretary said, in relation to sales of crowd-control equipment to Middle Eastern countries, that "we have seen instances in the past few weeks where grave concern has been caused to the Government and to other people in Britain about the use of some of that equipment". He added that "We have to review how our export controls work in that regard, but I don't think it should stop us from being able to trade with countries whose security is fundamental to global security". He noted that the Gulf states which the Prime Minister had visited in February were "neighbours of Iran, and in a very troubled region of the world" and that their external security was in the British national interest.[196] Mr Hague confirmed that there would be a review of arms export controls, that it would focus in particular on crowd control equipment, and that it would be subject to full parliamentary scrutiny.[197]

124. When he gave evidence to us on 23 May, Jeremy Browne told us that information would be provided to Parliament on the results of the Government's review "reasonably soon".[198] Asked whether external organisations such as human rights NGOs had been invited to contribute to the review, Mr Browne responded that they were welcome to submit their views in writing.[199] In a follow-up letter dated 10 June, Mr Browne told us that:

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125. When we approved this Report on 13 July, with three sitting days remaining before the summer recess, the Government had not brought forward the results of its review. In its response to the CAEC Report, which it published on 7 July, the Government said that it would be reporting on the review to Parliament once the Foreign Secretary had "fully considered" its findings. The Government said that any results of the review would apply to UK arms exports worldwide, not only to the Middle East and North Africa.[201]

126. We also asked Mr Browne in May why arms export licences to Saudi Arabia had not been revoked, given the risk that certain categories of British-supplied equipment could be used for internal repression, either in Saudi Arabia or in Bahrain. On the Minister's behalf, Thomas Drew, Director for National Security at the FCO Directorate for Defence and Strategic Threats, replied that "it is a question of looking at this case-by-case—at specific equipment for specific areas. [...] There is no arms embargo against Saudi Arabia, therefore we have looked specifically item by item, which is why we came up with the conclusions that we did".[202]

127. We conclude that the events of the 'Arab Spring' have revealed serious shortcomings in the system of UK arms export controls as regards the possible use of British-supplied equipment for internal repression. As one of the constituent committees which make up the Committees on Arms Export Controls (CAEC), we reiterate our support for the conclusions and recommendations contained in CAEC's Report of April 2011, namely that the present and the previous Government misjudged the risk that arms approved for export to certain authoritarian countries in North Africa and the Middle East might be used for internal repression. We urge the Government to make speedy progress in finalising the results of its current review of arms export controls and sharing them with Parliament.

128. We conclude that the recent policy of revoking arms export licences to countries in the Middle East and North Africa appears to have been inconsistently applied, inasmuch as no licences to Saudi Arabia, Syria or Yemen have been revoked, despite the fact that the risk of repressive use of equipment sold by British companies to those countries for their own use, or supplied by Saudi Arabia to other states such as Bahrain, appears to be as high as in the countries to which licences have been revoked. We recommend that the Government's review address specifically the issue of policy towards Saudi Arabia.

Cross-Government working: UKTI and BIS

129. Amnesty argued that there was a "lack of joined-up thinking" across the FCO, BIS, DFID, the MoJ and other departments and agencies, including UKTI, regarding human rights promotion in relation to the UK's international trade and investment policies. Amnesty said that UKTI did not address human rights issues in its country briefings, despite the fact that they might carry reputational risk for companies; and that official trade delegations were often insufficiently aware of human rights issues in the countries they were visiting. Amnesty said that there was a need for an overall cross-government strategy on business and human rights.[203]

130. Jeremy Browne pointed out that the Minister of State for Trade and Investment, with responsibility for UKTI, was a joint FCO-BIS Minister, and that FCO Ministers and officials had "the opportunity to express [their] concerns, insights or enthusiasms directly to him". He also said that, in his experience so far, UKTI staff working at FCO overseas posts "seem[ed] to be pretty woven into the overall operation, under the auspices of the ambassador".[204]

131. UKTI launched its new five-year strategy in May 2011. The document made no reference to human rights or corporate responsibilities overseas.[205]

132. We conclude that the absence of a reference to human rights or corporate responsibilities overseas in UKTI's new five-year strategy suggests that there is a lack of strategic co-ordination between the branches of Government responsible for promoting human rights overseas and for promoting British trade. We recommend that in its response to this Report the FCO respond to the suggestion that there should be a cross-Government strategy on business and human rights.

135 David Cameron, speech to Lord Mayor's Banquet, Mansion House, London, 15 November 2010 Back

136 "Man on an existential mission for British business", Financial Times, 14 July 2010 Back

137 Letter to the Chair from the Foreign Secretary, 2 September 2010, printed with "Developments in UK Foreign Policy", oral evidence taken before the Foreign Affairs Committee on 8 September 2010, HC (2010-11) 438-i, Ev 26-27 Back

138 Q 6 Back

139 FCO Report, p 71 Back

140 Foreign Affairs Committee, Seventh Report of Session 2010-12, The Role of the FCO in UK Government, HC 665, Q 297 Back

141 Q 114 Back

142 Qq 89-90 Back

143 Q 90 Back

144 Q 89 Back

145 Q 88 Back

146 Qq 90, 114 Back