Foreign Affairs CommitteeWritten evidence from the Isle of Man Government

This submission is made by the Isle of Man Government, and is in response to the Foreign Affairs Committee’s call for evidence in respect of its inquiry into “the Role and Future of the Commonwealth”.

The submission is made in the context of the Isle of Man’s constitutional status as a Crown Dependency, and as such, no comment is made on the wider issues concerning UK foreign policy, or the overall future and structure of the Commonwealth as a whole.

Executive Summary

1. As a Dependency of the British Crown, the Isle of Man is not—and at present cannot be—a member of the Commonwealth in its own right. However, the UK’s membership of the Commonwealth is taken to include the Isle of Man, and this enables the Island to participate in Commonwealth activities in two ways; firstly, as part of the UK delegation to certain meetings, such as the Commonwealth Finance Ministers; and secondly, through membership of individual Commonwealth bodies, in its own right, such as the Commonwealth Parliamentary Association and the Commonwealth Games Federation.

2. The Isle of Man is not a sovereign state, and so does not execute formal foreign policy or conduct formal diplomatic relations. For these reasons, the Isle of Man Government does not comment on the future of the Commonwealth as a whole, but deriving benefits from its cooperation with the Commonwealth it would wish to maintain and develop this in the future within the context of the outcome of this inquiry.

3. The question of allowing full membership of the Commonwealth for Overseas Territories, Crown Dependencies and self-governing territories is one which the Commonwealth considered in 2007. During the course of the consultation on membership, the Isle of Man Government stated that it could not commit to membership at that stage as there were no concrete proposals in terms of its costs and possible benefits.

4. The Isle of Man has, however, a proven ability in developing its international profile, in line with the “Framework agreement for developing the international identity of the Isle of Man” signed between the Isle of Man and the UK in 2007 (Appendix 1). This includes participation in a number of international bodies and the negotiation and signature of a significant number of tax information sharing agreements under entrustment from the UK Government.

5. In light of the above, therefore, were there to be a change of policy by the Commonwealth and a clearer definition of membership costs and other commitments, the Isle of Man would welcome the opportunity to revisit the question of membership and would approach it in a positive manner.

Overview of the Isle of Man’s International and Constitutional Position

6. The Isle of Man is an internally self-governing Dependency of the British Crown. It is not, nor has it ever been, part of the UK. Her Majesty The Queen, as with many Commonwealth Members, is the Isle of Man’s Head of State, and is represented in the Island by the Lieutenant Governor. The Isle of Man is not a sovereign state, and as such does not have a public international law personality in its own right. The United Kingdom has responsibility for the Island’s defence and international relations.

7. Membership of most international bodies—including the Commonwealth—is only open to sovereign states. However, it is accepted that the United Kingdom’s membership of the Commonwealth extends to cover the Isle of Man, and membership of the various bodies within the extended Commonwealth organisation (including the Commonwealth Games Federation, the Commonwealth Parliamentary Association and the Commonwealth Association of Tax Administrators) is open to the Island, where the constitution of those bodies allows.

8. The Isle of Man is a modern parliamentary democracy, and supports the aims and objectives of the Commonwealth. The Manx parliament, Tynwald, was founded over 1,000 years ago and is the oldest continuous parliament in the world. The Island has no party political system and a large majority of members are independent. The Island’s legislature comprises three Chambers. There is the House of Keys, made up of 24 popularly elected members, and the Legislative Council, made up of 8 members elected by the House of Keys and 3 ex-officio members. These Chambers sit separately and each considers primary legislation. The Keys and the Council sit together in the Third Chamber, Tynwald, to debate policy, to consider secondary legislation and to vote on financial matters.

9. In line with its constitutional status, the Isle of Man Government does not conduct what might be recognised as a formal foreign policy, but it does build relations with countries other than the UK, and welcomes the opportunity to promote economic, political, sporting and cultural ties with other nations.

10. In line with Government Policy, and supported by resolution of Tynwald, the Island’s parliament, the Isle of Man is not seeking to gain independence from the UK. It is, however, seeking to develop more autonomy in the conduct of its international relations, including self-representation where possible. In support of this approach, the Isle of Man has a proven ability in developing its international profile, in line with the “Framework agreement for developing the international identity of the Isle of Man” signed between the Isle of Man and the UK in 2007 (Appendix 1). This includes participation in a number of international bodies including the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, and the establishment of direct working relationships with the IMF and the EU.

11. The Isle of Man has negotiated and signed a significant number of tax information sharing agreements on its own behalf, under entrustment from the UK Government. More recently, flowing from the recommendations of the House of Commons Justice Committee, and the Ministry of Justice’s response, the Isle of Man has welcomed the opportunity to develop further its own ability for self-representation internationally. Furthermore, due to financial and staffing constraints facing the Ministry of Justice, and in recognition of the Isle of Man’s wish for increased self-representation, the involvement of the Ministry of Justice has significantly reduced and the Island engages directly with UK Government Departments.

Response to the Questions posed by the Committee

Question 1: What is the future of the Commonwealth and what reforms are needed if the Commonwealth is to be successful?

Question 2: Does the Commonwealth retain a purpose and value? How has the Perth Commonwealth Heads of Government Meeting impacted upon this purpose and value?

Question 3: How does membership of the Commonwealth help the UK achieve its diplomatic objectives?

12. Whilst the Isle of Man does seek to develop relationships with other countries and with international bodies, as mentioned above, it does not conduct a formal foreign policy distinct from that of the UK.

13. Questions relating to the future of the Commonwealth and its purpose and value in a global sense, therefore, lie outside of the Isle of Man Government’s remit.

14. However, notwithstanding the above, the Isle of Man Government endorses and adheres to the same fundamental principles adopted by the Commonwealth as set out in Singapore in 1971, and reaffirmed in the Harare Declaration of 1991.

Question 4: What benefits does the UK’s membership of the Commonwealth bring in terms of:

Trade.

The promotion of human rights.

The promotion of “soft power” and a positive image of the UK?

15. The UK’s membership of the Commonwealth extends to cover the Isle of Man, and as such, some of the benefits of that membership are shared by the Isle of Man.

Trade

16. The Isle of Man’s closest and most significant trading partner is the UK, but the importance for the Island of free and open international trade cannot be overstated. As the Isle of Man has a very small domestic market it has, for the last forty years, built its economy on a diversified portfolio ranging from the provision of global financial services, shipping, film production and high value-added and high-tech industries especially in aerospace and advanced engineering. In common with all developed, and many developing countries, it relies on open, international markets, for its economic wellbeing. Historical and cultural/linguistic ties with many Commonwealth countries are still relevant and important to the Isle of Man as it seeks to build stronger and more extensive international business links.

17. The Isle of Man Government sees the promotion of trade and the growth of emerging markets within the Commonwealth as a key factor to the future success of the Commonwealth, and this is an area where the Island’s participation could be enhanced.

18. In conjunction with the recent 2011 Commonwealth Youth Games staged in the Isle of Man (see response to question 5 below) the Isle of Man Government held an event in London entitled “Doing Business in the Commonwealth” attended by representatives of various Commonwealth Countries. The event was an opportunity for Isle of Man Government to raise awareness of the Isle of Man as a business hub for high-tech, capital intensive businesses, promoting it as an environment that understands the needs of business to an international audience.

19. Contacts and opportunities were forged through this event and the Isle of Man Government is seeking to develop these in order to establish closer co-operation and economic benefit with the Commonwealth Business Council.

20. More recently, in December 2011, and following initial discussions with its secretariat, the Isle of Man applied to become a member of the Commonwealth Association of Tax Administrators. The Constitution of the Association explicitly provides that associated states and dependencies of Commonwealth countries can become members. The Isle of Man Government considers that through its commitment, energy and unique experience, it can add value to the work of CATA and assist in delivering the Association’s mission.

Human Rights and “Soft Power”

21. In terms of the promotion of human rights, “soft power” and a positive image of the (UK and) Isle of Man, the Island has been able to provide support to the Commonwealth and its members in a number of ways, in order to promote human rights, the rule of law and democracy, and adherence to prevailing international standards.

22. For example, Tynwald’s long association with the Commonwealth Parliamentary Association (CPA) has allowed it to promote the Island as a good “international citizen” in terms of the maintenance of a strong tradition of parliamentary democracy in a small nation. The Isle of Man has the oldest parliament in continuous existence, and over the years Manx parliamentarians have provided advice and support to new democracies which have achieved independence from the UK, and have set up their own systems of government. This includes participating as observers in elections, and also hosting and participating in CPA conferences. In 1983-84 the Speaker of the House of Keys, Sir Charles Kerruish MHK, was the President of the CPA, and it was in 1983 that the Isle of Man instigated the establishment of the Law Officers of Small Commonwealth Jurisdictions. (This group still meets every two to three years, and is now supported by the Commonwealth Secretariat).

23. It is notable that there is now a predominance of small states within the Commonwealth and the Isle of Man has been able to support the promotion of democratic values and robust parliamentary practice through its membership of the CPA.

24. More recently, the Isle of Man Government, in conjunction with the Commonwealth Secretariat, the World Bank, the Small States Network for Economic Development and Oxford University, has sponsored the Small States Financial Management Programme. Participants in the programme are drawn from officials within finance ministries, central banks, and regulatory bodies in small developing countries. They benefit from access to some of the best practitioners and academics in the world, during an innovative two-week learning experience where they have the opportunity to share their own countries’ ambitions and challenges and to consider possible solutions.

25. The programme takes place annually at both the Isle of Man International Business School and Oxford, and covers key issues such as risk assessment, management and regulation, debt and cash management, and regulatory collaboration.

Question 5: What direct benefits does the Commonwealth bring to citizens of the UK and of Commonwealth countries?

26. One of the benefits which the Commonwealth brings to the Isle of Man is the ability to participate in the Commonwealth Games. The Isle of Man is a member of the Commonwealth Games Federation in its own right, and as well as regularly participating in the Commonwealth Games and Commonwealth Youth Games, it hosted the Commonwealth Youth Games in 2011. This gives an opportunity for Isle of Man competitors to participate at an international level and has recently provided a stepping stone to membership of the Great Britain Olympic team.

Question 6: What role and status should the British Overseas Territories, Crown Dependencies and self-governing jurisdictions have in relation to the Commonwealth?

The Isle of Man’s Existing Relationship with the Commonwealth

27. By memorandum of 1950 the then UK Home Secretary Ernest Bevin decreed that any international agreement entered into by the United Kingdom would not automatically extend to include the Crown Dependencies, without the Crown Dependencies’ agreement. It has subsequently become common practice for the United Kingdom to consult the Crown Dependencies on each international agreement it enters into, as a contracting party, in order to ascertain whether each Island would be able to comply with the terms of the agreement and whether it would wish to be included in the ratification. As a Crown Dependency, the Isle of Man does not have the requisite international legal personality to enter into such agreements on its own behalf.

28. The UK would, during the normal course of events, make an explicit declaration or would deposit an instrument of ratification or similar, which would make clear that its signature or ratification of a particular convention or treaty should be taken to include the Isle of Man.

29. The UK’s membership of the Commonwealth, however, pre-dates the 1950 memorandum and as with other organisations established before this date, as well as some major international treaties, the UK’s membership is taken to include the Isle of Man.

30. Under the auspices of the UK’s membership, the Isle of Man currently participates in two main ways in the activities of the Commonwealth; firstly, as part of the UK delegation to certain meetings, such as the Commonwealth Finance Ministers; and secondly, through membership of individual Commonwealth bodies, in its own right, such as the Commonwealth Parliamentary Association and the Commonwealth Games Federation. The Isle of Man Government’s participation—in Ministerial meetings, and potentially through increased interaction with Commonwealth Business Council—is distinct from that of Tynwald, in the CPA, and of the Commonwealth Games Association of the Isle of Man, in the Commonwealth Games Federation.

The Commonwealth’s Membership Rules

31. The Commonwealth last discussed the issue of membership, and in particular, the question of possible membership for Overseas Territories and Crown Dependencies in 2007. Following the submission of its report to the Kampala Commonwealth Heads of Government Meeting (CHOG), the Committee on Commonwealth Membership recommended, amongst other things, that membership should be confined to sovereign states.

32. The Committee stated that “provided an aspirant member was a sovereign state, had a historic constitutional link with an existing member or a group of its members and adhered to the Commonwealth’s fundamental principles, values and norms, a modest expansion in membership would be in the interest of the Commonwealth’s strategic engagement with the wider world”.

33. The Committee also considered and rejected the proposal to establish a second tier or associated status.

The Isle of Man and Commonwealth Membership

34. With the exception of sovereignty, it is clear from the above that the Isle of Man comfortably meets all of the Commonwealth’s requirements for membership.

35. In the absence of a strong political wish for the Isle of Man to achieve independence or any desire from the Commonwealth to allow for membership for non sovereign countries like the Isle of Man, it would seem there is currently no realistic prospect of the Isle of Man becoming a member of the Commonwealth.

36. During the course of the consultation on the question of Membership leading up to the CHOG meeting in Kampala in 2007, the Isle of Man Government advised the UK Department of Constitutional Affairs that in the absence of detail on membership costs and other commitments such as provision of staffing or other resource, the Isle of Man could not determine whether it might be beneficial for it to become a member, even if it were to be possible.

37. However, were there to be a change of policy by the Commonwealth and a clearer definition of membership costs and other commitments, the Isle of Man would welcome the opportunity to revisit the question of membership and would approach it in a positive manner.

What role and status should the Isle of Man have in relation to the Commonwealth?

38. Whilst the Isle of Man’s role and status in relation to the Commonwealth is in line with its current constitutional position, the Isle of Man Government and other bodies, such as Tynwald, and individuals, including sportsmen and women, are able to play a full and active role in the work of the Commonwealth. This is of great benefit to the Island because of the opportunity it presents for interacting with the wide variety of countries included within the Commonwealth network, and also, the ability to access technical assistance through various bodies such as the Tax Administrators Association.

39. The Isle of Man Government very much welcomes the positive and supportive approach of the Commonwealth, its Secretariat and its various associations, takes towards the Island and believes the Isle of Man has a proven track record of effective and positive engagement with the Commonwealth. This is demonstrated through its very active participation in the Commonwealth Parliamentary Association, sponsorship of the Small States Financial Management Programme, and participation in the Commonwealth Games.

40. Seeking recognition and also making a positive contribution on the international stage are in line with the Isle of Man Government’s stated aim of enhancing its international reputation and profile.

41. To this end the Isle of Man Government believes that whilst the Island makes a positive contribution towards the work of the Commonwealth, and plays an active part in upholding its values and principles, this could be enhanced. As stated above the Isle of Man Government is pursuing more active engagement with the Commonwealth, for example with the Commonwealth Business Council. In addition to this, should the Committee recommend that the role and status of non sovereign countries in relation to the Commonwealth be enhanced further, then the Isle of Man Government would very much welcome the opportunity to be part of a discussion as to how its role and status might develop, in order to play a fuller part in the work of the Commonwealth.

42. Should the Committee deem it to be helpful, the Isle of Man Government would be very willing to provide further oral evidence to the Committee as required.

APPENDIX 1

Framework for Developing the International Identity of the Isle of Man

Following the statement of intent agreed on 11 January 2006, the Chief Minister of the Isle of Man and the UK Secretary of State for Constitutional Affairs have agreed the following principles. They establish a framework for the development of the international identity of the Isle of Man. The framework is intended to clarify the constitutional relationship between the UK and the Isle of Man, which works well and within which methods are evolving to help achieve the mutual interests of both the UK and the Isle of Man.

1. The UK has no democratic accountability in and for the Isle of Man which is governed by its own democratically elected assembly. In the context of the UK’s responsibility for the Isle of Man’s international relations it is understood that:

The UK will not act internationally on behalf of the Isle of Man without prior consultation.

The UK recognises that the interests of the Isle of Man may differ from those of the UK, and the UK will seek to represent any differing interests when acting in an international capacity. This is particularly evident in respect of the relationship with the European Union where the UK interests can be expected to be those of an EU member state and the interests of the Isle of Man can be expected to reflect the fact that the UK’s membership of the EU only extends to the Isle of Man in certain circumstances as set out in Protocol 3 of the UK’s Treaty of Accession.

2. The Isle of Man has an international identity which is different from that of the UK.

3. The UK recognises that the Isle of Man is a long-standing, small democracy and supports the principle of the Isle of Man further developing its international identity.

4. The UK has a role to play in assisting the development of the Isle of Man’s international identity. The role is one of support not interference.

5. The Isle of Man and the UK commit themselves to open, effective and meaningful dialogue with each other on any issue that may come to affect the constitutional relationship.

6. International identity is developed effectively through meeting international standards and obligations which are important components of the Isle of Man’s international identity.

7. The UK will clearly identify its priorities for delivery of its international obligations and agreements so that these are understood, and can be taken into account, by the Isle of Man in developing its own position.

8. The activities of the UK in the international arena need to have regard to the Isle of Man’s international relations, policies and responsibilities.

9. The UK and the Isle of Man will work together to resolve or clarify any differences which may arise between their respective interests.

10. The Isle of Man and the UK will work jointly to promote the legitimate status of the Isle of Man as a responsible, stable and mature democracy with its own broad policy interests and which is willing to engage positively with the international community across a wide range of issues.

Signed on 1 May 2007 by:

The Rt Hon Lord Falconer of Thoroton QC
Secretary of State

Hon J A Brown MHK
Chief Minister

25 January 2012