Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Examination of Witnesses (Questions 400 - 419)



  Q400  Lord Morris of Handsworth: So where would you see greater adherence to human rights issues, here at home or abroad where the same business operates?

  Ian Lucas: We want to see greater adherence both domestically and abroad.

  Q401  Lord Morris of Handsworth: I know we do, but the question was your judgment as to where the greater adherence takes place?

  Ian Lucas: I think that international businesses tend to think of human rights as a foreign issue in their own minds and what we need to do is to get them to think about the domestic aspect of the business in human rights terms as well.

  Q402  John Austin: Can I just follow that up? This is a joint BIS/FCO initiative, and this goes back to Lady Prashar's comment earlier. There is a perception outside that whilst the FCO may be beavering away at ethical foreign policy the emphasis of UK Trade International is business, business, business. Have you identified any tensions or differences within this working party on the degree of commitment between the FCO and BIS?

  Ian Lucas: I think that Mark and I have been getting on very well! I think there is a perception of difference, for example, in the UKTI and perhaps the Foreign Office, from outside; but what we are working hard to try to do is to ensure that for UKTI human rights are just as much on their agenda as they are for the Foreign Office. That is an important part of my role, to emphasise that.

  Q403  Chairman: Can I come to some points for Mark. You have said quite a lot about the Kimberley Process and all those sector-based programmes, but one of the criticisms we have had of the UK is that it is less effective at integrating human rights into its more general work in the EU, the OECD and the World Bank, so what are you doing to try and promote responsibility of business to protect human rights in these wider inter-governmental activities, particularly in the EU?

  Lord Malloch-Brown: Although you say particularly the EU I will start, if I may, with the World Bank for a moment and then come back to the EU. Things like the whole issue of transparency in contracting has been very, very driven and heavily driven by the World Bank but very much at the instigation of British pressure. Similarly, the World Bank's development of social and environmental standards, which on the social side have a number of human rights components to them, is again an area where there has traditionally been strong British leadership. So I would argue rather the opposite, that within these foras we have actually worked to try and mainstream human rights into their decision-making. With economic institutions there are always limits. The World Bank is itself insistent that its conditions for lending have to be primarily based on economic impact and return and not on human rights issues.

  Q404  Chairman: That is the whole point, is it not? The criticism from Amnesty is that we should be exercising more leadership in trying to get higher standards into all these agreements with international organisations to try and entrench, embody better standards of corporate behaviour and we are not doing that. That is their criticism, we are not showing the leadership that they think we should, like we showed leadership as you mentioned in the Extractive Industries Agreement, in Kimberley and all the rest of it, but not international bodies.

  Lord Malloch-Brown: Those international bodies are intrinsic to the operation of most of these initiatives. It would be impossible to do what we are doing on natural resources without the collaboration of particularly the World Bank. I think that more broadly there are limits, and I have to be frank about it. The World Bank particularly is also subject to a lot of push back, not by companies but by countries arguing that its lending conditions to them cannot be primarily human rights driven, they must be economics driven, and over many years the Bank has tried to push back on that, increase building conditions which in a sense are there because of their link to development, you cannot have development unless you have a degree of political freedom as well as economic freedom. But they are not human rights institutions and, therefore, getting this mainstreamed is not a straightforward process; there are many countries which are development successes but disappointing on human rights and democracy criteria. That is just a fundamental dilemma at the heart of all of these international development institutions. The only one I would say which actually says that you cannot have development without human rights is UNDP, for which that is a very strong philosophical premise; but it is not the case in the economic institutions. Just on the EU, which you have mentioned as well and drew particular attention to, again I would argue that within the EU's work in this area, which again I have to stress, is country-based, it is not taking the international business sector at the abstract global level—

  Q405  Chairman: What about the Procurement Directive; that says how you should go around buying things?

  Lord Malloch-Brown: If you take that Procurement Directive—and officials are welcome to kick me in the pants if I get this wrong—there are real issues there about ensuring that the procurement process is fully competitive. We have been frustrated in trying to build in that kind of conditionality because it often breaches procurement requirements.

  Q406  Chairman: This is the whole point: are we actively showing the leadership within the EU to advocate that when we set out rules relating to procurement we build into those procurement rules human rights principles? After all, the EU is the European Union, it is no longer the Common Market or the EC, it is much broader than it was, and membership of the EU is predicated on compliance with the European Convention and all the rest of it. You cannot be in the EU without being compliant with the European Convention. So why are we not thumping the table and saying, "We have to go beyond straightforward mere commercial interests when we are looking at procurement"?

  Lord Malloch-Brown: We are, but we are pushing on a closed door which is not closed because other countries want to keep procurement as something where human rights abusing companies can benefit from it, but because Europe has developed a procurement system where there is a real wariness about introducing these actors for fear that they will be used in ways which actually prevent the European taxpayer getting best value for money.

  Q407  Chairman: Best value at the expense of human rights in the developing world.

  Lord Malloch-Brown: That is the argument.

  Q408  Chairman: Human right within our own countries.

  Lord Malloch-Brown: That is the argument. There is no doubt which side of the argument we take. My only point is, and maybe at this point I should defer to Ian because it is as much a BIS issue as it is an FCO issue, because of issues in the past about non-transparent procurement there is within these Procurement Directives a prejudice towards the best price at the expense of some of these other considerations. Equally, I can tell you that while that is a tension it does not lead to conditions of abusive labour, etcetera, in terms of the contracting that goes on. There is a balance that may not be drawn where we think it should ideally be.

  Q409  Chairman: We will come back to procurement in more detail later on. Can I come at this from a slightly different angle now and that is bilateral trade agreements. One of the things that Ruggie identified was the fact that bilateral trade agreements can have the effect of suppressing human rights developments in the host country, and he referred to Sub-Saharan Africa at paragraph 32 of his report: "Provisions were found in seven of the 11 host government agreements specified exemptions from or compensation for the effect of all new laws for the duration of the project, irrespective of their relevance to protecting human rights or any other public interest." When Norway got involved in these things this made sure that these agreements with which they get involved do not do that; that they do have proper respect for human rights, but ours do not. Why?

  Lord Malloch-Brown: The FCO is not the lead on these issues.

  Q410  Chairman: Ian then.

  Ian Lucas: I am not sure if your characterisation is entirely correct.

  Q411  Chairman: This is Ruggie's characterisation: "seven of the 11 host government agreements specified exemptions from or compensation for the effect of all new laws for the duration of the project" and many of those new laws would be, for example, to protect labour standards.

  Ian Lucas: That is your description relating to the quotation; that was not within Ruggie's quotation. That is your observation.

  Q412  Chairman: That is based on other evidence that we have had in this inquiry.

  Ian Lucas: Within BIS, and I refer you to the OECD guidelines to which I referred to earlier on this, that is an extremely important device as far as we are concerned, both to indicate the general approach that we want to be taking as a government and for business to be taking in the way that they conduct business. Those are the guidelines that we want them to adhere to. In circumstances where the guidelines are for any reason broken or if we find that there is not the adherence to the principles relating to human rights that we would like to see and if that is established then that is clearly something that will be considered in the future when dealing with that individual organisation or company.

  Q413  Chairman: Why do we not do as Norway does?

  Mr Wills: Can I clarify one point? Article 45(2)(d) of the Procurement Directive enables contractors to exclude suppliers if they have been found guilty of human rights breaches. So it is not the case that this cannot be taken into consideration—it can be. Also, it is perfectly open for public sector procurers to stipulate compliance for basic human rights principles as well, particularly when we are talking provision of care services or things which directly engage human rights provisions as well. So it is not that we do not think that these things are important, but there are opportunities to bring this into play and we need to make sure that they are done across the public sector—it is a very wide ranging sphere of business and what we are all engaged in doing is seeing as far as possible that these principles are brought into play in procurement.

  Ian Lucas: I need to find out precisely what you are advocating and consider it and I will come back to you.

  Q414  Lord Dubs: This again is to you, Ian, and it is about Export Credit Guarantees. We have heard suggestions that the Export Credit Guarantee Department does not have adequate procedures to ensure that the projects that are guaranteed by the UK will not contribute to human rights abuses overseas. How, if at all, does the ECGD prevent British taxpayers' money being used in projects that might contribute to human rights abuses?

  Ian Lucas: The approach with relation to the Export Credit Guarantee Department is the same and adheres to the principles that we have indicated already in the evidence session to date, so that if there are individual instances or allegations relating to particular contracts or credits then we would want to know about them and to look at them in the context of the principles that I have outlined.

  Q415  Lord Dubs: But where does the onus lie? How do you react to the suggestion that human rights assessments should be conducted on any project seeking export credit guarantees? They have to look at it and see whether any project meets the human rights standards.

  Ian Lucas: The ECGD is primarily a commercial department and that is the way in which it approaches the guarantees that it is talking about. The whole focus of the work of the Department will have to change if a capacity was created to, for example, investigate the human rights' position in another part of the world relating to the credit guarantees. What we need to do is ensure that embedded in the work of the Department is an understanding of the importance of human rights and the way in which the work of the Department is conducted. It is very difficult for the ECGD to carry out the type of assessment you are describing.

  Q416  Lord Dubs: It could do if they were geared up to doing that sort of assessment.

  Ian Lucas: It would entirely change the work that it does because at the present time the work that it does is primarily to assist UK business in commercial operations. We want UK business to conduct business with respect to human rights and that is the overarching framework that we want to see but it is not specifically the role of the ECGD to link in or use as a basis of their decision-making the issues which you are raising.

  Q417  Lord Dubs: Obviously implicit in my question is the suggestion that they should be, but do you accept that limiting measures designed to protect human rights in order to meet business interests of UK companies might be inconsistent with the framework proposed by Professor Ruggie?

  Ian Lucas: I do not think they were limiting in the way that you describe it. I think that there is a fundamental assumption which underpins the work of the Department as a whole, that we have respect for human rights and the way that we approach matters; but it is not a question of allocating individual tasks or investigations relating to human rights to individual departments. We need to have an overarching approach and the work of the Department needs to be conducted with respect to that overarching approach and not specifically directing itself to individual investigations relating to human rights in each individual case.

  Q418  Lord Dubs: I understand what you are saying but if the ECGD are aware of human rights, unless they look at individual projects they are not going to know whether these projects are liable to breach human rights. In other words, it is all right saying, "Yes, of course we are aware of this," but unless it is their responsibility to look at it they may miss out.

  Ian Lucas: I think it is their responsibility to consider the human rights position because it is part of their existing impact analysis, but what they cannot do is assess the human rights' position for each individual application in the way that they commercially assess each individual application. But they have to have regard to human rights both in the context of each of the applications that they are considering but also in the context of the overall approach of the Department.

  Q419  Lord Dubs: My last question is this: but could not the ECGD ask an individual business that is seeking support to do human rights assessment and to provide that to the Department?

  Ian Lucas: I think that the present position is that human rights are considered as part of the process. I think that that is the correct approach, rather than requesting a business to make a human rights assessment and to present it to the Department; I do not think that that is the correct burden to impose on that individual business.

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