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While the EU’s reaction, led by President Sarkozy, was “rapid and reasonably successful”, in paragraph 21 of our report we stated:

“We are seriously concerned that Russia has not complied fully with the ceasefire agreement ... Full Russian compliance with the ceasefire plan should continue to be used as a measure of Russia's behaviour, even though such compliance is unlikely in the near future”.

In paragraph 23 we added:

“It is essential that the mandate of the EU Monitoring Mission in Georgia (EUMM) is renewed later this year and is allowed to exercise its agreed tasks in full on both sides of the border”.

The reality is that there have been and continue to be serious breaches of the ceasefire agreement and the monitoring mission has not been allowed to carry out all its agreed tasks.

Russia is a hugely important trading partner; it is the provider of much of our energy resources and it has the potential to be an important ally on issues such as nuclear proliferation and terrorism. It is in Europe’s interests to be patient and show understanding of Russia’s feeling of humiliations suffered, but Europe has to be robust as well and make it clear that no progress can be made on matters such as the partnership

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and co-operation agreement or on other issues important to Russia while agreements that have been made continue to be breached.

In this context I want to say a word, as both the other speakers have, about NATO’s role in the sensitive area of Russia’s “near abroad”, which has become Europe’s “near abroad” as well. I refer to the evidence of Sir Roderick Lyon about the three questions that should be asked about potential NATO members:

He did not think that,

Had Georgia already been a member of NATO, that would not have prevented the war. Sir Mark Lyall Grant’s view was that NATO was not ready to extend the Article 5 guarantee, which was fundamental to NATO, in circumstances where there were difficulties within Ukraine and attacks on Georgia’s territorial integrity.

We suggested that the ongoing disputes over missile defence and NATO enlargement risked further complicating EU-Russian relations and that, without drawing back on the commitment to eventual membership,

In the event, this May we have had tit-for-tat expulsions of diplomats and a military exercise in Georgia that has provoked Russian anger, just at the moment that President Obama is seeking to improve relations with Russia. It does not appear obvious that the decision to hold this exercise, even if it was small in terms of numbers and aimed at disaster relief, was a good idea. However, perhaps Russia wants to respond positively to the President’s initiative, and last Friday Dmitry Rogozin, Russia’s envoy to NATO, made conciliatory remarks. Surely every effort should be made to respond in a positive way.

We also stated in our report:

“The EU has an important role to play in strengthening the economies and democracies of both Georgia and Ukraine”.

Last week, at a meeting in Prague, the EU sought to intensify political and economic ties with six former Soviet republics, including Georgia and Ukraine, while seeking to reassure Russia that it was not trying to assert itself in Moscow’s former sphere of influence. The Eastern Partnership programme announced in Prague, which pledged $799 million in aid from 2009 to 2013, was perhaps inevitably greeted with suspicion in Moscow and not with great enthusiasm by some of the countries which should benefit. They argued that it was insufficient at a time of political and economic distress. A majority of the leaders from Europe’s biggest nations, including France, Britain and Italy, stayed away from the meeting. Only Chancellor Merkel of Germany attended. I doubt if that is the right signal to send to our eastern neighbours and I hope that the Minister will explain Britain’s absence from a meeting which could have important consequences.

The events in Georgia in August last year were followed by an interruption in gas supplies through Ukraine in January this year. That interruption resulted

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in significant reductions in supplies for a number of European countries. Martin RĂ­man, the Czech Minister for industry and trade, described the gas crisis as,

Michael Davenport from the Foreign Office told us that the proximity of the Georgian conflict to key energy transit routes in the Caucasus had highlighted their fragility. He urged that the EU should be more proactive in bolstering the prospects for improving supply routes to the west from the Caspian Sea, and the proposed Nabucco pipeline was part of that picture, but that it would work only if it was commercially viable and there was sufficient gas available to channel through it from, in particular, countries beyond Azerbaijan, such as Turkmenistan. At paragraph 43 of the report we pointed out that,

At paragraph 44 we stated:

“Events since our last report have increased the importance we attributed to the EU’s having a unified energy strategy, including an interconnected and liberalised internal market in energy, especially gas”.

At paragraph 45 we emphasised that:

“More vigorous action needs to be taken by the EU to diversify gas supplies, to increase gas storage capacity and to encourage the development of the Nabucco pipeline”.

All these recommendations simply reinforced what we had urged in our original report. During our first inquiry, Professor Dieter Helm from Oxford had explained to us the Gazprom strategy of increasing its market power. The Baltic pipeline, Nord Stream, had been part of a strategy to reduce the pivotal role of Ukraine. Deals with the Caspian states to send gas north through Russia had undermined the alternative non-Russian pipeline proposals for Europe, and the special relationships with German and other large European companies had helped to secure the Russian position.

In response, Europe failed to speak with one voice and EU member states pursued a strategy of bilateral relationships with Russia and Gazprom. The relationship of the German company E.ON and Gazprom is deep and the Baltic pipeline is essentially a German-Russian project. Other countries have followed by making their own separate deals. Faced with external dependency and market power the obvious strategy is to build up internal resilience. Completing the European electricity and gas networks would increase the ability to render mutual support while reducing costs. Strategic gas storage and diversification of sources of supply would add resilience. Although the Commission has been attempting to shift policy in this direction, progress has been slow and in the case of strategic gas storage practically non-existent.

Russia at present cannot produce enough gas to meet its own demand, let alone supply Europe as well. In the short term it has solved the problem by taking Caspian gas north. Dieter Helm, responding to a question from me, pointed out that a pipeline from the Caspian through Turkey does not solve our security of supply problem. It just means that less gas is available in Russia to service its own market and that therefore less gas is available from Russia to come

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to Europe. However, it would increase Europe's bargaining power and reduce Russia’s ability to suddenly curtail supplies.

All this is important for the United Kingdom as well as the rest of Europe. The UK faces increasingly critical security of supply problems. Gazprom has insisted that its European customers or partners sign long-term take or pay contracts. The Germans have done it, the Austrians have done it, and more recently the Italians and the French have done it. When we have a winter when there is a supply shortage, the price of gas to the UK rockets and no gas flows. When that happened a couple of years ago, the Prime Minister and the Energy Secretary talked about markets behaving irrationally. Dieter Helm commented:

“What did they expect to happen? These were long-term take or pay contracts and that is the form”.

I emphasise that the UK has as great an interest as the rest of Europe in a concerted European approach based on the interlinking of supplies and storage. The gas companies will not find storage commercially attractive and may need substantial inducements to provide it, but the North Sea is a natural zone for gas storage and as a deposit for carbon sequestration, which also has to play an important part.

While some of us were in Brussels last Thursday as part of our current inquiry into the EU’s relations with China, there was an interesting exchange at Questions in this House. I welcome the fact that the Minister, the noble Lord, Lord Davies of Oldham, announced that,

My noble friend Lord Howell of Guildford, who I am delighted to see in his place and who will speak shortly, was sceptical. He said:

“That, of course, depends on Russian willingness to see an under-Caspian pipeline from Turkmenistan, and that in turn depends on the attitude of the President of Turkmenistan and the President of Azerbaijan”.—[Official Report, 7/5/09; cols. 661-62.]

He asked whether it would not be much wiser to develop our links with Norway, which has unlimited gas to supply us, and to develop our own storage systems and import more LMG. I hope that despite the difficulties we will throw our weight behind efforts to achieve a southern corridor route. Of course, we must press on with storage and do our best to get the gas we need from Norway. But it is not obvious why Norway, with a population of 4.5 million and with more cash coming its way than it can possibly use in the short term, should accelerate the depletion of its resources to assist a neighbour which has depleted its resources as fast as it possibly could and is now running short.

If I were a Norwegian, I would expect my Government to extract a very good price for the additional supply. Norway also has other interests. A year or so ago it had to abandon all its rigs for a time because of Russian military activity in the area. With the opening up of the Arctic zone—my noble friend Lord Howell of Guildford has written very cogently on the importance

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of that area—and increasing disputes about who owns what in this potentially hugely important area, the Norwegians will want to talk to the Russians and remain on good terms with them. The trouble is that it is more expensive than gas delivered through pipelines and, when demand is high, the ships tend to get diverted to where the price is highest.

In conclusion, it must be in the United Kingdom’s interest to back to the hilt the kind of European energy policy for which we pressed in both our reports. We cannot stand aside and say that these matters do not concern us. It will not be easy to find a way forward. Germany, with its Russian contracts, and France with nuclear power as well, may be reluctant to play the part that is required if Europe is to have a sensible energy strategy, but for such central players in the European project to leave their eastern and southern neighbours vulnerable, and Russia holding Europe in a potential stranglehold, cannot be good politics or sensible economics. It is time that Europe started to protect its own interests by acting together in this vital field of energy security.

6.01 pm

Lord Chidgey: I, too, add my congratulations to my colleague and noble friend Lord Teverson on so ably introducing the committee’s report. In welcoming it, the Government endorse the importance—the committee noted this—of the EU’s swift reaction to the crisis in Georgia and its facilitating a ceasefire agreement. The Government rightly recognised the EU’s ability to use military and civilian tools to foster stability and enhance security in that area at an international level.

As noble Lords have already mentioned, the exact circumstances surrounding the outbreak of conflict in August 2008 are unclear and will probably remain so. However, we should support efforts within the European Union, particularly those of umbrella institutions, as they work towards attempting to establish conditions for meaningful dialogue between Russia and Georgia, which are both members of the Council of Europe. They meet in a democratic parliamentary assembly in Strasbourg and there is an opportunity for their peers within the European Community to hold both of them to account in democratic debate. It is right that they should, and can, be held accountable for the actions of their military and civilian personnel during and after this war between the two states. I shall make further reference to Russia, Georgia and the European Community in due course, but both parties should be investigated for breaches of international humanitarian conventions. Russia should be held to meet in full all international commitments and obligations, particularly those agreed under the Sarkozy peace plan. The attempts by Russia to move the goalposts by claiming that the separatist areas of Abkhazia and South Ossetia have evolved as if by magic into sovereign independent states while they remain clearly under Russia’s patronage should be rebuffed.

The Government’s response to the committee’s report was prepared some two months ago and events have moved on in various directions and to varying degrees. To some extent this is encouraging, but it is a cause for concern. The European Union Committee was seriously

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concerned that Russia had not complied fully with the Sarkozy-Medvedev peace plan. The Government were right to point out that the plan to militarise the breakaway separatist regions under the fabricated “bilateral” agreement further violates Georgian sovereignty and territorial integrity. Their view is shared by the international community and the European family of nations: the EU, the UN and the Council of Europe. The key requirements of the ceasefire agreement were the withdrawal of Georgian military forces to their usual bases and the withdrawal of Russian military forces to the lines they held before the hostilities broke out. The latest reports from international monitors show that the deployment of Georgian troops continues to be in line with the provisions of the ceasefire agreement, that there has been no increase in troops from the Georgian side, and that special police force units are being replaced by the regular police force in that country.

The major cause of Russia’s lack of compliance and heightened instability in the region is to all intents its unilateral recognition of the so-called independence of South Ossetia and Abkhazia. The international community agrees that this instability is heightened by Russia’s assertion that deploying troops in South Ossetia and Abkhazia is a matter of bilateral agreement with the de facto authorities in the breakaway areas and therefore is no longer governed by the ceasefire agreement. This is frankly ludicrous when, out of the 211 United Nations member states, only Nicaragua has joined Russia in recognising the independence of South Ossetia and Abkhazia.

The noble Lord, Lord Anderson, mentioned the issue of Russian passports to non-Russians. When Russian parliamentarians were challenged about this recently, they claimed that Russian passports had not been issued to non-Russian citizens in South Ossetia; the South Ossetian authorities had issued South Ossetian passports to citizens in that area. I will be grateful to hear whether the Minister has any news because that is clearly an interesting development in the status of the areas concerned. In short, the international community has concluded that while Georgia has not fully complied with all the ceasefire agreement demands, Russia has failed to comply with most of them. In fact, Russia could be seen to be moving further away from the minimum conditions for a meaningful dialogue.

A key factor in the continuing instability in the region appears to be the uncertain status of the international monitoring commissions. The denial of access to the breakaway areas by the de facto authorities in South Ossetia and Abkhazia creates a major obstacle to implementing the incident prevention and response mechanisms agreed by the parties at the talks in Geneva in February. Clearly these procedures are essential if security and stability are to be established in these volatile areas and renewed confrontation is to be avoided. I think I am right in saying that the next round of Geneva talks is scheduled for 18 and 19 May, and I would be grateful to the Minister if, in his reply to the debate, he could provide us with an update on these plans and confirm, if it is known, whether the agenda includes establishing new security mechanisms

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—an area of debate at previous meetings—and agreement on the principles of the non-use of force in these areas.

In the mean time, refusing access to OSCE and EU monitors to the volatile breakaway areas is impeding progress. Could the Minister also confirm the Government’s position on the actions needed to avoid further deterioration in security and stability? Could he refer in particular to actions to reverse the further militarisation of the breakaway regions, to which noble Lords have referred on a number of occasions today, and to implement the agreed incident prevention and response mechanisms, including joint visits by observers to the breakaway areas; to withdraw restrictions at points of entry for humanitarian aid; and to respect fully the rights of return of internally displaced persons as a result of this conflict.

At present, the situation seems to be moving further away from establishing the minimum conditions for a meaningful dialogue between Russia and Georgia. For example, as noble Lords have mentioned, there are claims by the Georgian Government to have put down a brief mutiny by a tank battalion—alleged, by the way, to be part of a Russian-inspired coup attempt to depose the Georgian president. Of course, Georgia’s hosting of NATO training exercises, with 1,000-plus troops drilling close to areas where Russian troops are still stationed in South Ossetia, generated the retort from President Medvedev that the action was an “overt provocation”. The meeting last week between EU nations and the “supplicant six”, as I call them—the “near abroad” post-Soviet countries that form the Eastern Partnership—is being interpreted as a move to counter Russia’s proclaimed rights in its buffer region. All these developments illustrate a move away from meaningful dialogue to resolve the Russia-Georgia issues by Russia and Georgia, and they do nothing to address growing concerns over the humanitarian consequences of the war as set out in recent reports in the international community.

The conflict resulted in some 130,000 people being displaced in Georgia, with 26,000 internally displaced persons still in centres in Tbilisi and elsewhere nine months later. But the humanitarian concerns are in fact far deeper than that. In addition to the recent IDPs, the Georgians have indicated that there are a further 225,000 resulting from earlier conflicts, particularly people from Abkhazia. In total, therefore, more than quarter of a million IDPs are suffering in inadequate centres that fail to meet minimum living standards, threatening the health and well-being of children and the elderly in particular.

In conclusion, it is clear that the humanitarian consequences of the war between Georgia and Russia are far from being resolved. There is a climate of fear on all sides of hostilities being renewed. Solutions need to be found to ensure that an effective international presence remains in the region, providing guarantees for security and human rights. New approaches need to be found to open up dialogue between the international community, the de facto authorities and, of course, the people of South Ossetia and Abkhazia. Both Georgia and Russia have a responsibility to see that this happens.

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6.12 pm

Lord Hannay of Chiswick: It is right that we should have the opportunity again to debate the important issue of the EU’s relations with Russia, even quite soon after our previous debate. Much is happening in that relationship and not all of it is for the good. The hard fact is that the European Union does not have a functioning across-the-board policy towards Russia. Until it does, we shall be easy prey to Russia’s divide-and-rule tactics.

I congratulate the noble Lord, Lord Teverson, and his colleagues on a truly excellent supplement to last year’s report that takes full account of the events in Georgia last August and of the effect of the economic crisis on the Russian economy, and thank them for so generously inviting me to participate in their discussions of it, despite the fact that by then I had moved on to a different part of the European Union Committee’s firmament.

First, I have a couple of comments about the Government’s response to this report. They bridle at the suggestion that mixed signals from Washington may have contributed to President Saakashvili’s lamentable decision to try conclusions with the much superior Russian military forces, a decision which, quite rightly in my view, the committee characterises as “reckless”. No doubt the president listened to those voices in Washington that were saying what he wanted to hear, and chose to ignore any cautious advice he may have received from the State Department. A simple reading of the American press, however, would show that there were plenty of voices egging him on, and that not all of them were very far removed from the former Administration. The lesson to be learnt is the crucial importance of avoiding loose rhetoric and misleading indicators when dealing with a situation as combustible as that in the Caucasus. Fortunately, the new US Administration seem to have learnt that lesson.

A second point on the government response: it was a bit of a pity that the Government missed the opportunity to set out in full the compelling reasons why the analogy drawn by the Russians between the cases of Abkhazia and South Ossetia on the one hand and of Kosovo on the other was self-serving. The Government simply swatted it away without explanation. If one wants to look for such an analogy in recent international relations, one finds it not with Kosovo but with the Turkish Republic of Northern Cyprus. There, too, an entity was carved out of a sovereign, independent member of the United Nations whose territorial integrity all had agreed to respect. There, too, military force was used, substantial ethnic cleansing took place and only one country recognised the new entity. The irony is that Russia, and before it the Soviet Union, has always been among the most vociferous critics of the Turkish Republic of Northern Cyprus. So when the Russian Foreign Minister waxes eloquent about others’ double standards—he was an old sparring partner of mine in the 1990s, so I am sure that he will not resent what I say—he should perhaps take a glance in the mirror.

Kosovo’s autonomy under the old Yugoslav constitution—and these seem to be the bullet points as regards saying that Kosovo is quite different—was

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unilaterally withdrawn by President Milosevic against the wishes of 90 per cent of its inhabitants. A repressive regime was installed which committed many gross abuses of international humanitarian law. Now, the new constitution of an independent Kosovo guarantees the rights of the Serb and other minorities—not something that is noticeable in the Abkhaz or South Ossetian constitutions, if they have them. More than 50 countries have recognised Kosovo’s independence. That is quite a contrast, I should have thought.

Clearly, as the noble Lord, Lord Crickhowell, and others have said, energy will be at the heart of any relationship between the EU and Russia, now and for the foreseeable future. It is here that the EU has so far lamentably failed to get its act together. The consequences were there for all to see during last January’s stand-off between the Ukraine and Russia over gas supplies. The remedies are not difficult to identify: a more unified and more competitive internal energy market, the building of interconnectors between the gas supply pipelines of different member states, the diversification of the EU’s sources of external supply and of the pipeline networks leading westward into Europe, and the ability to speak to Russia with a single voice.

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