Foreign Affairs Committee: Press Notice

4 July 2008

EMBARGOED PRESS RELEASE

NOT FOR PUBLICATION UNTIL 00.01 (GMT)

SUNDAY 6 July 2008

(one minute past midnight)

COMMITTEE PUBLISHES REPORT ON OVERSEAS TERRITORIES

The Foreign Affairs Committee will publish its report on Overseas Territories at 00.01hrs GMT Sunday 6 July. This will be the Committee's Seventh Report of Session 2007-08 (HC 147).

Advance embargoed copies will be made available to witnesses and members of the press in electronic (pdf) form at 11am on Friday 4 July and in printed form from the Press Gallery, and the Foreign Affairs Committee office, House of Commons.

The Chairman of the Committee, Mike Gapes MP, said:

"This is a wide-ranging report considering the FCO's discharge of its responsibilities with regard to the UK's 14 Overseas Territories and making recommendations across these Territories. We considered the FCO's management of the risks and contingent liabilities to which Overseas Territories expose the UK. We recommend that the FCO should encourage Bermuda, the British Virgin Islands, the Cayman Islands and Gibraltar to continue to make progress in improving financial regulation, in particular in arrangements for investigating money laundering. We recommend that the FCO take further steps to encourage economic diversification in and improved transport links with the Falkland Islands.

We make recommendations relating to the sovereignty disputes between the UK and Spain over Gibraltar, with Argentina over the Falkland Islands, and with Mauritius over British Indian Ocean Territory.

Overall, we have concluded that, in some cases, the FCO's approach has been too hands-off. The FCO must take its oversight responsibilities for the Overseas Territories more seriously. In particular, after receiving very serious allegations about corruption in the Turks and Caicos Islands and experiencing a palpable climate of fear on the Islands, we have recommended that a Commission of Inquiry should be announced in that Territory. We also recommend that the Government should detail the steps it has taken to ensure that allegations of corruption in Bermuda are properly investigated.

The FCO must lead by example on good governance. On the British Indian Ocean Territory, we concluded that there was a strong moral case for the UK permitting and supporting a return of the exiled Chagossians and that the FCO's arguments that a return would be unsustainable were less than convincing. We also found it deplorable that previous US assurances about rendition flights through Diego Garcia had turned out to be false. We have decided to consider further the security implications of a resettlement to the US base on Diego Garcia, as well as the extent of UK supervision of US activities on the base, including all flights and ships serviced from Diego Garcia.

On Ascension Island, a Dependency of St Helena, we concluded that the FCO had raised expectations that permanent rights would be granted to those living and working on the Island and that it had lost the trust of residents when it carried out a U-turn on this. We have recommended that the FCO should work with elected representatives on the Island to try to reduce potential liabilities of a permanent settlement, with the ultimate aim of granting such rights."

Conclusions and recommendations

Constitutional relationship

Constitutions

1. We welcome the Government's approach of encouraging Overseas Territory governments to take the lead in reviewing their constitutions and making proposals for reform. We recommend that the FCO should, as far as possible, hold negotiations and consultations with Territory governments on such proposals within the individual Territory concerned so that the process does not appear distant to the local population. We believe that the modernisation of constitutions could also be made more transparent if the FCO published criteria for deciding the degree of self-government that is appropriate for Overseas Territories and we recommend that it does so. We also recommend that the FCO continues to send us draft constitutional Orders in Council at least 28 sitting days before they are made. (Paragraph 30)

2. We conclude that Gibraltar's presence on the UN list of Non-Self-Governing Territories is an anachronism. We recommend that the Government continues to make representations to the UN about delisting the Territory and that it makes clear that it is only sending the UN progress reports on Gibraltar because it is obliged to do so. (Paragraph 41)

3. We conclude that there is a strong moral case for the UK permitting and supporting a return to the British Indian Ocean Territory for the Chagossians. We note the recent publication of resettlement proposals for the Outer Islands by Chagos Refugees campaigners. The FCO has argued that such a return would be unsustainable, but we find these arguments less than convincing. However, the FCO has also told us that the US has stated that a return would pose security risks to the base on Diego Garcia. We have therefore decided to consider the implications of a resettlement in greater detail. (Paragraph 69)

4. On Diego Garcia itself, we conclude that it is deplorable that previous US assurances about rendition flights have turned out to be false. The failure of the United States Administration to tell the truth resulted in the UK Government inadvertently misleading our Select Committee and the House of Commons. We intend to examine further the extent of UK supervision of US activities on Diego Garcia, including all flights and ships serviced from Diego Garcia. (Paragraph 70)

5. We recommend that British Overseas Territories Citizenship should be extended to third generation descendants of exiled Chagossians. We also recommend that the Government should provide more guidance to those Chagossians wishing to resettle in the UK. (Paragraph 74)

6. We conclude that the FCO did raise expectations that rights of property and abode would be granted to those who live and work on Ascension Island. We recommend that the FCO must make greater efforts to restore trust among the residents of the Island. In particular, we recommend that it should try to re-establish the Island Council as soon as possible. We further recommend that the FCO should work with elected representatives to consider the potential contingent liabilities of a permanent base on Ascension Island, and means of reducing these liabilities, with the ultimate aim of granting rights of property and abode to residents. (Paragraph 82)

Consultation and representation

7. We recommend that Territory governments should be given an opportunity to pass on their opinions of the candidates for Governor before appointments are made. We welcome the appointment of local individuals as Deputy Governors in some Overseas Territories, but urge the FCO to ensure those appointed are not seen to be politically partisan individuals. (Paragraph 87)

8. We conclude that the annual Overseas Territories Consultative Council (OTCC) is a valuable event. However, since it is intended as a forum for Territory governments, they should be given more of a say about the way in which the OTCC is run. We recommend that the FCO consults Territory governments on the improvements they would like made to the OTCC and implements their suggestions. We also recommend that the FCO should consider ways of raising awareness of the OTCC within Overseas Territories, including, as far as possible, making papers tabled for the forum publicly available. We note that Overseas Territories' representatives reported that those issues raised in the OTCC which involved other Whitehall departments were least likely to be followed up and we recommend that the FCO continues to press other departments to take their responsibilities with regard to the Overseas Territories seriously. (Paragraph 98)

9. We recommend that the FCO urges Overseas Territory governments whose offices in the UK are less active to consider ways of raising their profile. The FCO should also encourage this by, when appropriate, making more use of official Territory government representatives, as well as Governors, to liaise with Territory governments. We recommend that the Government also ensures that all new officeholders in Overseas Territories appointed by or on the Government's recommendation are briefed by official Territory government representatives in the UK before they take up their posts. (Paragraph 105)

10. We conclude that the FCO's guidelines on treaties applying to Overseas Territories do not yet appear to be being followed by all of Whitehall and recommend that the FCO writes to remind other Government departments of their existence. We also recommend that the FCO should provide more drafting assistance to Overseas Territories for transposition of international agreements into local legislation. (Paragraph 111)

11. We conclude that it is disappointing that the UK did not properly engage with the government of Gibraltar about its concerns regarding the text of the Lisbon Treaty. We recommend that the FCO must ensure it takes Overseas Territories' interests into account in its relations with the EU. We further recommend that in its response to our Report the FCO sets out the mechanisms it has in place to ensure the Overseas Territories covered by the Overseas Association Decision are informed and consulted about EU legislation that affects them. (Paragraph 118)

12. We recommend that the Foreign and Commonwealth Secretary should consider with the Leader of the House and with representatives of the Opposition parties whether improvements can be made in the ways in which the views of those resident in the Overseas Territories can be made known in the UK Parliament. (Paragraph 126)

13. We are concerned that witnesses from Overseas Territories cannot at present be guaranteed protection against legal action or even intimidation or other abuse arising as a consequence of their giving evidence to select committee inquiries in the UK. We recommend that the Government should introduce legislation to extend the Witnesses (Public Inquiries) Protection Act 1892 to Overseas Territories, or as an alternative, that it should urgently require Overseas Territories to introduce equivalent legislation as a matter of good governance. (Paragraph 131)

14. We conclude that it is wrong for some Overseas Territories to have access to the benefits of International Olympic Committee (IOC) recognition while others do not. We recommend that the FCO should make representations to the IOC about recognition for all the UK Overseas Territories. (Paragraph 136)

15. We recommend that Overseas Territory government representatives from Bermuda, Gibraltar, the Falkland Islands and any other Territory wishing to do so should be permitted to lay a wreath at the Cenotaph on Remembrance Sunday. The Foreign Secretary should continue to lay a wreath on behalf of other Territories. (Paragraph 141)

16. We recommend that the Government should give consideration to whether it would be appropriate to support wider participation of Overseas Territories in Commonwealth meetings and conferences, including the Commonwealth Heads of Government Meeting. (Paragraph 144)

Governance

Allegations of corruption in the Turks and Caicos Islands

17. We are very concerned by the serious allegations of corruption we have received from the Turks and Caicos Islands (TCI). They are already damaging TCI’s reputation, and there are signs that they may soon begin to affect the Islands’ tourism industry. There is also a great risk that they will damage the UK’s own reputation for promoting good governance. Unlike the Cayman Islands, where the Governor has taken the initiative in investigations, the onus has been placed on local people to substantiate allegations in TCI. This approach is entirely inappropriate given the palpable climate of fear on TCI. In such an environment, people will be afraid to publicly come forward with evidence. We conclude that the UK Government must find a way to assure people that a formal process with safeguards is underway and therefore recommend that it announces a Commission of Inquiry, with full protection for witnesses. The change in Governor occurring in August presents an opportunity to restore trust and we recommend that the Commission of Inquiry should be announced before the new Governor takes up his post.  (Paragraph 196)

18. On 20 May we held a private meeting with Meg Munn to express our concerns about the allegations we had received during the course of our inquiry. (Paragraph 197)

Other Overseas Territories

19. We recommend that the Government should encourage the Anguillan government to establish an independent inquiry into allegations that Anguillan ministers accepted bribes from developers in the Territory. We also recommend that the Government should urge the Anguillan government to use the opportunity of constitutional review to introduce stronger anti-corruption measures in the Territory. (Paragraph 203)

20. We recommend that the Government sets out in its response to this Report the steps it has taken to ensure that allegations of corruption at the Bermuda Housing Corporation, in the issuing of contracts, and of electoral fraud in Bermuda are properly investigated. We also recommend that the Government should encourage the Bermuda government to strengthen its transparency measures, including by establishing an independent Electoral Commission and ending the practice of Committees of the House of Assembly sitting in camera. (Paragraph 214)

21. We recommend that the FCO should strongly encourage all Overseas Territories which have not yet done so to introduce freedom of information legislation. We also recommend that the FCO should review with Overseas Territories what steps they might take to improve their public accounting and auditing capability. We support the Public Accounts Committee’s recent recommendations that the FCO should explore how Overseas Territories might make better use of UK expertise and that it should also explore whether those Territories with Public Accounts Committees could make more use of ex-officio members. (Paragraph 233)

Rule of law

22. We conclude that the FCO must ensure there are sufficient measures in place to prevent interference from either the Governor or the local government in judicial decisions in Overseas Territories. We recommend that the FCO should consider transferring the responsibility for Chief Justices’ terms and conditions of employment to the Ministry of Justice. We also recommend that the FCO should consider whether judges in Overseas Territories would be less vulnerable to interference if they were on longer non-renewable contracts, with appropriate safeguards in case of incapacity, rather than on renewable short term contracts. (Paragraph 242)

Human Rights

23. We recommend that the Government should take steps to ensure that discrimination on the basis of sexual orientation or gender status is made illegal in all Overseas Territories.  (Paragraph 260)

24. We recommend that the Government should closely monitor the conditions of prisoners, illegal immigrants and migrant workers in Overseas Territories to ensure rights are not being abused.  (Paragraph 268)

25. We conclude that although extending voting rights to non-Belongers will be politically difficult for Overseas Territory governments, the Government should at least encourage local administrations to review this issue with regard to non-Belongers who have resided in an Overseas Territory for a reasonable period. We recommend that the Government should propose that non-Belongers’ rights be an agenda item for the next OTCC. (Paragraph 275)

26. We recommend that the Government should encourage the Bermuda government to move away from conscription and towards the Bermuda Regiment becoming a more professional organisation, with voluntary and paid elements. We conclude that this could make serving in the Regiment more attractive, giving it the staffing resources required to extend into maritime duties. (Paragraph 285)

Environmental governance

27. We agree with the Environmental Audit Committee that the Government does not appear to have carried out any kind of strategic assessment of Overseas Territories' funding requirements for conservation and ecosystem management. We conclude that given the vulnerability of Overseas Territories' species and ecosystems, this lack of action by the Government is highly negligent. The environmental funding currently being provided by the UK to the Overseas Territories appears grossly inadequate and we recommend that it should be increased. While DEFRA is the lead Whitehall department responsible for environmental issues, the FCO cannot abdicate responsibility for setting levels of funding given its knowledge of Overseas Territories' capacity and resources. The FCO must work with other government departments to press for a proper assessment of current needs and the level of the current funding gap and then ensure increased funding by the Government through DEFRA, DFID or other government departments is targeted appropriately. (Paragraph 295)

Contingent liabilities

Regulation of offshore financial services

28. We recommend that the FCO should encourage Bermuda, the British Virgin Islands, the Cayman Islands, and Gibraltar to continue to make progress in improving financial regulation, in particular in arrangements for investigating money laundering. (Paragraph 311)

29. We are concerned by the National Audit Office's finding that the FCO has been complacent in managing the risk of money laundering in Anguilla, Montserrat and the Turks and Caicos Islands, particularly since these Territories are those for which the UK is directly responsible for regulation and therefore most exposed to financial liabilities. We agree with the Public Accounts Committee's recent recommendation that Governors of these Territories should use their reserve powers to bring in more external investigators or prosecutors to strengthen investigative capacity. (Paragraph 312)

30. We also recommend that the FCO should continue to work with DFID to introduce a financial services regulatory regime in St Helena that is appropriate to its local economy and development. (Paragraph 313)

Economic diversification in the Falkland Islands

31. We recommend that the FCO works with the Falklands Islands government and the Ministry of Defence to ensure that the future air service allows the Islands to develop their tourism industry. We also recommend that in its response to this Report the FCO states clearly what, if any, it considers the UK's entitlement would be in respect of potential oil and gas revenue from the Falkland Islands and from other Overseas Territories. (Paragraph 322)

32. We conclude that there are a number of issues to be considered, including cost, practicability, safety and environmental impact, before a decision can be taken on whether to carry out de-mining in the Falkland Islands. We therefore welcome the Government's announcement that it has sought an extension of the deadline to meet the UK's obligations under the Ottawa Convention. We recommend that the Government should discuss the results of its recent feasibility study with Falkland Islanders before coming to any decision about landmine clearance. (Paragraph 328)

Budgetary aid

33. We conclude that the building of an airport and related infrastructure on St Helena could be a significant step towards self-sufficiency for the Territory. However, we are concerned about the potential capital and maintenance costs of the project and we recommend that in its response to this Report the Government provides us with figures to demonstrate that it has selected the most cost-effective option for bringing St Helena off dependency on aid. We also recommend that the Government encourages St Helena's government to include affordable housing in its Sustainable Development Programme and that it sets out in its response what action it has taken with regard to allegations of poaching in St Helena's territorial waters. (Paragraph 342)

34. We recommend that the Government should focus funding on infrastructure in Montserrat on those areas that are most likely to assist the development of tourism on the island. (Paragraph 348)

35. We recommend that the Government should ensure that Pitcairn residents are informed and consulted on proposals for the Island's economic development. (Paragraph 353)

36. We welcome the Government's swift provision of emergency assistance to Tristan da Cunha following harbour damage and an outbreak of illness on the Island. We recommend that the Government continues to provide funding for projects on Tristan da Cunha, focusing on projects that will promote greater self-sufficiency. We also recommend that the FCO makes representations to China to try to open UK-China trade agreements to the sale of Tristan lobster. (Paragraph 360)

Illegal immigration

37. We recognise that immigration policy is a matter devolved to the Turks and Caicos Islands (TCI), but we conclude that given the scale of illegal immigration of Haitians into the Territory the FCO should accept greater responsibility for tackling the issue. We recommend that the FCO should provide a regular Royal Navy presence in TCI's coastal waters to assist with patrols and that it should consider with the Haitian government what further measures could be taken by the Haitian and UK governments in cooperation with each other to prevent Haitians leaving by boat to enter TCI illegally. (Paragraph 374)

Regulation of civil aviation

38. We agree with the Public Accounts Committee that the UK Government should not fund aviation regulation in Territories that are able to pay for this service. However, we recommend that the FCO must ensure that it responds to Territory government criticisms of the designated regulator before moving to charging for the service. (Paragraph 377)

Sovereignty disputes

Falkland Islands

39. We conclude that when the visit by President Kirchner to the UK is rearranged the Government must use this opportunity to raise issues of concern to the Falkland Islands. In particular we recommend that the Prime Minister calls for an end to Argentina's obstruction in relation to use of its airspace and that he also highlight potential logistical issues if Argentine families are allowed to fly in to visit graves. We also recommend that the Prime Minister should press the Argentine President to agree to the establishment of a Regional Fisheries Management Organisation for the South West Atlantic and reiterate the Islands' right to develop a hydrocarbon industry. (Paragraph 386)

Gibraltar

40. We welcome the Cordoba Agreement and the progress being made on cooperation between Gibraltar, Spain and the UK in the Trilateral Forum. We note that the pensions settlement which was part of the Agreement was costly for the UK, but we welcome an end to the "pensions scam" and the removal of other potential liabilities on the UK. We recommend that the Government continues making strong representations to Spain and within NATO at the highest level about the unacceptability of Spain's continuing restrictions on direct naval, army and airforce movements or military communications between Spain and Gibraltar. We further recommend that the Government continues to make strong representations to Spain about its failure to recognise Gibraltar's territorial waters and its objections to international conventions being extended to Gibraltar. (Paragraph 414)

British Indian Ocean Territory

41. We conclude that any resolution to the UK's sovereignty dispute with Mauritius over the British Indian Ocean Territory must take Chagossians' wishes into account. (Paragraph 419)

Seabed claims

42. We conclude that the Government was right to submit a claim to the UN Commission for the Limits of the Continental Shelf for the seabed around Ascension Island. We recommend that the Government should submit a similar claim for the continental shelf around the Falkland Islands and South Georgia and the South Sandwich Islands. We also recommend that the Government should in its response to this Report state its current policy on seabed claims in relation to the continental shelf around the British Antarctic Territory. (Paragraph 427)

HMG's overall approach to the Overseas Territories

43. We conclude that the Government has acted decisively in some Overseas Territories, for example in the investigations and prosecutions that took place on the Pitcairn Islands. However, in other cases which should also cause grave concern, in particular, allegations of corruption on the Turks and Caicos Islands, its approach has been too hands off. The Government must take its oversight responsibility for the Overseas Territories more seriously - consulting across all Overseas Territories more on the one hand while demonstrating a greater willingness to step in and use reserve powers when necessary on the other. (Paragraph 437)

44. We also conclude that the choice of Governor for a Territory, and the levels of training and support they are given, are crucial. We welcome the recent upgrading of the Governor post in the Turks and Caicos Islands. We recommend that the FCO should give consideration to opening up appointments of Governors more frequently to candidates outside the diplomatic service. We also recommend that the Director of the Overseas Territories Directorate should become a more senior post. (Paragraph 438)

45. Finally, the Committee concludes it is deplorable and totally unacceptable for any individual who has assisted the Committee with its inquiry to be subjected to threats, intimidation, or personal sanctions or violence in any form. If the Committee is informed of any such retaliatory measures being taken against any person who has submitted formal or informal evidence to this inquiry, it will take all appropriate steps within its powers. (Paragraph 439)

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Further Information:

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The membership of the Committee is as follows: Mike Gapes (Chairman), Labour, Rt Hon Sir Menzies Campbell, Liberal-Democrat, Mr Fabian Hamilton, Labour, Rt Hon David Heathcoat-Amory, Conservative, Mr John Horam, Conservative, Mr Eric Illsley, Labour, Mr Paul Keetch, Liberal Democrats, Andrew Mackinlay, Labour, Mr Malcolm Moss, Conservative, Sandra Osborne, Labour, Mr Greg Pope, Labour, Mr Ken Purchase, Labour, Rt Hon Sir John Stanley, Conservative, Ms Gisela Stuart, Labour.

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