HOUSE OF LORDS Select Committee on Economic Affairs 2nd Report of Session 2006–07 The Impact of Economic Sanctions Volume II: Evidence Ordered to be printed 24 April 2007 and published 9 May 2007 Published by the Authority of the House of Lords London : The Stationery Office Limited £price HL Paper 96-II CONTENTS Oral Evidence Foreign and Commonwealth Office Written evidence 1 Oral evidence 27 June 2006 12 Dr Kern Alexander, University of Cambridge Written evidence 24 Oral evidence 4 July 2006 30 Mr Alex Singleton, Globalisation Institute Oral evidence 11 July 2006 39 Mr Carne Ross, Independent Diplomat Written evidence 43 Oral evidence 11 July 2006 47 Mr Alex Yearsley, Global Witness Oral evidence 18 July 2006 57 Mr John Hilary, War on Want Oral evidence 18 July 2006 65 Confederation of British Industry (CBI) Written evidence 70 Oral evidence 10 October 2006 75 Supplementary written evidence 79 Mr Joakim Kreutz Oral evidence 10 October 2006 80 European Commission Written evidence 85 Oral evidence 17 October 2006 91 The Lord Renwick of Clifton Oral evidence 17 October 2006 97 Dr Kim Howells MP, Minister of State, and officials, Foreign and Commonwealth Office Oral evidence 24 October 2006 101 Mr Alex Vines, Royal Institute of International Affairs Written evidence 107 Oral evidence 24 October 2006 109 Written Evidence British Bankers’ Association 114 British Exporters Association 116 Ms Rachel Barnes 117 Mr Jeremy P Carver 129 Council for Arab-British Understanding 133 Professor Margaret Doxey 138 European Banking Federation 142 Mr Mikael Eriksson 142 HSBC Holdings 147 Professor Peter Fitzgerald 149 Professor Michael P Malloy 158 Dr Colin Rowat 163 Mr H C von Sponeck 168 Mr Derek Tonkin CMG 170 United Nations Office for the Co-ordination of Humanitarian Affairs 175 Voices for Burma 176 NOTE: The Report of the Committee is published in Volume I, HL Paper No. 96-I The Evidence of the Committee is published in Volume II, HL Paper No. 96-II Evidence received by the Committee but not printed can be inspected through the Parliamentary Archives (0207 219 2333), email [email protected] 3576972001 Page Type [Ex 1] 30-04-07 19:04:19 Pag Table: LOENEW PPSysB Unit: PAG1 Minutes of Evidence TAKEN BEFORE THE ECONOMIC AFFAIRS COMMITTEE MONDAY 27 JUNE 2006 Present Kingsdown, L Sheldon, L Macdonald of Tradeston, L Skidelsky, L Paul, L Vallance of Tummel, L Powell of Bayswater, L Wakeham, L (Chairman) Oakeshott of Seagrove Bay, L Memorandum by the Foreign and Commonwealth Office 1. The notion that severe humanitarian costs from effective comprehensive economic sanctions can be avoided by exemptions appears to be fundamentally flawed. First, humanitarian exemptions will be permitted by those imposing them only at the margin so that the aim of severely weakening the economy of the target country in order achieve political goals is not undermined. The extensive exemptions necessary to avoid severe humanitarian costs would by their very nature mean that the sanctions were not comprehensive. In other words, severely damaging the economy of the target state is not separable from severe humanitarian costs. Second, when an economy is weakened severely, the most vulnerable, especially the poor, suffer the most. Third, the government of the target country will concentrate its remaining resources on prioritising itself and its supporters. Fourth, the government of the target country will have a major incentive to limit its cooperation with humanitarian exemptions in an effort to undermine the sanctions. Fifth, the governments of the sanction countries will have a major incentive to blame the government of the target country for any humanitarian costs in order to avoid modifying the sanctions. How would you respond to this assessment? The Government notes that the recent trend in UN sanctions has been towards the use of more targeted measures which are designed specifically to limit any humanitarian impact. There are currently no comprehensive UN sanctions in force. Where targeted sanctions are being used, these include humanitarian exemptions. For example, in the case of the travel bans in place against individuals in relation to Liberia sanctions there are provisions which allow travel for humanitarian purposes such as to receive medical treatment overseas. Such exemptions play an important role in alleviating any unnecessary impact which sanctions could have on a target. The Government believes that even where sanctions regimes have been extensive, the use of mechanisms to exempt the provision of humanitarian supplies can play a vital role. This was the case with the sanctions in place in relation to Iraq, where the Security Council agreed the operation of the Oil-for-Food Programme. The Programme made substantial progress in alleviating the situation of the Iraqi people, despite ongoing eVorts by the regime to frustrate such eVorts. The United Nations reported that the Programme helped increase the Iraqi ration and reduce the incidence of tuberculosis. UNICEF reported a reduction in the child mortality rate in northern Iraq. The World Health Organisation reported a reduction in the incidence of chronic malnutrition among children under five. The Government agrees that the objectives of the target state will often be at variance with the purposes of sanctions. However, the progress made in alleviating humanitarian suVering in the case of Iraq sanctions was achieved despite the Iraqi regime’s eVorts to frustrate and obstruct progress. This included attempts to block agreement on an Oil-for-Food Programme, failure to adequately distribute medical supplies and attempts to frustrate the work of international NGOs and UN humanitarian workers. 2. Would a finding of potential or actual severe humanitarian costs—for example by an expert panel advising a UN sanctions committee—trigger British support for the modification of such sanctions to ensure that such costs cease to be inflicted? Would it support their lifting should such modification be impractical? With the trend towards more targeted measures, the humanitarian impact of such sanctions has been minimised. However, the Government would take into account information about the humanitarian impact of sanctions, in line with its policy as set out in the 1998 Whitehall Review of Sanctions Policy announced 3576972001 Page Type [E] 30-04-07 19:04:19 Pag Table: LOENEW PPSysB Unit: PAG1 2 impact of economic sanctions: evidence 27 June 2006 to Parliament on 15 March 1999. The Whitehall Review concluded that better targeting of sanctions would minimise the risk of harm to ordinary people and that sanctions regimes should include exemptions to minimise the humanitarian impact on civilians. The precise way in which sanctions might be modified in the event of any humanitarian impact would depend on the specific situation. 3. In considering whether to impose, continue, modify or lift comprehensive economic sanctions, to what extent are the likely views of the population of the target population or the views of domestic or exiled opposition movements a consideration? In considering whether to seek the imposition, continuation, modification or lifting of sanctions, the Government has to weigh a number of factors, including the appropriateness of the measures proposed against the policy objective and, in the case of lifting sanctions, whether that objective has been met. The Government also needs to take into account the level of international support and the impact of the measures on the target’s population. All these can be aVected by the views of representatives of the target’s population and/or opposition groups. However, in the case of extensive measures, such as those in relation to Iraq, the nature of the regime holding power can make it diYcult to get an accurate and consistent picture of the population’s views. These views may also vary according to diVerent constituencies within the population. In the case of South Africa, the Government disagreed with the calls for sanctions from many representatives of South Africa’s black population. Whereas the calls for sanctions on Haiti by the deposed President Aristide and his supporters, were an important factor in generating international support for the measures taken in relation to Haiti. But in all cases, the Government’s support for humanitarian exemptions—the Oil-for-Food Programme being the most extensive—shows that as a matter of policy it seeks to limit the humanitarian impact of sanctions on the general population. 4. In the last three years, to what extent have UN panels of experts and sanctions reviews been successful in bringing about modifications of sanctions to improve their effectiveness and limit their humanitarian and other costs? The bodies of experts which monitor sanctions implementation play a crucial role in reporting on the eVectiveness of sanctions to the Security Council and in making recommendations for further modification. Only in the case of Liberia sanctions has a body of experts explicitly been mandated to consider the humanitarian impact. However, there are a large number of instances where sanctions have been modified in the light of UN expert reports and reviews of sanctions. These include the greater use of targeted sanctions against individuals in respect of Democratic Republic of Congo (DRC) in 2005, Cote d’Ivoire and Sudan in 2006 and the widening of the scope of the arms embargo in relation to DRC in 2005. In the case of Liberia, the Security Council decided in 2006 to suspend the timber ban for 90 days, while expressing its intention