EUROPEAN PARLIAMENT 2014 - 2019 Delegation for relations with South Asia DRAFT REPORT on the 10th EP/Pakistan Interparliamentary Meeting (Islamabad & Lahore) 16 / 20 February 2015 by Ms. Jean Lambert, Chair of the Delegation ------------ 05/03/2015 PK/am 1/18 EN EN Introduction The last time the EP South Asia Delegation also led by Ms Jean Lambert MEP, visited Pakistan, was in late 2012; the country was already in pre-electoral mood, 6 months before the elections that saw the victory of the PML-N. This was the first democratic transition from one elected civilian government to another in Pakistan’s modern history – and recognised as such by the EU, which fielded an EOM led by Chief Observer Michael Gahler MEP; Richard Howitt MEP had led, at the time, the EP Delegation which was part of the overall observation team. The 2012 talks had focused on the steps taken by Islamabad in rule of law and good governance issues, which had helped the country successfully apply for the EU’s special incentive arrangement for sustainable development and good governance – or, more colloquially, the GSP+ scheme, in effect since 1.1.2014. This arrangement, which was examined by the EP Plenary in December 2013, entails enhanced trade preferences, i.e. the full removal of tariffs on essentially the same products as those covered by GSP. MEPs had thus welcomed the ratification of all the major human rights conventions directly linked to the scheme, as well as the lifting of a series of reservations on many of those, such as the ICCPR or the CAT. It should be recalled that the D-SAS had already raised, repeatedly, the need to withdraw or reformulate these reservations in the context of its previous mission to the country in November 2010. As to the EP as a whole, it has since often examined developments in Pakistan – with the last related resolution being passed by the House on 15 January 2015. Making the most of their four days on the ground, the EP Delegation met with a wide range of stakeholders in Islamabad and Lahore; this included Prime Minister Nawaz Sharif, Speaker of the National Assembly Sardar Ayaz Sadiq, the EU-Pakistan Parliamentary friendship group led by Minister for Commerce Khurram Dastgir Khan, and Foreign Affairs Advisor Sartaj Aziz. More specialised meetings took place with Punjab’s GSP+ compliance committee presided on this occasion by the Chief Minister of Punjab Shahbaz Sharif, newly appointed Chief of the Election Commission Justice Sardar Muhammad Raza, Interior Secretary Shahid Khan, as well as think tanks (Institute for Strategic Studies, Research Society on International Law), civil society, business community and trade unions. The mission furthermore included visiting, and assessing by way of separate reporting sheets, two EU-financed projects: one linking trade with water & sanitation (water recycling) in Lahore, and the IP3 programme to increase parliamentary capacity – strengthen democratic oversight of the National Assembly in Islamabad, in direct follow-up of the EU-EOMs recommendations. On the eve of their departure, MEPs also had the opportunity to appreciate Pakistan's vibrant cultural scene by participating in the EU-sponsored Lahore literary festival – and of raising EP visibility in this respect, with the participation of the Chair in one of its main panels. The EP Delegation wishes to express its gratitude to all diplomatic authorities in Pakistan for the facilitation of this visit. In a similar vein, preparatory meetings with the EEAS in Brussels allowed identifying in advance the main priorities and agenda issues to be discussed. Against this backdrop, the EP Delegation was happy to be able to count on the expertise of M. Sajjad Karim MEP, Chair of the Monitoring Group for South Asia of the EP’s International Trade Committee. Last but certainly not least, the EU Delegation in Islamabad spared no efforts, despite operating in a sometimes challenging environment, in devising an intensive programme of activities and meetings, which allowed the EP Delegation to better grasp realities and be able to thus report back to line Committees (AFET; DROI; INTA) on the current situation and issue policy recommendations. 2/18 EN EU/Pakistan relations Since 2001, EU policy has been to stay constructively engaged with Pakistan - and the 2013 and 2008 EOMs were generally felt to have been instrumental in establishing EU credibility in this engagement. The EU and Pakistan also signed, in January 2012, a 5-year Engagement Plan - not a legal instrument replacing the existing cooperation agreement but, rather, an umbrella framework to further develop bilateral relations beyond traditional areas, thus covering six areas of common concern (including political and security cooperation or counter- terrorism). A Strategic Dialogue has also been established – the last taking place in March 2014, three months after the country started benefiting from GSP+. Prime Minister Nawaz Sharif thus underlined that relations with the EU were "now moving, beyond trade alone to a new strategic level", also looking forward to working with the newly elected European Parliament. Foreign Affairs Advisor Sartaj Aziz stressed for his part, the value of the roadmap on EU-Pakistan relations, hoping that a 3rd EU-Pakistan summit would take place in 2015 – while stressing the value of the on-going Human Rights dialogue and the good work done in a joint readmission committee setting. GSP+: a new paradigm? The EP Delegation repeatedly stressed the need of effective implementation of the 27 international conventions linked to the GSP+ scheme, in particular in view of the 2016 review process – and explained that the European Parliament, as an institution, was now a stakeholder in the scorecard exercise – with the relevant services of the European Commission expected to present to the EP the results of this on-going monitoring by January 1st 2016. Not a single interlocutor met by the EP Delegation during its stay in the country appeared to ignore the GSP+ scheme;: “a shining light”, in the words of Commerce Minister Dastagar Khan. EU market access facilitation had had benefits of such a magnitude “that we are still evaluating them”. Most stakeholders saw in the scheme the proof of the significance the EU attached to its relations with Pakistan: the increase in Pakistani exports to the EU in 2014 by over one billion USD was concrete evidence of how GSP+ was yielding results. For Minister Khan, there were already clear positive effects in terms of youth employment and women employment; given the surge of exports of ready-made garments, where women are predominantly employed, there was “a direct correlation”. 3/18 EN The scheme had helped “keep Pakistan afloat in very difficult times”, also conveying the message that “we are not just exporting bombs” – which was an image to be dispelled. Especially after the Peshawar bombings, this concrete proof of EU support to Pakistan’s democracy was very much appreciated. The PML-N mantra, Minister Khan recalled, was achieving a ‘sustainable democracy’. In this sense, GSP+ was “an additional incentive for us to do so and makes our case easier in Government”. This said, both Members and Minister Khan agreed that the priority ought to now be diversification, moving from textile exports to commodities such as leather, agricultural products, fruits and vegetables – while meeting EU health standards. The EP Delegation further met in Lahore, the All-Pakistan Textile Mills Association – insisting on the need to see that the benefits of EU market access would also trickle down to the workers rather than be translated in ‘property development in Dubai’, in order to be of profit to Pakistan’s economy as a whole. Commerce Minister Khan had already stressed that the business community was very much aware of the fine print, related to the implementation of the 27 international conventions ratified by Pakistan on good governance, rule of law, human rights, environment – and had taken concrete steps in this direction (the Pakistan Textiles Exporters Association – ILO agreement was mentioned in this respect). Minister Khan insisted that “for us, compliance with labour standards is not seen as a impediment, but as a strength – this is how we can attract worldwide investment”; he felt that “most of the large manufacturers are already in compliance”, stressing that the situation in Pakistan was far from being comparable to a Rana Plaza type of image. Trade-unions met in Lahore, were however less upbeat – stressing that the Government ‘would always paint a very rosy picture’, preferring to turn a blind eye to the fact that the minimum wage, as per law, would often not be paid or that safety conditions and labour standards in the workplace would not be respected: the whole of the country, with less than 400 labour inspectors, faced a real problem of implementation in labour law terms. Likewise, enforcing provisions on each worker having a valid social security card or on the health and safety standards in the work place were a known problem. In Lahore alone, there were about 14,000 unregistered manufacturing companies, making law enforcement a real challenge. Beyond this issue, the EP Delegation was told that, in the whole of the country, about 20 million workers were employed in brick kilns under conditions that could be described as bonded labour – and where GSP+ was not really a direct incentive. The problem was not so much lack of legislation –existing since 1992- but of implementation. Some slow progress had been taking place, but it was very difficult to ensure that GSP+ would really trickle down to the informal sector. This was also a matter of political will, in a country where, in the past, social movements had been seen as a mere law and order issue, and trade-unionists even charged on anti-terrorism grounds – which perhaps explained why the percentage of trade-unionised workforce was at a bare minimum (circa 2%).