European Bank for Reconstruction and Development (Hansard, 13 March 1991)

§ The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd)
I beg to move, That the draft European Bank for Reconstruction and Development (Immunities and Privileges) Order 1991, which was laid before this House on 8th March, be approved. I shall be brief, but I must make a few introductory comments, as I have been requested to do so. The debate is about the European bank for reconstruction and development. I am delighted that the bank has chosen London as the location of its headquarters—[HON. MEMBERS: "Hear, hear."] I am glad that hon. Members of all parties join me in expressing that welcome.
Specifically, the debate is about the privileges and immunities which are necessary to fulfil our obligations under the agreement which has established the bank and its headquarters in London. The privileges and immunities give no more than is necessary for the effective operation of the bank in London. What I propose is standard practice for institutions of this kind.
The order needs to be formally made at the next meeting of the Privy Council on 20 March so that the headquarters agreement can be signed at the inaugural meeting of the bank on 15 April, which will be a most important occasion at which the Prime Minister, President Mitterrand and the governors of the bank will be present. The agreement will come into force on signature——

§ Rev. Ian Paisley (Antrim, North)
Will the hon. Gentleman assure the House that the order in no way gives any power to the bank over and above the internal affairs of our own banking arrangements in this country?

§ Mr. Lennox-Boyd
It gives no powers of that kind. I shall give some more details, and the hon. Gentleman can then judge them.
We had a general debate about the establishment of the bank last July when my right hon. Friend the Minister for Overseas Development informed the House that the Government would be presenting this order for approval once the negotiations for a headquarters agreement had been completed. That has happened, and the headquarters agreement has been laid before the House.
In the debate last July, the House discussed an order which gave effect to the immunities and privileges of the agreement establishing the bank. The order before the House today will revoke that 1990 order and replace it with fresh provisions which will consist of the provisions in the 1990 order and certain new immunities and privileges negotiated for those connected with the bank.
The privileges and immunities in the 1990 order were given by the House and by every member of the bank. The new immunities and privileges to which I shall refer relate to not the establishment of the bank but its siting in London. To recap briefly on the debate last July, the privileges and immunities debated then and now produced in this order include certain exemptions from duties and taxation for the bank and certain immunities from seizure of its property. The officers and employees of the bank are exempted from taxation on the salaries paid to them by the bank, although they will pay an internal tax for the benefit of the bank. They will be immune from suit and legal 1069 process in respect of their official acts. Legal status is conferred on the bank by the order. That order is to be revoked and reincorporated in the new order with further provisions on which I shall touch briefly.
The further provisions relate to privileges and immunities which the House has not had chance to discuss before. They give effect to the draft headquarters agreement and result from the bank and its staff being located in London. They are complicated and, of course, I can give further details in response to any inquiry. Briefly, the privileges and immunities include immunity of the bank within the scope of its official activities from legal proceedings, subject to certain specified exemptions, and inviolability for the bank's premises.
Persons connected with the bank, including officers and employees, experts performing missions for the bank and representatives of members of the bank are granted varying privileges and immunities according to their status. However, those who are British citizens or permanent residents of the United Kingdom receive only the essential minimum privileges and immunities to enable them to perform their official functions.
All the proposals are common practice in institutions of this nature. I should add that the Joint Committee on Statutory Instruments has drawn the attention of the House to two points on the drafting of article 6 of the draft order. That article regulates the inviolability of the bank's premises. The order before the House has been amended to meet the objections made by the Committee. I commend the order to the House.

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
First, I thank the Minister for his careful and helpful introduction to the order and for his courtesy in explaining it to me informally before the debate. The Opposition join the Government in welcoming the location of this important institution in the United Kingdom and we greatly welcome its role and function. That welcome was extended in great detail by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd).
However, it is most regrettable that the Government made something of a dog's breakfast of getting the order through the House. All credit must go to the Joint Committee on Statutory Instruments for helping to sort matters out and to my hon. Friend the Member for Bradford, South (Mr. Cryer), the Chairman of that Committee. However, the Opposition recognise the importance of getting the order to the Privy Council next Wednesday so that there will be no undue embarrassment when President Mitterrand and the Prime Minister take part in the ceremony later this month.
Therefore, we shall support the order, although there is a growing feeling among Opposition Members that the number of international organisations with immunities and privileges is growing rapidly. It is about the only growth industry in the United Kingdom, and we hope that the Government will keep a tight rein on it. I know that, in this instance, they have been cautious about the number of members of staff allocated privileges, for which I commend them. Notwithstanding those points, there are no substantial reasons why the order should not be 1070 approved by the House. We do not oppose it, and we look forward to its safe passage through this House and the other place.

§ Mr. Bob Cryer (Bradford, South)
I shall make only a few brief remarks because, as both Front-Bench spokesmen said, the order has been dealt with by the Join Committee on Statutory Instruments, one of the less glamorous of the Select Committees of the House which does a useful and important job in scrutinising, not the merits of statutory instruments, but their technical proficiency. The original draft order was defective. Although it was authorised under the International Organisations Act 1968, the agreement establishing the European bank for reconstruction and development provided for a number of qualifications to the inviolability of the bank's premises which the order sets out to establish.
Section 6 of the agreement gave two qualifications. The first, 6.2, stated: The Bank and the Government shall agree under what circumstances and in what manner any such official may enter the Premises of the Bank without the prior consent of the Bank in connection with fire prevention, sanitary regulations or emergencies. Clearly, those are sensible qualifications to allow access to the bank and qualify the inviolability of the bank's immunity.
However, that section was not included in the first draft order, and after representations by the Joint Committee on Statutory Instruments, the Foreign and Commonwealth Office withdrew the original order and relaid the order —incorporating that section—which we are considering tonight.
However, the Foreign and Commonwealth Office did not include article 6.3, which provides that the bank shall allow duly authorised representatives of public utilities to inspect, repair, maintain, reconstruct and relocate utilities, conduits, mains and sewers within the Premises of the Bank and its facilities. The argument that the Foreign and Commonwealth Office used was that, when the agreement was reached on the European bank for reconstruction and development, it was "understood"—the word used in its memorandum —that it was one of a class of provisions that imposed obligations on the bank exclusively under international law. I find it curious that inspection, repair, maintenance and relocation of utilities, conduits, mains and sewers within the bank's premises should be subject to international, not domestic law. I should have thought that sewers were very much a matter for domestic, not international, law.
Therefore, we have drawn the attention of the House to the instrument, which is noted on the Order Paper, not because of any specific headings under which we are required to report instruments to the House—for example, if they go beyond the Minister's powers or involve unusual use of powers—but on the residual power that we have to draw attention to the unusual use of an instrument, which we are doing.
The extract from the 14th report of the Joint Committee on Statutory Instruments is available in the Vote Office should any hon. Member wish to obtain it —several already have. I cannot imagine that there has been a huge rush to obtain it. However, it is available and, of course, in presenting a report to the House, we are 1071 obliged to include the memoranda from the Foreign and Commonwealth Office. I hope that the Minister can explain why sewerage in such cases is subject to international law. His reply will be interesting.

§ Mr. Lennox-Boyd
I am pleased to say that I think that I can provide an explanation. I am grateful to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) for his kind words. I am sorry if he or any of his colleagues suffered any discourtesy or inconvenience. It was unfair of the hon. Gentleman to suggest that the Foreign and Commonwealth Office was at fault. The hon. Gentleman and the hon. Member for Bradford, South (Mr. Cryer) will know that the interpretation of legal drafting is not an exact science. The legal department accepted the alternative view of the Joint Committee and acted accordingly. It was a matter for debate, but, naturally, the department wished to afford the Joint Committee the courtesy of accepting its view and that view was incorporated. That is the reason for the delay and why the matter is before the House.
I shall now deal with the matters raised by the hon. Member for Bradford, South. We are affording diplomatic immunities to the bank. The hon. Gentleman spoke about the provision in article 6.3, in which we are breaking new ground in our agreement with the bank. By derogation, we are reducing the full diplomatic immunity that is normally accorded to diplomatic institutions. that part of the negotiations was hotly debated, but the Government's view prevailed. It was decided that it would be improper to incorporate that derogation in our domestic law because those who represented the bank and accepted the derogation felt strongly about the matter. They agreed to abide by the decision as a matter of international law, but did not wish to have this diminution of their diplomatic rights, as they saw them, incorporated in British law. They have undertaken to allow inspection. Emergency inspection is enshrined in article 6.2 and they have accepted the need for access for such inspection. However, they have not accepted the incorporation in British law of the need for general access by public utilities. As I said, they are happy to agree to it under international law. I hope that my explanation satisfies the hon. Member for Bradford, South.