Common Fund for Commodities (Immunities and Privileges) Order 1981

HL Deb 07 December 1981 vol 425 cc1210-4

3.20 p.m.

Lord Trefgarne rose to move, That the draft order laid before the House on 19th October be approved.

The noble Lord said: My Lords, I beg to move that the Common Fund for Commodities (Immunities and Privileges) Order 1981 be approved. With your Lordships' permission, I will speak at the same time to the International Natural Rubber Organisation (Imminities and Privileges) Order 1981. These orders, which are made under the International Organisations Act 1968, were laid before Parliament on 19th October.

The purpose of the first order is to confer on the Common Fund the immunities and privileges which the organisation's members are required to grant under the terms of Chapter 10 of the Common Fund Agreement. As many of your Lordships may know, the formation of a Common Fund for commodities was proposed at the United Nations Conference on Trade and Development at Nairobi in 1976. Subsequent negotiations led to agreement on a treaty text in 1980 which we signed in December that year. The agreement will come into effect when it has been ratified by 90 states which between them provide the necessary contributions to the two accounts which comprise the fund. The deadline for this is the end of March next year. So far 69 states, including 47 developing countries, have signed the agreement, and 12 of these have ratified. One of our partners in the European Community, Denmark, has already ratified the agreement. Others will do so as they complete the necessary formalities. For our part this order will complete our own procedures, allowing the United Kingdom to ratify the agreement.

The fund will support the operations of the international commodity organisations which associate themselves with it. Commodity organisations which operate buffer stocks and meet other requirements could draw on the first account of the fund. An example is the International Natural Rubber Organisation which is the subject of the second order before your Lordships. To do this, the individual commodity organisation must deposit with the fund one-third of the amount of money required to finance its buffer stock. It can then draw on this sum as it needs it. If it needs more, it can borrow from the fund against the security of guarantees from its own members and warrants for the stock it has acquired. The fund in turn will provide these loans either from the unused cash deposited by other commodity organisations, or borrow, if necessary, from the commercial market. The first account of the fund is therefore intended to provide a reserve of finance to reduce the direct cash contributions by the members of the individual commodity organisations.

The fund will also operate a second account, financed by voluntary contributions, to pay for other measures such as research and development which will be carried out by individual commodity organisations. So far no organisations which would draw on the second account only have been established, though there is a possibility that the negotiation of an international jute agreement may be concluded in the New Year, and discussions on tropical timber are making steady progress. The Government have made a voluntary pledge of £4.3 million to the second account. We expect that this sum and the paid-in part of our assessed contribution to the first account will be required during the first four or five years of the fund's operations.

The Government have welcomed the creation of the fund, and have invited the organisation to site its headquarters in London. The Dutch and Philippine Governments have issued similar invitations, but no decision has yet been taken. Should the fund not establish its headquarters here, then clearly the effect of the orders we are considering will be slight. It will however facilitate such activities as the fund might engage in here—like placing contracts or arranging meetings. But if the fund sets up its headquarters here, as we very much hope, then the effects of this order are such as to treat the fund on all fours with other comparable international organisations.

I now turn to the second draft order before your Lordships which concerns the International Natural Rubber Organisation. This is one of the international commodity organisations which is expected to associate with the Common Fund. The organisation is to operate a buffer stock to help to stabilise the price and supply of natural rubber, thereby benefiting both producers and consumers of this important commodity.

We and 28 other countries brought the International Natural Rubber Agreement into force provisionally in October last year. In order to bring the agreement into force definitively it must be ratified before the end of this year by countries who between them account for 80 per cent. of both production and consumption of the world's natural rubber. Enough producing countries have now ratified and the target for consuming countries will be met when we and our partners in the European Community join the United States and other consuming countries which have already done so. The making of the order will enable us to do this.

The headquarters of the organisation is situated in Kuala Lumpur. Unlike the Common Fund Agreement, the natural rubber agreement requires that we do no more than accord legal personality to the organisation. The order does no more than that. Its effect will, therefore, be very much more limited than the order for the Common Fund. The United Kingdom would very much welcome the opening of a branch office in London by the organisation. In that event, the approval of Parliament would, of course, be sought to any order conferring immunities and privileges on the office and its staff.

I very much hope, therefore, that your Lordships will also approve this second draft order, thereby signifying your Lordships' recognition of the important work to be performed by the International Natural Rubber Organisation. I beg to move the first motion standing in my name on the Order Paper.

Moved, That the draft Common Fund for Commodities (Immunities and Privileges) Order 1981, laid before the House on 19th October be approved.—(Lord Trefgarne.)

Lord Brockway

My Lords, as one who over the years has urged support for the Common Fund both from Labour Governments and Conservative Governments without much success until recently, I should like to welcome the decision of the Government, inadequate though it is.

3.28 p.m.

Lord Davies of Leek

My Lords, having heard the Minister's clear exposition, I think that, to save the time of the House, I shall reply to both orders because from looking at them and from where they originate there can be no doubt that the noble Lord and the other side of the House will get full support for the order that is being moved.

I turn first to the rubber agreement. As one of the people who worked for many, many months on the commodity agreements—and we had the opportunity of calling on people, discussing the matter with various persons and digesting papers—it is of paramount importance that, so far as the commodity of rubber is concerned, we do not once again see, as some of us saw in the 'thirties, the tragic collapse of rubber agreements. It is fascinating to notice that if we look at the countries that are included in both these Common Fund agreements we find that, despite what we sometimes hear referred to as powerful warlike talk, the exigencies of economics and the necessity of people learning to live together force into committees men with many opposite points of political view.

It is good to see the Socialist Soviet Republics and the United States on both papers. In the one case there were 170 nations and in the other there were 50 nations which sat together to discuss the vital problems of the allocation of necessary supplies throughout the world for mankind. I pay tribute to all the Governments concerned—there happens to be a Government of a different political colour at present—for their constructive work of bringing together to fruition the Common Fund.

If noble Lords wish to look at it further—and I shall not quote from it and take up the time of the House—the agreement establishing the Common Fund for Commodities, which was discussed in New York in 1980 and 1981, is Cmnd. 8192. The Natural Rubber Agreement is Cmnd. 8018. I shall assume that this House would not like to me read out chunks of it, for noble Lords can read it for themselves, but I simply want to add what I would call a little caveat. Before I go into the matter of immunities and privileges, the idea of buffer stocks has been discussed for many years. All that we on both sides of the House can do is hope that we find a successful solution to this problem of the distribution, consumption and reasonable price of natural rubber.

Do these two orders imply an extension of the Diplomatic Service? They will probably involve the provision of staff for services. I see that the noble Lord, Lord Trefgarne, is shaking his head and I am glad of that, but if the organisation comes to London, as he says, there may be problems in that direction. I shall not take a long time, but I should like to raise one or two matters.

The Common Fund will be negotiating not only with Commonwealth countries but with foreign countries and, from time to time, with diplomatic missions; and policy objectives will be needed in order to administer the fund. Britain has varied and wide overseas relations, and not many men in the street realise that, according to the official handbook for this year, Britain 1981, we had diplomatic relations with 150 countries and 20 of these have special treaty relations and special immunities. Despite our economic and social problems at home, it is often forgotten that British development assistance is providing for more than 130 countries. In itself this fund will mean that for the British taxpayer there will be a need for taxation to meet these obligations to the underprivileged, and the British Government, whatever party may be in power, must have continuity of foreign policy.

As the world is growing smaller, immunities and privileges grow; through modern, sophisticated and instantaneous communications—teleprinters and satellites—the smallness of the world is making these immunities and privileges grow. It would be interesting to know how many organisations have immunities and privileges. Before this noble House passes this order, can the noble Lord briefly tell the House what those immunities and privileges really mean?—because from time to time one has seen in the press criticisms of the privileges that some people retain. Nevertheless, it is recognised that in an increasingly interdependent world the attainment of overseas objectives and the ability to exert influence in support of them can be provided only through international co-operation. If we are to have that international co-operation, at times it is absolutely necessary for immunities and privileges to exist to cover those important discussions and the people who take part in them.

Will many organisations, like the International Monetary Fund and the Export Credits Guarantee Department, also be involved? There is a criss-cross of responsibilities; sometimes there is overlapping. Can it be avoided? Those of us who have experienced discussions at international conferences both here and elsewhere often believe that an overlapping and a waste of effort take place. This is no criticism of the Government, but life has become so complex that it is time to reconsider the number of international organisations that are increasingly growing in the need to build up a civilised system of society.

This fund has grown out of the second Lomé Convention, as noble Lords will see if they look at the White Paper; and I promise not to read it. This not only brings in the Commonwealth, but it will ultimately bring in the North-South dialogue or the Brandt Report, and the ACP countries—Africa, the Caribbean and the Pacific areas—and Asia. At the Venice Summit in June 1980 these points were discussed. A number of commodities are exempt from terrific increases in taxation. When this fund is established—we use the phrase, Stabex, meaning to stabilise exports—in many cases it is liable to help areas (in particular areas which have been exploited for phosphates and very rare and important minerals) to obtain an economic price and value for their natural resources.

I see that I have been speaking eight minutes, which is quite enough on an important and agreed order like this. Without taking up too much time of this noble House, I simply want to say that we, on this side, congratulate the Government on pushing this forward, and in this direction it would be churlish of me not to give them more strength to their elbow for establishing these funds as being a concrete process towards better international understanding and thereby helping the underprivileged nations.

3.37 p.m.

Lord Trefgarne

My Lords, I am greatly obliged to the noble Lord, Lord Davies of Leek, for his general reception to these two orders. I shall simply take the points that he raised with me. I understand that there are 26 international organisations which enjoy these privileges in London at the present time. That excludes the Commonwealth Secretariat, which is perhaps not quite in the same class. There are 11 high officers, as they are called, of those organisations who enjoy certain personal privileges with regard to their official acts, and 1,071 other officers.

The general policy of Her Majesty's Government in regard to privileges and immunities of international organisations is that they should be granted primarily on a basis of functional need. The principle of the independence of the organisation and the equality of its member states, in particular that no state should derive undue fiscal advantage from the funds of the organisation, are also important considerations. Your Lordships may well feel that it would not be appropriate for me to go into further detail on the general principles on this specific order, but I hope that I have said enough to set the noble Lord's mind at rest.

On Question, Motion agreed to.