Foreign Compensation (Amendment) Bill [H.L.] (Hansard, 5 November 1992)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, I beg to move that this Bill be now read a second time.
The House has before it a short technical Bill to amend the Foreign Compensation Act 1950. The Bill enables the Foreign Compensation Commission to act in those cases where Her Majesty's Government receive, or expect to receive, compensation for losses overseas from, or through, an international organisation or tribunal. The key reason for the Bill is to cope with claims against Iraq following its illegal occupation of Kuwait from August 1990.
As the introductory memorandum to the Bill explains, the commission may presently be empowered to act only where the Government enter into an agreement under which compensation is to be paid by another country or in anticipation of such an agreement. As an independent statutory judicial body, the commission is able to bring special administrative and legal skills into the determination of individual claims which Her Majesty's Government have espoused and into the equitable disbursement of any funds received in settlement.
When the Foreign Compensation Act was passed in 1950 it was not anticipated that there would be a situation in which compensation would flow through an international organisation or tribunal. We now face that very situation as a consequence of the Gulf war.
Last year the United Nations Security Council established the United Nations Compensation Commission and Fund in Geneva under the provisions of Security Council Resolution 687. This will cope with the great mass of claims against Iraq that will arise. Some 3,000 of these claims will be British—over 2,000 from individuals—the remainder from companies.
We still wait for Iraq to resume exporting oil in accordance with Security Council Resolutions 706 and 712 which will ensure proper funding for the compensation fund. Meanwhile, the United Nations has given authority for certain Iraqi frozen assets to be temporarily sequestered for compensation and other purposes.
Also, the commission's governing council is well ahead with setting up the necessary administrative machinery. It has agreed many of the criteria against which claims will be assessed. They are based on established principles of international law. The commission is already beginning to receive consolidated batches of claims from governments for assessment. In due course, compensation will be allocated to governments for distribution. As yet it is not clear whether there will be specific amounts nominated for individuals, or whether governments will be given overall sums to allocate themselves. The Government will need also to be prepared to make a final adjudication of large or complex claims should 1546 this be required. Amending the Foreign Compensation Act in the way suggested will provide us with the appropriate means to this end.
In putting forward this proposal, we have taken the opportunity to consolidate previous amendments to Section 3 of the 1950 Act. In future, all those matters which may be provided for by Orders in Council will be listed in one place. I trust that the Bill will commend itself to your Lordships.

§ Lord Judd
My Lords, we welcome the Bill which, as the noble Baroness has so well explained, meets the need which 'became evident in the aftermath of the Gulf war. We should like to take this opportunity to commend the United Nations on the speed with which it has moved following the end of that war. However, there are several specific points on which it would be helpful if the noble Baroness could clarify the situation.
First, can she indicate how many claims for compensation the Government expect to receive or have already received as a result of the conflict? Secondly, can she advise the House of how the United Nations Compensation Commission will treat claims arising from losses caused by compliance with the trade embargo? Finally, given that the whole system of compensation payments will depend on the resumption of Iraqi oil sales, can the noble Baroness advise the House of any progress that has been made recently towardś achieving a full diplomatic settlement with the Iraqis?
Subject to satisfactory clarification on those points, I should like to assure the noble Baroness that we on this side of the House will be glad to support the Bill.

§ Baroness Chalker of Wallasey
My Lords, I should like to try to respond to the points raised by the noble Lord, Lord Judd. As I said in my opening remarks, we know already of some 3,000 British claims. We do not have the figures for other nations' claims. More than 2,000 of the claims registered here are from individuals. The remainder are from companies. At this moment I cannot give the noble Lord any exact figures for claims from other nations but I will inquire for him of the United Nations whether it has such figures and let him know about them.
The noble Lord also asked whether those individuals who had complied with the trade embargo would be covered by this compensation. I understand that once the embargo was in place everyone was bound by it and therefore they would not be able to claim compensation; otherwise, we would have a never ending situation occurring. I cannot see that there would be compensation for those who newly entered into any arrangement which was caught by the embargo. However, it is for companies or individuals to make claims.
It may be helpful to your Lordships if I give some indication of the categories of claims which are envisaged. To help funds flow more quickly once they are available, three categories have been established for expedited claims from individuals by the governing council of the UN Compensation Commission. They 1547 are fixed amounts of 2,500 dollars or 4,000 dollars per person or 5,000 dollars or 8,000 dollars per family for departure from Iraq or Kuwait. They, of course, were the poor souls whom I met in the desert in Jordan as they fled for their lives in September 1990. The higher figures would be payable when an individual or family agree to waive further claims. The lower figure would still entitle them to make further claims. The second category of claim are fixed amounts of 2,500 dollars per individual with a 10,000 dollar family ceiling as an early interim relief for death or serious personal injury, including mental pain and anguish. Those would be adjusted by expert assessors.
The third type of claim will be claims up to 100,000 dollars covering all losses, including individual business losses. The commission will then deal with claims by individuals for more than 100,000 dollars. Company claims for which criteria are being finalised, governmental claims and claims by international organisations are the three final categories which are, as yet, not spelt out. Obviously many people employed in Kuwait were from the sub-continent. The bulk of the claims is expected to be received from them. We do not yet know the individual numbers. When we do have that information, I shall write to the noble Lord, Lord Judd, on the matter.
As regards the noble Lord's third question about the way in which we are proceeding to obtain agreement—or, perhaps, I had better say, gain acceptance—from the Government of Iraq for Security Council Resolutions 706 and 712, I very much regret to tell your Lordships that no progress is currently being made. However, that does not mean that efforts are not continuing; indeed, such efforts are continuing.
I hope that my few remarks in response to the noble Lord, Lord Judd, will reassure both him and your Lordships that the Bill should be given a Second Reading. I believe it is right that we should do everything we can to ensure that the necessary administrative arrangements are in place quickly for the UN Compensation Commission in Geneva. We are busy preparing the ground. The claims will be examined as early as possible and then payments will be made to claimants as soon as the funds become available. I hope that your Lordships will give this important Foreign Compensation (Amendment) Bill a Second Reading.