Advisory Centre on WTO Law (Immunities and Privileges) Order 2001 (Hansard, 8 May 2001)

§ Baroness Ramsay of Cartvale
rose to move, That the draft order laid before the House on 10th April be approved [14th Report from the Joint Committee].
The noble Baroness said: My Lords, the draft order will enable the United Kingdom to ratify the agreement establishing the Advisory Centre on WTO Law which was signed by the Secretary of State for International Development and presented to Parliament in May 2000 (Command Paper 4721).
The Advisory Centre on WTO Law will be located in Geneva and will be independent of the WTO. It will provide free or low cost support to WTO developing countries pursuing cases through the dispute settlement mechanism. The centre will assist developing countries to make use of the dispute settlement procedures, an area where developing countries are at a particular disadvantage compared to larger trading nations. The centre will also offer seminars on WTO jurisprudence, general legal advice on WTO law and an internship programme for officials.
The agreement establishing the centre includes provisions (Article 10.1) requiring members to give the centre legal capacity, in particular the capacity to contract, acquire and dispose of immovable and movable property and to institute legal proceedings. The draft order will enable the UK to give effect to these provisions once the agreement has been ratified and enters into force. The draft order will confer only legal capacity on the centre and will not result in any privileges and immunities in the United Kingdom for the centre or its staff. Similar legal personality has been granted to other international organisations in the past. for example, the International Jute Organisation based in Dhaka, the International Natural Rubber Organisation in Kuala Lumpur and the International Copper Study Group in Lisbon.
The final deadline for entry into force is 30th September .2002, but the centre's members have informally agreed that this should be brought forward to the earliest practicable date so that the centre will be able to offer its much-needed services as soon as possible. Entry into force requires only 20 signatories to deposit their legal instrument of ratification, acceptance or approval, a threshold which is likely to be passed before the end of this month in fact. Where United Kingdom ratification is critical is in meeting the second criterion for entry into force: the receipt of 12 million dollars to fund the centre's operation (6 million dollars of multi-year contributions from developed country members of the centre to cover start-up and running costs during the first five years and 6 million dollars for its long-term endowment fund). Once the UK instrument of ratification has been lodged with the Dutch Ministry of Foreign Affairs, which is acting as depository for the agreement, DfID will be in a position to release the first tranche of its £1.2 million multi-year contribution which will meet this second threshold.
992 I very much hope that your Lordships will approve this modest, non-controversial order. I beg to move.

§ Baroness Rawlings
My Lords, I thank the Minister for the clear way she presented the order to the House. We welcome in principle establishing the advisory centre on World Trade Organisation law. We are also pleased to have the opportunity today to follow up the short but detailed debate that was held in another place on the order. It is important that we have had time to scrutinise the draft order as that is the proper job of your Lordships' House.
This order is timely, with the heated debate on globalisation and with so many unruly demonstrations around the world. The "Immunities and Privileges" title of this statutory instrument is provocative in itself—enough to make any rebel demonstrator over-excited. It is all that they would abhor even without, as mentioned in another place, the frivolous suggestion of parking ticket fines for diplomats.
We do not intend to oppose the order. However, I should like to pose a few questions, some of which were left unanswered in the other place. We agree with what was said in the speech of the Director-General of the WTO in January of this year—that the one major priority is to bring the developing and the least developed countries more fully into the WTO. This is a step along the way. For the agreement to enter into force, two conditions have to be met: the deposit of the legal instrument of ratification/acceptance by at least 20 signatories; and the presence of 12 million dollars of financial contributions reflected in these deposits, consisting of 6 million dollars for the endowment fund and 6 million dollars of multi-year contributions by developed country signatories. Thirty days thereafter the agreement enters into force.
Indeed, as of 21st March 2001, the preparatory committee agreed on the nominations for the management board of the centre, going so far as to invite the management board to start recruiting the executive director in consultation with the signatories while they await the deposit of the few remaining instruments of ratification, one of which is that of the United Kingdom. The agreed objective is to appoint the selected candidate for the post of executive director in the joint meeting of the constituent General Assembly and the management board so that the director could start up the office immediately afterwards.
Financing of the centre raises some interesting questions. Can the Minister help us by telling the House why the United States and EC countries such as France did not pay anything? Is any pressure being put on those countries to contribute? The European Community has been a member in its own right since 1st January 1995. What representations have Her Majesty's Government made to Brussels concerning that lack of commitment?
993 It has not been made clear whether we have paid 1.25 million dollars, whether that is part of the endowment fund to be paid in instalments over five years or whether it is part of the required deposit that accompanies the ratification process. Are we putting the money in now, or by 30th September 2002, or when we deposit our instrument of ratification? I presume that we shall pay immediately. If not, we shall be out of sync with the other countries, which pay from 30 days after the 20th country has ratified. At present, it appears that we shall not be in the first 20. All that I seek is clarification on the timetable for the UK's contribution to the centre.
Annex 1 to Command Paper 4721 says that we intend to make a contribution of 1.25 million dollars to the annual budget during the first five years. It shows that we are not contributors to the endowment fund. Eight members of the WTO have each contributed 1 million dollars to the fund. During the debate in another place, the Minister said that the Government hope to do the same. That would make our contribution a considerable 2.25 million dollars.
In due course, the General Assembly will be requested to approve, as part of the financial regulations, the opening of a technical expertise trust fund which will be available to developing countries and economies in transition and to members for the part financing of technical expertise for the preparation of an underlying technical dossier. The trust fund is to be funded by donor governments and inter-governmental organisations only. Will that contribution be over and above the endowment fund contribution, or is it included in the payment? Are we being asked to approve an open-ended spending commitment or are there limits to our contributions? I raise the issue only because I notice that the centre is to be self-financing in the sixth year of its existence. To finance its regular activities after the first five years, the centre will draw on revenue generated by its endowment fund and user fees charged for the legal services in dispute settlement proceedings. The centre will be able, under strict conditions, to attract voluntary contributions from governmental and non-governmental donors for specific purposes that are not related to actual dispute settlement cases, such as training and internship programmes. Those voluntary contributions sound like open-ended spending commitments.
The immunities and privileges naturally do not concern parking fines, as the organisation will be based in Geneva, although there are meters there, too. What are the immunities and privileges? On whom are they being bestowed? Why does this institution have to be based in Geneva, where building costs and salaries are very high? With all the modern technology, why is a site in a developing country not being considered?
That leads on to an important question that Mrs Cheryl Gillan asked in the other place. We have recently passed legislation that highlights the exclusive poverty focus of the payments made from DfID. We are not sure that the 1.25 million dollars to be paid over the next five years meets the criteria laid out in that 994 legislation. Will the Minister reassure the House that there are no tensions between the legislation and the payment, which appears to be for lawyers' accommodation and fees? The aims and objectives set out in the legislation are correct, but they have tied the Secretary of State's hands. Will the Minister reassure the House that the organisation is included in the legislation and that there is no lacuna into which the payment and that activity of the department fall? The payment is for lawyers and administrators and does not fulfil the poverty focus. No such assurance was forthcoming from the Minister of State, John Battle. I reiterate: will the Minister reassure the House that there are no tensions between the legislation and the payment?
We support this initiative. As I said earlier, we do not stand in its way. However, if the Minister is able to respond, we should like these few important points to be answered.

§ Lord Goodhart
My Lords, I shall be brief. The order and the setting up of the Advisory Centre on WTO Law seem to us to be an admirable way in which to provide practical help to the developing world. Speaking for myself, I can see no reason whatever why the centre should not be in Geneva, which is, after all, where a great deal of expertise is concentrated in fields of this type.
I have only one query and it is an entirely frivolous one. Why does paragraph 2 of the order, which seems to be simply a statement of existing fact, appear in that part of the order rather than as a recital to it?

§ Baroness Ramsay of Cartvale
My Lords, I thank noble Lords who have responded to my introduction to the order. I shall try to answer as many as possible of the questions raised by the noble Baroness, Lady Rawlings. I hope that she will forgive me if I do not manage to cover them all, especially given the lateness of the hour. However, I shall certainly write to her if I leave any unanswered.
She started by commenting on what the director-general said about the centre. It is welcomed very widely. At the signing ceremony, the former director-general of the WTO, Renato Ruggiero, also stated that the centre was one of the best and most constructive proposals in international economic relations that he had seen in a long time. I believe that we can all go along with that.
The noble Baroness asked about the position of the United States. She also mentioned France, which has not contributed money. As I said, all states appear to support the initiative. However, at present and for their own reasons, the US and France have opted not to become members of the centre. The US traditionally prefers to focus on trade development initiatives through bilateral means. However, it is possible that a number of countries that have not been at the forefront of the initiative will show more direct support nearer to the trade ministerial meeting at Doha which is to take place later this year.
995 The noble Baroness asked some detailed questions about the payment made by the United Kingdom and about what would happen to that money. I have a large amount of detail on that matter. First, the noble Baroness is absolutely right that we did not contribute to the endowment fund. The agreement recognises a need for both endowment funds to reinvest for the long-term sustainability of the centre and for multiyear contributions, which can be budgeted towards medium-term running costs.
The UK funds have been welcomed as multi-year contributions because the endowment facility is already fully subscribed and donations have exceeded the minimum requirement. Multi-year contributions are crucial to the centre. The predictability of funds for the first five years will help the centre to use its budget effectively and efficiently. Multi-year contributions also represent an effective use of UK development budget resources because funds are not released in advance of need.
I turn to the questions of when instalments are due, how they will be paid and to whom. Once the agreement comes into force, which will be 30 days after all the instruments have been deposited, the UK will be invoiced for its contribution and our money will be paid to the ACWL itself—that is, the advisory centre—which is independent of the WTO. The fund will be managed by the executive director of the ACWL. The details of instalment amounts will be an internal matter for DfID. There are likely to be five instalments of £250,000, which will be transferred annually.
I hope that that has answered the main thrust of the noble Baroness's questions. I agree with the point made about Geneva by the noble Lord, Lord Goodhart. We both say, "Why not?". I also point out that Geneva is an excellent location for such a centre for advisory international legal expertise. It was therefore a natural choice and I am not aware that grave disagreements were expressed by any interested parties.
I do not believe that I have covered all of the points that were raised by the noble Baroness, but I shall write to her, send a copy to the noble Lord, Lord Goodhart, and for good measure put a copy in the Library.