Economic Activity of Public Bodies (Overseas Matters) Bill Debate

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Department: Cabinet Office
Moved by
18: Clause 3, page 2, line 36, at end insert—
“(3A) Regulations under subsection (2)(b) may include descriptions of considerations (including disregard thereof) to give effect to the United Kingdom’s obligations under international law.”Member’s explanatory statement
This amendment seeks to provide for a clearer way of implementing the international law exception in paragraph 6 of Part 2 of the Schedule.
Lord Verdirame Portrait Lord Verdirame (Non-Afl)
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My Lords, I rise to move the first amendment in this group, Amendment 18 in my name, with the support of the noble and learned Lord, Lord Etherton. It must be read together with Amendment 29, which is also in this group. I shall speak to both of them together. These two amendments deal with the problem arising from the international law exception at paragraph 6 of the schedule.

A number of noble Lords highlighted this problem at Second Reading. In my speech, I referred to the opinion on the Bill by the Richard Hermer KC. I disagree with certain aspects of his opinion, but I agree with his analysis of the effect of paragraph 6 of the schedule. As he put it, a breach by the UK of an unincorporated treaty does not normally give rise to a claim under domestic law, but paragraph 6 of the schedule provides a domestic law foothold for such claims on a virtually unlimited basis. Unless the paragraph is amended or removed, the consequence will be that, contrary to the purposes of the Bill, local authorities, for example, will make their own determinations about UK compliance with international law obligations. If there is a dispute about the correctness of the position they have taken, that dispute will be decided by our courts.

We do not normally implement international law obligations on such an unspecified and broad basis. What we generally do is give effect to specific international law obligations in a manner that is clear, and thus consistent with the rule of law requirement of legal certainty and clarity. There are countless examples of this approach, from the Diplomatic Privileges Act 1964 to the Human Rights Act. In essence, what happens is that the implementing legislation identifies specific provisions in a treaty that are to be incorporated in domestic law, and sometimes those provisions will be listed in a schedule to the Act. The legislation will then create special rules or mechanisms that Parliament considers are required to give effect to those international law obligations. Examples include the declarations of incompatibility under the HRA and Foreign Office certificates under Section 4 of the Diplomatic Privileges Act.

Paragraph 6 of the schedule to the Bill does not do any of that. It purports to import the entirety of international law—potentially all treaties, whether incorporated or not—in every rule of customary international law, and invites decision-makers to consider for themselves whether their decisions will be compliant with any such international law. It is an inherently uncertain and unclear provision. Moreover, the international law obligations that might be relevant in this field are contested and unsettled.

This is particularly the case for international legal rules on the duties of third parties vis-à-vis a serious breach of peremptory rules of international law—most notably, Article 41 of the International Law Commission’s articles on state responsibility provides for three very general obligations for states faced with a serious breach of international law by another state. Those obligations are non-recognition, non-assistance and co-operation; but whether this rule entirely reflects customary international law and what it specifically requires of a state are not settled.

Public bodies would also have to determine for themselves whether they can avail themselves of the international law exception. That too requires a complex international law analysis. Whether an entity is a public body under domestic law is, of course, a question of domestic law, but whether the conduct of that body is attributable to the state on the international plain is a question of international law. Universities might be an example of public bodies under domestic law—we have been discussing that in previous debates on this Bill—but it is not the case that the conduct of a university would ordinarily be attributable to the state as a matter of international law.

The amendment that we propose would maintain the international law exception but add clarity to it by ensuring that regulations are adopted to include descriptions of considerations, including disregard thereof, to give effect to the UK’s obligations under international law. There may be a better formulation than the one we propose, but in essence the idea is to replicate the manner in which we have given effect to international law obligations that have not yet come into existence: for example, those that may arise in the future under decisions of the Security Council.

An example of this power is in the Sanctions and Anti-Money Laundering Act 2018. It creates the power to make regulations for purposes of compliance with UN obligations and, more generally, for the purpose of compliance with any other international obligation. What happens in practice is that the Foreign Office lawyer, together with the Attorney-General, will consider the specific international law obligations that have arisen and then contribute to the drafting of clear, specific and precise regulations to give effect to those obligations. To be clear, the power that we are proposing will not, of course, replace the power in the Sanctions and Anti-Money Laundering Act. It would be in addition to that.

I understand that the noble Baroness, Lady Noakes, and the noble Lord, Lord Pannick, take the view that that power in paragraph 6 may not be needed and could simply fall away. Our proposal is a compromise that reflects the reality that this is a sensitive area and we thought that embedding in the Act a power to make regulations for purposes of complying with international law may, in this context, be useful. I beg to move.

Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, I have Amendment 28 in this group and I thank the noble Lord, Lord Pannick, for adding his name. I should first say that I am in complete agreement with the thoughts that lie behind Amendments 18 and 29, to which the noble Lord, Lord Verdirame, has spoken so eloquently.

My Amendment 28 is simply a more direct way of dealing with the same problem. It deletes paragraph 6 of the schedule in its entirety, so that public authorities cannot use international law considerations as a means of avoiding the effect of Section 1 of the Bill. Public authorities are not experts in international law but might well seek to use ill-founded concerns about the UK’s adherence to international law as a smokescreen behind which they believe that they can hide their boycott activities. Put simply, it creates a huge loophole in the Bill.

I tried to compare the Bill with last year’s Procurement Act to see whether the exclusions in the schedule to this Bill are the same as the mandatory and discretionary grounds for exclusion in the Procurement Act. This was not easy, because it is clear that two completely different sets of draftsmen have been involved in the two Bills. However, the one thing that I am pretty sure of is that the Procurement Act did not have an international law exclusion ground, so the inclusion of paragraph 6 in the schedule to this Bill is somewhat puzzling.

I shall comment briefly on Amendment 31 in this group, in the name of the noble Lord, Lord Kennedy, and the noble Baroness, Lady Blower, because that would extend the range of things that public authorities could look at to breaches of international law outside the UK. Not only is this way beyond the Procurement Act exclusions as well, but it adds yet another loophole, making the loophole as big as it could possibly be in order to allow public authorities to justify boycotts. For that reason, I cannot support it. I look forward to hearing the Minister’s rationale for the inclusion of paragraph 6 in the schedule.

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Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
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I am not sure that I entirely understand the noble Lord’s question, but I will reflect on it. We will come relatively shortly to a group that will look at these issues more broadly. If I am able to do so, I will come back to him at that point.

As I have already said, various concerns have been raised, which we will consider. I thank all noble Lords for their contributions. I say to the noble Lord, Lord Deben, that we value this House’s expertise, as I said at Question Time only last week. The Government will continue to think carefully about the important points that have been made. I hope the noble Lord will feel able to withdraw his amendment.

Lord Verdirame Portrait Lord Verdirame (Non-Afl)
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My Lords, I thank all noble Lords who have taken part in this debate. The key driver behind our amendments was a concern about clarity, as the noble Lord, Lord Deben, pointed out. International law is not just a law but an entire legal system, so to say that you cannot breach international law is like saying that you cannot breach Chinese law. The legislative instruction has to be more specific than that. That is the essence of our concern.

I do not think the power we are proposing in my amendments, supported by the noble and learned Lord, Lord Etherton, would be excessive, as suggested by the noble Lord, Lord Oates. We have other examples of that in the legislation. As for the Minister’s comment on sanctions, we already have powers in legislation to deal with sanctions, so there would not need to be an international law exception on such a broad and unlimited basis to cover that situation; we already deal with that in our existing legislation.

I thank those who supported our amendments and analysis, in particular the noble Baronesses, Lady Altmann and Lady Noakes, and the noble Lord, Lord Wolfson of Tredegar. I look forward to the proposals that the Minister said she would consider bringing forward on Report. With that, I beg leave to withdraw.

Amendment 18 withdrawn.