The debate centres on a case involving my constituent, Mr. John Braithwaite, but it also raises some general issues about private security companies that provide services in Iraq. The company in this case is ArmorGroup. My concern is the absence of any effective regulatory regime for such companies.

I shall start with the case of my constituent. John Braithwaite was a serving police officer with Thames Valley police when in early 2006 he responded to an advertisement, specifically aimed at police officers, offering vacancies to provide short training courses for Iraqi police recruits in southern Iraq. The advert said that the scheme augmented a UK Government-sponsored programme in Basra. It was placed by ArmorGroup and stated clearly that the contracts on offer varied in length.

Mr. Braithwaite applied and was in due course offered by e-mail a posting for 12 months, although it was renewable. He assessed his future options, which included satisfying himself that he could take up to two years out from the police pension scheme and then rejoin it. On that basis, he accepted the offer, resigned from Thames Valley police and, after having the requisite immunisations and making other preparations, presented himself in London for deployment on 2 May 2006.

Only at that point, after he had resigned from his employment and was ready to leave for Iraq, was Mr. Braithwaite allowed to see a copy of his contract. It became clear that he was being offered only a six-month contract. He questioned that but was given to understand that company practice had changed and that no 12-month contracts were now on offer, but that there was a good chance of renewal. No clear information was available about the client details, which contravened company policy, but Mr. Braithwaite was given to understand that the Japanese and Dutch Governments were partly funding the project. In those circumstances, he felt that he had little choice but to go ahead and fly to Iraq.

He arrived at his final destination in Iraq after passing through three different staging posts and started work, but 24 days later he was handed his redundancy notice and flew home. He was subsequently told by ArmorGroup that his redundancy was a result of changes with the Japanese contract. Mr. Braithwaite was obviously extremely angry about his treatment by ArmorGroup. He had accepted an appointment to work in a conflict zone, using his considerable experience to help to train Iraqi police recruits. He had left a secure post with Thames Valley police expecting to be away for 12 months at least and possibly 24. Instead, he had been employed for only one month.

He was relatively fortunate in that he was able to find employment again with Thames Valley police, but he was unemployed for three months, his career progression at Thames Valley police was set back by two years and he had to rejoin the pension scheme on less favourable terms than before, because its terms changed while he was away.

Unsurprisingly, Mr. Braithwaite tried to take legal action against ArmorGroup over his redundancy on a number of grounds, including the fact that the redundancy decision, which affected others employed by ArmorGroup, seemed to be made arbitrarily and was not based on experience or other objective criteria. He then discovered that ArmorGroup is incorporated in Jersey, and so any application would have to be dealt with under Jersey law and through a Jersey employment tribunal. The tribunal rejected his application, because Jersey law does not apply to employment outside Jersey.

Mr. Braithwaite then attempted to complain directly to ArmorGroup and to clarify why he had been employed on a six-month contract that was terminated so quickly. None of the information that he has received, none of that which I have received from the Foreign and Commonwealth Office through ministerial letters and written parliamentary questions and none of that which he has received from freedom of information requests to the FCO has made the situation any clearer—if anything, it has been made more opaque.

It appears from those sources that ArmorGroup had a contract with the FCO for police mentors that started on 4 June 2004 and was due to expire in June 2007. The contract was initially for five months, and was reviewed and renewed five times—in November 2004, January 2005, September 2005, April 2006 and finally in October 2006. As of January 2007—this information was given in answer to a written parliamentary question—the contract specified 71 police mentors, although to ensure that there were 71 mentors on the ground at all times, extra personnel were employed up to a maximum of 91. In August 2005, the contract with the FCO was extended to include an additional 17 mentors. That extension was funded in full by the Dutch Government and lasted until February 2006. There had also been a contract funded by the Japanese Government, but that was for six months and ended on 18 May 2006. When the Minister responds, I would be grateful if he were to confirm whether the information I have summarised is correct and whether there were other related contracts involving ArmorGroup that I have not cited.

To summarise, Mr. Braithwaite was employed by ArmorGroup for six months, on a renewable basis, on 2 May 2006, when the FCO contract had just been renewed and was due to run until June 2007, the Dutch contract had finished two months previously and the Japanese contract had only two weeks left. Given that ArmorGroup had already been making people redundant because of the end of the Dutch contract and approaching end date of the Japanese contract, it is difficult to understand its reasons for hiring Mr. Braithwaite and then terminating his employment so abruptly.

My understanding of the way in which the main UK contract operates is that ArmorGroup contracts to ensure that the full complement of training posts is operative at all times. That means that it has to employ staff over and above the 71 mentors stipulated to provide cover, and the cost agreed with the FCO takes that into account. It is therefore most profitable for ArmorGroup to employ sufficient extra personnel to ensure that it can always meet its contractual requirements, but to keep the number of staff to a minimum in order to reduce costs and maximise profit. I can only surmise that Mr. Braithwaite was hired to fill a temporary gap in cover and that once that immediate problem was over he was made redundant.

It appears that ArmorGroup, by taking on extra staff—including Mr. Braithwaite—and quickly making some redundant, is essentially transferring the risk inherent in such contract work to its employees while making fat profits for itself. It can do so because it is registered in Jersey, so overseas employees are given little or no employment protection.

I have recently been contacted by another former employee of ArmorGroup in Iraq, who is not my constituent, and it appears that ArmorGroup’s hiring and firing policies are persistent and well known.

I congratulate the hon. Lady on securing this debate. I believe the individual to whom she has referred to be a constituent from Northern Ireland who has been in contact with me. Will she keep me advised of any further contact on the issue? It appears that the problems apply not just to one individual, but to others.

I thank the hon. Gentleman for his intervention. I will certainly keep him informed. After this debate, it may be that other hon. Members contact me about their constituents, and I should be more than happy to co-ordinate with them.

I want to make it clear that as far as I can tell, the company has done nothing illegal, but I believe that it has acted with a total lack of consideration for the effect of its policies on its employees. Being incorporated in Jersey, it is not subject to UK employment law. Will the Minister clarify whether Jersey is obliged to conform with EU employment law? Because Jersey law does not extend to extraterritorial employment, the company appears to be able to hire and fire as it pleases. In respect of my constituent, it appears even to have ignored its own company policy in a number of instances: it did not make the contract available before deployment; it changed the terms of engagement after the offer had been accepted; and the selection of individuals for redundancy was arbitrary and based on no objective criteria, as was admitted at the time by ArmorGroup personnel in Iraq.

The case also raises the general issue of private security companies and the implications of their increasing involvement in conflict and post-conflict situations. I am grateful to a paper produced by Sarah Percy of the International Institute for Strategic Studies, of which I am a member, entitled “Regulating the Private Security Industry”. I have used it to inform myself on the issue.

Since the Foreign Affairs Committee report on the Sierra Leone arms investigation in 1998, most of the attention has focused on private security companies at the front end in conflict situations. The ambiguous legal position of mercenary forces and the absence of effective regulation was the subject of a Green Paper in 2002 and a further Foreign Affairs Committee report, but has not, as far as I am aware, led to UK legislation, as yet.

The issues raised by the case of my constituent and that of the hon. Member for Lagan Valley (Mr. Donaldson) are, of course, much less serious than the legal vacuum that appears to allow foreign mercenaries to commit human rights abuses and breach international law with an impunity that, quite rightly, does not apply to military personnel in the same situation. However, it is our Government who are commissioning and funding post-conflict reconstruction projects in Iraq. If that work is being done on the Government’s behalf by employees of a private security company, the Government should take some responsibility for ensuring that those employees are protected against the exploitative employment practices to which my constituent and others appear to have been subjected by ArmorGroup.

The FCO has admitted in a parliamentary answer that the contracts include no stipulation requiring conformity with UK employment law, and I should like the Minister to explain why not. In response to my first letter to the Foreign Office on 24 October, the Minister for the Middle East said that ArmorGroup had undertaken an internal inquiry reporting on 10 November and had assured the Foreign Office that all proper procedures were followed in Mr Braithwaite’s recruitment, employment and redundancy. I am tempted to say, “They would say that, wouldn’t they?” I certainly do not think that the Foreign Office should have been satisfied with that response. Essentially, the firm was allowed to be its own judge and jury.

The IISS article states that Christopher Beese, ArmorGroup’s chief administrative officer, has suggested that with the demise of Sandline and now that no UK firm is involved in providing front-line fighting personnel:

“the need for regulation is less pressing.”

Given his company’s cavalier employment practices, I can see exactly why he is not keen on regulation, but the British Government owe it to people such as my constituent, who actually do the work in Iraq that the Government are paying for, either to introduce better regulation of private security companies or to include in their contracts better protection for employees.

As I have pointed out, my constituent has been relatively fortunate in being able to return to employment with Thames valley police after only three months out of work, but I do not believe that it is acceptable for firms such as ArmorGroup to continue to operate in a way that exploits their employees, particularly when their major customer is the British Government and therefore the British taxpayer.

There is very little evidence about the cost-effectiveness of using private security companies in post-conflict situations. Costs are simply not available publicly, and so few firms are involved that there is little effective competition. The Foreign Office has commissioned independent reviews of the policing programme to assess its effectiveness, such as the security sector development advisory team’s review in May 2005, Sir Ronnie Flanagan’s assessment in January 2006 and Chief Constable Paul Kernaghan’s progress assessment visit on 4 to 7 October 2006. However, it is not clear whether any of those reports considered cost-effectiveness or employment practices, and there has not been an opportunity for parliamentary scrutiny.

I ask the Foreign Office seriously to re-examine its use of private security companies, independently to assess their cost-effectiveness to the taxpayer and institute proper controls in contracts to protect employees. Will it ensure that those reviews are available to Parliament and drawn to the attention of the relevant Select Committee? No one else employed by ArmorGroup on a British Government-funded contract should be subject to the same experience as my constituent, Mr. Braithwaite.

I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) on securing the debate. I am genuinely pleased to have the opportunity to respond to her concerns and the contribution of the hon. Member for Lagan Valley (Mr. Donaldson). I commend the commitment and bravery of John Braithwaite and the many individuals like him working for a range of organisations who put themselves forward to work on the ground in difficult environments in Iraq, Afghanistan and other parts of the world.

The security situation in Iraq remains a matter of great concern. Key to its resolution is building the capability of the Iraqi security forces, including the Iraqi police service, so that they can assume control. The Iraqi Government will take increasing responsibility for security in all provinces in 2007. The UK is heavily involved, and we have much to offer. Our work in the south of Iraq has been laying the foundations for security transition there, and the transfer of security responsibility has now been achieved in the provinces of al-Muthanna, Dhi Qar and Maysan.

Much of the progress in building civilian security capacity has been achieved through the work of the UK civilian policing mission to Iraq. Civilian police trainers and mentors, including those employed by ArmorGroup, have made a vital contribution through their work to build the capacity of the Iraqi police service. The UK has had a policing assistance mission in Iraq since 2003, working to train and mentor Iraqi police in the three southern provinces of al-Muthanna, Maysan and Basra, as well as providing specialist input into police development and reform in Baghdad. In the southern provinces of Iraq, police trainers have worked alongside the Iraqi police service on projects to increase the capacity of local police stations, to support investigations into allegations of serious corruption in the police and to build the command and control capabilities of the provincial police leadership.

Helping democratically elected Governments to develop an accountable and effective police service to enforce the rule of law is a critical part of the UK’s work overseas, not only in Iraq but in many countries and regions, including Afghanistan and the Caribbean. External organisations have a valuable role to play in ensuring that we can respond to local needs quickly and flexibly by providing individuals with the necessary skills and experience to make a difference on the ground.

The civilian police advisers and mentors who use their skills to carry out that essential work on the ground in Iraq are recruited in two ways. Many, including the chief police adviser, are recruited on secondment from their police forces and then continue as serving or retired British police officers. Others such as Mr. John Braithwaite are recruited through a contract with ArmorGroup Services Ltd, a company registered in the UK and elsewhere, including Jersey. Since June 2004, the Foreign and Commonwealth Office has had a contract with ArmorGroup to provide police trainers and mentors to assist the Iraqi police service in southern Iraq and Baghdad. A similar contract for Afghanistan has been in place with ArmorGroup since late 2006.

The information that my hon. Friend the Member for Milton Keynes, South-West gave about the FCO’s contract with ArmorGroup in Iraq is accurate. I would only point out that in May 2006 the company’s contract with the FCO in respect of Iraq was due to run to September 2006, and that the company formerly held a separate contract with the FCO to guard embassy premises in Iraq.

As a provider of security services, ArmorGroup works with several national Governments, international peace and security agencies and private sector organisations. It was formed through the acquisition of Defence Systems Ltd by Armor Holdings Inc., a New York stock exchange listed company, and a subsequent management buy-out by ArmorGroup. In 2005, the company had a turnover of $233 million, and it has been listed on the London stock exchange since 2004. It is led by chief executive officer Mr. David Seaton, and the company’s non-executive chairman is the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind) who, as my hon. Friend will be aware, served as Foreign Secretary from 1995 until 1997. He became non-executive chairman of the group in 2004.

There is a role to be played by the private sector in the provision of security services in third countries. The FCO recognises that and in line with certain other Government Departments uses private military and security companies to provide security to staff working in difficult locations overseas, including Iraq and Afghanistan, or, as in this case, to provide expert advice to local agencies.

Possible options for regulation were explored in the Green Paper on private military companies, which was published in February 2002. Since then, the industry has expanded considerably. In late 2004, the then Foreign Secretary, my right hon. Friend the Member for Blackburn (Mr. Straw), therefore requested a further review of the options for regulation of the private military and security company industry. It was completed in mid-2005 and its findings are currently being discussed by Ministers and officials. If it is agreed that regulation is appropriate, the Government will introduce proposals for public and parliamentary consultation. I will ensure that the details of that debate and the correspondence that my hon. Friend the Member for Milton Keynes, South-West has sent to the Department on the matter are made available to the Ministers who are involved in the review.

I make a point of historical fact. In opposition as a shadow Minister and in government as a Minister, I worked on ensuring that legislation was introduced to regulate the private security industry in Britain, so I am very much aware of the points that my hon. Friend made.

There are already several tools available to counter potentially illegal or unethical activity. They include export controls, legislation on arms brokering, UN and EU arms embargoes and the national law of the countries in which companies operate. We work with the British Association of Private Security Companies, private military and security company representatives and the Security Industry Authority to encourage best practice and adherence to standards.

My Department has been in regular contact with my hon. Friend regarding Mr. Braithwaite’s case, including through parliamentary questions and written correspondence. I understand that following the end of his employment with ArmorGroup, Mr. Braithwaite has sought compensation from the company and pursued his case through relevant channels. For our part, we raised Mr. Braithwaite’s concerns about his contract directly with ArmorGroup and asked questions to which the company responded.

I have read the correspondence—that is to say the correspondence that we have been given; there will be other correspondence that we have not seen. It appears from the correspondence that has been revealed to the FCO through letters and e-mails between Mr. Braithwaite and ArmorGroup that there are several potential discrepancies and issues that clearly need to be resolved. The first is the extent to which ArmorGroup does or does not practise a duty of care in employing its employees, wherever they may be based. The second, more specific issue is the inconsistency between the accounts given by Mr. Braithwaite and ArmorGroup regarding the offer of a 12-month contract, which was set out in an e-mail to Mr. Braithwaite from Lucy Bampoe-Parry on behalf of the group on 23 March 2006. The third matter is the need for the FCO to protect its reputation by ensuring that those through whom it procures services operate consistently with best practice.

I have read the correspondence that Mr. Braithwaite sent to the non-executive chairman of the group, the right hon. and learned Member for Kensington and Chelsea, which was passed to ArmorGroup’s chief administrator Christopher Beese for reply. My hon. Friend the Member for Milton Keynes, South-West may wish to seek a meeting with the chairman to raise her concerns with him, given his responsibility as chairman of the organisation.

We would like to discuss with my hon. Friend what more we may be able to do to satisfy her and her constituent Mr. Braithwaite that the Government have done their utmost to ensure that any legitimate concerns have been addressed by the company in an appropriate way. I would be happy to offer my hon. Friend a ministerial meeting at the FCO at a convenient time to discuss the matter further, and the hon. Member for Lagan Valley may come to that meeting as well, if he wishes.

In cases where individuals are employed by companies overseas, it is for the relevant courts rather than the contracting authority to determine on a case-by-case basis whether either UK or EU employment law applies. As my hon. Friend knows, the branch of ArmorGroup with which Mr. Braithwaite signed a contract is registered in Jersey. Although I am not aware of the particular circumstances in which the case was dismissed, I can give a response to her question on the applicability of EU employment law in Jersey.

Jersey’s employment laws are not exactly the same as the UK’s laws, but there is a significant degree of commonality in the level of protection available to employees, including the right to a minimum wage, the right to a minimum period of paid leave, the right not to be unfairly dismissed and the right to a minimum period of notice. In that regard, one of the interesting factors in this case is that the job was advertised and then offered as a job with a UK company based in the UK, but on departure Mr. Braithwaite learned that he had actually been employed by a company based in Jersey. The point that my hon. Friend made about that was well made.

The FCO expects its contractors to meet high standards in their employment relations practices. We very much hope that Mr. Braithwaite and ArmorGroup will be able to reach a satisfactory conclusion to the matter, and I hope that the company takes seriously the comments made by my hon. Friend and by me after having reviewed the papers. I thank hon. Members for listening to my response.

Question put and agreed to.

Adjourned accordingly at four minutes to Five o’clock.