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European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Turkmenistan) Order 2017
18 July 2018
Volume 792

European Union (Definition of Treaties) (Enhanced Partnership and Cooperation Agreement) (Kazakhstan) Order 2017

European Union (Definition of Treaties) (Comprehensive and Enhanced Partnership Agreement) (Armenia) Order 2018.

Considered in Grand Committee

Moved by

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That the Grand Committee do consider the European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Turkmenistan) Order 2017, the European Union (Definition of Treaties) (Enhanced Partnership and Cooperation Agreement) (Kazakhstan) Order 2017 and the European Union (Definition of Treaties) (Comprehensive and Enhanced Partnership Agreement) (Armenia) Order 2018.

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My Lords, very much as with the preceding orders that we discussed this afternoon, these agreements have all been negotiated between European Union member states on the one hand and these third countries on the other. Each agreement provides an enhanced framework for regular political dialogue at ministerial, official and expert level. The EU- Turkmenistan partnership and co-operation agreement will support reforms and help build Turkmenistan’s economy in line with market principles. The agreement provides for EU technical assistance to reinforce democratic institutions, as well as encouraging economic reforms and strengthening protection for European investors in Turkmenistan.

The EU-Kazakhstan Enhanced Partnership and Cooperation Agreement updates and augments the existing partnership and co-operation agreement agreed in 1996. It will contribute to modernising the commercial environment in Kazakhstan, and will increase the ease of doing business for UK and European firms. Finally, the EU-Armenia Comprehensive and Enhanced Partnership Agreement provides a foundation for enhanced political and economic co-operation, and will support reform of the commercial environment in Armenia.

I do not propose to repeat at length text to which I have already subjected your Lordships. The purpose of these orders and the necessity for them is exactly the same as I described for the previous set of orders. Again, approval of these draft orders is a necessary step towards the UK’s ratification of these agreements through designating them as EU treaties under Section 1(3) of the European Communities Act 1972. The provisions of the agreements covered by the draft orders are not identical. They are the result of years of negotiation and reflect differing priorities that we share with the partner countries and the varying depth and maturity of the relationship that the EU and its member states already enjoy with them.

I have already set out at length the implications of our departure from the European Union in relation to the orders we are discussing. I do not propose to repeat myself. I am advised that it is unlikely that the agreements before us today will enter into force before the UK has left the EU. I have already covered the consequences of our departure from the EU in March 2019 in relation to these orders.

The motivation, purpose and reason for these orders is very much as I have previously stated: namely, to formalise positive relationships with these third countries and deliver on the Prime Minister’s commitment to continue to be a supportive EU member until we leave. It would be wholly counterproductive to block the aspirations of these countries to have a closer relationship with the European Union. I welcome this opportunity to discuss these three draft orders and to answer questions from your Lordships. I beg to move.

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My Lords, the Minister spoke about the need for positive relations. I totally concur. I will make some remarks, particularly in relation to Kazakhstan. The Minister commented on the road map for foreign policy. I have no doubt that, as we move to a post-Brexit global world, the United Kingdom will be working hard on its relationships, instilling a sense of urgency and looking to up our strategic play in an opportunistic manner.

Remarks during consideration of these instruments in the other place last week, beyond Sir Alan’s ministerial introduction and response, were reserved mostly for Armenia. I wish to turn attention to what should be seen as a key component of the UK’s future—our relationship with Kazakhstan—and take this opportunity to expand on the strategic and beneficial nature of that relationship.

As we have heard, the EU instrument before us could serve as a framework to move seamlessly into part of a future bilateral instrument. We have built the relationship with Kazakhstan into one of comparative advantage. Over the past 26 years, our two nations have co-operated closely on a wide range of issues, making Kazakhstan a key regional partner.

Among many priorities is a determination to focus on what more can be done to counter the global threat of terrorism and extremism. This includes increased efforts from both regional neighbours and the wider international community to help stabilise Afghanistan. Both these goals are, I understand, supported strongly by the UK.

British investment in Kazakhstan has totalled over £20 billion since independence in 1991 and so has played an important role in building Kazakhstan’s economy into the strongest in central Asia. Following the success of the Expo international fair, Kazakhstan is implementing an ambitious, large-scale privatisation programme. The launch last Monday of the Astana International Financial Centre—the AIFC—will transform Astana, the capital, into one of Eurasia’s pre-eminent financial hubs and will serve as a major platform to implement the large-scale privatisation programme in Kazakhstan. With a degree of considerable shrewdness—if I may use those words—the AIFC is governed by English common law, with English as its official language. The AIFC’s independent court will be presided over by our very own noble and learned Lord, Lord Woolf, who has been appointed the court’s chief justice. I am delighted also to acknowledge and pay tribute to the contribution of TheCityUK in assisting in the establishment of the centre.

The Government of Kazakhstan are developing the economy rapidly into a diverse and mature economy to bring reliance and protection against volatility in the oil and gas sector. The $9 billion Nurly Zhol investment programme is designed to build industrial capacity, develop infrastructure and diversify the energy sector. Kazakhstan is also working with China and other multivector partners on the belt and road initiative—sometimes referred to as the new Silk Road—to integrate the region into a cohesive economic area through the building of infrastructure. I was most pleased to hear the remarks of the noble Baroness, Lady Fairhead, on her activities in China to help us understand what is in Britain’s best interests to pursue within that whole programme. I understand that consideration is being given—on this remark, I thank UK Export Finance, which I called on yesterday—to allocating £25 billion to support projects that provide real opportunity for UK interests.

I had the honour of negotiating the terms of what is known as the Aktau Declaration on Joint Actions, together with the then chairman of KazMunayGas, who is now a Senator, Mr Kiinov, and with the Minster of Energy, Magzum Mirzagaliev. This endeavour works to address priority needs to underpin the underlying ability of Kazakh goods and service industries to bolster capabilities through a strategy of local content. The rationale is to harmonise procurement procedures, specifications and the use of a single prequalification database by the three foreign-led oil and gas operators in their billions of dollars of capex and maintenance spend. It is worth noting that British interests are very much part of that programme; Shell is a major partner with Kazakhstan and should be supported. UK industry embracing this initiative would protect our position for the long term as a lead supplier.

I will say a word on democratic reforms. Kazakhstan’s reforms have drawn some criticism over the past years. The country’s overall progress has advanced. However, more needs to be done. Building a democratic society with robust institutions should be seen in the context that the country is starting from scratch, having secured its independence with the demise of the Soviet Union—I hesitate to use the word demise, but certainly with the Soviet Union continuing no longer in that form. However, that was only a comparatively short while ago.

What I can say is that Kazakhstan listens to and engages constructively with criticism and co-operates with international organisations. It works with, among others, the OSCE, the UNDP and the Council of Europe in this regard. For my part, with the assistance of the Hansard Society I produced a film entitled “Parliament in 30 Minutes”, which explains the mechanics of how Westminster operates. That was in addition to the signing of a co-operation protocol with the Majilis in my capacity of establishing the initial APPG.

In conclusion, Kazakhstan is a key partner in the region, working together on shared foreign policy goals. I am confident that, as the United Kingdom forges a new global path, the next decade will see UK-Kazakhstan co-operation both bilaterally and internationally go from strength to strength. The smooth transit of this enhanced co-operation will further strengthen bilateral relations between our two countries. I therefore add my support to the ratification of this instrument.

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My Lords, I add my thanks to the Minister for introducing these agreements. I will speak briefly to put on the record my welcome for the agreement signed between the European Union and the Republic of Armenia in November 2017. I have visited Armenia many times and I have developed a profound respect for the ways the people, who have suffered so much, including genocide and a horrendous earthquake, are developing a democratic nation full of hope for the future. This agreement will strengthen the economic, political and cultural relations between the parties involved. It marks the beginning of a deeper political engagement, and it provides new opportunities for stronger collaboration in various key sectors, including education, energy, transport, the environment, trade and infrastructure.

Relations between the United Kingdom, Armenia and the European Union are based on genuine friendship founded on mutual trust and a strong commitment to shared values. We need to support engagement with Armenia since its prospects for the future are compatible with our commitment to a democratic state based on the rule of law, democracy and human rights. I therefore believe that it is in our interest to assist Armenia to implement this agreement effectively.

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My Lords, colleagues have spoken much more knowledgeably than I possibly could on Kazakhstan and Armenia, so I will not attempt to repeat what they have said. Perhaps I may add a word about Armenia. It is clear that Armenia is an important country as regards EU relationships in the region. Could the noble Baroness tell us whether this agreement would have any influence on other efforts being made to try to resolve what is often called the “frozen conflict” between Armenia and Azerbaijan over Nagorno-Karabakh? It may be that every bit helps. If she has any knowledge of that it would be useful.

I will say something about Turkmenistan. One can understand why this agreement has not been enforced 20 years after it was signed and that the delay in ratification arises out of concerns about Turkmenistan’s human rights record. Perhaps I may quote from an article which is about 18 months old by the Carnegie Endowment for International Peace:

“Twenty-five years after the breakup of the Soviet Union, Turkmenistan holds the title of the most authoritarian of all former Soviet states … a political system based on repression and hydrocarbon wealth … an internal security apparatus, an omnipresent propaganda machine … Freedom of speech, the press, association, and religion remain curtailed in Turkmenistan to such an extent that Freedom House puts the country in the same category of dictatorships as North Korea, Sudan, and Syria, at the very bottom of its 2016 Freedom in the World index. The ability of Turkmen to travel overseas is restricted, and the country remains largely closed off to most foreigners, making it the most isolated of all former Soviet states”.

There is quite a challenge in having any meaningful influence on changes in Turkmenistan. I realise that there is always a dilemma with countries which come from a very poor human rights and democracy background. At what point do you say that things are moving enough to make it worth while to have an agreement with the EU, which of course will be taken as some kind of status, and when do you say it is of no use and it will just legitimise further a regime which should not be legitimised?

I ask the Minister: what is the greater scope that is claimed to encourage progress on human rights and good governance in Turkmenistan? It is very dependent on China. Russia is competing for economic power there. If I was being cynical, I would wonder whether this is the EU wanting to get in on the action with regard to energy and investment opportunities. This is not a very encouraging scenario for an EU agreement.

I am curious why the Turkmenistan and Kazakhstan SIs are dated 2017—leaving aside the 20-year delay on the agreements, which, as I say, is perhaps understandable. These things have been hanging around. Are there others in the pipeline that are going to be put through before next March? Have these been lying in a dusty drawer in Whitehall and suddenly, because of the prospect of Brexit, there is a rush to get them all through so that they will apply before 29 March next year? Am I being unjustifiably cynical and suspicious? Are there any others? Perhaps the Minister could explain.

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My Lords, every opportunity that I can have to debate with the noble Baroness, Lady Goldie, I would like to take, so the more statutory instruments we have, the more pleasure it will give me. I will be the only one who will find it pleasurable, I expect. But there is little between us on these instruments. I think we all welcome the potential for engagement that will result in improvements in governance and human rights. The noble Baroness, Lady Ludford, highlighted the human rights record of Turkmenistan but all three countries have human rights issues. It is important that we work with our partners to ensure that we can address the need to strengthen democracy and the rule of law in all these countries. That is what these agreements are doing.

Of course, there is another issue, highlighted by the noble Viscount, Lord Waverley: corruption is another important feature of these countries. I hope that complying with these agreements and having closer ties will enable us to properly address or support those Governments in tackling corruption. I hope the Minister will tell us exactly how we are doing that. It is important that we develop those structures.

I return to the original point alluded to by the noble Baroness in her introduction. Being in the European Union has enabled the United Kingdom to amplify its voice and increase its influence for its foreign and security policy by working closely with other nations. The assessment that the United Kingdom Government have to make is about what happens post Brexit, when we will not have that amplification. We remain, of course, committed to addressing these issues and to human rights. However, if we enter into an agreement with these countries post-Brexit or ensure that these agreements continue, how strong will our voice be in influencing behaviour if we are unable to amplify it as previously? The noble Baroness will repeat the mantra about the United Kingdom now having a global vision. The fact is, however, that that vision will have less impact because we will not be acting in concert with 27 other nations.

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My Lords, I again thank noble Lords for their contributions. As ever, they have raised important issues and I will do my best to address them.

I start with the noble Viscount, Lord Waverley, who rightly pointed out that there is a positive relationship Kazakhstan, with opportunities for the United Kingdom. I totally agree, and this agreement cements the relationship: it will bring Kazakhstan more closely into alignment with a rules-based international system. That includes supporting Kazakhstan in meeting its WTO commitments, which is extremely important.

The noble Viscount also referred to the Astana International Finance Centre. I am delighted that the noble and learned Lord, Lord Woolf, was appointed chair of the court of commercial arbitration there, which, as the noble Viscount pointed out, is underpinned by English common law. As a Scot, I have to say that if you cannot have Scots law you had better make do with the next best thing, but I am sure that we are all very pleased and proud about that. It underpins the desire to see a rules-based, solidly based judicial system.

The noble Viscount is correct in saying that we engage extensively with Kazakhstan: we are one of its top six investors and we support its aspiration to become one of the top 30 developed economies in the world. We have always been clear that to do this Kazakhstan needs to develop an open political system that guarantees fundamental rights and provides a firm basis for future prosperity and stability. To this end, the UK supports economic and judicial reform in Kazakhstan. I have just alluded to an important component of that. We are confident that all this will help to boost the country’s future prosperity and democracy. To illustrate the strength of the relationship between the UK and Kazakhstan, last year we celebrated the 25th anniversary of UK-Kazakhstan relations, and we look forward to the next 25 years of strong relations, not just in trade and investment but on the international stage.

The noble Baroness, Lady Cox, raised important issues about Armenia, and I will address her question about that agreement. The agreement is geopolitically important because it supports Armenia’s interest in maintaining a close relationship with the EU and its member states, as well as with Russia and other regional partners. It also helps Armenia to diversify its political and trading relationships while enabling it to fulfil its obligations as a member of the Eurasian Economic Union.

In this context, the noble Lord, Lord Collins, raised the important issue of rights. He specifically mentioned corruption—I now have his undivided attention, which is something I seldom achieve, but I am pleased to have done so on this occasion. He raised an important point. The agreement supports Armenia’s internal reforms. These include anti-corruption measures and improvements to governance in areas such as taxation, public administration and the civil service. Importantly, the agreement supports institution building and the strengthening of civil society, democracy and human rights, and it is designed to bring Armenian law gradually closer to the EU acquis in certain areas. To avoid doubt, it does not go so far as to establish an association between the EU and Armenia, but it is certainly a strong step in the right direction.

The noble Baronesses, Lady Cox and Lady Ludford, also raised the Nagorno-Karabakh dispute. The UK supports the peaceful resolution of that conflict by the co-chairs of the OSCE Minsk Group. We have strong bilateral relationships with both Armenia and Azerbaijan, and we believe that continued engagement is key. With Armenia, this means engagement on good governance, democracy, and political and economic reform. The agreement calls for a peaceful and lasting resolution to the conflict through the negotiations of the co-chairs of the OSCE Minsk Group, and the UK fully supports this approach.

The noble Baroness, Lady Ludford, raised issues relating to Turkmenistan, with particular reference to its human rights record. Turkmenistan remains a human rights priority country for the Foreign and Commonwealth Office. Although the human rights situation continues to be a cause for concern and progress has been slow, our judgment is that the structured engagement that the partnership and co-operation agreement provides will give us and EU partners greater scope to encourage progress on human rights and good governance, rather than placing restrictions on engagement. It is a challenging place to operate, with a difficult business environment, and it currently faces economic challenges. The agreement makes some improvements to the business environment and puts in place an institutional framework to support further reform. It provides for engagement across a wide range of issues, including energy, business and the environment.

The noble Baroness, Lady Ludford, and the noble Lord, Lord Collins, asked what the agreement does specifically for human rights and democracy in Turkmenistan. It provides for technical assistance programmes to reinforce democratic institutions, to strengthen the rule of law and to protect human rights and freedoms; for instance, to support the drafting and implementation of laws and regulations. That might sound very dry and arid to the onlooker, but it is key to the ability to write good constitutional law. It will enhance expertise on the role of the judiciary and of the state in questions of justice, and on the operation of the electoral system.

The noble Baroness, Lady Ludford, who is never one to miss the difficult question, asked what else is in the pipeline. Depending on the noble Baroness’s perspective, I might have good news. Due to time restrictions, it will not be possible for the UK to ratify any further FCO-led EU third-country agreements before the UK leaves the EU in March 2019. It was an important question to ask and I hope that that answers it.

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Which agreements that have been reached with external partners of the EU will we not have ratified before Brexit?

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I am checking with my officials. It is my understanding that none is in the pipeline.

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Except Japan, which has just been signed.

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We will put in writing to the noble Baroness what the situation is.

The noble Baroness, Lady Ludford, also raised the issue of timing in relation to the Turkmenistan partnership and co-operation agreement. Apparently, all the EU member states initially delayed its ratification to signal their concern about human rights abuses in that country, but over time they all decided to ratify it because the agreement would enable greater scope to influence Turkmenistan’s development in a positive direction. In 2013 the UK also agreed to ratify it because, on balance, the Government agreed that entry into force of this agreement would allow a closer relationship with Turkmenistan and potentially greater scope to encourage progress on human rights and good governance.

I was asked about how these agreements would progress UK objectives. As the agreements provide for a broad framework to reinforce political dialogue, they provide EU member states with a range of tools for influencing reform, including institutional links that allow for regular discussions, including on human rights reform as well as technical co-operation programmes.

I have tried to respond to all the questions, and as I say, I undertake to write to the noble Baroness, Lady Ludford, about the specific point she has raised. I am grateful for the contributions to the debate and, as I outlined in my opening speech, these agreements will support our values and objectives long after we have left the European Union. By ratifying them, we are demonstrating our good will as a loyal and supportive partner of the EU and of each of these countries as they seek to expand their relationships within the EU. I should say that they do not detract in any way from our own prospects outside the European Union. We are enhancing our co-operation with partners across central Asia and the south Caucasus as we leave the EU, in line with our very ambitious global Britain vision. I beg to move.

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Attention was drawn to the situation in Nagorno-Karabakh, and I note in particular the presence of the noble Baroness, Lady Cox, in the debate. Does the Minister agree—not necessarily on matters specifically to do with Nagorno-Karabakh, Armenia and Azerbaijan—that it would be extremely helpful if the UK, as a component part of the United Nations Security Council, encouraged a process to complete the unfinished Wilsonian principles on self-determination? There are many instances around the world where clarification of these issues would be helpfully addressed. I do not necessarily expect the Minister to rise to respond at this point, but it really is an issue of extreme importance and should be considered further.

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The noble Viscount is a realist, but I am going to disappoint him. Apparently there are no plans to support those principles.

Motions agreed.