MAC: Mines and Communities

London Calling on Santa Sleaze

Published by MAC on 2006-12-20

London Calling on Santa Sleaze

December 20 2006

In terms of "Rule by Sleaze", the UK Labour government surpasses that of any previous UK administration - and the nadir was reached last week. On the same day that prime minister Bliar was questioned by police over alleged provision of honours in exchange for donations to the Labour Party, his Attorney General suddenly announced a cessation of enquiries into criminal conduct by BAe, Britain's chief arms merchant. Bliar argued that this was to safeguard his "war on terror" in the prosecution of which the assistance of Saudi Arabia is considered crucial. Few British citizens were fooled: BAe is itself Europe's largest dealer of weapons of mass destruction with an order book exceeding fifty billion pounds and annual sales approaching £15 billion. Recusing to Saudi strong-arming, the prime minister was going to save his beloved country six billion quid on sales of 72 Typhoon aircraft to the royal despots in Riyadh

Thankfully, two NGOs have now mounted their own judicial review of that decision, citing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

True, the Saudi Arabian bribery allegations - previously under investigation by Britain's Serious Fraud Office (SFO) - do not directly relate to mining and minerals. However, several previous actions taken by Bliar and his cronies to "fix" contracts, or abandon scrutiny of dubious deals, certainly do.

As reported by London Calling in February this year: "In 2002, the UK ambassador to Romania intervened directly with the Bucharest government, to push Mittal Steel's bid for the state smelting company, Sidex. No competitive tenders were offered, and Lakshmi Mittal got the plant for a knockdown £300 million. This came shortly after the company's eponymous founder handed a cool quarter of a million pounds to the Labour Party.

Although Bliar claimed he knew nothing about this particular deal, four years later he himself intervened to back Oxus Gold when the new, popularly-elected president of Kyrgyzstan cancelled the AIM-listed company's contract. The UK prime minister berated president Kurmanbek Bakiyev for not 'living up to obligations under his [Bliar's] global anti-corruption initiative'.

Just two months ago, RAID (Oxford-based Rights for Accountability in Development) berated the government for failure to properly investigate human right violations alleged (under the OECD procedure) against Barclays Bank and mining companies, De Beers and Oryx. The House of Commons International Development Committee also expressed concern about "how vigorously the UK seeks to ensure that OECD guidelines are adhered to ..." (See article below "Government inquiry into firms 'fuelling Congo war' attacked).

These particular accusations were first made in 2002 by a special UN panel, when the UK minister for trade and industry was Patricia Hewitt. In November that year she presented Rio Tinto's chairman, Robert Wilson, with the "First" magazine "Award for Responsible Capitalism". It came only a few months after Blair himself launched the "Extractive Industries International Transparency Initiative" at the UN World Summit for Sustainable Development. A year later, Ms Hewitt told a Social Enterprise Conference in London that:

"We in Government don't run social enterprises. There is only so much a Government can do through top down measures. Real power and real change comes from bottom up pressure. And the evolution of the voluntary sector since the 70s is a wonderful example of bottom up pressure"

But don't be fooled into concluding that this implied support for NGOs (such as RAID and Global Witness) in their hounding of companies for various malfeasances. On the contrary, the minister went on to provide one of the clearest indications to date that the Bliar regime has handed over responsibility for corporate regulation to the scions of industry themselves, thus washing its hands of the duty of direct intervention. Said Ms Hewitt:

"Social Enterprises up and down the country are performing better with more entrepreneurialism and innovation than ever before...we have the potential to unleash the voluntary sector onto the third dimension (sic). Bringing together voluntary sector expertise and private sector entrepreneurialism. Nurturing a whole new generation of social reformers and philanthropists... The not for profit, charitable and limited company form never really fitted social enterprises. Our consultation showed how not for profit companies and charitable forms were too expensive, yet philanthropists wouldn't invest in normal companies because they wanted a lock on assets and profits. And they wouldn't invest in not for profit structures because they were puzzled by their complexity!"

It wasn't long afterwards that Foreign Minister, Jack Straw, shocked those who still naively believed the British government would crack down hard on bribery and corruption by domestic firms abroad. "Whilst small extorted payments…are strictly illegal" said Straw," we do not envisage circumstances in which there would be a prosecution"

Just a few days before caving into the Saudis, the UK secretary for international development, Hilary Benn promised a conference in Jordan, of countries signed on to the UN Convention Against Corruption in Jordan that:

"We will not tolerate those who extort, corrupt and deceive. Together we can make progress and by strengthening the institutions of government, promoting better transparency and accountability and giving a voice to those who are hit hardest by corruption - the world's poorest - we can make a difference."

If you expect Mr Benn to resign now that his overlord has exhibited such rank submission to extortion, corruption and deception, then you don't know how low the British cabinet has sunk - to the point of moral impotence, in fact.

As Eva Jolly - special advisor to the Norwegian government on corruption and money laundering - wrote in last Wednesday's "Independent":

"This illegal decision is a betrayal of the British people and every principle that Britain is committed to uphold."

But it was perhaps the military historian, Correlli Barnett, who put his finger most firmly on the nail when, on December 17, he described Blair as "clinically deranged" and compared him with Adolf Hitler:

"What his Chief of the Army General Staff…said of Hitler would surely be true of Tony Blair today: 'He had a special picture of the world, and every fact had to be fitted into that fancied picture. As he believed, so the world must be but, in fact, it was a picture of another world'…[I]t is surely more than time that [Blair] resorted to the British constitutional equivalent of Hitler's Luger bullet in the heart - a resignation visit to Buck House."

Legal challenge to decision to drop BAE corruption inquiry


19th December 2006

Last night The Corner House and Campaign Against Arms Trade (CAAT) began a legal challenge to the decision to drop the investigation into bribery allegations involving BAE Systems Plc in Saudi Arabia. Lawyers, Leigh Day & Co, acting on behalf of the two organisations, issued letters to the Director of the Serious Fraud Office, the Attorney-General and the Prime Minister laying out their intention to judicially review the decision.

The basis for the legal challenge by the two NGOs is that:

- The decision was based on considerations of potential damage to relations with Saudi Arabia. This is expressly forbidden under the OECD's Anti-Bribery Convention (Article 5);

- The Prime Minister, in his advice on the public interest to the Attorney General and the Serious Fraud Office, improperly took into account considerations of damage to diplomatic relations;

- The advice given by the Prime Minister amounted to a direction to discontinue the investigation, which is an unlawful interference with the independence of prosecutors under domestic and international law.

CAAT spokesperson, Nicholas Gilby, said:

"The public expect BAE Systems to be subject to the same laws as the rest of us. But this decision shows that they are not. We are confident that this outrageous and unlawful decision will be overturned by the courts".

Susan Hawley, corruption expert at the Corner House, stated:

"This investigation was always a test case of how serious the UK government is about meeting its international commitments on combating corruption. The government has clearly breached its obligations under the OECD Convention. If the decision not to investigate is allowed to stand, international efforts to fight corruption will be set back by at least a decade. Corrupt politicians and businesses around the world will be rubbing their hands with glee."


Symon Hill, CAAT 020 7281 0297 or 07920 037719

Susan Hawley, the Corner House 07940 827605

or Nick Hildyard, the Corner House 07773 750534

Notes to Editors:

1. The Corner House is a not-for-profit social and environmental justice group. In 2005 it brought a successful claim for judicial review against the Department of Trade and Industry's decision to weaken anti-corruption procedures following lobbying by BAE Systems and other defence and aerospace companies. See

2. Campaign Against Arms Trade (CAAT) works for the reduction and ultimate abolition of the international arms trade.

3. Article 5 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions states that "Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved."

4. The OECD Anti-Bribery Convention was signed in 1997 and came into effect in 1999. It requires signatories to criminalise the payment of bribes to foreign public officials in international business transactions.

5. In June 2005, the OECD Working Group on Bribery evaluated the UK's implementation of the Convention, and expressed concern at the potential for 'national interest' considerations to influence the decisions on investigations. The Attorney General assured the OECD that "none of the considerations prohibited by Article 5 would be taken into account as public interest factors not to prosecute".

6. CAAT and The Corner House have instructed Richard Stein and Jamie Beagent at Leigh Day & Co solicitors and barristers David Pannick QC, Dinah Rose QC and Ben Jaffey of Blackstone Chambers.

7. A copy of the letter sent to the Serious Fraud Office is attached to this press release. A response is expected by 2 January. If no satisfactory response is received, CAAT and the Corner House intend to issue a claim for judicial review.

Government inquiry into firms 'fuelling Congo war' attacked

By Robert Verkaik, Legal Affairs Correspondent, The Independent

13 November 2006

British-based human rights groups have lambasted a Government investigation into British companies accused of indirectly fuelling the war in the Democratic Republic of Congo for failing to produce a prosecution or deliver a single sanction. Cases originally identified by the United Nations against 11 of the 12 British companies, including well- known names such as Barclays, De Beers and Oryx, have either been "resolved" or dropped, prompting criticism from both MPs and international human rights groups. Only one company, Das Air, is still being investigated by the DTI.

The Commons International Development committee has stated that the failure to satisfactorily carry out the investigations undermined Britain's commitment to international corporate responsibility.

They said: "Given the number of UK companies listed by the UN ... the Government response should have been more thorough."

Two pressure groups against corporate sponsorship of war have asked the Government to investigate the evidence amassed.

A range of allegations first made by a panel of experts appointed by the UN in 2002 include financial and trading activities in violation of international guidelines for multinational companies. A subsequent UN report recommended that four of the 12 British companies should be investigated.

Only one of these, Das Air, accused of being in breach of guidelines by transporting the black mineral coltan from the DRC, is still being investigated by the DTI. A spokesman for Das Air said: "We are co-operating with the DTI investigation but the case against us appears to be full of inaccuracies. We deny any wrongdoing."

The other cases have either been "resolved" or ignored, the human rights groups allege. Yet many British companies continue to trade with the DRC in a way that may be still indirectly fuelling a conflict that has claimed four million lives.

MPs, in their report, said they were also unhappy at the way the allegations had been settled: "We are concerned by the manner in which companies ... were put in the resolved category by the UN panel ... they raise concerns about ... how vigorously the UK seeks to ensure that OECD guidelines are adhered to ..."

Patricia Feeney of Raid, the British based human rights group said: "The British Government's failure to draw a line between acceptable and unacceptable corporate behaviour encouraged some companies to continue to exploit the Congo's natural resources in ways that the UN had deemed highly unethical." Carina Tertsakian, lead campaigner for Global Witness said: "The British government has not carried out any serious investigation into the British companies named and there have been no prosecutions the UK or elsewhere ..."

A spokeswoman for the DTI said that all cases were properly investigated where there was evidence against an individual company and that these had either been concluded or the issues had been resolved with the companies. One investigation remained "ongoing".

[Sources: Blair and Mittal/Oxus: Mines and Communities website, London Calling, February 26 2006;Hewitt on Social Enterprise: DTI website 26/3/2003; FT 8/1/2004; Man of Straw: FT 19/2/2004; RIGHTS AND ACCOUNTABILITY IN DEVELOPMENT Letter of concern, 28 June 2004, to The Rt Hon Patricia Hewitt MP, Minister of Trade and Industry Department of Trade and Industry; Benn's statement on corruption - see DfID press release, December 9 2006; Corelli Barnett on the deranged Tony Blair: Independent December 17 2006]

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