Gillian Merron Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs

Last Thursday, 23 April 2009, the 2008 Foreign Affairs Committee (FAC) Report on the British Overseas Territories was debated in Westminster Hall – part of the British Parliament usually reserved for non-contentious debates.

The report was introduced for debate by FAC chairman Mike Gapes, who said that it had been more than 10 years since the last report on overseas territories by the Committee.

“That is probably far too long,” Gapes said.

“We initially thought that it would last only a few months; but in fact, it was far more detailed and intensive than we originally envisaged,” he added.

Much of the debate centred on the situation in the Turks and Caicos Islands, where the constitution is expected to be partially suspended within the next month or so by means an Order in Council, following a highly critical interim report by the Commission of Inquiry into government corruption.

Labour Member of Parliament, Jeremy Corbyn, questioned the use of an Order in Council to achieve that outcome. “It is an extremely undemocratic process that bypasses any democratic accountability either in the Turks and Caicos Islands or here,” he said.

Mr Gapes responded, “I do not believe that the Government had much alternative in the short term but to act quickly with regard to the interim report.”

The FAC had also received allegations about corruption in other overseas territories, including in Bermuda and Anguilla and Mr Gapes asked Gillian Merron, Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs, to reassure the House that the Government are looking closely at these matters.

Ms Merron said that the FCO has instructed Governors to review the Turks and Caicos Islands commission interim report and to ensure a thorough assessment of any systematic controls that need improvement in their territory.

“From my discussions with representatives of the territories, I am in no doubt about how exercised they themselves are about the report on Turks and Caicos Islands, because they wish to keep their reputation. I hope that we can use the report to great benefit across the overseas territories,” she said.

The FAC had recommended that the Governors of those territories should use their reserve powers to bring in more external investigators or prosecutors to strengthen their investigative capacity. The Government accepted that recommendation, but stressed that using reserve powers to bring in those people would be a last resort.

“That may be true, but there is a question over when they should use their last resort,” Mr Gapes said.

Another of the FAC’s recommendations was that the Foreign and Commonwealth Office consider transferring the responsibility for the terms and conditions of employment of chief justices to the UK Ministry of Justice.

“That was not accepted by the Government,” Mr Gapes said.

The FCO had, however, agreed to consider whether judges in overseas territories would be less vulnerable to interference if they were on longer, non-renewable contracts, with appropriate safeguards in case of incapacity.

Mr Gapes asked Ms Merron to update the House in this regard, but she failed to cover this point in her responses.

The FAC recommended that the British Government should encourage Bermuda, the British Virgin Islands, the Cayman Islands and Gibraltar to continue to improve their financial regulation and the investigation of money laundering. The Government accepted that recommendation.

However, they did not accept the National Audit Office conclusion, which was supported by the Committee, that they had been complacent in managing the risk of money laundering in Anguilla, Montserrat and the Turks and Caicos Islands, where the UK is directly responsible for regulation.

In her contribution to the debate, Ms Merron said, “I recognise that the UK’s OT relationship needs improvement.”

She pointed out that the FCO has revised the requirements on those being appointed to governorship to ensure that they have the right capabilities for the job and that they are clear about their responsibilities for good governance.

“We have also made it clear—I hope that this will be welcome—that Governors who raise concerns about good governance will have support from the FCO,” Ms Merron added.

“The Government are committed to working closely with the overseas territories to ensure security and good governance,” she concluded.

As much of what was said illustrates the attitude of the British parliament and the government towards the Overseas Territories in general and the Cayman Islands in particular, Cayman Net News will be serialising the transcript of the debate in its entirety. Part One starts on page 16 of this issue.