House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Second Report

INSIDE THE FCO IN LONDON

Dealing with intelligence material

72. One aspect of the Sandline affair which has worried us is the way in which intelligence information received from the Ministry of Defence (MoD) and others was treated with what appears to amount to cavalier disregard by the FCO. A member of Defence Intelligence Staff (DIS) met FCO officials on 3 December 1997 to discuss Sierra Leone. Mr Everard, who was present,[260] has indicated that he chose to discount the information supplied to him by DIS, even though the minute of the meeting indicates that Executive Outcomes was believed to be arming the Kamajors, presumably in breach of the Security Council resolution and potentially in breach of the Order-in-Council.[261] When we raised this subject with the Foreign Secretary on 16 December 1998 he told us that the reference to Executive Outcomes in the minute was in error.[262] On 21 January 1999 the FCO wrote to explain that the record of the meeting was "compressed", and told us that the error had not been brought to the attention of Sir Thomas Legg and Sir Robin Ibbs during their investigations.[263] The error does not seem to have been noticed at the time by any of the recipients of the minutes of the 3 December 1997 meeting. Mr Penfold, Vice Admiral West and Ms Grant all gave evidence to us on the basis that the minutes were correct.[264] We regard this tale as quite fantastical. If the original minute was correct, then important intelligence was disregarded. If it was incorrect, then it is extraordinary that no-one corrected the original minute. To allow an incorrect record on such a vital issue to stand shows alarming sloppiness. It is also extraordinary that Sir Thomas Legg and Sir Robin Ibbs were misinformed. If they were misinformed about this, then it is of course not impossible that they were misinformed in other areas.

73. When Mr Penfold handed in the Sandline strategy paper on 29 January (a paper which is hard to read any other way than as a plan for the use of military force), Mr Andrews handed it on to DIS for an assessment. When the DIS officer reported back, Mr Andrews did not recall anything significant being said.[265] Sir John Kerr made the surprising claim that "nobody could work out what it meant."[266] An intelligence report received on 19 February that Sandline was heavily involved in military activities was marked for Ms Grant's attention but she did not recall seeing it, while Mr Murray (who did) discounted it.[267] The military liaison officer in Conakry (Major Hicks) reported on 28 February that the Sandline arms had arrived. This report was sent by the MoD to the Resident Clerk in the FCO who telephoned a member of staff of AD(E) over the weekend. That member of staff has not been identified, though the Resident Clerk recollected that it was Mr Murray. Whoever it was astonishingly advised on two occasions that the report should be destroyed.[268] Another report from Major Hicks on 2 March cannot now be traced.[269]

74. The Chief of Defence Intelligence was clearly unhappy with the way in which DIS material was not treated with the seriousness which it deserved.[270] Sir John Kerr also told us that he was not satisfied with the way in which MoD material had been treated, and that there had, at least, been a failure in the logging system, which had been remedied. Although Sir John found the way in which the FCO had dealt with DIS material as "not very reassuring," he pointed out that the MoD itself had not alerted Customs and Excise.[271] The Foreign Secretary was more worried about his own Department's performance than that of MoD.[272] The FCO is the lead Department on implementing UN arms embargos and cannot divert blame elsewhere. The essence of intelligence is that a jigsaw is built up painstakingly and judgements are made on the balance of probabilities. Different pieces of the picture as it affected Sandline were ignored by different people and there was therefore no means by which sensible deductions could be drawn. The lesson of these failures must be learnt. We recommend that the FCO review and modify where appropriate the methods by which intelligence from external agencies is assessed inside the Department.

75. We make two other detailed recommendations. The person whom the Resident Clerk telephoned over the weekend is unidentified. The Resident Clerk told Legg that he thought it was Mr Murray, but Mr Murray denied this to Legg and to us.[273] Secondly, it is not clear whether the intelligence report of 19 February was or was not seen by Ms Grant. We note, in the aftermath of the Sandline affair, new procedures have been established for the logging and distribution of intelligence reports which arrive from the MoD.[274] We recommend that in order to protect the interests of the Resident Clerk in the future, he or she should formally record the name of any official with whom he or she deals, and that every official who sees an intelligence report should be required to record the fact that he or she has done so.

Enforcing sanctions

76. The dedicated unit in the FCO devoted to sanctions enforcement was disbanded in 1996.[275] This was regrettable, and it is equally regrettable that it was only as a result of the Sandline affair that a sanctions enforcement unit was re-established. This unit serves to re-enforce the importance of ensuring that sanctions are complied with,[276] and therefore plays a vital role in what is a key practical aspect of delivery of the Government's human rights policies. As the Foreign Secretary put it, the breach of an arms embargo is "an extremely serious matter indeed."[277] This does not seem to have been the view of officials at several stages of this saga. We welcome the establishment of a sanctions enforcement unit, and recommend that it is provided with proper resources and a wide mandate to enable it to discharge its brief.

Dealings with prosecuting authorities

77. Ministers were not the only ones who could fairly say that FCO officials had failed to inform them in good time of the Sandline affair. Customs and Excise, as prosecuting authorities, were also not informed as directly or as fully as they might have been. Ms Grant told us that the allegations "were so important that we referred them immediately to Customs and Excise."[278] This was not factually correct. The allegations contained in Lord Avebury's letter of 5 February were formally referred to Customs only on 10 March. Fortunately, this was not the first Customs had heard of them. According to the documents appended to the Legg report, Lord Avebury's letter was sent on 9 February to the FCO's Non-Proliferation Department who raised it at a meeting on 18 February of the inter-departmental Restricted Enforcement Unit, on which Customs were represented.[279]

78. Lord Avebury's letter should not have been the only document forwarded to Customs. As we have already said, Ms Grant agreed that Mr Penfold's minute of 2 February was "very strong evidence" of illegal activity by Sandline.[280] When asked why Customs was not notified immediately, she said that she thought that they had been, but that she did not check that her juniors had done so, which she regretted.[281] In fact, the minute of 2 February was never formally referred by the FCO to Customs and Excise, although Ms Grant had assumed that it had been.

79. Mr Murray told us that when he saw Lord Avebury's letter of 5 February, he regarded it as providing "very, very useful and pertinent information about a company" of which he had formed "deep suspicions," and that he "immediately instructed that the information be passed on to the relevant criminal authorities."[282] On the other hand, he did not follow his first instincts to copy Mr Penfold's minute of 2 February (which he saw on 23 February) immediately to Customs because he had been warned to leave Mr Penfold alone by Mr Dales; because he was reluctant to shop a colleague, and because he believed Customs would find out eventually anyway.[283]

80. Mr Murray minuted Mr Dales on 30 March about his conversation with Customs and Excise. As we have mentioned,[284] this minute was copied to Sir John Kerr. The minute continued the phrase "we were not aware of any shipments of arms," which, the minute implied, was what Mr Murray had told Customs and Excise. Mr Murray told us that the minute was intended only for internal purposes and "addressed to people who knew the story," and that, in any case, the phrase was accurate because the Department did not know that any arms had been shipped at that stage.[285] Yet there had been reports to London from the military liaison officer on 15 February that the arms delivery was imminent and on 28 February and 2 March that the arms had arrived.[286] Sir John Kerr was misled by the minute, and, if this was all that Customs were told, they might well have supposed that the word "we" included Mr Penfold. We regard any defence of the use of the phrase "we were not aware of any shipment of arms" on 30 March as quite implausible and unacceptable.

81. There was thus a failure to communicate as promptly and directly as possible with Customs and Excise when the FCO first became aware that the law might have been broken, and some evidence that Customs were not subsequently told the full story. Mr Lloyd rightly told us that the Customs investigation was an important external check on the FCO—he described it as "the ultimate failsafe on incompetence or even corruption....by officials."[287] It cannot have been welcome for FCO officials to see external investigators crawl over their own internal affairs. No-one like to see his or her own dirty washing exposed. Nevertheless, we believe that FCO officials have a duty to ensure that prosecuting authorities are informed immediately when serious criminal allegations are made to them, and also to co-operate as fully as possible with those authorities when an investigation is under way.

82. Mr Penfold told us that he found it "quite distasteful" that he was interviewed by Customs under caution without having being warned by the FCO to expect this when he returned to the United Kingdom on 26 April.[288] We do not criticise the FCO for this. We regard it as entirely appropriate that an official should not be warned by his or her managers when a criminal prosecution is in contemplation.

Dealing with persons under criminal investigation

83. We questioned Mr Murray about his telephone conversation with Mr Spicer on 27 March. He conceded that it would have been "extremely unwise" for him to have attempted to contact someone under criminal investigation, but that there was nothing "that was out of order at all" in him responding to requests made to him by Mr Spicer.[289] We disagree. We believe that it is wholly inappropriate for any official of the FCO (or indeed of any government Department) to discuss with any person whom he or she knows to be the subject of criminal investigation any matter germane to these investigations. Common sense should perhaps be sufficient, but we asked Sir John Kerr whether any guidance covered these matters. He told us[290] that there was no specific guidance for non-consular staff who might be speaking to, or dealing with, persons under criminal investigation. However, officials were expected to be cautious; to take legal advice, and to follow general guidance on conduct. It was "impossible to give staff guidance covering every eventuality." On balance, we believe that there is one area where it is both possible and appropriate for guidance to be issued. We recommend that instructions be issued to all FCO staff that they must not communicate, other than in a consular capacity, with persons they know to be subject to criminal investigation about matters germane to those investigations, except through legal channels.

Dealings with the press

84. Unfortunately news management is all too common a feature of public life. In at least two instances in the Sandline affair, the press were given a partial version of the true picture. We have already referred to the emphasis in the press line on the UN embargo on the fact that it applied to the Junta, with the implication that it applied to the Junta alone.[291] Later, before the story was covered in The Observer on 8 March, a news line was prepared in the Department which was, again, economical with the truth. The Observer had received reports of three-way meetings between Mr Penfold, Mr Spicer and President Kabbah. Since these had never happened, they were denied—allowing a false inference to be drawn that there was no truth in a three-way connection. The FCO was also said to be "aware of reporting of a deal in the offing," though it was by this stage well aware (through Mr Penfold's minute of 2 February) that a deal had occurred. There is a fine line between attempting to ensure that journalists concentrate on the favourable side of a story and disguising the truth. But what happened in the Sandline case will undermine the credibility of FCO news lines with the media.

Management practices

85. One of the conclusions drawn in the Legg report is that the resources of the FCO were under considerable strain. Mistakes and misjudgements are the inevitable result of requiring officials and Ministers to work "at or beyond the limits of their capacity." Legg commented that "significant overload seems likely to continue. If additional resources are not available, attention needs to be given to simplifying and streamlining the work, or reducing the span that is attempted."[292] Sir John Kerr claimed that "continual downward pressure on resources had meant that people were under very considerable strain,"[293] and that the "pips were squeaking." He welcomed the increase in resources which the Comprehensive Spending Review of July 1998 had brought the FCO, and told us that the FCO would in consequence be able to staff up to establishment levels. These points were again made by the Foreign Secretary.[294] The way the FCO is resourced and how those resources are directed are questions which go far beyond the Sierra Leone inquiry. For this reason, we shall be conducting a separate inquiry into FCO resources later in 1999. Nevertheless, there are a few observations we wish to make in the context of the current inquiry.

86. Legg commented that the staff of AD(E) "have to juggle copious demands, their hours are long and their working conditions stressful."[295] We were told that Ms Grant was working a 70 hour week, Mr Murray between 60 and 70 hours and Mr Andrews 50 hours and sometimes more.[296] Despite improvements, the Head of AD(E) in December 1998, told us that his staff were still working hours which they all regarded as too long.[297] To expect an official to work for 70 hours a week is quite unacceptable. Assuming one day of rest a week, that means that on average Ms Grant worked more than 11½ hours a day from Mondays to Saturdays. Sir John Kerr told us[298] that "overwork has been, and remains, a serious problem." He attributed this to the unpredictability of foreign policy work, as well as to past cuts in resources. Most managerial jobs have to cope with unpredictability. But we believe that something is fundamentally wrong with the management of the FCO if officials are regularly expected to work excessive hours. Not only are they doing themselves no good, but the end result of their work is bound to be inferior to work done by staff who have reasonable opportunity for relaxation. We suspect that there may be a culture in the FCO of clocking up hours to impress managers. This was recognised by the Foreign Secretary.[299] If that is so, it is undesirable. We welcome the Foreign Secretary's recognition that working pressures are excessive, and applaud his wish to reduce the hours worked by means such as the additional resources already allocated. We share with him the belief that excessive working hours are not efficient, are socially undesirable and tend to reduce officials' capacity to think freshly.[300] We note that the Working Time Directive requires a maximum average working week of 48 hours.

87. The length of hours worked can be affected by management practices. One is the complex hierarchy of reporting inside the Department.[301] As the Foreign Secretary said "the section leader responsible for Sierra Leone has above him a deputy head of department, who in turn reports to a head of department, who in turn reports to a director of a command, who in turn has a deputy under secretary to whom he reports, who in turn has a permanent secretary. There must be some ways of short-circuiting this chain of command."[302] Such a management structure must, at least, be cumbersome and cannot lead to effective decision making. We asked Sir John Kerr what he was doing to ensure that the management advice contained in Legg was implemented. He mentioned a number of measures, including the 60 Measures for Change outlined by the Foreign Secretary (though the bulk of these are unrelated to the Sandline affair—and must have been under consideration in the FCO for some time).[303] In written evidence, he expanded on some of the measures being taken.[304] The Foreign Secretary stressed the importance of introducing modern management methods into the FCO, and told us that this was why he had appointed Sir Robin Ibbs to the Sandline inquiry. It makes sense now to build on what Sir Robin has done—after all, the Legg report specifically says that it is not "an analysis of the organisation and working methods" of the FCO.[305] Like the Foreign Secretary, we want to see the FCO adopt the best of modern management methods.[306] We believe that there may be merit in asking external management consultants to look afresh at FCO management practices to see whether existing staff can be used more effectively. We recommend the employment of external management consultants to assess the effectiveness of management practices in the FCO and to make appropriate recommendations.