Consideration of the Chairman's draft Report resumed.

Postponed Paragraph 6 again read, amended and agreed to.

Postponed Paragraph 24 again read, amended and agreed to.

Paragraph 41 read, as follows:

Mr Penfold was criticised by Legg for giving a "degree of approval" to Sandline's illegal plan to send a shipment of arms to Sierra Leone "which he had no authority to do." Legg also believed, however, that the High Commissioner did not know that the shipment would be illegal. Whereas the first part of this conclusion was accepted by FCO witnesses, they appeared to have more difficulty with the second part. We will examine in turn whether Mr Penfold should have known that arms supplies were illegal; whether his dealings with Mr Spicer were appropriate; whether he discharged his obligation to the FCO accurately to report on his dealings, and whether he was operating outside government policy—or "freelancing" as it was described by one of our witnesses.

Amendment proposed, in line 3, after the word "do." to insert words " We can find no evidence of this."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided

Question put, That the paragraph stand part of the Report.

The Committee divided.

Paragraph 42 read, as follows:

Mr Penfold claimed that, when meeting Sandline in December 1997, he was not aware that what they were contemplating was illegal. The Foreign Secretary shared Legg's view that Mr Penfold could have done more to acquaint himself with the true state of the law. Sir John Kerr found it "very surprising" that Mr Penfold was able to claim that he did not know that it was illegal to send arms to President Kabbah, "particularly as, during the period when the Security Council Resolution was being drafted and negotiated and the Order in Council was being drafted and submitted and approved, [Mr Penfold] was in London." His argument rested on the persuasive ground that a Head of Mission has a duty to understand thoroughly government policy as it affects the country to which he is accredited ("he should have made it his business to find out"), though he did concede that "it was also the responsibility of the Department to make sure he came across all [relevant] information."

Amendments made.

Another Amendment proposed, in line 9, to leave out the word "persuasive."—(Mr David Wilshire.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment made.

Paragraph, as amended, agreed to.

Paragraph 43 read, amended and agreed to.

Paragraph 44 read, as follows:

The cavalier attitude shown by the FCO in not making sure that the Order in Council was brought to Mr Penfold's attention is inexcusable. Mr Penfold's failure to ascertain government policy towards arms sales to Sierra Leone is also unacceptable. We note that Mr Penfold knew that Ministers' policy was that the problems of Sierra Leone should be resolved by peaceful means. He was obviously also aware that arms supplies to Nigeria (and ECOMOG were a largely Nigerian force) were embargoed both by the EU and Commonwealth. From these facts alone he should have deduced that British policy would have been to prevent all arms sales to Sierra Leone. We conclude by expressing our surprise at Mr Penfold's ignorance and his lack of due diligence in ascertaining the true legal position on arms supplies to Sierra Leone, and our equal surprise that the staff of AD(E) were not themselves clear on this matter and did not keep Mr Penfold informed.

Amendment proposed, in line 1, to leave out from beginning of line 1 to second "Mr" in line 2 and to insert "The FCO's practice of not circulating Orders in Council but relying instead on UN Resolutions is inexcusable. Such a practice signalled to every affected Ambassador or High Commissioner that there was no need to acquaint themselves with an Order in Council".—(Mr David Wilshire.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment proposed, in line 2, after the word "inexcusable" to insert the words:

"Equally so, was the failure of FCO officials in London to tell Mr Penfold that his interpretation of the legal ambit of the arms embargo was incorrect even after this had become patently apparent from his minute of 2 February. We recommend that clear instructions are issued to FCO officials in London that it is their responsibility to inform the relevant overseas post immediately if there is any evidence of its staff misunderstanding the terms of a UK arms embargo."—(Sir John Stanley.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment proposed, in line 2, to leave out from the word "inexcusable" to the end of the paragraph and to insert the words:

"Mr Penfold's understanding that the British Government's arms embargo policy was an embargo on arms supplies to the Junta was consistent with every document he received from the FCO—with the internal telegram to posts of October 9, with the FCO's daily bulletins of October 9 and January 9, with the CHOGM communique of October 27 and with the FCO's letter of January 9 to the Foreign Minister of the Government of Sierra Leone. All these documents are referred to in paragraph 16 above. At no time was Mr Penfold given any indication whatever by the FCO in London that his interpretation was incorrect. Moreover, reprehensibly, the FCO never informed him that the arms embargo applied to the actual Government to which he was accredited - namely the democratically elected Sierra Leone government in exile. Against this background we conclude that the Legg report's criticism of Mr Penfold—endorsed by the Foreign Secretary- that he should have taken steps to inform himself more fully about the scope of the arms embargo was unjust and unreasonable.


When the Permanent Secretary, Sir John Kerr, was asked whether he accepted "that the first and overriding duty to inform Ambassadors and High Commissioners as to the legal ambit of arms sanctions orders lies, first and inescapably with officials in London", he replied "I entirely agree ¼¼. That is exactly right."[FN: Q1827.] We consider that it was a duty that FCO officials in London signally failed to discharge towards Mr Penfold."—(Sir John Stanley.)

Question put, That the Amendment be made.

The Committee divided.

Other Amendments made.

Another Amendment proposed, in line 13, to leave out the words "were not themselves clear on this matter and."—(Mr Ernie Ross.)

Question, That the Amendment be made, put and negatived.

Paragraph, as amended, agreed to.

Paragraph 45 read, as follows:

Mr Penfold characterised his relationship with Sandline as typical of the sort of relationship he had with other British companies wishing to do business with Sierra Leone. His initial introduction to the nexus of companies of which Sandline was a part was when he called upon Branch Energy at the suggestion of the FCO before he took up his appointment as High Commissioner. While in Conakry, Mr Penfold had some dealings with Mr Rupert Bowen and a Brigadier Sachse, both associates of Sandline. He was present at an official meeting in London on 3 December 1997 when intelligence that Executive Outcomes (another associated company) was supplying arms to Sierra Leone was discussed. Subsequently, he met President Kabbah on 19 December and was shown a draft contract involving Sandline which he surmised was for the supply of arms. It is disputed whether or not he advised President Kabbah to sign this contract. Mr Penfold says that he did not, and points out that President Kabbah himself corroborated this. However, he agrees that he did not discourage President Kabbah from signing. Mr Spicer told us of a conversation with Mr Penfold in which the High Commissioner told him that he had suggested to President Kabbah that "Sandline might be a suitable company." Mr Murray claims that Mr Penfold told him that he had advised President Kabbah to "take on Sandline." Subsequently, Mr Penfold was telephoned at home by Mr Spicer on 21 December; lunched with him on 23 December; again telephoned by him after Christmas; spoke to him from New York by telephone in mid-January, and again went to his offices on 28 January. In all of these later discussions and meetings, the existence of the contract between Sandline and the Kabbah government was known.

Amendments made.

Another Amendment proposed, in line 20, after the word "Sandline" to insert the words "What these words may or may not mean must be open to speculation."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Paragraph, as amended, agreed to.

Paragraph 46 read, as follows:

We believe that Mr Penfold showed a certain lack of caution in his dealings with Sandline. Mr Penfold accepted that Mr Spicer and his colleagues "may have taken it that I was giving the nod," though he argued that this was an incorrect inference on their part: "I firmly refute that," he told us. By accepting their hospitality or by meeting them in their offices unaccompanied by other officials, Mr Penfold left himself open to accusations of encouraging Sandline. We believe that it would be reasonable to conclude that Mr Spicer had the tacit approval of the British Government from Mr Penfold for his deal with President Kabbah. We agree with the Foreign Secretary that this was "regrettable" and should not have happened."

Amendment proposed, in line 1, to leave out from the beginning of the line to the first word "Mr" in line 2.—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Other Amendments made.

Paragraph, as amended, agreed to.

Paragraph 47 read, as follows:

What is somewhat puzzling is that there was no clear policy laid down about dealings with Sandline for officials in the Africa Command. Mr Lloyd told us in no uncertain terms that there were no circumstances in which the Government dealt with mercenaries, and Ms Grant was well aware of the suspect nature of Mr Spicer's business. He had asked to see her soon after she took over as Head of Department in August 1996, but she had refused the meeting because she did not want him to be able to say that he had a friend in high places in the FCO. She had given a "very strong steer....that you dealt with Sandline with a very long spoon." Mr Murray's predecessor, Mr Everard, while he had held regular telephone conversations with Mr Spicer and met representatives of Branch Energy at the FCO on 10 December 1997, had also been uncomfortable in his dealings with Sandline. Mr Penfold, however, received no guidelines or briefing for his dealings with Sandline. Many of the problems which occurred would not have done so if Ms Grant had acted on her suspicions and instructed those who answered to her (including Mr Penfold and Mr Murray) to follow her example, and if Ministers had made their policy on dealings with mercenaries clearer to officials. We conclude that Mr Penfold's relations with Sandline were open to criticism.

Amendment proposed, in line 18, to leave out from the word "officials" to the end of the paragraph and to insert the words-

"We conclude that Mr Penfold was unwise to see Sandline on his own, thereby exposing himself to Sandline's claim that he had given tacit approval to their arms sales contract, a claim that Mr Penfold strongly denied. As Mr Penfold told the Committee: "At no time did I give them [Sandline] any understanding that they would be given authority for what they were doing. I made it quite clear to Spicer that I was not in a position to give authority for what they were doing, all I could give was opinions and so on."[FN: Q1169.] Incautious as Mr Penfold's discussions with Sandline were, they yielded a document that should have been seen to be of key significance when it was given to the FCO by Mr Penfold on January 29, the day after he received it from Sandline. This document was Sandline's strategy paper outlining what they termed Project Python—their planned military operations in Sierra Leone. It should have been abundantly clear from this document, even to civilian FCO officials, that Sandline's planned activities in Sierra Leone were certainly contrary to British Government policy and likely to be in breach of UK law. Regrettably those officials who saw the Sandline document that Mr Penfold had promptly passed to the FCO failed totally to appreciate its importance.—(Sir John Stanley.)

Question put, That the Amendment be made.

The Committee divided.

Whereupon the Chairman declared himself with the Noes.

Another Amendment proposed, in line 18, to leave out the word "We" and to insert the word "Some."—(Sir Peter Emery.)

Question, That the Amendment be made, put and negatived.

Another Amendment proposed, in line 19, after the word "criticism" to insert the words "—mainly because he was inadequately advised by the FCO."—(Mr David Wilshire.)

Question put, That the Amendment be made.

The Committee divided.

Paragraph agreed to.

Paragraph 48 read, as follows:

Mr Penfold accepts that he had surmised that arms were to be supplied by Sandline to President Kabbah after his discussions with the President on December 19 and this was corroborated by his lunch with Mr Spicer on December 23. He did not, however, properly report this information to the FCO. He himself accepts that his briefing ought to have gone further. He told us that he "did not have the opportunity to make a written report" of the 19 December meeting, although he accepted that it was an important meeting, and there are disputes about whether he made an adequate oral report or any at all when he went into the FCO on 23 December before lunching with Mr Spicer. For example, he agrees that he did not draw the attention of the relatively junior officials he met to the fact that he believed that the contract was an arms contract, while they have no recollection of any mention of a contract between Sandline and President Kabbah. Mr Penfold said he was at a loss as to why officials in London had not reacted appropriately to the momentous news—what Sir John Kerr called the "bombshells"—he had brought. Sir John told us that he did not know whether or not the meeting on 23 December had taken place, but he was clear that it was part of Mr Penfold's professional duty to produce a written report of the meeting with President Kabbah on 19 December.

Amendments made.