Another Amendment proposed, in line 11, to leave out the words "wholly inadequate" and to insert the words "not only wholly inadequate but an amazing disregard of the coming "explosion"."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Paragraph, as amended, agreed to (now paragraph 69).

Paragraph 69 read and postponed.

Paragraph 70 (now paragraph 71) read, amended and agreed to.

Paragraph 71 read, amended, divided and agreed to (now paragraphs 72 and 73).

Paragraphs 72 to 74 (now paragraphs 74 to 76) read and agreed to.

Paragraph 75 read, as follows:

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." This was not strictly the case. 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.

Amendment proposed, in line 6, to leave out the words "was not strictly the case" and to insert the words "is not true"—(Mr David Wilshire.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment made.

Paragraph, as amended, agreed to (now paragraph 77).

Paragraph 76 (now paragraph 78) read and agreed to.

Paragraph 77 read, as follows:

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." 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.

Amendment proposed, in line 9, after the word "anyway." to insert the words "We find these excuses amazing and totally unacceptable."—(Mr David Wilshire.)

Question put, That the Amendment be made.

The Committee divided.

Paragraph agreed to (now paragraph 79).

Paragraph 78 read, as follows:

Mr Murray minuted Mr Dales on 30 March about his conversation with Customs and Excise. As we have mentioned, 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. 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. 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.

Amendment proposed, in line 14, after the word "March" to insert the words "by Mr Murray."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment proposed, in line 15, after the word "and" to insert the word "utterly."—(Mr David Wilshire.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment proposed, in line 15, to leave out the word "unacceptable" and to insert the word "untrue."—(Sir Peter Emery.)

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

Paragraph agreed to (now paragraph 80).

Postponed paragraph 69 again read, amended and agreed to (now paragraph 70).

Paragraphs 79 and 80 read and agreed to (now paragraphs 81 and 82).

Paragraph 81 read, as follows:

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. 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 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.

Amendment proposed, in line 5, to leave out the words "We disagree." and to insert the words "This cannot be correct."—(Sir Peter Emery.)

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

Paragraph agreed to (now paragraph 83).

Paragraph 82 read, as follows:

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. 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 would have 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 tend to undermine the credibility of FCO news lines with the media.

Amendments made.

Another Amendment proposed, in line 15, to leave out from the word "truth" to the first word "the" in line 16 and to insert the words "Unfortunately what happened in the Sandline case must tend to undermine in the future."—(Sir Peter Emery.)

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

Another Amendment made.

Paragraph, as amended, agreed to (now paragraph 84).

Paragraphs 83 and 84 (now paragraphs 85 and 86) read and agreed to.

Paragraph 85 read, as follows:

The length of hours worked can be affected by management practices. One is the complex hierarchy of reporting inside the Department. 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." 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). In written evidence, he expanded on some of the measures being taken. 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. Like the Foreign Secretary, we want to see the FCO adopt the best of modern management methods. 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.

An Amendment made.

Another Amendment proposed, in line 20, after the word "methods" to insert the words "although this may not be welcomed by the Department."—(Sir Peter Emery.)

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

Another Amendment made.

Paragraph, as amended, agreed to (now paragraph 87).

Paragraphs 86 and 87 (now paragraphs 88 and 89) read, amended and agreed to.

Paragraph 88 (now paragraph 90) read and agreed to.

Paragraph 89 read, as follows:

There is a very plausible argument that private military companies are nothing more than mercenaries and arms-mongers, and that the last thing which a country like Sierra Leone—or any other trouble-spot—needs is the involvement of people like them. However, it is very possible that military operations in sensitive areas like Africa will be increasingly "privatised" as governments become wary about being directly involved. At present, there is no legislative prohibition or regulation which deals with private military companies, and they are therefore, as Legg puts it "entitled to carry on their business within the law and, for that purpose, to have access and support which Departments are there to provide to British citizens and companies." We raised with our government witnesses the possibility of greater legislative control. In early June, Sir John Kerr told us that his Department was "reflecting seriously" upon legislation to deal with private military companies, while Ms Grant thought that there was "a case for more regulation, particularly for more transparency about how these companies operate and are set up." In November, Sir John explained that Whitehall-wide consultation was taking place. This was confirmed by Mr Lloyd in the House. Perhaps anticipating the way the wind is blowing, Mr Spicer was reported in November as backing regulation of private military companies by the Government or the United Nations in order to remove "the shadow hanging over the business"—a matter at which he hinted in evidence to us.

Amendment proposed, in line 1, to leave out the words "There is a very plausible argument that" and to insert the words "Some see."—(Mr David Wilshire.)

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

Paragraph agreed to (now paragraph 91).

Paragraph 90 (now paragraph 92) read and agreed to.

Paragraphs 91 and 92 (now paragraphs 93 and 94) read, amended and agreed to.

Paragraphs 93 to 95 (now paragraphs 95 to 97) read and agreed.

Paragraphs 96 and 97 (now paragraphs 98 and 99) read, amended and agreed to.

Paragraph 98 (now paragraph 100) read and agreed to.

Paragraph 99 read, as follows:

The Foreign Secretary and Sir John Kerr both argued that their reluctance to release papers to the Committee was vindicated by the eventual Legg report. We certainly accept that our work in producing this report has been facilitated by what Legg did before. We are also realistic enough to recognise that there are difficulties in holding two inquiries in parallel with the same witnesses and documents involved in each. Nevertheless, it would be a dangerous precedent if any future Executive were able to argue that any select committee inquiry could be superseded, or perhaps blocked for a considerable period of time, by a whistled-up departmental inquiry. The somewhat choleric evidence sessions which we held in May and June with Sir John indicated that the Committee was prepared to be tenacious in its determination that Parliament should not be ousted by the Executive. We note Sir John's comments that he "knew of nobody in Government, Minister or official, who thinks that the Committee is not entirely within its rights to probe this matter," and that his concerns were only about "sequence." These points were made again by the Foreign Secretary. We believe that we must be trusted to do the job that the House has given to us in the way we think fit, and we remark in passing that the affair might have been over sooner if we had been allowed to proceed before Legg reported. We recommend that the Government undertake in future to respect select committees' needs for information, irrespective of any departmental inquiry on related matters which might have been established.

Amendments made.

Amendment proposed, in line 18, after the word "over" to insert the word "much."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Another Amendment made.

Paragraph, as amended, agreed to (now paragraph 101).

Paragraph 100 (now paragraph 102) read and agreed to.

Paragraph 101 read, as follows:

We asked the Foreign Secretary in July to allow us access to relevant intelligence reports and assessments. This request was refused on the basis that intelligence information was not normally released to select committees. The Committee responded by accepting that intelligence reports were not sent to committees as a matter of routine, but recalling that exceptions had been made—as in the case of the so-called "Crown Jewels"—intelligence about the sinking of the Belgrano during the Falklands war. We commented that we "should not have to rely on the judgement of others as to the relevance of these intelligence reports to our inquiry." The Foreign Secretary's response re-iterated his belief that there was "no reason to depart from the normal practice that the Committee does not see intelligence reports." We confirmed our view that "it is unacceptable to the Committee to be asked to rest on [Sir Thomas Legg's] judgement of the relevance of intelligence material." The Foreign Secretary was unwilling to alter his position, commenting as follows:

"In making the case for access to the intelligence reports, you draw a parallel with the "Crown Jewels" paper for the Belgrano inquiry. I have already given the Committee unprecedented access to official papers for this inquiry, as I am sure that you recognise. Particularly in the light of the view which Sir Thomas Legg took of the relevance of the intelligence reports, I am satisfied that the parallel with the Belgrano inquiry is not accurate, and that there is no good case for departing from normal practice."

Amendment proposed, in line 23, after the word "practice." to insert the words "This sounds very much like a Minister determined to defend his own position."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Whereupon the Chairman declared himself with the Ayes.

Paragraph, as amended, agreed to (now paragraph 103).

Paragraphs 102 and 103 (now paragraphs 104 and 105) read and agreed to.

Paragraph 104 read, as follows:

We then attempted to have an informal briefing from C, drawing a parallel with informal briefings which are, we understand, being offered to the Home Affairs Committee by the Director General of the Security Service. An informal briefing is less satisfactory than formal evidence, but better than nothing. Again, this was refused. In making his refusal the Foreign Secretary drew a distinction between the SIS and the Security Service. In the case of the latter "there is a certain amount which can be said openly....without damage to its operational capability." With SIS "the position....is different." Mr Cook stressed that SIS was accountable to him, was overseen by the ISC, and was subject to the work of the independent Commissioner. He told us that he had "concluded that there is very little which C could usefully say in an informal briefing of the Foreign Affairs Committee" and that he "would not therefore wish C to give this briefing."

Amendment proposed, in line 13, after the word "briefing." to insert the words "If, after all, there was very little which "C" could say, we find it perverse that he be stopped from coming to the Committee."—(Sir Peter Emery.)

Question put, That the Amendment be made.

The Committee divided.

Paragraph, as amended, agreed to (now paragraph 106).

Paragraph 105 read, as follows:

We greatly regret that we were not given access to intelligence material and that we were refused the opportunity to take evidence from the Director of the SIS. First of all, this has inhibited our work, which might conceivably have been focussed differently. We cannot now say that we have had access to all the sources of information which would have allowed us to come to unequivocal conclusions. From the point of view of the Government, we are not able to say that, in the Sandline affairs, the SIS has a clean bill of health. We can neither condemn nor exonerate it. Nor can we say that FCO officials acted with good judgement or bad on the intelligence they were sent. The obduracy of the Government on this matter is inimical to its own best interests. Secondly, we believe that it is most regrettable that our Committee is apparently not regarded by the FCO as sufficiently trustworthy to have access to intelligence material or personnel. Sir Thomas Legg and Sir Robin Ibbs were so regarded; junior civil servants are so regarded, but the Members of Parliament (some of whom are former FCO or MoD Ministers) charged with the oversight of the Foreign and Commonwealth Office are not. We respect secrecy and have the interests of the nation in mind just as much as anyone, civil servant or current Minister, within government.