Uncorrected Evidence 147

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Oral Evidence

Taken before the Foreign Affairs Committee

on Monday 3 December 2007

Members present:

Mike Gapes (Chairman)

Mr. John Horam

Mr. Eric Illsley

Andrew Mackinlay

Mr. Malcolm Moss

Rt hon. Sir John Stanley

________________

Examination of Witnesses

Witnesses: The Hon Ralph O'Neal, Premier, British Virgin Islands, and The Hon Kurt Tibbetts, Leader of Government Business, Cayman Islands, gave evidence.

Chairman: I ask the public to take their seats quickly and switch off their mobile phones, please. Last week, for the first time, I had to throw someone out of an evidence session, and I will not hesitate to do that again, so please turn them off or put them in silent mode-[Interruption.] I heard one then; that is a good warning.

Good afternoon, gentlemen, and welcome. As you know, the Foreign Affairs Committee is, after many years, conducting an inquiry into the Overseas Territories, and we thought we would take the opportunity provided by the important meeting that you have in London this week to have an evidence session with those of you who were able to find the time to take part. Regrettably, not everybody has been able to, but we are very pleased that a number of you have been able to find the time to be with us today to give us your impressions and to answer questions about your Overseas Territory. I shall begin by asking you to introduce yourselves.

Ralph O'Neal: I am Ralph T. O'Neal, Premier of the British Virgin Islands.

Kurt Tibbetts: My name is Kurt Tibbetts. I am the Leader of Government Business in the Cayman Islands.

Q1 Chairman: How would you characterise your relationship with your Governors at the moment?

Ralph O'Neal: I was just elected as Premier on 20 August, so I have not really worked with the Governor long enough to find out what kind of man he is, but he has his job to do and I have mine, and so far we have been working. We have not quarrelled yet.

Q2 Chairman: That is a good sign. Do you anticipate quarrelling at some point?

Ralph O'Neal: As I tell people when they are being sworn in-I have said this many times-there is always a rift between the Governor and those who are governed. Those who represent those who are governed will one day come up against it.

Q3 Chairman: What about you, Mr. Tibbetts? How is the situation from your point of view in the Cayman Islands?

Kurt Tibbetts: If you do not mind, I would like to speak not about the personal relationships, but about the relationship between Governor and government.

Chairman: That is absolutely fine.

Kurt Tibbetts: The Cayman Islands is now in the process of constitutional modernisation. When we get to the negotiating table, there will be several areas that we will wish to discuss with regard to moving a little away from what obtains at present. The relationship that obtains now is that the Governor chairs the Cabinet and decides on Cabinet agendas. We think that time has evolved to the point where that should not be the case. We have a very vibrant democracy and the elected government should, we believe, have more of a say when it comes to deciding the agendas for Cabinet and who chairs Cabinet meetings. We respect the relationship involved in being an Overseas Territory, but we believe that in many instances the role of the Governor as is needs to be changed a little to allow more of a partnership to exist.

Q4 Chairman: Do you believe that you should be formally consulted on the appointment of Governors?

Kurt Tibbetts: First, I do believe that common courtesy should dictate that; but we have our own experiences with the word "consultation" and being consulted. If it is simply being told who that good person is, we do not consider that to be consultation. We do believe that there should be some consultation. We respect the fact that the Governor is the UK's representative in each of the jurisdictions, and that because of the constitutional arrangements he is head of state; but we have to live with him every day while he is there. Although we certainly do not expect to be on the committee that appoints the Governor and to be involved in the interviews and so on, we believe that it is only fair that we have wind of who is being considered and see some type of biography, so that we can have a look and perhaps pass on our opinions.

Ralph O'Neal: I, too, believe that the word "consultation" needs a wider meaning. In the British Virgin Islands, we have a cabinet system; the Governor, the Premier and the secretary to the Cabinet fix the agenda. However, when it comes to appointing somebody and sending him without even telling us who he is, where he is from and what is his background, how do they know that he is going to fit in with the community? The elected representatives should be the persons to judge that. We have had experience of Governors who just did not fit into the community; they were respected only because they were Her Majesty's representatives. It needs something more, so that we can say, "Well, if he turns out to be a misfit, we can take some of the blame."

Q5 Mr. Illsley: Mr. Tibbetts, you said that you were about to begin some form of consultation on the role of the Governor and modernising.

Kurt Tibbetts: The consultation would be for a new constitution.

Q6 Mr. Illsley: Do you expect any resistance from the Governor or the UK Government to what you have proposed? I believe that the subject was raised back in 1998, and the Government rejected it then. Do you see any change?

Kurt Tibbetts: We have had the benefit of seeing the results of the modernisation process in three Territories in recent times-the British Virgin Islands under my good friend Ralph O'Neal, the Turks and Caicos Islands and Gibraltar. We have seen the end result of their negotiations. I think that there may be a few other variations to what they received as their framework that we would wish to see.

I would not like to use the word "resistance" because we respect the fact that, for as long as we wish to retain the constitutional status of a British Overseas Territory, it is only fair to expect the UK Government to have some hand in our government. We know that it is always a question of liability, and that they wish to ensure that they do not find out too late if the country is doing something wrong. We understand that. However, we are going to seek a certain level of autonomy to ensure that the democratic process is truly democratic, and that the elected representatives who represent the people-in my case, the people of the Cayman Islands-are able to do so fairly freely, understanding the limitations of the constitutional arrangements. I do not expect resistance, and I think that we shall simply be very realistic about it. We are going to ask for what we think is right, and we will see what the outcome is.

Q7 Sir John Stanley: Mr. Tibbetts, will you give us a bit of background to how the constitutional review came about? Your constitution has been essentially unchanged, I think, since 1972.

Kurt Tibbetts: We have had minor amendments.

Q8 Sir John Stanley: Will you clarify for us whether in the Cayman Islands you had been pressing for some time against resistance from the Foreign Office here for a constitutional review; or did it work the other way round-were they pressing you to review the constitution and you were resistant to it? Can you explain the background?

Kurt Tibbetts: I have to say that I do not think it was either one of the two. It was a combination of many things. We have had minor amendments since 1972 and there was an attempt in the very early '90s, but elections caused the process not to be completed. We restarted those engines in 2002 and this was based more on the White Paper that was produced, "Partnership for Progress and Prosperity". We were told that the UK Government wanted the Territories to look at their constitutions with a view to modernising, but there was no real pressure, that I know of, brought to bear. We started the process; unfortunately, we had already begun negotiations with the Government and at the end of the day we had a draft constitution sent to us, but the Government of the day decided to scrap it. That is my best way to explain it in short terms.

Q9 Sir John Stanley: Which year was that?

Kurt Tibbetts: That was 2003. We had elections in 2005 and we are now back on track with a new secretariat set up. The process has started again. We intend to begin public consultation very early next year and go through a referendum, perhaps by May, with a view to beginning negotiations very shortly after that. To answer your question quickly and to give you the background, there was no pressure put on the Cayman Islands by any of Her Majesty's Government's representatives, for this to be done within a given time frame. They told us that they were quite happy to work along with us at our pace, to ensure that we would get the best that we could get, and that that would satisfy them, whenever we could complete that process.

Q10 Chairman: Mr. O'Neal, you already have your new constitution. Could you tell us how you feel about it? Is it satisfactory? Do you have any views about the negotiation process that led to it?

Ralph O'Neal: The present constitution is one that I helped to form. I was on the delegation and we had some very good sessions here in London. It provided for things that the people asked for; we got that. There are one or two little things that need mopping up, you know; but I suppose that will come after three or four years, by making minor amendments.

The process really was one where people throughout the Territory were consulted. There were three sessions in the BVI with representatives of the United Kingdom Government, and the final one was here, in February. By 15 June, the constitution was brought into operation. We are now getting the various instruments of the constitution. Some have been brought in already. We have to get a reformed judicial and legal commission. It has been enlarged from three members to five. We have a new commission-the police service commission, which the new constitution provides for. It also provides for two additional elected members, but before that we need an electoral boundaries commissioner to decide whether they should be members for a district, or at large. We are seeking a commissioner to be appointed to do that. But by and large, the majority of the people, as far as I know, are satisfied with what has been achieved.

Chairman: Thank you. That is helpful.

Q11 Mr. Horam: Could I ask you about the Overseas Territories Consultative Council? How useful a forum do you find this to be in practice?

Ralph O'Neal: I think it is a most useful institution. I remember being at the very first meeting. This is my fifth meeting. I find that the Overseas Territories have gained some use from it-for example, the United Kingdom passport that we are able to get now, as a result of which people can travel much more easily, especially to America; and the reduction in the fees for students from the Territories. When the OTCC started we had about five or 10 students in the UK; now we have 65. Although the cost of living here is higher than in the United States, it is a great achievement for us to have our students coming here, especially those who are studying law. They can qualify here in the United Kingdom.

Q12 Mr. Horam: Do you feel satisfied with the sort of input you can have, for example, into the setting of the agenda for the OTCC? Do you have enough time with Ministers?

Ralph O'Neal: Yes. The heads of the Territories are written to and asked to suggest items for the agenda. I think that Mr. Tibbetts will confirm that all their suggestions are included. Our requests are treated very sympathetically and after the discussions and recommendations, action is taken to follow them up. It is not simply a talking shop; there is also some action. That is one of the excellent things about it.

Q13 Mr. Horam: Do you agree with that, Mr. Tibbetts?

Kurt Tibbetts: I agree, but I would like to add to that. My good friend Ralph speaks of the value of the OTCC meetings, and it certainly is good that we are able to have them. The OTCC is a good forum for all of the Overseas Territories to get together. Geographically, we are many miles apart in many instances. You have one group and then you have another, but this forum allows us to discuss our many common concerns and to make concerted representation through the OTCC to the Foreign and Commonwealth Office, which will spread to the various Ministries and other agencies that need to be dealt with.

The only comment I wish to make in relation to what Premier O'Neal has said is that, although action is taken, I have to say, after some of my own experiences, that that has not been enough. I am certain that there are the best of intentions with regard to all the information that is collated, all the requests that are made, and all the discussions that take place. But sometimes, we find that when it moves from within the FCO to whichever agency has to deal with it, many times those agencies do not treat the situation with the importance that we would like it to be treated with, and sometimes we have to be chasing things up. Sometimes, the next year that you come, the meetings are dealing with the same matter.

Q14 Mr. Horam: Does an example come to mind?

Kurt Tibbetts: You are putting me on the spot. We have had instances with the Department for Transport where we have been dealing with the same issue for two or three years. I suspect that it might not just be that they do not want to pay attention to it, but it might be that they do not want to do what we are asking. Maybe we shall just keep at it and hope for the best, but I can assure you that in many instances it seems to us-if I can put it in a nutshell-that although the FCO understands our plight, the various agencies do not take the same positions. I guess that what we need is for the political arm of Government to say, "Listen, you need to respect these people. They do exist, and they are real," if I may put it like that.

Q15 Mr. Horam: And are you able to follow matters up? Where you are dissatisfied, and something has taken two or three years, you bring it back to the Consultative Council, presumably.

Kurt Tibbetts: Many times we try through our Governors, and if we do not get results, then when we come to the next meeting, and we go at it again.

Q16 Mr. Horam: May I ask you about the way the FCO consults you about ratifying treaties which apply to the Overseas Territories? Is the way that it consults you on those satisfactory?

Kurt Tibbetts: I am going to be very blunt, but respectful. Our experiences have not been very good in the past. However, we have had certain assurances given to us in recent times that there will be more consultation. I would just say that not enough time has passed for us to have had enough interaction and experiences to say yes, the whole culture has changed. But in a nutshell, we raised holy hell, if I may term it like that, especially about the savings tax directive, which we only knew about when it was all over, and that kind of spurred on the discussion.

Q17 Mr. Horam: That had a massive effect on you?

Kurt Tibbetts: We do not know the effect that it has had on each of the Territories yet, to be honest with you, because it is hard to quantify, but that perception alone is what gave us a problem in the international arena.

I want to say that with these assurances, I think that part of our constitutional arrangements which we will now seek to make will have to deal with matters like that. I am sure that you know now that what obtains is whatever these international treaties are, they are simply forwarded on to us, at will. London has said to us-I am sure that it has said it to all of us-that it will do their best to have discussions about these matters prior to it. I am not saying that the end results will change, but at least if we have an option to make representation, we might be able to massage the situation to allow for a better end result for us. I am hopeful that that will continue. I cannot say for sure at this point because we have not experienced many instances since the last blow-up, if I may call it that.

Q18 Chairman: Mr. O'Neal, do you have anything to add on the question of consultation about treaties?

Ralph O'Neal: Only that we were displeased about how that was done. However, it was done, so we just have to make sure that we follow the regulations, keep in step with what is happening and provide the necessary human resources to ensure that those things are carried out. However, we are also aware that next year they will come up with something else, and the year after that. It will be a continuum, but we will try our best to fight against this disease.

Q19 Andrew Mackinlay: Do you have belongers in your Territories?

Kurt Tibbetts: Yes, we do.

Q20 Andrew Mackinlay: How would I become a belonger?

Kurt Tibbetts: In the Cayman Islands, our own domestic legislation dictates the conditions under which someone can gain permanent residence. After permanent residence, there is the naturalisation process that follows automatically; and then, after a certain period of time, one becomes a Caymanian.

Q21 Andrew Mackinlay: Is that a controversial area, and do belongers have the vote?

Kurt Tibbetts: Once they become Caymanians, they certainly do.

Q22 Andrew Mackinlay: But not belongers?

Kurt Tibbetts: Well, that depends on what you mean. My belonger is a Caymanian. I am not being rude, but want to make sure that we understand one another. Permanent residence does not allow someone to vote. That may be what you call a belonger, but as far as we are concerned there is another step under our domestic legislation.

Q23 Andrew Mackinlay: Is citizenship awarded by your government, rather than by the United Kingdom Government?

Kurt Tibbetts: It is not the United Kingdom Government. The system is such that there is the legislation, and we have a board that is appointed and made up of citizens of the country from various cross-sections of society. They make the decision based on the parameters that the legislation calls for.

Ralph O'Neal: The situation in the British Virgin Islands is similar to that in the Cayman Islands, except that you have to live and reside continuously in the Territory for 20 years before you can apply for permanent residence. After you have permanent residence, you can apply to become a belonger. The law sets out how that should be done and what you should present. Then you will become a belonger, be eligible to vote and have all the rights of a British Virgin Islander.

Q24 Andrew Mackinlay: Therefore, as a belonger in your Territory, I could vote, whereas in the Cayman Islands, I could not vote.

Kurt Tibbetts: That is not what he is saying. He is saying that you become a permanent resident just as you would in the Cayman Islands. After that, you get belonger status and can then vote. It is the same thing.

Ralph O'Neil: Then you can vote and own land without a licence.

Q25 Andrew Mackinlay: In both jurisdictions, the Governor is, ultimately, the person with stewardship of law and order. Although there might be police commissions, he is ultimately the person who has that stewardship. Is that a problem? Does the Governor discharge his duties adequately? Again, we are talking not personally, but about the office. You are in a part of the world that has vast expanses of water and lots of boats. What would you say about tackling not so much domestic issues, but international crime, regulation and protecting the shores from illegal landings?

Kurt Tibbetts: You have to separate the two areas. On protecting the borders, His Excellency the Governor is responsible for internal and external affairs, but the Cabinet and the legislative assemblies vote the money. We have joint policy considerations, but the day-to-day operations are discharged by the commissioner, who reports directly to His Excellency the Governor. We deal with policy and legislation, which is the political arm of government, but we do not have any dealings with the operational side of the police.

For protecting the borders, in the Cayman Islands, for instance, we have just ordered some new boats and are building a new marine base. We recognise the need for it and are pacing ourselves as far as our budgetary allocation allows. It will probably happen over the next two to three years.

I am not sure where you are going with what you said on international crime, but I thought that it might be connected to the fact that we are an international financial centre and must have a proper regulatory regime to ensure that the system is robust. In the Cayman Islands, we have the Cayman Islands Monetary Authority. I could say a lot about that and the other regulators, but wonder if you have any specific questions about it.

Q26 Andrew Mackinlay: Can I be candid? It is the nature of things that you and I and my colleagues have a limited amount of time today. There is a geographical problem. You have a duty to your constituents and we have a duty to you, internationally. We both need to combat crime. If there is more information, you should feed it to us because we need to get a handle on and a feel for what our responsibilities are. We need to be reassured-I use that word deliberately-that all is well. That is part of our motive in holding this inquiry. Part of it is an issue relevant to all your jurisdictions-I say this to Premier O'Neal, as well. I touched upon belongers and the question of rights and citizenship because if a person gets citizenship of your jurisdictions, it gives some access to the United Kingdom, does it not?

Kurt Tibbetts: That is fair comment.

Chairman: We are short of time. We have two more groups of witnesses, so can I move on to more questions? You touched on the financial side and we have some more questions on that.

Q27 Mr. Moss: We have drifted on to the financial powers of your two Territories. A recent report by the National Audit Office found that the regulation of the financial industries in both your Territories-and in two others that I will not mention-were superior to others in your general region. Why do you think that you are better than some of the other centres and Territories in your region? This gives you a chance to tell us how good you are.

Ralph O'Neal: I will tell you what we have done in the British Virgin Islands. The Financial Services Commission is a separate and distinct entity; it is not under any political control. That commission was set up in 2002 and, as a result, they have the regulations and agreements that they have made worldwide. They have enhanced the financial services in the Territory and gained worldwide recognition for running a very good regime. The laws and regulations are frequently updated. To prevent money laundering and other crimes associated with money and the proceeds of drug trafficking, every effort is made to stop every possible loophole-the minute anything happens, a red flag is raised and it is dealt with immediately.

The managing director of the Financial Services Commission keeps the Governor informed about how matters are going. The commission meets once a year with the Cabinet to provide, in addition to the annual report, an update and overview of what is happening and what is likely to happen. We propose now to change that, so that the commission will meet not only with the Cabinet but with the House of Assembly. It is the House of Assembly who has to pass the laws. Unless it has a good insight and understands why things are done, and why laws must be passed, there might be difficulties. For years now the Legislative Council, as it was called then, has gone on record as saying that when it comes to the financial services and legislation, there has been no division at all. It realised the importance of having adequate legislation to support the industry.

Kurt Tibbetts: If I may do so quickly, I should like to add some insight into the Cayman Islands. We have a very strong compliance culture, which is underpinned by modern legislation and complies with international best practice. This is built on a partnership between the government and the private sector. We have an environment which accords with international best practice. This encourages business to be done in the Islands, because nowadays business entities want to conduct their affairs in a jurisdiction that accords to such best practice. The Islands have a strong cadre of professional service providers; we have been able to attract them-the lawyers, the accountants, the auditors, the company managers and the fund administrators. All of those factors combined are essential to ensure that we are successful and that our financial services industry is successful.

To add to that, we are very stable politically. That is further underpinned by our constitutional relationship with the United Kingdom Government. We have first-class telecommunications, which link the Cayman Islands to the rest of the world. We are very accessible to the rest of the world also because we have good international air links with the US, Canada, the UK and the entire Caribbean region.

We also have a strong legal and independent judicial framework. The system is independent of the executive arm of government, which adds confidence to business entities. It also means that disputes between parties can be dealt with by a confident judiciary.

The Islands also have an efficient, competent and impartial civil service that is able to implement the policies of the Executive, which are developed to create a business environment in which international financial services can flourish. We have a Monetary Authority comparable to the BVI's Financial Services Commission. We, too, operate the authority as an independent body-independent of either of the other arms of government. They send us their quarterly reports, and we fund them according to their needs-the human resources or other resources that are needed to ensure that they are able to comply with all the international standards that continue to bear down on us.

Chairman: That is the last of the questions, I am sorry to say. I know that at least one of you gentlemen has another engagement, and we were told not to delay you. I thank you both for coming here today. We may write to you with some follow-up questions. If there is anything more that you wish to add to assist us in our inquiry, you can write to us, and we will be very pleased to hear from you. We thank you for your time, and for the information and answers that you have given us today.

Kurt Tibbetts: I thank you, Chairman, and I thank the Committee. Should you wish to ask us any more questions, I am sure that we would be happy to answer them.

Ralph O'Neal: Thank you. It was a privilege to be here, and I invite the Committee to visit the Islands one of these days and see for yourselves what nature is like.

Kurt Tibbetts: Come on a cruise ship and visit us all.

Chairman: Thank you. We shall break for two minutes in order to change our witnesses, and then continue.

Examination of Witnesses

Witnesses: Councillor Mike Summers, OBE, Legislative Council, Falkland Islands, Leslie Jaques OBE, Commissioner for the Pitcairn Islands, and The Hon Brian W. Isaac MLC, Member of the Executive Council, St. Helena, gave evidence.

Chairman: I ask those members of the public who are leaving to go quickly, and those who are entering the room to take your seats and switch off your mobile phones. For those who have just arrived, I repeat what I said at the beginning. I threw someone out last week whose mobile phone went off. I shall not hesitate to do so again. Please switch them off, or put them on silent. Thank you.

Gentlemen, all three of you were sitting at the back listening to the previous witnesses. I thank you very much for coming to see us today. Would you begin by introducing yourselves?

Brian W. Isaac: I am Brian Isaac, a member of the Executive Council of St. Helena.

Leslie Jaques: I am Leslie Jaques, Commissioner, from the Pitcairn Islands.

Mike Summers: I am Mike Summers, of the Legislative Council of the Falkland Islands Government.

Andrew Mackinlay: That is like being the Governor, is it not?

Chairman: You are the UK representative, I believe.

Leslie Jaques: Yes.

Q28 Chairman: How would you characterise your relationships with your respective Governors? That is a difficult question for a man from the Pitcairn Islands, so I put it to the other two.

Brian W. Isaac: We work very closely. As you are aware, the island recently received a new Governor, with whom I have had two meetings. They were most welcome. Working relations with the previous Governor were close and very good.

Mike Summers: You will appreciate that in our circumstances it is essential that the Legislative Council works very closely with the Governor, particularly on foreign affairs issues. By and large, we tend to have good and co-operative relations with Governors. However, you will have noted, from evidence submitted from the Falkland Islands Legislative Council, that there are concerns that that relationship can vary with personalities, which cannot be right. It is essential that Governors coming to the territories have the right brief and training to ensure that they know precisely what they are meant to achieve.

Q29 Chairman: Perhaps we will come on to those issues in greater detail. I have a general question about the Overseas Territories Consultative Council, which you are attending this week. How useful is that organisation to you?

Leslie Jaques: It is very good. Pitcairn Island is small and isolated. It is probably the most remote region of what was the British Empire. We do not get to London very often. Both through the Consultative Council and other relationships, there is a huge amount of networking, support and learning, which is to our advantage. Certainly, from our point of view, it is very worth while.

Q30 Chairman: You are in a rather unusual position, because you are a Foreign and Commonwealth Office appointee, but you also represent an overseas territory at the Consultative Council.

Leslie Jaques: That is right.

Q31 Chairman: How widely known is the relationship between Overseas Territories and the Consultative Council among Pitcairners?

Leslie Jaques: Pitcairn Island has always been run almost directly through the Governor's office. One of my roles is to restructure that in order to create more of a self-governing scenario and to devolve operational responsibility to Pitcairn in the same way that other governments administer their Overseas Territories. We consult very widely with the community, as part of that process, and I spend a lot of time on Pitcairn: this year I spent six months there, and I shall spend virtually the whole of next year there as well in order to implement and manage change. The consultation process is a very important part of that. Communication between the Foreign Office, the Governor's office, our office and the Pitcairn Island Council and community has improved massively-it is probably better than it has ever been.

Q32 Chairman: Could you deal with the wider question, Mr. Summers?

Mike Summers: I have been to the majority of OTCC meetings since the organisation was set up. It has improved over the years. We are all responsible if it does not work as it should do, because we have the opportunity to add items to the agenda and to comment on how it is run. It is a good institution and we would be very much the poorer without it. However, sometimes we wonder whether there is significant resource to follow up all the issues raised at OTCC meetings, which we will probably discuss this year. However, it is an evolving institution and it is a good thing that it exists.

Brian W. Isaac: This will be the first time that I have attended the OTCC. I look forward to working with it. Previous colleagues of mine who have attended those forums found them very beneficial. They have strengthened links between Territories and we must retain our relationship with it. I hope that that relationship will continue.

Q33 Sir John Stanley: I have three questions to put to you in relation to the Falkland Islands. The Foreign Office, it must be said, had a pretty appalling track record under the previous Conservative Government-of which I was a member in different Ministries from time to time-in terms of standing up for the sovereignty and independence of the Falkland Islands people. Do you feel that the Foreign Office has learned those lessons, and is it now sufficiently robust in protecting the sovereignty of the Falkland Islands?

Mike Summers: The Falkland Islands Government are happy with UK Government statements on sovereignty over the Falkland Islands going back a number of years now. The current Prime Minister and his predecessor have been very robust in saying that the UK does not doubt its sovereignty over the Falkland Islands, and that there should be no discussion of sovereignty unless the people of the Falklands so wish. That has been a strong, coherent and unwavering message, and in our circumstances the consistency of that message is crucial.

Q34 Sir John Stanley: Thank you. Do you feel that present arrangements for the demarcation of fishing rights between the Falkland Islands and Argentina are stable and satisfactory, and that they properly protect the Falkland Islands' fishing rights?

Mike Summers: I believe so. The boundaries between the Falklands and Argentina, where they exist, are well known to us. There have been some instances relatively recently where vessels that thought they were fishing legally on the high seas have been arrested by Argentina and caused to make some payment to be released. It is a matter for international debate. How the Argentine Government delimit their outer area is not entirely clear to everybody and seems to be open to some interpretation. That cannot be satisfactory, but we are entirely clear about where the boundaries lie between us and Argentina in areas where they are contiguous.

Q35 Sir John Stanley: Do you feel that the Foreign Office is taking sufficient steps to resolve the grey areas of dispute to which you refer?

Mike Summers: I am not aware that the Foreign Office is very active on that issue.

Q36 Sir John Stanley: Thank you. Can we turn to oil and gas rights? The British Government are taking some interesting initiatives-including in the United Nations, it appears-to claim oil and gas rights in areas around the world where the UK has particular continental shelf rights. Do you feel that the Foreign Office is doing all it reasonably can to protect oil and gas rights in the Falkland Islands and the adjacent South Georgia and the South Sandwich Islands?

Mike Summers: In conjunction with the Foreign Office and other UK institutions, we have undertaken study of the continental shelf extending eastwards, in particular, from the Falkland Islands to establish whether continental shelf extension can legitimately be claimed. The results of that investigation seem to suggest that it can, and we are satisfied that the British Government and their institutions are preparing that claim. It goes largely to the east, and not much to the north and west, which deals with some potential difficulties. It is our understanding that that claim, along with those for other British Territories, will be made to the United Nations convention on the law of the sea in due course. I regret that I cannot speak on behalf of South Georgia and the South Sandwich Islands, over which we have had no jurisdiction since the 1985 constitution.

Q37 Sir John Stanley: You made it clear that we are concentrating on the westward extension.

Mike Summers: No, eastward.

Q38 Sir John Stanley: Okay. If the focus is on the eastward extension and the sensitive issue is westward extension, are there any areas of westward extension likely to produce a clash with Argentina?

Mike Summers: I do not believe so-not as far as the Falklands jurisdiction is concerned, although you will obviously be aware of proposals to claim continental shelf extension from the Antarctic, which will cause some difficulties with both the Argentines and Chile.

Q39 Mr. Illsley: I have a couple of questions. I was at a conference in Chile in 2003 with the United Kingdom delegation when we were subject to a bit of a diatribe by the Argentine delegation about the Falklands Islands. We are a long way away from the Falkland Islands and I just wondered whether you have picked up an increased level of claim on the part of the Argentines recently. Is the rhetoric about the ownership of the islands or their sovereignty still the same or has it decreased?

Mike Summers: The attitude of the current Argentine government under President Kirchner has been different from the attitude of Argentine governments in the past, in that they have been significantly more aggressive and have sought to undermine the economy of the Falklands in a number of ways. That has been going on throughout the presidency of Mr. Kirchner. We are not clear about what his successor will do, although there is every reason to believe that the policy will remain much as it is.

Other South American countries tend simply to put up their hands and say, "We support the Argentine claim", without there being very much debate or discussion. I suspect that it is convenient for them not to get into public debate with the Argentines about the Falklands.

Q40 Andrew Mackinlay: I have a question which I should have asked previous witnesses and which I might put to others. Even small jurisdictions have to replicate domestically a whole host of legislation because of international treaties-treaties perhaps entered into by the United Kingdom. I want to understand the logistics of that and how you keep abreast of matters. It was touched on by the other folk. Although you are not a member of the European Union, things might happen consequent on the United Kingdom's membership of the EU. When it comes to Pitcairn, how do you possibly legislate? A few years ago, even Gibraltar, with all its sophistication, was literally a factory of legislation. It has overcome such problems now and is keeping abreast of such demands. Is it a problem?

Leslie Jaques: It is not now. Perhaps there was a lack of communication on such matters. Our current Governor is very keen on devolving responsibility and working with the Island Council. There were some treaties to which we had signed up that we were not advised of, but that was a while ago. There is now a consultation process and very good communication between the Pitcairn Islands and the FCO.

Mike Summers: It certainly can be a problem for us. Given that our Legislative Council is responsible for passing the legislation and that our institutions are responsible for drafting it, there can be significant problems on occasions. They tend to arise out of the application of international law to the Falklands. Often, they are things that we could not reasonably object to, and that we would wish to do, but sometimes the sheer volume of what is required is just not possible. On those occasions, we tend to respond to the Foreign Office and say, "We would like to co-operate on this issue, but the sheer volume of the existing legislation that has to be checked and the new legislation that it requires makes it impossible for us to do."

Brian W. Isaac: The international treaty does not affect St. Helena as much as other overseas treaties. Any treaty that needs legislation will be discussed, drafted and put in place, but the majority of the international treaties do not have a direct impact on St. Helena.

Q41 Chairman: Mr. Isaac, may I take you on to some difficult constitutional issues? Without going into the history, the situation in St. Helena has become rather difficult constitutionally has it not? Why do you believe that the idea of ministerial government was rejected by the voters?

Brian W. Isaac: I find it difficult to answer that, but from the consultative poll the wishes of the people were for constitutional reform. Currently, the people of the island feel that we need to have constitutional reform, and that is on the agenda.

Q42 Chairman: So do you think that we are likely to revisit the issue as a whole, or is it going to be cherry-picked?

Brian W. Isaac: I think the wishes are to review the whole constitution, and a lot of work has been undertaken on that process. I think that people have realised the need for it, and hopefully within the next two years it will be very high on the agenda.

Q43 Chairman: Can you tell us what is happening on Ascension Island, because it is even more difficult there, is it not?

Brian W. Isaac: Yes. As elected members of St. Helena's Legislative Council, we do not have any autonomy over Ascension Island. Ascension Island and Tristan da Cunha are the sole responsibility of the Governor.

Q44 Chairman: But they are dependencies of St. Helena?

Brian W. Isaac: Yes, they are, but we have very little working relationship with Ascension Island from the legislative side.

Q45 Chairman: So that is really a matter for us to address with the Governor, not with you.

Brian W. Isaac: Yes.

Q46 Sir John Stanley: We are, of course, aware that there is a significant number of St. Helenans employed on Ascension Island. Do you feel that their interests and rights have been adequately safeguarded?

Brian W. Isaac: As I said, I have very little involvement with Ascension Island, and the employment of St. Helenans on the island.
Are you speaking of the right of abode on Ascension Island?

Q47 Sir John Stanley: Yes, and the terms and conditions of employment.

Brian W. Isaac: I have very little involvement with the rights of employment on Ascension Island.

Q48 Chairman: At the moment, there are offices and UK representatives for the Overseas Territories. Do you think that it would be a sensible idea if the dependencies-Ascension Island and Tristan da Cunha-had their own UK representatives?

Brian W. Isaac: Again, it is very difficult for me to answer that, because of the relationship with Ascension Island and Tristan da Cunha. St. Helena has its representative here in London, who has a very good working relationship with the island. But it is for the Ascension Island Government to take this matter forward.

Q49 Chairman: But the people living there are not actually represented in any real sense by St. Helena's representative in the UK?

Brian W. Isaac: No.

Q50 Chairman: Thank you. That is important.

Mr. Summers, you have been involved in the constitutional reform process as well. When do you think that these proposals, which I understand have not been very controversial, are going to be implemented?

Mike Summers: We hope that they will be implemented during next year. I will be able to tell you after next week whether or not they are controversial, because we have a delegation visiting from the Foreign Office for the first round of negotiations. There has been no response so far from the Foreign Office on the report, so we do not know which parts of the report they take issue with, and which ones they do not. We will know that after next week. I certainly hope that the new constitution could be in place in 2008.

Q51 Chairman: Thank you.

Mr. Jaques, you come to your role at a rather difficult time historically. Can I ask you about your assessment of the impact of Operation Unique on Pitcairn? Has the community been given sufficient support since those difficult times, particularly with regard to child protection issues, and also in terms of local involvement? I understand that there have been consultations on human rights issues. Could you give us a sense of where that process is at the moment?

Leslie Jaques: I do not know how unique Operation Unique was, because this sort of thing happens all over the world, but it happened on Pitcairn in a rather dramatic way. I was not there at the time-I came in subsequent to the trial process. None of us can right the wrongs or turn back the clock. All that we can do is work to build a better tomorrow, which we are doing on the back of economic changes and changes to the structure of the Government.

With regard to help for people after Operation Unique, we have had social workers on the island and community police. Obviously, there is a significant impact on a small community when half a dozen of its members go to prison. We do a lot more in terms of working with the community on consultation and communication. Could we have done more? We could possibly have done more for people after the trial process. I do not think that people realised the significant impact there would be after the trials. It is a very small community, so it is divided and hurting on both sides. The healing process and the reconciliation process will take time. We are having to park that and work together for the common good. There are lots of small projects that are bringing the community on the island together. I am confident that, in the fullness of time, we will bring them back together again.

Q52 Chairman: You refer to small projects. Does that include projects that are funded by the Department for International Development?

Leslie Jaques: Yes, it does.

Q53 Chairman: How is that co-operation with the Foreign Office going?

Leslie Jaques: It is going very well. Again, as you have said, governance with any kind of personnel depends upon the people. We have been very fortunate with the Foreign Office people that we have had at every level, and the DFID people. They work closely together, come to the island and work with the community. DFID has been superb in terms of the infrastructure support that it has given us.

Q54 Chairman: Mr. Isaac, your Territories-St. Helena and the other dependencies-also receive budgetary support from the UK Government. How does that work in practice? Are you content with the amount of support? Is it enough and is it the right kind?

Brian W. Isaac: There is always room for more budgetary support from Britain. Currently, we are in the process of increasing tariffs, which is very difficult because we have a low tax base on the island. We have people leaving the island, which puts a further burden on those who remain. At the moment, we are at a sort of balance, but have the opportunity of more support from Britain with the approach of air access for the island, hopefully. All the work that has been carried out on the island with regard to infrastructure development will require more support from Britain. DFID is very favourable towards that development and we look forward to the continued support in that field.

Q55 Chairman: You said "air access, hopefully." Was that a deliberate choice of words or does it mean that you are rather sceptical that the timetable that has been outlined will be met?

Brian W. Isaac: I am very hopeful that the airport proposal will materialise, as it will benefit the island. It will also benefit Britain, with regard to aid and helping the island to move to being more self-sufficient. At the moment, I am not sure where the process lies. We are waiting on the outcome of the tendering process. From that stage on, it will be the main objective to work towards.

Q56 Chairman: But the National Audit Office said that even with financial support and leadership from the Department for International Development, the impact would be insufficient to stop St. Helena being dependent upon UK budgetary assistance and that you would need other investment. Are you confident that that will happen?

Brian W. Isaac: Yes, I feel confident that that will happen.

Q57 Chairman: Okay. And we are talking about 2012 or 2013 as the target date?

Brian W. Isaac: Yes.

Q58 Chairman: That has not slipped?

Brian W. Isaac: It still remains 2012.

Q59 Sir John Stanley: Councillor Summers, are the Falkland Islands government content with the current defence posture on the Falkland Islands adopted by the British Government?

Mike Summers: Yes. We are briefed on a reasonably regular basis by the commander of British forces for the south Atlantic islands and get a number of high- level visitors from all parts of the UK defence institutions. Our understanding of the defence posture of the UK and how it will work in an emergency leads us to believe that it is satisfactory. However, we are not defence experts and have to believe what we are told, to an extent.

Q60 Sir John Stanley: What is the current position of the Falkland Islands government on the applications from Argentine families that lost relatives in the war to come to the Falkland Islands?

Mike Summers: The Falkland Islands government have always been open to the visits of next of kin from Argentina. We have had a number in the past. There was an application for a visit this year that has not materialised because, I believe, the Argentine families commission was not able to put in place the arrangements that it needed to bring them. I believe that they are now planning to make the visit next year. Providing that all those arrangements are satisfactory, we will welcome those people in the same way that we have in the past.

Q61 Sir John Stanley: What is the Falkland Islands government's current position on civil direct flights between the Falkland Islands and Argentina?

Mike Summers: The Falkland Islands government at the moment are not content for there to be civil direct flights to Argentina. We have a strategy to improve communication on the north-south air bridge to such an extent that it can service our expansion and development needs, and then to go back to discussing east-west flights. We must never put ourselves in the position that we were in during the late '70s and early '80s when we depended on Argentina for flights. We must have confidence that the north-south flight is available to us and capable of expansion before we go back to east-west discussions about how we can go through Argentina. If we are confident about the air bridge north-south, we will be more open to considering flights that stopped in Argentina.

Q62 Sir John Stanley: What is your current position on applications by Argentinian businesses to engage in trading activities and investment in the Falkland Islands and to have their own employees in the islands on a commercial basis?

Mike Summers: I do not recall having received, or having had to deal with, such an application. If we did, we would have to consider it on its merits.

Q63 Chairman: What is the current position regarding negotiations about the air bridge north-south?

Mike Summers: We have had meetings recently with the Ministry of Defence and the Foreign and Commonwealth Office about improvements to the air bridge and expansion possibilities for it. We are relatively content with those discussions, but they have not yet reached a conclusion and we do not yet have all the answers that we are looking for. Perhaps we could give you some further information about that in the coming weeks.

Q64 Chairman: Have I asked that question at a sensitive time?

Mike Summers: Yes.

Andrew Mackinlay: There are just two minutes left.

Chairman: There are some more questions that we can ask. Saved by the bell. Gentlemen, our time is up, in terms of the 40 minutes. We have a Division that will go on for 15 minutes, if there is just one vote. The Committee will then resume. If you wish to wait, I can give you five more minutes of questions before our next set of witnesses. If you are in a position to do so, then do so. We will be back after the Division and will then take the final set of witnesses.

Mike Summers: I am happy to wait.

Sitting suspended for a Division in the House.

On resuming-

Q65 Chairman: Gentlemen, I am sorry to keep you waiting. Whips Offices sometimes tell Members that there are further votes coming and then we discover that there are not, so people hang around by the Chamber expecting further votes and they do not happen.

We have almost concluded our session. I understand that Mr. Isaac had to go because he had another engagement. Can I just finish off by asking a general question about relations with the UK Parliament? Are you satisfied with the present relations that you have with the UK Parliament, or do you think that there is anything that can be done to improve them?

Mike Summers: The Falkland Islands has a very active all-party group in the UK Parliament and it has done an excellent job for us over a number of years. It is not easy to see how you would improve on that arrangement. We are currently satisfied with that link as an important part of our contact with the UK Government.

Q66 Chairman: Mr. Jaques, would you like to say anything on this subject?

Leslie Jaques: Only that we do not have a direct relationship really with Members of Parliament. We work through the United Kingdom Overseas Territories Association, which has quite a lot of lobbying relationships. Also, from time to time we get MPs sending e-mails asking various questions, but we do not have a direct relationship with them.

Q67 Chairman: In the final few seconds of this session, is there anything that you would like to add to what you have said before?

Mike Summers: No, I do not think so. I am satisfied that we have had the opportunity to present evidence to the Committee. We very much look forward to welcoming your delegation to the Falkland Islands early next year and we hope that you will enjoy your lengthy visit.

Chairman: Thank you very much. Some of us are looking forward to it; summer in the southern hemisphere will be quite a bit warmer than February in the UK.

Leslie Jaques: We have an excellent relationship with all aspects of Her Majesty's Government. We are working together as a team to build Pitcairn's future. There are challenges, as you have identified, especially rebuilding from the devastation of the trial process, but we are all committed to meeting those challenges. We have nothing but gratitude really for Her Majesty's Government and I think that, in due course, once we have a sustainable economy and the island is thriving, everybody will see the benefits of what we are doing right now.

Chairman: Thank you, gentlemen, for coming and answering all our questions. We will now break for one minute while we get our next witnesses in and then begin straight away.

Examination of Witnesses

Witnesses: The Hon Osbourne Fleming, Chief Minister, Anguilla, Dr The Hon Lowell Lewis, Chief Minister, Montserrat, and Dr The Hon Michael E. Misick LLB, MLC, Premier, Turks and Caicos Islands, gave evidence.

Chairman: Welcome and thank you for being patient with us while we had that delay. Can each of you introduce yourselves?

Osbourne Fleming: I am Osbourne Fleming, the Chief Minister of Anguilla.

Lowell Lewis: I am Lowell Lewis, the Chief Minister of Montserrat.

Michael E. Misick: I am Michael Misick, the Premier of the Turks and Caicos Islands.

Q68 Chairman: Thank you very much. May I remind the public to switch off their mobile phones?

I will begin by asking each of you what your relationship is with your Governor.

Osbourne Fleming: First, I want to say how thankful and grateful I am to be here. I know that this is the first evidence session in the Committee's inquiry, and I am very pleased to be a part of it. Secondly, I know that my colleagues have come prepared with their scripts, but I do not have any because we were not advised on how comprehensive this discussion would be. However, we move forward.

Our relationship with the Foreign and Commonwealth Office has been remarkable. We have no serious problem with Her Majesty's Government and the FCO- and I am sure that my colleagues will agree with that. We have been candid and clear about what we want from them. However, one thing that has caused us some pain and headache with the FCO is an issue related to appointments, which we have brought to this table before. As elected Members, we feel that the time has come when senior appointments should not be made with the consultation of the Governor, but with the advice of the elected Members. We think that that is something that should happen. I hope that after this meeting our concerns will be raised with the appropriate authorities.

I have one serious concern that I would like the Ministers of the Government to hear. In 1984, the Government of Anguilla had four Ministers. We had a budget at that time of less than $3 million. Today, we have four Ministers and a budget of over $270 million. Since then, we have initiated the following Departments: probation, youth and culture, environment, community college, prison and disaster preparedness. Four Ministers cannot do justice to the people of Anguilla. To that end, I am asking you to help us put in place a fifth Minister now, even if it is a designate Minister. The four of us cannot carry the burden of a country that is progressing as rapidly as Anguilla.

Q69 Chairman: Chief Minister, you have a Deputy Governor who was appointed in 2006, who is an Anguillan. Does that mark a significant improvement in the relationship?

Osbourne Fleming: Yes, we are very pleased about that. We were a part of that and, as a Government, we endorsed that and the person as well.

Q70 Chairman: Thank you. Dr. Lewis, what is the position in Montserrat?

Lowell Lewis: First, let me express my gratitude at being here to speak to the Committee. I am impressed by this part of the building. However, I thought that by now you would be voting with a button, instead of having to get up and go to the House.

In Montserrat, we have good personal relationships with the Governors, but we at times feel that the system is undemocratic, and sometimes the relationship is humiliating. You have a situation where the Governor, being responsible for the appointment of staff, can in fact ignore the advice of the political directorate, and that has happened on occasion, with disastrous consequences. It is important for us to move towards a situation where we have an Executive public service commission and the authority for the selection of appointments does not rest solely with the Governor. The Governor should be obliged to act on the advice of the public service commission and the Governor's influence should be no more and no less than the influence of the political directorate. If anything, local representatives have more, let us say, detailed knowledge and should be in a position to guide the Governor.

On the subject of Ministers, the issue, again, is resources. We were once ahead of Anguilla and the British Virgin Islands, but because of the volcano way back, we are now 5,000 people and a struggling economy. However, we still think we need about five Ministers so that we can have the capacity to deal with the range of different activities that need to be covered.

Q71 Chairman: You said "disastrous consequences." Could you be a little more specific? Are you referring to a specific episode or a series of episodes?

Lowell Lewis: There are several things. To give a single example, if you appoint somebody at permanent secretary level and they prove three months later to be totally inadequate, you have lost three months' work. I can think of an instance where delays in the completion of Executive Council memorandums and project memorandums have cost us $3 million or $4 million in lost aid because we did not make the deadline for an EU-funded project. Those are examples of where it is important for Governors to take the advice of the local political directorate if they feel that a particular person is not suitable, competent or capable to do a particular job.

On the other side, we have had many instances in Montserrat where our local knowledge of the situation relating to the volcano has put us at an advantage in terms of making decisions. We have the situation of the dome collapsing, with no real threat, but six or eight weeks later, we have to wait for the Governor to do something that could have safely been done six weeks before. You have a constitution in which, to some extent, the discretion of the political directorate is not given as much weight as the discretion of the Governor.

Michael E. Misick: Thanks for the opportunity to give evidence to the Committee. In relation to your question about my relationship with the present Governor, there is to some extent a question of personality, and the relationship with HMG is also of great importance. The present Governor is a pleasant gentleman and we get along well personally, as one would with most persons.

We do not have some of the same issues as Montserrat and Anguilla in relation to appointments because we have an independent public service commission, but we believe that it is time for all the Territories to embrace real Cabinet government, as in Gibraltar and Bermuda, where the Chief Minister or Premier is president or chairman of the Cabinet. Throughout the Territories you see that there are different standards, or that the constitution is not uniform, so different Territories are treated differently. We feel that, if, in our various constitutions, domestic concerns are a matter for the local government, then the Premier or Chief Minister should be chairman of his Council of Ministers and should make decisions based on domestic areas, and, as a matter of course, the government should be informed. To answer your question directly, I have no personal qualms with the present Governor. He is a nice man with a very nice family.

Q72 Mr. Horam: We come to the matter of the Overseas Territories Consultative Council, which you are attending. How useful do you find it, and is it developing in the way you would want? Perhaps we could start by Mr. Fleming answering that point.

Osbourne Fleming: I have been around here for the past seven years and I have been to London for the consultative conference six times. I find it very useful. As a matter of fact, there is nothing like seeing someone in front of you and telling them how you feel about a matter. The Overseas Territories, on the whole, have been blessed to be able to sit around the table at least once a year in the common interest that we all share. I think that we get that right and I hope that it continues. I hope that one of these days the conference will be held somewhere in the Caribbean, so that they can come to us. But, all in all, the conferences have been very useful to me as a representative of Anguilla.

Q73 Mr. Horam: Dr. Lewis, how do you feel?

Lowell Lewis: I think that they are very important meetings. As long as our constitutional status remains in a state of change, we need to continue meeting and discussing the issues with the United Kingdom. As long as we interact with the rest of the world through the United Kingdom, it is important for us to come face to face from time to time, so that we are properly represented.

It is also important for the opportunity it gives United Kingdom Ministers to meet Ministers from the Territories and to come to an understanding that it is actually okay to delegate responsibilities to political colleagues in another country, or territory, as opposed to having to delegate them to a Governor. Surely we aspire to the same level of integrity in governance and, if we practise the same type of democracy, there is no reason why a political colleague cannot delegate responsibility to the political leader of a country. That is at the basis of the existing differences over the resistance to reducing the powers of the Governor. If the local political leader can achieve the same objectives as the Governor, why does he have to be President of the Executive Council and why does he have to be responsible for security and issues of safety? It is by our having this dialogue that we believe that we can break the ice and become greater partners.

Q74 Mr. Horam: Would you like to add to that, Mr. Misick?

Michael E. Misick: Yes. Certainly, every time that I have attended it has been constructive. However, we believe and I believe that the presence of Governors is not necessary. Governors have annual meetings with the Foreign and Commonwealth Office.

Q75 Mr. Horam: So do you think that they should be excluded?

Michael E. Misick: Well, if there needs to be another meeting for Governors and leaders, there should be one. It is unfortunate that during the opportunity that leaders have to consult with the Foreign and Commonwealth Office on issues of mutual concern in our relationship, in the last two years a lot of the time has been taken up by discussing whether Governors should be there, which should be a moot point in my view. It is a relationship between Her Majesty's Government, through the Foreign and Commonwealth Office, and the various governments headed by the various elected leaders of those countries. I think that the concept is a good one. Certainly, I would like to see more conclusions coming out of it and more follow-through-more action-but it is good to come and have discussions.

Q76 Mr. Horam: Some of your colleagues from other Territories have said that there is sometimes excessive delay in putting things through. Nice words were said at the meetings, but none the less after two or three years nothing much had happened; transportation was given as one example. Is that your experience?

Michael E. Misick: Unfortunately, I was not here to hear exactly what they said, but I think that our fear is: is it becoming another talking shop, with no conclusion, no follow-through, no action? I believe that among the remaining Territories-the Territories that opt to remain having relations with the United Kingdom-most of our Territories are progressive, most of their leaders are modern in their thinking and most of us seek a modern relationship with the UK Government, whereby we are seen and respected as leaders of our various countries. We represent a constituency, so we want to be heard and taken seriously. As I said, in some cases there has been more talking than action.

In the absence of the Chairman, Sir John Stanley took the Chair.

Q77 Mr. Horam: On the constitution, you have a new constitution in Turks and Caicos. How is that working? Are you satisfied with it?

Michael E. Misick: The present constitution that we have is certainly working; we expect to get more. We accept what we have but as I said in my opening statement, I believe that more autonomy could have been given within the framework of our relationship with the United Kingdom. One of the things that I mentioned is the question of the head of government heading his own cabinet, as is the case in Gibraltar and in Bermuda, even if you have to define what domestic issues are. If, on one hand, you say, "Okay, you have internal self-governance" but still the representative of Her Majesty's Government chairs that internal self-governance, that is a contradiction in terms. I believe that that is an area that should be rectified.

Also, with some of my other colleagues, I believe that on issues such as security, some foreign relations elements and so on, there can be a degree of delegation. We deal from time to time with the Caribbean Community and Common Market and all of our neighbours in the Caribbean. There can be a degree of delegation on foreign relations. We have a unique situation in Turks and Caicos, where one of the greatest threats to our survival, our economy, is illegal immigrants coming from Haiti. On average 400 or 500 people a week come on boats to Turks and Caicos. We spend millions and millions of dollars repatriating them back to Haiti, with no financial assistance from the UK. In this case it is considered an immigration problem, and we feel that it is a foreign affairs problem, as well. The point that I am making is that if we can deal with the Haitian problem, we can deal with other elements of foreign relations. I believe that the future constitutional relationship between the Territories and the UK can be defined in a way that gives the Territories maximum autonomy, while still for the countries that want to remain British, preserving that historic connection.

Q78 Mr. Horam: You mentioned the expenditure you incur on repatriating illegal immigrants from Haiti. Do you repatriate all of them who come, or do you accept some immigrants and not others? How do you operate that policy on immigration?

Michael E. Misick: Obviously, they are processed. I do not know the percentage that is shipped back, but most of them are economic rather than political refugees.

Q79 Mr. Horam: I wondered whether you return most of them Haiti.

Michael E. Misick: Yes.

Q80 Mr. Horam: You do? Return most of them?

Michael E. Misick: Yes.

Q81 Mr. Horam: Most of them you send back?

Michael E. Misick: Yes.

Q82 Mr. Horam: That was all I wanted to know.

Mr. Lewis, you acknowledged in your memorandum to the Committee that you have some serious disagreements with the UK Government about the new constitution. Would you like to enlarge on that?

Lowell Lewis: There are a few outstanding issues-one or two of which we resolved today, in fact-on the powers of the Governor and the desire to introduce a national advisory council that would assist the Governor with their powers. There was a suggestion that the Governor should be allowed to access the budget. These matters are under discussion. We have completed four rounds of talks, and we have scheduled the next round.

Q83 Mr. Horam: So they are negotiable, you think?

Lowell Lewis: Yes. In fact, I believe that, following today's meeting, the next time we meet, in March, we will make some progress on some issues, but we are not rushing it this time.

Q84 Mr. Horam: When do you expect the process to be concluded?

Lowell Lewis: It is possible that by next summer, we will be at a stage where we are able to meet the Ministers to resolve the issues and the differences that can be resolved only by Ministers. After that, we may come to a conclusion.

Q85 Mr. Horam: Mr. Fleming, your constitutional talks are stalled. When do you expect them to restart?

Osbourne Fleming: Early next year. Come January, we hope that they will start again. As you know, we were supposed to have our first visit in September, but it was stalled because the people of Anguilla decided to revisit the commission's recommendations, and the feeling that emerged was that there should be full internal self-government. That is where we are now. We must go to the people as a whole, sell this message and see how it is received. That is the way we are going to go forward, so we hope that early next year we will start the process.

Mr. Horam: Thank you.

Q86 Sir John Stanley: May we turn to some governance issues? Dr. Misick, the inquiry has aroused enormous interest in the Turks and Caicos Islands. At my last count, about one third of the total written submissions so far to the Committee, covering all the Overseas Territories, had come from the Turks and Caicos. I am sure you know also that a group of Opposition political figures flew especially to London to have an informal meeting with members of the Committee.

It is clear from the representations we have received that some believe substantial financial impropriety is taking place in the Turks and Caicos. Allegations have been made about corruption, including at government level. I make it wholly clear on the record that the Committee has reached no view and no conclusion on that; it is for the Committee at the end of its inquiry to produce its report to the House and for submission to the Foreign and Commonwealth Office. Having said that, I should like to hear your response to the allegations that some have made about significant corruption-including within the Government-in the Turks and Caicos.

Michael E. Misick: I have not seen any submissions, but on the general allegation of corruption, from a government standpoint, we categorically deny that there is any corruption at government level in the Turks and Caicos. As a matter of fact, an anti-corruption Bill is on first reading in Parliament, and we intend it to go through during the first quarter next year. Unfortunately, in small countries such as ours there are always allegations of corruption, particularly from our opposition activists coming out of an election. Much of what is alleged cannot be substantiated. It is unfortunate that potential leaders would try to put the good name of a country through the mud by making such allegations.

We have a transparent system when it comes to tendering. We have a tenders board that deals with that. In relation to allocation of Crown land, there is a process in place by which, at a ministry level, land is allocated to different citizens. In relation to other areas, our Parliament has a register of interests.

My position is that the Turks and Caicos government are a transparent government. We uphold all modern legislation to support that transparency and to ensure that corruption does not rear its ugly head in our territory.

Q87 Sir John Stanley: Do you consider that responsibility for dealing with any corruption that might arise lies solely with the government of the Turks and Caicos, or do you look to the UK for support or assistance? Do you believe that a measure of responsibility to help you deal with this lies with the UK as well as with your own government?

Michael E. Misick: I would say that we both have responsibility for good government. Obviously, the UK has ultimate responsibility for good governance of the territories. For example, over the years, when there has been a question about the police, the matter is within the ambit of the Governor. We have an independent, non-politically appointed Attorney-General who is responsible for prosecutions. All the institutions are in place to deal with corruption and to bring to justice anyone who has perhaps been participating in that. It is easy, particularly for opposition activists who are still sore about losing the election, to claim that there is corruption.

Q88 Sir John Stanley: On this specific issue, do you feel that whether an individual is granted belonger status or not is free from any corrupt practices?

Michael E. Misick: It is free from corrupt practices, because belonger status is granted by the Cabinet; no one individual grants belonger status. With the exception of marriage, belonger status is granted on the basis of the length of time that a person has stayed in the country, the contribution that they have made to the country, and how they are assimilated into the community. There are a number of factors that are laid out by law in the granting of belonger status.

Q89 Andrew Mackinlay: Just to clarify-belonger status is granted by the Cabinet?

Michael E. Misick: It is.

Q90 Andrew Mackinlay: Does the Governor sit at Cabinet?

Michael E. Misick: He chairs the Cabinet.

Q91 Andrew Mackinlay: So, if there were allegations of corruption with regards to the Cabinet granting belonger status, that would apply to the Governor as well as the members?

Michael E. Misick: He is the President of the Cabinet.

Q92 Andrew Mackinlay: Yes, I wanted to establish that.

Michael E. Misick: There is a process to the granting of belonger status.

Q93 Andrew Mackinlay: Yes of course. I did not mean to cut you short. I understand that point. It might be useful to have a note on how, and who and what the process is.

Michael E. Misick: The process is that the Governor is President of the Cabinet. He acts on the advice of Cabinet, and where he does not take Cabinet's advice, he can consult with the Secretary of State. For example, if he thought that the Cabinet was granting a belonger status that had a corrupt undertone, he would not have to accept Cabinet's advice.

Mike Gapes took the Chair.

Q94 Andrew Mackinlay: Particularly in relation to your jurisdiction but also in relation to that of your colleagues, I am told that you do not see anything much of the Royal Navy. A good-will boat might occasionally look in, but they are not patrolling around your jurisdiction or others, preventing illegal immigration, are they?

Michael E. Misick: No, they are not. From time to time they make visits, perhaps because they happen to be in the area, but they do not patrol.

Q95 Andrew Mackinlay: Also, in reply to my colleague, you said that you return Haitian illegal immigrants, but presumably you should have added that you do so to the best of your ability. This very day, there are in your jurisdiction Haitians and-I am not sure whether they are in secure areas-kiddies.

Michael E. Misick: What is that?

Andrew Mackinlay: Children.

Michael E. Misick: Yes.

Q96 Andrew Mackinlay: And there is a big debate about what the human rights obligations are to the children as regards schooling and so on, is there not?

Michael E. Misick: There was a debate prior to my party coming into office. We have taken the position that all children, whether or not they are legal, have a right to education. We have therefore allowed all children to attend our schools once they reach a certain age. As a matter of fact, there are a number of kids whose parents have left them in the islands and maybe gone on to Miami; that is the way that the trade is in trafficking humans. We have regularised the situation for most of them in the Turks and Caicos; prior to that, they were stateless. We could not send them back to Haiti as they did not come with any documents and they grew up in the islands.

Q97 Andrew Mackinlay: So you are saying to me that this afternoon there are a number of children who, to all intents and purposes, have been abandoned in the Turks and Caicos. There may or may not be some remuneration coming from Florida or wherever, but there are children who have come on boats and you are having to pick up the tab for their education, which I endorse-

Michael E. Misick: And health care.

Andrew Mackinlay: And health care. What do Her Majesty's Government in London say about that? Surely they should not only be assisting you but sending a gunboat, presumably. I am just bewildered.

Michael E. Misick: If we could get assistance, I would be really appreciative.

Q98 Andrew Mackinlay: Has London done anything? What has it done?

Michael E. Misick: We get no financial assistance in relation to that from the United Kingdom. As I said, Navy ships come into the waters periodically, but the burden of policing lies with the Turks and Caicos government.

Q99 Andrew Mackinlay: How many people-a broad-brush figure, if needs be-are illegal immigrants in your jurisdiction today, and what percentage of the total population?

Michael E. Misick: We have an approximate population of 40,000. I think that probably anything up to a quarter-maybe 10 or 20%-are illegal, primarily Haitian people.

Q100 Andrew Mackinlay: And you are losing that battle, are you not? If you came back in five years' time it would be a higher figure, would it?

Michael E. Misick: Absolutely. We are outnumbered already. We send 500 home and another 1,000 come. It is a revolving door.

Q101 Chairman: May I ask you, Mr. Fleming, about problems that you face? The Foreign Office website mentions that the main focus of Overseas Territories expenditure in Anguilla is devoted to enhancing the capabilities of law enforcement agencies. Do you have a particular problem with crime?

Osbourne Fleming: Yes. I have made a note here and I want the Committee to know that we are into tourism. The only industries that really propel Anguilla's development are tourism and construction. We have seen an unusual level of crime coming through the country, and most of it can be attributed to the fact that we have a number of foreign workers in Anguilla as well as Anguillans who may be involved in crime. We need some help to combat the criminal activity that is going on. We feel that if something is not done about it, and quickly, we could lose the industry by which we survive. We have come to London to make this plea and I hope that this Committee can help us. We need some help to combat the criminals; otherwise, we may be back on the grant in aid again. We never want to subject ourselves to that again. Tourism is a fragile industry-I know that I am speaking to the choir, here. It can be wiped away by criminal activities. Although we are doing fairly well, we need some help in that direction. Of course that presence is costing us, but we are better off sacrificing ourselves to keep some help from London in Anguilla than to lose the whole country.

Q102 Chairman: What kind of crime are you talking about?

Osbourne Fleming: We have had some murders this year, which were unprecedented. There is some stealing and some larceny. Luckily for us, this has not been against tourists over the last year and a half. It has been localised up to now, but the criminals will not stay in one spot. They will go where they think there is prey. It is not out of control, but we must begin to close the gap quickly.

Q103 Chairman: May I ask all of you about your financial regulation systems? In a previous session we had evidence from the Cayman Islands and from the British Virgin Islands. What is the position in your Territories? Are you satisfied with the current situation?

Osbourne Fleming: Unfortunately, I am not the Finance Minister in Anguilla.

Q104 Chairman: You are only the Chief Minister?

Osbourne Fleming: I am only that and I delegate and I leave the guys to themselves. However, we are doing well financially. When you consider our geographical position, we are edging up. Our offshore services are slowly coming up. I am glad that the Minister of Finance is here: sometimes I get tired of him over there. He has brought many measures to the House of Assembly that ensure that we run a clean operation. Anguilla's name cannot be tainted. So we try our best to put all the regulations and Acts in place. As you might know, Mr. Chairman, we sell high-end tourism. We want everything that we sell to be high end, even the financial services. To that end we go forward. We are going forward and ensuring that we deliver the best.

Lowell Lewis: In Montserrat we have almost completed putting into place and enacting the legislation that brings us up to date with the rest of the international community. We have had expert advice and we have shared resources using legislation from the CARICOM and other countries. We are putting in place the legislation needed to allow us to participate in international financial services. In addition, our new draft constitution has a section on financial regulation, which will more or less provide all the necessary safeguards.

On the issue of governance, there has to be some discussion about what is appropriate for small countries, as opposed to Britain. Your system of governance includes providing political parties with state funding, expenses for Ministers and so on. In the small Territories there is nothing like that. I am a doctor and people complain when I tell a patient that they do not have to pay today because they cannot afford it. The whole issue of how you deal with the financing of political activity and how you resolve conflicts of interests needs to be examined. The Foreign Office needs to recommend that the Territories adopt some sort of state support for political activity, to prevent the differences that occur between those who have and those who do not. I think that that answers your questions.

Q105 Chairman: You have hit on a very topical subject, but we will not go there.

Michael E. Misick: We have an independent financial services commission that regulates our financial services in the Turks and Caicos Islands. Instead of a boutique financial services industry, with luxury registry for yachts, aeroplanes and so on, we have brought our legislation in line with all the international requirements, including those of the International Monetary Fund, and we have a stringent know-your-customer policy for trust companies, banks and other practitioners.

We recently introduced a series of laws, including proceeds of crime and anti-money laundering legislation, as we believe in running a clean and high-quality financial services industry. A lot of it is tied to the construction boom of condominiums and second homes, and the persons and trusts that use the jurisdiction for estate planning. We are pleased with how that has panned out in the last few years.

Q106 Andrew Mackinlay: I want to ask one thing-it might sound small-about international bodies such as the Olympics committee. If you have an athlete, or a sportsman or sportswoman, your only conduit for them to get advancement is through the United Kingdom. There may or may not be anyone in that category-I do not know-but it is a matter of right or justice. Are you in the loop, as it were?

Michael E. Misick: I am happy that you should raise that question. That is a point that I believe changed in the last couple of years. For example, the Cayman Islands has an Olympic committee, an Olympic team. I am not sure about others, but I know that Turks and Caicos Islands was interested in the past couple of years in having an Olympic team. However, because of the current position-I am not sure whether it is down to HMG or the Olympic committee itself-we are not able to have our own Olympic team. That is something that certainly needs to be addressed. Despite the fact that we have a constitutional relationship with the United Kingdom, all of our various Territories have their own distinct identities. The people have their own aspirations and national pride. Nothing in the world can instil national and identity more than sport. I believe that it is an injustice.

Q107 Andrew Mackinlay: I fully understand that, but the Commonwealth games gives you an opportunity.

Michael E. Misick: It is not the Olympics.

Q108 Andrew Mackinlay: No, but when it comes to the Olympics-I am not sure of the sports-you might have handgun people, for instance, who might not be known in the UK by those making decisions about the United Kingdom team, of which you are entitled to be a part. That is correct, is it not? I note that the Montserrat representative is nodding his head. I do not know what athletes or sportsmen you have, but I am concerned that you are out of sight and out of mind.

Lowell Lewis: Our athletes have tried out for the British Olympic team. However, I am glad that you mentioned sport, because that is something that I have to mention. In our recovery, we have had little or no financial support for any sporting facilities in our Islands, among many other things. If you are rebuilding a nation and a country that has been destroyed, resources have to be put into social services.

Q109 Chairman: You have had significant support from the Department for International Development over recent years, since the disastrous consequences of the volcano nearly 12 years ago. In your opinion, how good are the arrangements now being made by the Foreign and Commonwealth Office and DFID to assist Montserrat?

Lowell Lewis: I think that they have finally agreed that we need a lot more. The extent of the destruction was never really understood. The bottom line is that we lost 80% of our assets. We are rebuilding because the northern 17 square miles is safe. Many essential things are needed. We do not have a port. There is no courthouse. Many basic items are still not in place. Although we have had a lot of help, a lot more is needed. It is as simple as that. At the moment, 70% of our revenues are budgetary aid; we were once self-sufficient, with a surplus. All we need is to replace what we have lost-the hospital, the library and so on; essential infrastructure-and then we will be able to start again.

Q110 Chairman: Finally, may I ask you all a question that we asked the previous panel? Are you satisfied with the relationship that you have with the UK Parliament?

Osbourne Fleming: I have already reported this to the Committee and I want you to take the message forward because we need help on it: four of us cannot run the government of Anguilla. You are well aware of the problems taking place in that country. The situation is very hard for us. I want to push that point.

Chairman: You made that point at the beginning and you are making it at the end.

Osbourne Fleming: Other than that, we enjoy a good relationship.

Lowell Lewis: I have just received a note from my colleague saying that I should make a plug for a Parliament building in Montserrat. The bottom line is that we have a relationship that can improve. We invite you to come to Montserrat, because only when you come there do you realise that we have a future and realise the devastation that we sustained and the additional help that we need.

Chairman: Thank you.

Michael E. Misick: There needs to be better relations between Parliament and Members of Parliament in the various Overseas Territories, so that people are better able to understand the dynamics of the different Territories. I think that most of us seek a modern relationship in which there is representation, just as Scotland and Wales have representation, whether it is in the House of Commons or elsewhere. I believe there was a Bill several months ago about possible representation from the Overseas Territories in the House of Lords. If we are to have a long-term marriage, the time has come for consideration of the Overseas Territories having direct representation in the House of Commons. Perhaps there could be a couple of elected Members as well as persons in the House of Lords. That is one area that has not been looked at properly and that can be improved if there is to be a long-term modern relationship. We can look at the United States and Puerto Rico, the Virgin Islands-

Andrew Mackinlay: Samoa.

Michael E. Misick: Samoa. There is also Guam. Hawaii is a state, but has representation in Congress-even Washington DC has it.

Q111 Chairman: Even the French Senate has representatives for the Overseas Territories, so the point you are raising is well made.

Michael E. Misick: Exactly. St. Martin and Guadeloupe and all those places have representation in the French Parliament. The situation is the same with the Dutch. The colonial days are over. We are talking about the remaining Territories and their citizens. There are probably fewer than 160,000 people and most of us are from the Caribbean region. The time has come for the United Kingdom to consider a modern approach whereby if most of the Territories want to remain British, there has to be a modern relationship. Otherwise, once Territories develop a certain degree of economic independence, they will probably sail off into the sunset. Today, when we are all interdependent, there can be a modern relationship with the remaining Territories.

Chairman: Gentlemen, thank you for coming. Thank you for your time and your comprehensive answers. We hope you enjoy your Overseas Territories meetings in the next two days and we wish you all the best for the future.