Pieter Cleppe: The EU, Spain and arbitration – and why it should spare us lectures on the sanctity of international law

21 Jun

Pieter Cleppe is an EU policy analyst, based in Brussels, a research associate at various think tanks, and the editor-in-chief of BrusselsReport.eu.

With Boris Johnson having secured his job for now, attention returns to the ongoing tussles between the UK and the European Union – and Government has published plans to change the Protocol section of the Brexit deal. The goal is to make it easier for some goods to move between Britain and Northern Ireland. The EU is against this, as it claims this would break international law.

So what are the merits of these plans? And how unreasonable is the UK to tear up an international deal after having agreed it?

Yes, the UK signed up to checks in the Irish sea in return for avoiding a hard border on the island of Ireland, but the actual extent of the checks was never agreed. The understanding was that both sides would be reasonable and meet each other somewhere.

Surely this should not be so hard. If the EU is actually worried about goods sneaking into its Single Market – a fair concern – it ought to double down on checks in the ports of Rotterdam and Antwerp, the two big entry gates, not some back alley in Northern Ireland. According to the Mayor of Antwerp, both ports are “leaking like a sieve”.

The EU claims that its proposal amounts to minimising checks. However, what is often lost in this debate is that the EU has attached a stringent condition to ‘minimising checks’. It is demanding that, in return, the UK agrees to a Swiss-style deal on animal and plant standards, which would require the UK to continue to align its regulations with the EU’s.

As Daniel Hannan has argued, this, therefore, does not amount to a concession but to an extra demand, stating: “the real threat is this lamentable tendency in Brussels to think of the UK as a renegade province that needs to be brought to heel rather than as a strategic ally”.

This is really unfortunate, given that the EU could simply offer to minimise checks without making extra demands for regulatory alignment. Due to the standoff, the political situation in Northern Ireland is becoming even more complex than it already was. The Brexit deal did not provide each community in Northern Ireland with a veto, whereas this is one of the core pillars of the Good Friday Agreement to appease the situation. Perhaps one could argue in favour of this factor, but it doesn’t make it easier to sell the Brexit arrangement to the likes of the DUP.

In the end, the EU can drag the UK to court. Strangely, the EU’s own top court, the European Court of Justice, in Luxembourg, has been tasked to serve as the arbiter for differences resulting over anything to do with Northern Ireland. The UK now wants to water down the ECJ’s role. Perhaps the EU should take this request seriously, since having the top court of only one of the parties to serve as the arbiter may not be conducive to getting both parties to accept a fair resolution.

Indeed, the European Commission has already dragged the UK – the UK’s Supreme Court to be precise – before the ECJ, claiming that a February 2020 UK Supreme Court ruling in the “Micula” case – whereby Romania was ordered to pay compensation to investors who lost out on state subsidies – “breached the principle of sincere co-operation, and violated EU law”.

Clearly, the EU’s urge to respect international law does not seem to extend to cases where it is less convenient for the EU or certain member states. At the moment, the EU is also urging a D.C. federal court to overrule a €291 million arbitral award against Spain for having introduced drastic changes in 2013 to its financial support scheme for renewable energy installations, thereby changing the rules of the game for bona fide investors.

The award is one of many imposed on Spain, which is frantically resisting to pay its debt to companies like Nextera, Antin, Eiser or Greentech, having lost pretty much all of the many legal cases against it. Instead of simply compensating the investors, as it is ordered to do, the Spanish government legally challenges everything it is able to.

Overall, Spain has a pretty poor record of complying with arbitration rulings, whereby it finds itself in questionable company, together with the likes of Russia, Argentina and Venezuela. Last year, Spain even intervened in favour of Russia, in the Yukos case, encouraging them also not to pay. In 2011, when the lawsuit against Spain on the basis of the Energy Charter Treaty was launched, Spain was only the second Western European country to face a challenge. At that time, a person close to the groups bringing the case commented: “Spain is now in the same league as Kazakhstan and Azerbaijan when it comes to investor confidence.”

Today, however, in its quest to challenge arbitration, Spain is receiving back-up from the European Union. During its intervention for the American court, which needs to rule on an appeal against the arbitration judgement which Spain lost, the EU is not merely arguing that the private arbitration court would not have properly interpreted the law.

It goes as far to claim that the case should not have gone to arbitration in the first place, referring to the 2018 “Achmea” ruling by the European Court of Justice, which decided that intra-EU legal disputes should not be subject to arbitration.

The reason why arbitration is relevant here is due to the fact that the EU signed up to the multilateral Energy Charter Treaty back in the 1990s. A number of EU member states, including Spain, are now trying to renegotiate the international agreement and have even threatened to withdraw from it.

Perhaps for the future, the EU should spare us its lectures about international law, and focus on finding satisfying solutions on how to implement checks in the Irish Sea that are proportionate with the risk that this would become a back door into the single market. The UK’s proposal to merely check goods arriving into Northern Ireland from Great Britain that are not destined to remain in Northern Ireland is a more than reasonable contribution to squaring the circle.

The post Pieter Cleppe: The EU, Spain and arbitration – and why it should spare us lectures on the sanctity of international law first appeared on Conservative Home.

John C Hulsman: As it defies Putin’s pressure, now is not the time for the UK to abandon Kazakhstan

23 Mar

Dr John C Hulsman is the Founder and Managing Partner of John C Hulsman Enterprises, a global political risk firm. He is also a life member of the US Council on Foreign Relations.

Shrewd, knowing, screen legend Marelene Dietrich put it well when she said, “It’s the friends you can call up at 4m that matter.’”Having just emerged from its own crisis, the government of Kazakhstan has – to the surprise of many – answered the world’s wakeup call.

Despite its close ties to Russia, it has steadfastly refused to align itself with Moscow over the Ukrainian war, instead neutrally offering its offices to broker a peace deal, even as it refuses to recognize the two breakaway Ukrainian provinces, Luhansk and Donetsk, as separate countries as the Kremlin desires. Instead, Kazakhstan has called for Russia to consider dialogue and peaceful settlement of the war, noting its close ties to both belligerents.

To put it mildly, this is not what Vladimir Putin expected to happen.

Going even further, Kassym-Jomart Tokayev, the Kazakh president, has decisively stated that he is cooperating with Volodymyr Zelensky of Ukraine in coordinating humanitarian programs, while at the same time urging Putin to consider an immediate cease-fire.

In wisely stating that “a bad peace is better than a good war”, Tokayev has somehow kept his country’s traditional, multi-vector foreign policy intact, stressing Kazakhstan’s strategic autonomy despite the immense pressures of a war next door.

However, in turn, Kazakhstan has recently sent London a middle-of-the-night wakeup call of its own. How it responds will condition the UK’s relationship with this pivotal, resource-rich state, and the whole of the strategic Central Asian region, for decades to come.

Kazakhstan has had many achievements over the first 30 years of its independence. With its first president, Nursultan Nazarbayev, at the helm, the country embarked on a programme of strong economic reform and (as a consequence) enjoyed sustained growth.

Equally importantly, Nazarbayev fashioned a true multi-vector foreign policy (with Kazakhstan keeping Russia, China, and the West at arm’s length) despite living in the rough and tumble geostrategic neighborhood of Central Asia. In so doing, he safeguarded Kazakhstan’s strategic autonomy, despite long odds.

Nevertheless, violent riots erupted in the country on 2 January, tragically claiming over 200 lives before they were quelled. While the immediate cause of the disturbance was a rise in fuel prices, the underlying reasons for the unrest also included income disparities, crime, and extremism. Obviously, there is a clear need for further economic reform (moving definitively toward a post-Soviet, market-based economic model) and tackling income disparity, while addressing poverty alleviation and battling corruption.

Yet, as so often is the case, the events of January 2022 are in danger of being grossly misunderstood by a British foreign policy establishment who would rather feel good than do good. In this case, two bastions of old-style, brain-dead, Wilsonian thinking, Chatham House and Dame Margaret Hodge, the Labour MP, have reflexively called for sanctions against Kazakhstan, willfully ignoring what is actually going on in the country.

In the case of Chatham House, in a recent report they admit that the chaotic events of January make it hard to justify specific sanctions on the country due to the violence that occurred. Instead, they confusingly and nonsensically base their preference for sanctions as a policy response on the very income disparity that the Tokayev administration has made it a priority to alleviate.

Disregarding the strategic opportunity that the reformist government of Kazakhstan represents, Chatham instead adopts the usual, dreary paint-by-numbers approach to its domestic upheaval.

As for the scandal-plagued Dame Margaret, the old adage about glass houses and stones would seem to apply.

Rather than discussing her own massive peccadilloes – ranging from making $100 million from the sale of her family’s industrial conglomerate, STEMCOR, in Belarus to China, or to address her horrendous disregard for the horrific abuse of children in Islington’s children’s houses while leader of its council from 1982-92 – somehow, some way, she has the nerve to find Kazakhstan worthy of her moral disapproval.

Instead of seeing further developing ties with Kazakhstan as Britain’s strategic partner in Central Asia, the serially tone-deaf Labour politician is looking for redemption in all the wrong places.

Yet beyond the immediate crisis and the unthinking, censorious comments of its detractors, there is significant, deceptively good political risk news emerging in Kazakhstan. First, despite 30 years’ worth of worries about the durability of the Kazakh state itself, it came through its trial by fire, with the country’s integrity and cohesion never in doubt even as the disturbances raged.

Kazakhstan as a political entity has proven itself to be a genuine, organic country, with a genuine sense of nation and nationhood.

Second, in acting decisively and resolutely in the crisis, Tokayev has made it absolutely clear that he will direct the country’s revived economic reform programme, tackling the very practical underlying issues that people in Kazakhstan most care about, regarding inequality, corruption, and fuel prices.

Moving beyond the first era of Kazakhstan’s independence, it behooves the UK to be part of the second chapter in the country’s ongoing saga. Proposed British sanctions take none of these political risk realities into account, and would only heedlessly damage the UK’s interests.

Kazakstan is doing precisely what every foreign investor has been dreaming of (given its tremendous economic potential and boundless resources of coal, uranium, cotton, and copper), by stabilizing the economy and society. It is committed to maintaining its multi-vector foreign policy, just as the West has great need for friends in Central Asia following the chaotic American pull-out in Afghanistan.

For instance, Kazakhstan has the world’s 12th largest proven oil reserves (approximately amounting to 30 billion barrels), with oil output trebling since 2001, to 1.8 million barrels per day, and going up. Given the grievous need for Europe to find new, safer sources of supply, Kazakhstan amounts to a vital future oil source for a West sorely in need of energy diversification.

Also, in energy terms, Kazakhstan’s uranium will be badly needed as the nuclear industry may experience a renaissance, given the need for clean energy and more, for energy coming from stable, pro-western countries.

Instead of ostracizing Kazakhstan, it is entirely in the UK’s interests to diplomatically ‘lean in’, supporting Kazakhstan’s government. It would seem obvious (though sadly it is not) that when a longstanding ally, through the pressure of overcoming internal crisis, is committed to doing precisely what London urges it to do, more strategic support is both the proper and the practical foreign policy response, not less. It is past time for London to answer Dietrich’s proverbial 4AM phone call.

Robin Millar: History teaches us that appeasing aggression only fuels more aggression. It’s a lesson we must apply to Ukraine.

26 Jan

Robin Millar is the MP for Aberconwy.

Earlier this month Russian troops were deployed to suppress a civilian uprising and to protect Russian nationals, economic and military assets. Russian supplied weapons were used by the Russian-trained security services who were ordered to “shoot to kill” protesters who had revolted against the Russian-backed dictator of their country.

This situation played out in Kazhakstan, a former Soviet republic – but it serves as a reminder that Russia is determined to maintain its influence throughout the former Soviet Union. It also serves as a stark warning of the seriousness of the situation on Ukraine’s border and the small but real prospect of Russian invasion.

There are clear incentives for western involvement to prevent a Russian invasion of Ukraine.

First, the West has a moral obligation to take an interest and to act. Ukraine is a Western-looking country with aspirations to join NATO, a defensive alliance. Russia’s response to such aspirations held by other former Soviet republics has been to try and install a puppet regime – historically with a scant regard for democracy or human rights. Further afield, Russia’s actions in Syria under Assad and Belarus under Lukashenko must raise concerns for the fate that awaits the people of Ukraine, should their country fall.

Second, practically, a Russian invasion would drive up our cost of living, energy prices, inflation and threaten our post pandemic economic recovery. While the UK imports minimal quantities of Russian gas – depending instead on imports of LPG imports from the Middle East and of gas through pipelines from Norway – we are as exposed as any other economy to wholesale gas price increases. Should Russia restrict, by which I really mean weaponise, gas supplies in the event of conflict, prices would be pushed even higher than present record levels.

Third, unchecked, an invasion would have huge geopolitical implications for Europe and the West. Plenty of other states around the world will be watching to see if Western words are followed by action. China – and Taiwan – will have noted the NATO withdrawal from Afghanistan, led by an increasingly introvert US.

History teaches us that appeasing aggression only fuels more aggression. Even after 30 years, Russia has never fully accepted the independence of these former Soviet republics and has yearned to bring them back within its sphere of influence. Should Ukraine fall, Russia’s focus will shift to the Baltic States – each with their own significant Russian minorities.

However, the UK, along with our NATO allies, has been deterring them by overtly defending NATO member states.

Military deployments have included RAF Typhoon fighter jets to Lithuania in support of Baltic Air Policing in June 2021 – resulting in multiple interceptions of Russian military aircraft. In May last year an RAF-led military Tactical Air Control Party (TACP) was sent to the Baltic region as a component of Operation Cabrit – the British operational deployment to Estonia where UK troops are leading a multinational battlegroup.

This battle group forms part of the NATO-enhanced Forward Presence (eFP) mission, designed to improve Euro-Atlantic security, reassure NATO allies and deter NATO adversaries. Additional NATO reinforcements to the Baltic Sea include Denmark deploying a frigate and F-16 fighter jets, and the US reportedly deploying additional warships and aircraft to the region, along with thousands of additional troops.

As NATO members, the Baltic States fall under the umbrella of NATO’s collective defence – the unique and enduring principle that binds all NATO members together: an attack, be it armed, cyber or CBRN, against one member is an attack against them all. Russian aggression against the Baltic States is therefore a scenario that must be deterred. NATO can provide this deterrence.

However, NATO must stand united – which is easier said than done.

Last week the US President cast doubt on that unity, mutual commitment and determination. He undermined weeks of diplomacy and careful positioning when he stated: “what you’re going to see is that Russia will be held accountable if it invades and it depends on what it does… It’s one thing if it’s a minor incursion, and then we end up having to fight about what to do and not do etc”. He continued to say, “there are differences in NATO as to what countries are willing to do, depending on what happens.”

Closer to home, Germany, a key alliance member, is one of the world’s major arms manufactures and exporters and supplies weapons to nations such as Egypt, Israel and Pakistan. However, it is actively blocking the transfer to Ukraine from other alliance members urgently needed weapons including long range artillery shells and their delivery systems.

And this is exactly why the role of the UK is vital.

Shortly after being elected as the Member of Parliament for Aberconwy in 2019 I was privileged to be selected to participate in the Armed Forces Parliamentary Scheme. I am grateful to have had the opportunity to be briefed on our military preparedness in Eastern Europe and on the threat that Russia represents on several fronts. I am also grateful to have observed, first-hand, the professionalism and dedication of our Armed Forces personnel, along with the high standard of training that they receive.

The UK is showing leadership in supporting Ukraine and in deterring Russian aggression. In August last year Jeremy Quin, the Defence Minister, told Parliament that “since 2015, the UK has trained over 21,000 Ukrainian military personnel in medical skills, logistics, counter improvised explosive devices, leadership and infantry tactics as part of Operation Orbital.”

More recently, recognising that a Russian invasion would be led by armoured columns crossing the border, the UK has provided targeted support to the Ukrainian military by airlifting 2,000 Next Generation Light Anti-Tank (NLAW) missiles. Given the scale of Russian armour this contribution is hugely significant in deterring Russian aggression, although it will not have gone unnoticed that public flight data shows the transport flights of this vital cargo are deviating around German airspace.

The price of this support is indeed high, but the cost of failure will be undoubtedly worse.

Our military support of Ukraine’s freedom is a symbol of the UK as a force for good in the world – every bit as much as our leadership in support for COVAX, the programme to provide Covid-19 vaccines to developing nations. As I write, “God Save the Queen” is trending on social media in Ukraine.

Every effort must be made to secure a diplomatic solution. But we must not repeat the mistake of Chamberlain, to confuse peace with an absence of conflict, until it is too late. Russia must know that any invasion of Ukraine will be resisted, militarily if necessary, by a united and determined NATO.

Bim Afolami: The Olympic model of spotting and developing talent should be applied to academia

26 Jul

Bim Afolami is MP for Hitchin & Harpenden.

As the Olympics begins, I have a giddy sense of excitement. The coverage is the BBC at its best. I start to care about events you barely knew existed (Men’s 10m Air pistol anyone?), and cheer on each British athlete with immense fervour.

There is something magical about the Olympics. It isn’t just the hype. It is the stories behind each and every champion. There is something special about the sacrifices they have made, spending their teenage years in a mixture of holiday training camps in addition to the relentless grind before and after school, and seeing all of that effort culminate in competing at the very highest level.

We rightly applaud and celebrate them, and we also praise their highly focused coaches and families who have helped develop their extraordinary single-minded focus on achievement from a young age.

After the failure of the Atlanta Olympics in 1996, during which Team GB only won one gold medal, finishing 36th in the medal table – below Belgium, Algeria and Kazakhstan – it prompted a period of furious self-flagellation in the media and serious soul searching among administrators.

Due to the brilliant decision of John Major as Prime Minister to introduce the National Lottery, this provided the funds for the “World Class Performance Programme” to start diverting funds into elite sport. It allowed athletes to devote themselves entirely to their training, paying their living costs and delivering a wide range of support services, from physiotherapy to sports science and nutrition.

Extra funds were also invested in greatly improved facilities across a range of different fields. The talent development programmes that made sure promising athletes were funnelled into their best sport at a younger age. All of this work has led to Team GB hugely improving its performance at Olympic Games, finishing 4th overall in Beijing 2008, 3rd in London 2012, and 2nd in Rio 2016.

Why do we think about academic and intellectual achievement so differently? Why do we regard the selection of children for academic ability and potential so anathema, yet ruthless and narrow selection for sporting prowess is regarded as rightly necessary to develop the leading stars of the future?

We need to focus on developing our brightest and most talented people, in a range of different fields, from a young age – and do this irrespective of their social background. As the Prime Minister often says, talent is evenly distributed in this country, but opportunity is not. We need to rediscover meritocracy in Britain.

The truth is that in order to do so, one is confronted by a difficult problem. How to discover and develop talented children in the population at large when the ladder of opportunity has so many rungs missing? And how do you give the best possible opportunities to such children once you have discovered them?

Adrian Wooldridge, Managing Editor of the Economist, in his new book The Aristocracy of Talent argues that the way to do this is to revive two ideas that were at the heart of the meritocratic movement until the “progressive” reforms of the 1960s: IQ testing and academic selection.

We know the arguments about the 11 plus – the Left argues that dividing the country between sheep and goats at 11, on the basis of one test at a very young age, does immense harm to those who failed in the process; the Right retorting that it gave unique life chances to bright working class children who were identified early and given life changing opportunities.

The best way forward is to learn from the failures and successes of the past. We don’t need a national 11 plus in the old style. We need more of a variegated school system that has lots of different types of schools from technical schools to music schools and arts schools, but which also makes room for highly academic schools in the state sector.

We have already provided the material for this with school academies – Brampton Manor Academy, for example, is situated in Newham, East London, with one in five children eligible for free school meals. The sixth form is highly selective (on the basis of GCSE grades), and it cultivates a highly academic atmosphere, with intensive Oxbridge training as well as a host of extracurricular subjects. Last year it won 55 places at Oxbridge – their method is working.

The Government could push this revolution further by allowing academies to select at 11 – not with an 11 plus, but with IQ tests developed precisely to avoid being susceptible to intensive tutoring that is all too common in preparation for that exam. This would not just be for the typical “academic” subjects.

For example, we should turbocharge the intake for our university technical colleges (which start at 13-14 years old) by scouring the country and actively selecting children with special aptitude in technical, engineering and design skills. These are the children who will go on to build our future high tech manufacturing capacity, or develop the sort of innovative ideas that will help us achieve Net Zero by 2050.

Wooldridge argues that, in addition to this, we could create a system of fully-funded national scholarships, awarded on the basis of a combination of IQ and social need, that would allow children to study at any school in the country – opportunities to be selected for this would happen continuously throughout secondary school, lest late developers be missed.

Private schools would be forced to open up a certain number of places to these students. These national merit scholars would be given free university education in return for agreeing to spend at least 10 years working in the public sector.

This would address the public sector’s growing problem with attracting high flyers, particularly in IT and tech. It would repair the fraying link between public service and intellectual excellence. As government and governing becomes ever more complex, and we demand more from our teachers and other public servants, we should try and ensure that more of the most academically able students are incentivised and trained for life in public service.

I know that real life is not the Olympics. Yet training and developing our most able young people for the future will not just be important for identifying hidden talent, but it will benefit all of our society. It is mad that the only type of selection that is verboten in the state sector is academic, when the wealthy can just pay for it.

Let’s rejuvenate the idea of meritocracy, and truly ensure that the most talented, from every background can get to the top. We might end up with better technical skills in industry, better civil servants, better teachers, and yes – much better politicians!