Ivory Bill

Baroness Vere of Norbiton Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 10th September 2018 Lords Chamber

[The Earl of Kinnoull (CB)]

My Lords, I declare my interests as set out in the register of the House, in particular as a director or trustee of several museums and in respect of the insurance world.

This is a technical amendment to do with some insurance issues, so I hope to gallop through it, as I am sure not many of your Lordships would be that interested. I should like to add my own thoughts to the messages to the noble Lord, Lord Carrington, because I was going to start by citing something that he said in his Second Reading speech. He quoted a figure, which I have also seen, of there being somewhere between 2 million and 3 million objects that have an ivory content in the UK in personal collections and museum collections. He said that he felt that was an underestimate, and I agree with him that it probably is an underestimate. The UK is a heavy buyer of insurance. I can say with confidence that the majority of those objects are the subject of insurance, so I am talking about a large number of objects all round.

As I looked at the Bill, there were three areas where I felt there could be problems for the way in which the insurance world works today. The first was in simply paying a claim. I am sure that many of your Lordships have not made a claim and so may not realise this, but the point is that, when paying a claim, the insurer will pay out a sum of money, but the title of the object insured will transfer to the insurer. There would probably also be another agreement, a release agreement, between the insured and the insurer. Therefore, there is a tremendous amount of consideration moving and, certainly, the title of the object moving. That knowledge was with me as I read Clause 1(3), as I was very worried that the paying of the claim may be problematic under the way the Bill is currently drafted. For museums and private individuals, I thought that was regrettable.

Secondly, another thing that goes across to the successful claimant is a right of repurchase. Certainly all of the specialist insurance markets grant this right and I think all markets now in the UK grant it. This is a right whereby, if an object is stolen and comes back—quite a lot of stuff does come back, particularly the more valuable stuff, because if there are photographs of it, it is difficult for people to dispose of it—people have the opportunity to repurchase the object at the lower of the market value or the amount of money that was paid out in the insurance claim. For private individuals, that is often very attractive because many people are underinsured, so maybe they can buy something back that is worth more at a lower price. Certainly, for many private individuals, it is attractive because the sorts of things that are stolen are often things with great sentimental value to them. This is a very valuable right for private insurance. For the museum-insured area, which I am deeply involved with, it is important because often what is stolen is the key part of one or other of their collections, and it is very difficult to source replacement parts. I feel that this repurchase right is very difficult under Clause 1(3).

A third problem, which is much more technical, is to do with the way that insurance companies and Lloyd’s syndicates set themselves up, and that is that they move around the salvage rights within themselves. Naturally, this happens in a series of transactions that take place—most famously in the Lloyd’s syndicates, where there is a fresh syndicate every year—and so they move around these rights of repurchase further down. A Lloyd’s syndicate will need to be able to trade with a successor syndicate in order to preserve this right of repurchase. Of course, there are many latent rights of repurchase out there at the moment, which will all be covered, I assume, by this Bill. So this is not about fresh thefts but about stuff that comes back.

Those three issues were circulating in my mind, and I feel that there is a difficulty. I do not think it is the intention of the Bill to stop people from being able to rebuy their own stuff following an insurance loss. That can have nothing to do with the admirable intentions of this Bill, so I drafted a probing amendment, merely to just raise the debate, but not to settle on the precise language of how we deal with this problem that I have identified. I have limited it to providing some sort of route for just the 200 or so professional insurers in the UK. These are carriers who are all regulated by the FCA and who, I can assure your Lordships, if they saw any naughtiness, would be out with the fines book straightaway. I beg to move.

[Baroness Vere of Norbiton (Con)]

My Lords, the noble Earl’s amendment would insert a declaratory statement into the Bill confirming that prohibitions in the Bill would not apply to insurance and reinsurance transactions. I am very grateful to him for our helpful conversation over the weekend, and I confirm that it is indeed the Government’s intention that insurance and reinsurance activities will be able to continue as usual.

As the noble Earl has pointed out, this sector is very important with regard to items containing ivory. We are mindful of the types of transactions that may occur, and indeed we are further investigating other types of transactions and the associated transfers of ownership and the considerations paid and received in the ordinary course of these transactions. We are therefore considering ways of making it clear that financial transactions associated with the insurance and reinsurance of ivory items are not prohibited by the Bill, and we look forward to working with the noble Earl and other noble Lords to ensure that that is the case.

I hope that, in the light of what I have said the noble Earl feels able to withdraw his amendment.

[The Earl of Kinnoull]

I am very grateful to the Minister, with whom I had a number of amusing conversations over the weekend that involved lawn-mowing as well. I think this is a very constructive approach, and I hope we will be able to deal with the matters quickly when we get to meet. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Jones of Whitchurch]

My Lords, I am grateful to the noble Lord, Lord Clement-Jones, for raising this issue today. We touched upon it at Second Reading and noble Lords have referred to the letter from the Minister that we received in response to that. The noble Lord will know that we have considerable sympathy with the arguments that he has put forward this afternoon. The online sale of items containing ivory is undoubtedly the most difficult market to police. The Committee has already heard that the worst violations of existing restrictions take place online. It is a global trade, using global communications. As the noble Lord said, the poachers and middlemen have sophisticated communication networks, including codes and jargon to conceal the real nature of the goods being traded. This is happening globally, across borders. This is why, ultimately, we need a global response to close these markets down. It is an area for the UK Government alone to be effective in doing this.

We also know that, as the noble Lord said, we have limited resources to police these sales. This issue is covered in amendments to the Bill which we will come to later. I also like to think that the measures already in the Bill and the additional amendments we propose would at least bring the legitimate UK online trade under control. The requirement for exemption certificates; the need for registration and photographs; the oversight of professional institutions; the removal of the defence of ignorance for buyers and sellers and the tightening up of enforcement should help to deliver more watertight controls. I understand the argument about proportionality and we need to bear it in mind quite sensitively.

Although I am sympathetic to the noble Lord, I wonder if, at this time, we should let the current proposals run and then use the reviews we are proposing in later amendments to the Bill—for example, working with the National Wildlife Crime Unit and border police—to assess how effective the Bill has been. That would give us the opportunity to look at whether we still have an online problem. The onus is on the Minister to reassure the Committee that this is going to be effective in tackling online trade. Otherwise, the whole Bill will be effectively undermined if all the trade moves towards there.

I would like to think that the checks and balances are there. It may be that we have been proved wrong. I would like to hear more from the National Wildlife Crime Unit about whether it thinks it can manage within the existing constraints. If it feels it can do it, albeit it will probably need some extra resources—we are all well aware of that—then I am inclined to take it on trust at this moment. However, it is certainly an important issue to get right.

[Baroness Vere of Norbiton]

I thank the noble Lord, Lord Clement-Jones, for initiating this debate on whether to ban certain types of exempted, and therefore legally saleable, ivory items through online channels. The noble Lord has read out much of my answer already but it does bear repeating. From the very outset, the Bill was drafted with online and offline sales in mind. The Bill prohibits all commercial activities in ivory, regardless of where those activities take place, subject, of course, to the exemptions in the Bill.

Equally, anyone who breaches the ban, be it online or not, will be committing an offence and will face the same range of sanctions, including a criminal sanction of up to five years in prison and/or an unlimited fine. There are a number of further provisions included in the Bill that will assist in tackling illegal online sales. It will be an offence to facilitate breaching the ban. Therefore, this would include, for example, a UK-based online sales forum which facilitates the sale by allowing sellers to advertise their item, make contact with buyers and accept payment.

In that example, those responsible for such online sales forums, which would include corporate bodies, would be found to be in breach of the ban if they could not show that they had taken reasonable steps to prevent an illegal sale taking place. These steps would include, for example, ensuring that the item for sale is exempt and had been registered or had an accompanying exemption certificate. We therefore expect such online forums to take all actions to ensure that they and their users act in compliance with the ban, in the same way that we expect offline channels to do the same. The Bill also prohibits the deliberate misrepresentation of ivory during a sale—for example, as bovine bone. This issue was raised by the noble Lord and it is very important. Both the seller and the buyer could be committing an offence if one or both of the parties knew or suspected that it is ivory.

Noble Lords will be aware that other items subject to restrictions, such as kitchen knives, are allowed to be traded online. Indeed, I am not aware of any item that is singled out for such a ban depending not on the legality of the sale but on the channel—that is, online or offline—through which the sale is transacted. We believe it would be disproportionate to completely ban the commercial dealing in exempt ivory items online and that it would shut off a relatively transparent means of monitoring the extent to which trading is happening online. As a noble Lord mentioned earlier, there are 2 million to 3 million items containing ivory and it would be utterly wrong to ban the sale or the legal trading of those items online. Indeed, as my noble friend Lord De Mauley pointed out, the auction houses use the online environment as a very valuable way of marketing the items they have for sale.

We agree that enforcement is extremely important. We cannot have online trading in ivory if we are unable to enforce properly. Online sales are a priority for the National Wildlife Crime Unit regarding the illegal wildlife trade. There will be much more on enforcement and funding in due course. However, this issue is so important that I will recommend that we write to noble Lords on enforcement, on what we can do in the online environment and on the resources we intend to put into that enforcement.

I turn briefly to the point raised by my noble friend Lord James of Blackheath about roulette balls. I understand that he has been in touch with officials about this and that they have written to him. These balls will be caught by the ban but, as was mentioned, there are alternatives. I hope with this explanation I have reassured the noble Lord that we have considered—and, indeed, are considering—the matter of online sales and that he will therefore see fit to withdraw the amendment.

[Earl Attlee]

My Lords, can the Minister explain how we can take action against a forum that is based, say, in the Russian Federation? She talked a lot about the ability to prosecute people for contravening the law—the provisions of the Bill—but it is not clear how we would be able to take action against forums domiciled overseas.

[Baroness Vere of Norbiton]

My noble friend is quite right. If a forum is domiciled overseas, it will be up to enforcement to look at those advertising their wares and those who are looking to buy those items. However, we should also consider that in due course, the items for sale online will either be registered or will have an exemption certificate. We will be able to see clearly whether those items are legitimate, and that additional level of security for buyers and sellers is the most important thing when it comes to online sales.

[Lord Clement-Jones]

My Lords, I thank the Minister. In particular, that last sentence was extremely important in the circumstances, and the noble Baroness, Lady Jones, made the same point: that that will be the essence of the online sale as well. I thank the noble Earl, Lord Attlee, for his intervention and the noble Baroness, Lady Jones, for her positive words. In response to the noble Lord, Lord Inglewood, the amendment is meant to do what it says on the tin: certain of the exemptions are exempt, and certain others are not, and Clauses 8 and 9 are excluded from the ban on online sales for a purpose.

To come back to what the Minister said, I am of course reassured about the provisions of the Bill, and it is precisely the resources and the activity around enforcement which are absolutely crucial. A provision about banning online sales is not disproportionate if enforcement is inadequate. If enforcement is adequate, then of course it would be disproportionate, but this is in a sense designed to prevent the mischief of online sales taking place without adequate enforcement. I look forward to the letter from the Minister. In particular, the noble Baroness, Lady Jones, mentioned the National Wildlife Crime Unit and other aspects of enforcement, and I very much hope that they will be fully apprised of the importance of making sure that online sales are scrutinised and that these keywords—these coded words—are understood and combated in accordance with the research from the University of Kent. This is not some figment of the imagination of those who are against ivory poaching but respectable research, and we should pay heed to it. I look forward to the letter from the Minister and obviously I reserve the right to come back on Report if necessary. In the meantime, I beg leave to withdraw.