Draft Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015

Catherine West Excerpts

Monday 2nd November 2015 General Committees

[Catherine West (Hornsey and Wood Green) (Lab)]

It is an honour to serve on the Committee under your chairmanship, Mr Gapes. I thank you for the opportunity to speak.

I welcome the strengthening of relations between China and the UK and see some merit in swiftly setting up this investment organisation. We agree that the UK’s commitment to the AIIB is a positive step to strengthen multilateral relations globally and to open investment opportunities for the UK. That said, I hope that the Government will take into account some of the opinions expressed in Committee to ensure that the UK’s commitment to the bank is based on a sound economic case that takes full account of social and environmental concerns and, importantly, delivers a fair and good deal for UK taxpayers and the local populations affected by the bank’s investment schemes.

I do not doubt the spirit in which the AIIB was set up, but I echo the concerns of my hon. Friend the Member for Feltham and Heston (Seema Malhotra) that there must be an assurance such that, when funds are invested in infrastructure schemes, those projects serve the interests of the populations affected by them. That is particularly important for projects in areas with high prevalence of poverty. The Labour party has a proud history of commitment to international development. I hope that the Minister will confirm that the UK’s investment in the bank represents a genuine commitment to international development, and is not simply a down payment for membership of a club.

The next issue is on the need for a multilateral response to climate change and environmental protection. It is welcome that clear efforts have been made to ensure environmental and social standards and the sustainability of the bank’s operation through the launch of a consultation process and the dossier subsequently produced, entitled “Environmental and Social Framework”, but concerns have been expressed that that policy-making process has occurred rapidly and narrowly. Rayyan Hassan, director of the non-governmental organisation Forum, based in Manila, commented that the bank’s environmental protection consultation wanted

“the entire world to comment on AIIB’s $100 billion safeguards. And they want to finalize it by December.” Historically, that is a short consultation period.

Given the lack of oversight, transparency has become a recurring theme with such large investment organisations. Has the Minister raised the issue directly with the AIIB secretariat? If so, will the Committee have the opportunity to scrutinise any representations made? Given that the UK has committed £2 billion to the AIIB, I hope that the Minister shares my view that it is vital for his Department to ensure that it is delivering a good deal for public-funded projects, especially given the Government agenda of austerity.

As a newly launched organisation, it is important for the bank to be able to integrate into existing global economic and political structures, working in collaboration with global stakeholders. The point made by my hon. Friend the Member for Harrow West was that we must not collaborate only with the World Bank, the IMF, the EU, ASEAN, the UN and so on. Will the Minister explain the exact mechanisms for how we, as a member of the investment bank, will operate in parallel to those organisations? How will he assure us that operations will be co-ordinated with and complementary to those existing organisations, rather than duplicative?