Azerbaijan and the South Caucasus

Stephen Hammond Excerpts

Wednesday 22nd June 2011 Westminster Hall

[Martin Horwood (Cheltenham) (LD)]

Thank you for calling me, Mr Hollobone. I will try to keep an eye on the time. I commend my hon. Friend the Member for Harrow East (Bob Blackman) for securing the debate, and for resisting the impulse to give a rendition of the Eurovision song contest’s winning song. That is a mercy to all of us.

The debate is very important because although the region is ostensibly stable at the moment, it clearly has potential for a lot of volatility. As well as the conflict over Nagorno-Karabakh, there was the war only a few years ago between Russia and Georgia, there is unresolved conflict over South Ossetia and Abkhazia, and we now have other regional powers, such as Iran, taking an interest, although apparently in the unlikely role of peacemaker at the moment. That all underlines how such a potentially volatile region could deteriorate quite fast. If we have learned anything from events in the middle east and north Africa, it is that one cannot take one’s eye off the ball and expect stable regions to remain stable just because they are at the moment.

Reference has been made to the conflict in Nagorno-Karabakh, and in fact it has been called the occupation of Nagorno-Karabakh. Clearly, one person’s occupation is another person’s liberation, and the origins of the dispute started with a regional soviet voting to attach itself to Armenia in 1988 under the USSR. It is important that while emphasising many other universal values such as human rights, the rule of law and democracy, we remember the important right to self-determination. That will clearly be a live issue in this country for the next couple of years. Should the people of Scotland, however unwisely, decide to vote for independence or a different constitutional arrangement with the United Kingdom, we would of course respect that, just as Czechoslovakia respected the right of Slovakia to separate from the Czech Republic some years ago.

[Stephen Hammond (Wimbledon) (Con)]

My hon. Friend’s point about self-determination is of course right, but if the indigenous population has been expelled, self-determination and its result will be rather different from what might otherwise be expected.

[Martin Horwood]

My hon. Friend makes a valid point. Perhaps the way forward is that suggested by the European Parliament in its 2008 resolution, which recognised the territorial integrity of Azerbaijan but referred specifically to rights to self-determination, whether in the form of home rule, devolution, confederation or whatever. It is crucial that popular consent is part of the process.

I agree that progress towards a peaceful resolution seems to be frustratingly slow, although it is positive that all parties now seem to have committed themselves to peaceful resolution of the dispute. I gather that the South Caucasus security and co-operation conference has now resolved that all outstanding issues in the region should be tackled by 2014, and I would be interested to hear from the Minister—his enormous portfolio now also includes that troublesome region—what pressure Her Majesty’s Government will put on the Governments of Azerbaijan, Armenia and Russia to make that process a success.

I want to mention briefly two wider issues. One is the role of western foreign policy in the post-Soviet space in the world. Clearly, discussions are continuing between NATO and Azerbaijan, which is interesting. It is probably right and wise that those negotiations are concentrating not so much on Azerbaijani membership, but on building stability and ensuring that Azerbaijan is a barrier to the spread of weapons of mass destruction and other things that contribute to the stability of the region and the rest of the world.

The other issue, which other hon. Members have mentioned, is human rights. The Arab spring or awakening has underlined the importance of what President Obama called

“the false promise of stability”

sometimes enforced by repressive tactics. Azerbaijan is not Libya; it is not Syria; it is not Iran. It has many of the characteristics of an increasingly prosperous multi-party democracy, yet there serious concerns. The Organisation for Security and Co-operation in Europe described the 2010 parliamentary elections as “peaceful”, but

“not sufficient to constitute meaningful progress in the democratic development of the country.”

Amnesty International reports:

“Threats, harassment, and acts of violence against journalists, civil society activists and opposition activists continue with impunity, leading to an increase in self-censorship. Criminal and civil defamation laws are used to silence criticism, resulting in prison sentences and heavy fines against journalists.”

If I had more time, I would highlight the cases of Jabbar Savalan, Eynulla Fatullayev, Adnan Hajizade and Emin Abdullayev. I hope that the Minister will be able to take up those cases in particular with the Azerbaijani Government.

If Azerbaijan is to take its place in the democratic family of nations—I agree with hon. Members who have said that it is important to have examples of Muslim countries that are emerging as stable and free democracies—it must recognise the importance of tackling the human rights issues that still exist there. I hope that the good offices of the Minister, the Conservative Friends of Azerbaijan, and the all-party Azerbaijan group will be utilised in that effort. That would be extremely positive for Azerbaijan.

[Stephen Hammond (Wimbledon) (Con)]

As befits the importance of this debate and of your chairmanship, Mr Hollobone, I have prepared 25 minutes of eloquent speech, but as only five minutes are available to me, I shall cut to the quick and not discuss issues that colleagues have already mentioned this afternoon. I also refer hon. Members to my declaration of interests.

Some hon. Members have discussed the petroboom in Baku. Clearly, there is a wide spread of economic prosperity in that country, and I want to concentrate on two issues. The first is the prospects for UK industry. Wherever we look across the globe, instead of being cautious and concerned, we in the UK should be embracing some of the opportunities. Notwithstanding some of the issues that hon. Members have raised, it seems to me that beyond the fact that BP has its biggest European plant and refinery in Baku, and that we are already the largest foreign direct investor into that country and the largest exporter in that region, this country is missing some significant interests and opportunities.

It has been said that the construction boom is being driven by the petrodollar, but the construction boom is there, and yet another concert hall for the Eurovision song contest is being built. Where UK industry is missing out, I encourage the Minister to chide UK Trade and Investment, which is not doing enough in that and other regions of the world. UK civil contracting still has a global competitive advantage, so why is it not taking this opportunity?

The infrastructure boom is driven by the needs of agriculture, industry and increasingly tourism, and some providers in the UK have international advantage and strength, but yet again some of the opportunities are not being seized. That point was made to us by the ambassador, and our commercial interest is being neglected in our relationship with Azerbaijan.

I was particularly struck by our meeting with the Tourism Minister. Many of us will remember it for all sorts of reasons, not least for the most stylish carpet I have ever walked across. None the less, one of his points was that on the back of the Eurovision song contest, Azerbaijan’s historic importance, its historic attractions—Baku’s importance has been attended to by a number of nations in world wars—and its natural features, the tourist industry is likely to expand. We have seen tourism in our country move slowly eastwards across the continent, and it is now moving even further eastwards from Croatia. The point that the Tourism Minister made to us was, “What is the UK going to do to grasp this opportunity? Who should we tie up with?” He was asking us to do something about it, and UK plc should grab that opportunity.

My hon. Friend the Member for Cities of London and Westminster (Mr Field) has discussed financial services. One of the most impressive people we met was the gentleman running the sovereign wealth fund, which is putting on $1 billion a month. When that fund moves from debt instruments into equities, private equity and property, we want to make sure that we are in there ensuring that our opportunity is taken. My hon. Friend has also discussed education, as I was going to, but I will not.

I want to challenge the Minister on the issue of Nagorno-Karabakh. Can we put this on the record today or not? Whatever has been said about self-determination, there are 700,000 internally displaced people—three times the number of Sri Lankan internally displaced people, which I know the Minister is acutely aware of as well. If those people were back in the Nagorno-Karabakh region and the seven surrounding satellites, self-determination would be a relevant issue and the right to it would be important. At that stage, it would be important for the UK Government to take notice. Will the Minister comment on that point? And will he comment on the outstanding UN Security Council resolutions 822, 853, 874 and 884? Does he accept that we should put pressure on Armenia to accept those resolutions? Do the UK Government believe that they should support the Azerbaijanis in the settlement of the resolutions? My five minutes are now well and truly up.

[Mr John Spellar (Warley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I have been in a number of debates with you, but never with you in the role of a mute, so this is a new experience.

This debate, apart from being very interesting, has shown the value of delegations of Members of Parliament. If I may say so to the Minister, that is a message that needs to be heard both by the Foreign Office and by the House authorities. Participation in such delegations enables hon. Members to expand their horizons and brings a much more well informed atmosphere to the debates in the House in their various venues.

I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this debate on a country and region—the wider subject of the debate—that receives too little attention considering its crucial location, importance and, as we have heard, potential for conflict. It is also significant in terms of European energy supplies. I make no apology for highlighting that fact. When President Obama was speaking just outside this Chamber in Westminster Hall recently, he dealt head-on with the issue of the importance of energy supplies to countries when he observed of the middle east that the west squarely acknowledges that

“yes, we have enduring interests in the region—to fight terror, sometimes with partners who may not be perfect; to protect against disruptions of the world’s energy supply.”

It is a perfectly proper aspect of foreign policy that we should be concerned about that.

As has been mentioned, both Britain and the EU have considerable interests in that regard. The EU countries are considerably helped by the diversity of supply, both from the existing pipelines and, potentially, from the Nabucco pipeline providing a route for gas, not only from Azerbaijan but from the Caspian region as a whole. That gives the promise of a more balanced and diverse gas supply for western Europe and, we hope, will avoid some of the problems that Europe has experienced with interruption of supply, which has periodically caused such difficulties, particularly in the accession states. That problem will potentially be exacerbated by the recent decision of Germany to shut down its nuclear reactors, with the inevitable and immediate impact on gas demand in Europe.

Therefore, the situation that I have described is good news for those countries and for us. The hope is that as the European region gets more competitive sources of supply and more diverse sources of supply, we will also start to see more stabilisation of prices, rather than some of the spikes in prices that we are seeing and the way in which, bluntly, those are exploited by the ever-greedy utility companies to introduce substantial increases in the charges for domestic gas supplies in particular. That will be important for us all. It is therefore encouraging that the EU will be supporting the Azerbaijan Government to move the Nabucco project ahead.

In that context, it was pleasing to see the report this month that the EU Energy Commissioner had characterised Azerbaijan as “the EU’s key partner” on regional energy projects, while delivering endorsements of the Nabucco project. It was also reported earlier this month that the legal framework for the pipeline had been finalised, with the support of the relevant Ministries of the transit countries: Austria, Bulgaria, Hungary, Romania and Turkey. All that is extremely welcome news.

Britain, of course, also has a significant role. I partly take issue with the hon. Member for Wimbledon (Stephen Hammond) on project management. AMEC, for example, has been a major presence in Azerbaijan for some time, operating out of Baku. Perhaps it has been there so long that he does not look on what it is doing as a recent innovation, but it has been immensely successful and is seen as a major partner by the Azerbaijanis.

[Stephen Hammond]

I recognise that there are 175 companies beyond BP in Azerbaijan. My point was not about those that are there already, but that there are significant opportunities, particularly in areas where we have a worldwide competitive advantage.

[Mr Spellar]

There is always opportunity, but we should equally recognise when people are taking advantage of that opportunity. The hon. Gentleman rightly points out that BP is a major supplier, but this is about more than being first among equals. The UK accounts for some 52% of all foreign investment in Azerbaijan. BP’s stake is enormous. It will be one of the largest terminals that it will be operating on behalf of the Azerbaijanis.

Reference has rightly been made to the very significant presence in British tertiary education institutions from Azerbaijan. I have seen an estimate that some 80% of Azerbaijani students who study abroad study in the UK. That was highlighted by my hon. Friend the Member for Bradford South (Mr Sutcliffe). In the strategic context, we must remember the importance of Azerbaijan as a route for supplies and forces going into Afghanistan. That is not insignificant in terms of Britain’s interest.

We must also consider the broader security situation. Nagorno-Karabakh has been mentioned. In many ways, that is a synonym for many of the difficulties faced right across the south Caucasus. We are aware of the recent history. What was said about the end of the cold war? It led to a period of less threat and less peace. Certainly the region that we are discussing experienced that. I am thinking of the two wars in Nagorno-Karabakh, with Armenia and Azerbaijan, and the considerable number of displaced persons. The hon. Member for Harrow East rightly drew attention to the UN resolutions. He also mentioned the Minsk group, which is currently the main forum for resolution of the conflict, although we have to recognise that, unfortunately, progress has been fairly limited in that context.

This debate is particularly timely, in that the meeting on Nagorno-Karabakh has been taking place in Kazan, I think, yesterday and today, with Azerbaijan, Armenia and Russia. I hope that the Minister will be able to enlighten us on that. We obviously hope that there has been progress, but it would be interesting to be updated on whether there has been any progress or developments at that meeting.

Before I yield to the Minister—I want him to have the full amount of time to deal with the many points that have been made—I want to sound a cautionary note. We should accept that in the Caucasus, progress will quite often take more time than we would hope. It will be slow—certainly slower than we would hope— and evolutionary. Russia may no longer be one of the two superpowers, but it is still, not only in its own estimation but objectively, a major and very significant power, a P5 member and a nuclear power. It is also clearly the regional power and has very clear interests in what it would regard as the near abroad. Therefore, its views, interests and perspectives have to be taken fully into account. That is the reality not only for the countries of the south Caucasus, but for those countries that are engaged there diplomatically or economically. It is therefore crucial that we have full engagement with Russia, recognising its legitimate interests but also representing ours, as well as the understandable concerns of other countries in the region. I hope that the Minister will be able to report the Government’s actions in this regard.

The debate has demonstrated the considerable interest that Members of Parliament take in Azerbaijan, and they are very well informed about it. We look forward to the Minister’s reply.