That MoU with the Chinese companies…

With the news that the Scottish Government’s Memorandum of Understanding with two Chinese companies may have fallen through, it’s a good time to reflect on what lessons can be learned from all this.

With the news dominated (understandably) with Brexit and the US elections, many people can probably not remember as far back as May, so let’s re-cap….

Amnesty’s concerns

The Scottish Government’s MoU caused a stir during the Scottish Parliamentary election campaign when it first came to light. Journalists were quick to find a report by the Ethics Council of the Norwegian Oil Fund which showed that China Railway No 3 Engineering Group (CR3) had been blacklisted for “gross corruption”. Politicians from all sides jumped on the issue and questions were asked about what background checks had been carried out on these companies.

Amnesty International wrote to the First Minister of Scotland on 19 May 2016 (letter below) to highlight this Norwegian report along with a report of our own which showed the links between other companies within the China Railway Group to human rights abuses in the Democratic Republic of the Congo. 

The controlling shareholder of the China Railway Group (which includes CR3 one of the two companies that signed the MoU with the Scottish Government), is China National Overseas Engineering Group, which is Chinese state owned. This means that we’re going beyond companies’ responsibilities for human rights abuses, but state responsibilities.

What happened next?

At the beginning of June, Amnesty’s concerns were raised in the Scottish Parliament with both the Business Minister and First Minister by Liberal Democrat Leader, Willie Rennie MSP who also tabled a number of parliamentary questions. Our concerns were also covered in the Scottish media.

Then on 12 June, Amnesty received a response from the First Minister (letter below) confirming that a “full due diligence was not undertaken prior to the signing of the MoU”. The letter went on to say “I do want to emphasise that the Scottish Government welcomes commentary (and even criticism) which supports well-informed public debate and assists in promoting an understanding of and respect for human rights”.

According to The Herald newspaper article (7 Nov), the deal and MoU are now collapsing with the Scottish Government hitting out at the opposition. Willie Rennie cited the evidence from Amnesty International and Transparency International as key.

So what happened?

Well, who knows? Maybe it collapsed because of human rights concerns or maybe there were other financial and economic reasons but our challenge is to see where we go from here.

Amnesty International holds Governments to account in order that progress is made and human rights abuses ended. It is only through openness and transparency that we can scrutinise Governments and hold them to account. And it is through having robust scrutiny of Government deals and partnerships with companies that we can avoid potentially disastrous diplomatic situations such as this one.

Amnesty hopes that there are two important outcomes from this;

1. The Scottish Government ensures that thorough due diligence is done on all future business relations which includes a robust human rights impact assessment.
    
2. That the Chinese companies and authorities know that human rights abuses affect their business and their credibility. If they don’t address these concerns, it will cost them money and damage their reputation internationally.

In the context of Brexit, a lot more international deals are going to be made in the coming years and we all need to be vigilant of these deals and the impacts they may have on human rights within Scotland, the UK and around the world.

Timeline

• 24 March: First Minister Nicola Sturgeon signs MoU with Chinese companies SinoFortone and China Railway No 3 Engineering Group (CR3).

• 1 April: MoU becomes public knowledge

• 3 April: MoU is published on the Scottish Government website 

• 5 April: comes to light that CR3’s parent company has been blacklisted by the Norwegian Oil Fund due to “gross corruption” 

• 5 May: Scottish Parliament election

• 17 May: Nicola Sturgeon reappointed First Minister

• 19 May: Amnesty International writes to the First Minister regarding the MoU, highlighting our report on human rights violations in the DRC linked to CR3’s parent company.

• 31 May: Scottish government China deal correspondence released 

• 2 Jun: FM is asked about the China MoU and Amnesty’s report at FMQs

• 12 June: First Minister responds to Amnesty International’s letter

• 7 Nov: It is reported that the MoU with the companies has collapsed