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Global institutions affecting UK policy

British governments take part in decisions made on a global level by a large number of international organisations that reach into every part of domestic life in this country. These organisations determine the rules governing everything from international telephone calls to global trade. Some of these bodies also have the ability to make international law which binds the UK government and determines its policy. They are so numerous that the Foreign and Commonwealth Office (FCO) does not hold a comprehensive list of international organisations of which the UK is a member.

Here we consider the current parliamentary arrangements for scrutiny of decisions taken at inter-governmental organisations. We confine ourselves to the major bodies that have a largely domestic impact on the UK (and so for example we do not discuss oversight of NATO here).

According to traditional constitutional practice ministers should be held accountable for their part in international organisations. However breakdowns and faults in process and practice mean decisions are being taken at international organisations with very little, if any, parliamentary oversight. One problem is that Parliament can only hold UK ministers to account for their actions, not the international organisations - and there is no directly elected "world parliament" to perform the latter function. 

The World Bank

The World Bank and the International Monetary Fund were established at the 1944 Bretton Woods conference between the US and UK to address financial issues arising at the end of the Second World War; but as organisations they have outlasted the original Bretton Woods settlement.

The World Bank is not a bank in the traditional sense of the word; nor is it a central bank for the world. Its purpose is to "fight poverty and improve the living standards of people in the developing world". Rather than a single entity it is a group of five different organisations under the "World Bank umbrella": the International Bank for Reconstruction and Development (IBRD); the International Development Association (IDA); International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for the Settlement of Investment Disputes (ICSID).

References to the World Bank normally mean the IBRD and IDA, the parts of the World Bank Group that provide the grants and low- or zero-interest loans to developing countries.

The International Monetary Fund (IMF)

The IMF has a broader remit than the World Bank. It was set up to provide short-term lending to counter balance-of-payment crises. The potential impact of the IMF on Britain's domestic policy was dramatically demonstrated during the sterling crisis of 1976, when the IMF required a dramatic reduction in the public sector borrowing requirement as a condition of support to the UK economy.

But the IMF's more continuous and significant power is over developing countries through the facility to provide short-term loans in times of financial crisis. The IMF often attaches "structural adjustment" conditions to these loans, requiring states to adopt neo-liberal economic policies such as privatisation of state-owned industries and liberalising trade - the so-called "Washington consensus". This conditionality is highly controversial and runs counter to UK development policy, heightening the importance of parliamentary scrutiny of the role of UK ministers within the IMF.

Departmental responsibility for the IMF lies with the Treasury. The Commons Treasury Select Committee has stressed the importance of access to information on the activities of the IMF, particularly on who has taken decisions and why, to make its work more accountable. 

In 2001, the committee announced its intention to hold regular hearings with the UK executive director of the IMF - a Treasury official - but this has not occurred. Nor does it systematically hear evidence from the Chancellor of the Exchequer following the autumn meetings of the IMF. However it has regularly considered important strategic issues in relation to the IMF, like its recent inquiry reports on the IMF and globalisation and in 2005-06 a report on the role of the IMF and on the UK's role within the IMF (HC 875).

The Chancellor of the Exchequer traditionally makes a written or oral statement to Parliament following the autumn meetings, although it may be in response to a question. The brief statements give basic, but limited, information and the Chancellor determines what they contain, in contrast with a formal report to Parliament. The Commons rarely debates these issues.

The Bank for International Settlements (BIS)

BIS was originally established for the administration and distribution of the reparations payable by Germany following the end of the First World War. Its members are not states but rather central banks, so it is the Bank of England, not the Treasury, that is the UK member of BIS.

Its functions are now twofold - first to provide institutional support for the promotion of greater international monetary and financial stability; and second to act as a bank to central banks and other international organisations. It is the former function which provides the BIS with its substantial international influence.

The line of accountability to Parliament for the work of BIS is confused. Departmental responsibility for BIS falls within the scope of the Treasury, but the Bank of England's independent status makes the position less clear. The only parliamentary question tabled on the BIS in the last ten years, in 2003, led to the response that the Treasury had "no formal responsibilities with respect to the governance of the Bank of International Settlements". The Treasury Select Committee is able to investigate the activities of the Bank of England - but it has not carried out any inquiries into BIS. The Bank's annual reports are tabled in Parliament, but there is very little other parliamentary oversight.

The United Nations

The UN was established by international treaty - the UN Charter - following the Second World War. It is the major international forum for global affairs and relations. It is a hierarchical and complex organisation with a large number of independent specialised agencies.

The UN's primary task is the promotion of international peace and security, but UN agencies also provide forums for international action on a wide variety of issues under the UN mandate to "achieve international cooperation in solving international problems of an economic, social, cultural or humanitarian character." Its six most senior organs are the General Assembly; Security Council; Economic and Social Council; Trusteeship Council; Secretariat; and International Court of Justice. The Security Council is the most important political organ of the UN, on which the UK has a permanent seat.

The Foreign and Commonwealth Office (FCO)

The Foreign and Commonwealth Office (FCO) is the lead UK department on the UN and is supported by a permanent mission to the UN. In 2003 the FCO undertook to produce an annual report on Britain's role in the UN. The first of these was published in September 2003, the second in October 2004. There was no report in 2005 despite the important world summit that considered the future of the UN. A report was published in 2006.

These reports represent the first regular formal reporting of activities at the UN to Parliament, but they have not included a great deal of detail. While in 2003 and 2004 debates were held in Parliament timed to coincide with the preparation for the autumn General Assembly meeting the changing of the parliamentary timetable has made this difficult and there is doubt as to whether they will continue. 

Few debates take place in the House of Commons on the UN as a whole. There are debates on specific issues that are relevant to the UN, but these have often been adjournment debates that depend on a backbencher selecting the topic and being drawn out of the hat. These debates have only a limited time and few MPs are able to speak.

The House of Commons held only one debate on the Rwandan genocide while it was taking place and that was an adjournment debate. More recently the genocide in Darfur attracted more parliamentary attention. The government ensured that there were statements to the House on developments and gave MPs and peers opportunities to discuss the issues. However it was the government that determined the different amount of time allocated to the two humanitarian crises, through its control of parliamentary business.

The Commons Foreign Affairs Committee

Foreign Affairs Committee has paid little attention to the UN, despite its clear importance for international relations. In fact the last time that the FAC conducted an inquiry into the UN was in the 1992-93 parliamentary session.

The World Health Organisation (WHO)

WHO is a UN specialist agency established with the aim of enabling all people to attain the highest possible levels of health. It is established separately from the UN, not a subsidiary body. It has a broad remit pursuing activities from ensuring international preparedness for avian flu to coordinating a global strategy on obesity. WHO was responsible for the eradication of smallpox and carries out many on-the-ground activities (such as vaccination programmes). It can create international law through treaties and health regulations.

Britain shares responsibility for dealings with the WHO with the EU. The lead government department for WHO is the Department of Health, which liaises with the Department for International Development and determines positions in consultation with the FCO. Thus parliamentary questions on the WHO are not always answered by the Secretary of State for Health; they may be dealt with, for instance, by the Secretary of State for International Development. Decisions and resolutions of the WHO executive board are tabled in Parliament for information. The FCO annual report on the UN reports on the WHO - but only briefly. The Commons Health Committee has not conducted a specific inquiry into the work of WHO in the past five years.

Reform Proposals

1.  As with European policy, much international policy is intimately entwined with domestic policy, and so it remains incongruous that it remains almost wholly within the remit of the overstretched Foreign Affairs Committee rather than being considered by the expert subject committees.  International policy, alongside European policy, should be "mainstreamed", with the relevant departmental select committees taking on the responsibility for oversight of relevant international policy issues alongside domestic policy.

The work of the relevant subject committees could be arranged around the typical structure of international organisations. Committees would expect to receive the agenda of any relevant large meetings as soon as it was available, thus giving them the opportunity to ask the minister questions about any pressing issues. 

2.  We also recommend that committees should consider holding regular evidence sessions with ministers before and after meetings where significant issues for domestic policy are involved as well as on any broader issues in connection with the international organisation.  This initiative is part of our overall promotion of "soft mandating" and would enable a dialogue to develop between the committees and relevant ministers (go to Improving Democratic Oversight).