Written evidence from HM Government of Gibraltar (OTS107)
Dear Mr Chairman
RE: SUBMISSION TO THE FOREIGN AFFAIRS COMMITTEE OF THE HOUSE OF COMMONS ON THE POSITION OF GIBRALTAR AS REGARDS THE FUTURE OF THE UK OVERSEAS TERRITORIES
Thank you for the opportunity to provide a statement to the Foreign Affairs Committee on the future of the Overseas Territories.
The last time I provided a written statement to the Committee was just months away from the June 2016 Referendum which was to decide that the United Kingdom, and, with it Gibraltar, should leave the European Union.
Our position then was that remaining in the European Union was undoubtedly in the best interests of Gibraltar. That view was reflected in the outcome of the referendum in Gibraltar where a landslide 96% of those who voted opted for Remain.
Although this inquiry relates to the future of the UK Overseas Territories it is impossible to separate the impact on leaving the EU from our views on our future. Exceptionally amongst the Territories, Gibraltar has been a largely integral part of the EU since it joined with the UK in 1973.
However, despite these challenges, the people of Gibraltar are determined that Gibraltar should remain British.
We are equally determined to uphold our right to self-determination.
Thank you again for allowing the Government of Gibraltar to put forward its views.
My colleague the Chief Minister Hon Fabian Picardo QC would be delighted to give oral evidence before the Committee in order to expand on the points contained in the attached brief and to answer any questions that the Committee may have.
Yours faithfully
Dr Joseph Garcia
Deputy Chief Minister & Minister for European Affairs
SUBMISSION TO THE FOREIGN AFFAIRS COMMITTEE OF THE HOUSE OF COMMONS ON THE POSITION OF GIBRALTAR AS REGARDS THE FUTURE OF THE UK OVERSEAS TERRITORIES.
Gibraltar has long been exceptional amongst the UK Overseas Territories in that it has been an integral part of the European Union since it joined the European Economic Community (“EEC”) at the same time as the Member State UK in 1973.
The Rock entered the EEC in 1973 under Article 227 (4) of the Treaty of Rome, but at the request of the Government of Gibraltar it was excluded from the common customs tariff, the common external tariff, the Common Agricultural Policy and Value Added Tax. The terms also ensured that Gibraltar remained in the same position with regard the Community’s import liberalisation system as it was before accession.
The special derogations for Gibraltar were particularly important in the context of the closed border and the need for Gibraltar to import all its supplies by sea and air largely from the UK but also from third countries, notably Morocco.
The full border opening on February 5th 1985 led to a transformation of the economies on both sides of the border. The main impact came from tourism and the development of the Gibraltar finance centre as a major employer for the region.
On average about 10 million visitors now cross the land frontier each year.
Gibraltar has developed into an economic engine for the neighbouring region of Spain. There are 14,000 people who live in Spain and work in Gibraltar. An economic impact study commissioned by the Gibraltar Chamber of Commerce has found that Gibraltar businesses import some £ 380 million in goods and services from Spain each year. Gibraltar residents spend some £ 73 million in goods and services in Spain, and Gibraltarians with second homes in Spain contribute over £ 62 million a year to the Spanish economy.
The survey concluded that Gibraltar accounts for 25% of the GDP of the neighbouring region of Spain and as such is the second largest employer for Andalucia after its regional Government.
The importance of continued frontier fluidity for goods and persons post-Brexit is self-evident.
ENGAGEMENT WITH SPAIN
The preparations for the United Kingdom and Gibraltar to leave the European Union has led to engagement with different Member States, including Spain. Gibraltar has been fully involved in the process in matters which are relevant to Gibraltar.
There has been a variable geometry of meetings involving, at different times, Gibraltar, the United Kingdom, Spain and the European Union.
It should be made clear also that this engagement has not been in the nature of UK-Spain bilateral discussions but have included Gibraltar’s full involvement throughout. Indeed, Gibraltar has engaged directly with Spain in discussions that commenced when the Partido Popular was in Government.
The process of engagement with Spain since the 2016 Referendum has involved working together to seek a modus vivendi that protects the jobs, security and the rights of the people living and working on both sides of the border.
The discussions have covered:
- enhanced use of Gibraltar Airport;
- Gibraltar’s removal from unfairly compiled and maintained Spanish tax haven blacklists and better cooperation between our tax authorities, as we have been proposing for years under successive Gibraltar Government administrations;
- better traffic flows at the frontier;
- cooperation on police and customs matters and;
- better environmental cooperation, especially in relation to air quality and the protection of the environment in the region of Gibraltar and the Spanish hinterland known as the Campo de Gibraltar.
These discussions continue at the time of writing.
In terms of the UK’s wider discussion with the EU as a whole, it is important that the Withdrawal Agreement, and its transitional provisions, apply to Gibraltar. That means that any mechanisms agreed between the UK and the EU for orderly withdrawal and continued market access fully cover Gibraltar and that we will enjoy continued access to the EU Single Market until at least the end of the transition period.
Post-Brexit it will be vital that Gibraltar and UK maintain close dialogue with each other.
The Joint Ministerial Council between the two Governments, that was established to deal with Brexit, has been a very useful conduit for discussions with different UK Government departments. The view of the Government of Gibraltar is that serious consideration should be given to the continuation of this Council as a formal channel of communication between the two Governments.
CONSTITUTION
The position of the Government is that the 2006 Constitution should be reviewed in order to assess what further progress or changes are necessary and appropriate. This is all the more important in the face of EU exit.
The decision of the 2016 Referendum on membership of the EU held in the UK, in which Gibraltar participated and voted by 96% for Remain, creates various important and extant challenges for Gibraltar and its people.
Leaving the EU has brought into focus the need to reinforce and newly formalise Gibraltar’s engagement with UK in commerce and trade (financial services and gaming particularly) - along with agreements on issues such as education, environment and health care. This is important in order to ensure that our commercial and wider relationship continues unhindered.
Self-government was a long-time post WWII aspiration of the people of Gibraltar underpinned by the political consensus on the ‘right to our land’. The first substantial recognition of this right came with the 1969 Constitution. The review of that Constitution, which led to the 2006 Constitution, included reversing the position where only competences in defined domestic matters had applied to HM Government of Gibraltar and the House of Assembly (now the Gibraltar Parliament).
Under the 2006 Constitution the UK powers were defined and Gibraltar is responsible for all other matters not specified as pertaining to HMG. The Constitution further provides that EU matters remain the responsibility of Gibraltar Government Ministers, without prejudice to the UK’s responsibility for Gibraltar’s compliance with EU law.
Clause 47(3) of the Gibraltar Constitution reads:
“Without prejudice to the United Kingdom’s responsibility for Gibraltar’s compliance with European Union law, matters which under this Constitution are the responsibility of Ministers shall not cease to be so even though they arise in the context of the European Union.”
Our exit from the EU will require Gibraltar and its Parliament to pass the necessary legislation to ensure a fluid transition and continuity across a wide spectrum of different areas. This will happen through our own EU Withdrawal Bill.
HMGoG regards the 2006 Constitution as part of a live process of constitutional development and evolution for Gibraltar. For this purpose, a Select Committee of the Gibraltar Parliament is tasked with reviewing constitutional development.
It is vital that HMG, along with the welcomed and often expressed cross party support of both Houses of Parliament, continues to defend the right to self-determination of the people of Gibraltar and Gibraltar’s British sovereignty.
THE UNITED NATIONS AND DECOLONISATION
The principle of self-determination must be paramount in the decolonisation of Gibraltar.
The Government is keen to secure the removal of Gibraltar from the list of non-self-governing territories held by the United Nations. We understand that the position of the United Kingdom is also that Gibraltar should not be on the list. It is important to increase the efforts to remove Gibraltar in order to achieve decolonisation in international law.
The United Nations Committee of 24 and the Fourth Committee are responsible for the decolonisation of the territories that remain on the list. Gibraltar attends a session of the Committee of 24 every June and a session of the Fourth Committee every October. These Committees do not engage with Gibraltar. We have asked them to send a visiting mission to Gibraltar in order for them to obtain a better understanding of the situation on the ground. That visiting mission has not been forthcoming.
The last meeting of the UK-OT Joint Ministerial Council took place in London in November 2017. It declared the following in its final communique:
“The principle of equal rights and self-determination of peoples, as enshrined in the UN Charter, applies to the peoples of the Overseas Territories. We reaffirmed the importance of promoting the right of the peoples of the Territories to self-determination, a collective responsibility of all parts of the UK Government. We committed to explore ways in which the Overseas Territories can maintain international support in countering hostile sovereignty claims. For those Territories with permanent populations who wish it, the UK will continue to support requests for the removal of the Territory from the United Nations list of non-self-governing territories.”
The Government of Gibraltar fully supports and endorses this statement.
THE COMMONWEALTH
Gibraltar is engaged in increasing its links with the Commonwealth at the same time as we prepare to leave the European Union.
Indeed, to mark Commonwealth Day in March of this year, the flag of the European Union was lowered in different parts of Gibraltar and replaced with the flag of the Commonwealth.
Gibraltar is proud of its relationship with the Commonwealth. We participate fully in fora such as the Commonwealth Parliamentary Association, the Commonwealth Telecommunications Union, the Commonwealth Local Government Forum and the Commonwealth Games.
The Government of Gibraltar believes that the Overseas Territories who wish it should be directly represented at Commonwealth Heads of Government meetings. This might necessitate the creation of a new Observer status reflecting the position of territories that are connected to Member States of the Commonwealth.
FINANCIAL CENTRE
Transparency and continued EU, IMF, OCED standard of regulation is part of Gibraltar’s commitment to the UK as we leave the EU. This is to ensure continued access to the UK market which is vital for the Gibraltar economy.
The Panama papers, your Committee referred to in its briefing for this inquiry, raised no significant issues for Gibraltar.
When the Sanctions and Anti-Money Laundering Act was passed earlier this year the only issue of concern to Gibraltar was the matter of principle raised by the threat of using an Order in Council against the Overseas Territories.
It is important to note that Gibraltar is already committed to the introduction of an open register in compliance with the EU’s 5thAnti Money Laundering Directive next year.
Gibraltar complies with all international standards on all matters. It is the duty of the Gibraltar Government and Parliament to ensure that that commitment to international standards is maintained.
It would be a democratic abomination that a Government or a Parliament that is not elected by the people of Gibraltar should countenance legislating for Gibraltar. Indeed, it would be utter and unabashed modern colonialism.
Financial services and online gaming are significant sectors within Gibraltar’s economy (together accounting for 40% of GDP and a quarter of total jobs).
Restrictions on the ability to move freely across the border would also have a significant impact, as nearly a third of jobs in the finance sector are held by frontier workers. The online gaming sector is also highly dependent on frontier workers who make up 60% of jobs in this sector.
Gibraltar is also looking at new opportunities such as blockchain.
It is of critical importance to HMGoG that the DLT framework provide appropriate and adequate safeguards for consumers, ensuring financial crime risks are mitigated and the reputation of Gibraltar remains with integrity. It is in no way treated as soft regulation.
Risks identified will be assessed and measured against the Gibraltar Financial Services Commission’s regulatory objectives and managed in line with its risk appetite and tolerance.
The Gibraltar Financial Services Commission is a risk based regulator with the ability to adapt and make quick decisions due to its size and agility. As a regulator they actively support the development of new markets and activities in Gibraltar, promoting innovation that is well considered and safe for consumers and the jurisdiction.
The Gibraltar Financial Services Commission works to raise standards in the financial and professional service industries. The Commission remains forward thinking, proactive and ensures consistency in the understanding of risk in regulatory activity, which has enabled the same regulatory outcomes as the UK. It complies with all EU Directives and Regulations, international standards and requirements, having been confirmed over the years by evaluations from numerous international bodies.
In 2018 alone, HM GoG and the Gibraltar Financial Services Commission received expressions of interest in DLT/Token regulation work from regulatory peers on a near daily basis, ranging from enquiries from individual countries like Singapore and Hong Kong to EU Institutions like the European Commission and European Parliament.
Additionally, HM GoG and the Gibraltar Financial Services Commission have been asked to share best practice and lead dedicated Fintech working groups by international organisations such as IOSCO, IAIS, GIFCS and GIICS – all aimed at creating global standards in this sector.
HM GoG and the Gibraltar Financial Services Commission have also accelerated work with relevance to likely impact of Brexit and its related outcome scenarios.
Correspondence with HMT, the PRA and the FCA has ensured alignment within this. The Culmination of this work has seen applications from over 30 operators worldwide for a DLT licence in Gibraltar. Only those that meet the relevant standards and requirements will be successful in obtaining a licence.
HUMAN RIGHTS
Gibraltar has been progressive in recognising human rights and implementing legislation in support of international human rights obligations and principles.
The Government, through the Gibraltar Parliament, legislated for civil partnerships and then for equal marriage.
Most recently, on the question of abortion, HMGoG has issued a White Paper on this issue.
ENVIRONMENTAL CHALLENGES
HMGoG is proud of its record of accomplishments on environmental governance since the present administration took office in 2011.
Gibraltar has demonstrated green leadership and commitment where and when it matters the most. This has been done, not simply because of membership of the European Union but because of a fundamental belief in sustainability as a guiding principle.
Gibraltar has and will continue to demonstrate both within Gibraltar, its waters and abroad, that environmental protection and improvement can enhance economic prosperity
There is no doubt that our membership of the EU, through its many and world leading environmental policies and statutory instruments, has resulted in unprecedented progress in environmental governance. HMGoG is determined to make sure that this continues post EU exit, and that new mechanisms introduced to deliver this to the highest standards are never lower than those of the EU.
Accountability for the environment will not be compromised post Brexit. At our point of departure, Gibraltar’s own EU Withdrawal Bill will convert all existing EU environmental law into Gibraltar law.
However, Brexit is not without its challenges to the environment.
HMGoG has committed to the ongoing implementation of EU environmental standards, as a minimum, across all environmental disciplines, and as such, will continue to update and introduce new legislation to mirror this. Furthermore, the Government commits to developing domestic policy and legislation that will ensure that its environmental governance spans the full breadth of environmental matters and is not compromised by Brexit.
In principle, there are several options or variations, each based on different alternative scenarios that could arise following the UK/Gibraltar departure from the EU.
Gibraltar is dependent on the land frontier for the importation of most products (food, plants, animals, commodities, construction material etc) and exportation of waste. Waste management is one of the most prominent issues of concern. A no deal Brexit scenario would therefore present us with problems in our ability to manage these issues.
Another area of particular concern for HMGoG is that of marine conservation and management, which raises issues of jurisdiction. Of particular note are the implications of Brexit on the Common Fisheries Policy (CFP). Given that under the terms of Accession to the EEC the CFP does not apply in British Gibraltar Territorial Waters it is imperative that any future UK deal with the EU on this does not change this position.
Additionally, the rectification of trans-boundary impacts from activities in Spain will be problematic. Gibraltar’s experience in this area even as a member of the EU has been negative as evidenced by the on-going problems at one of our beaches.
Access to the European Commission has been of considerable value in dealing with differences with Spain at this level. The binding nature of the EU legislation has been the single most important factor in delivering outcomes on the ground. In their absence, subscription to other international agreements becomes all the more important. The Paris Agreement and the Barcelona and Bern conventions are particularly relevant in this context, and have not as yet been extended to Gibraltar despite repeated requests by HMGoG.
There are a large number of areas being tackled by the joint Gibraltar-UK Brexit working groups, including the Environment Working group. These include recognition of pet passports, importation of F gases, and the continuing protection of Natura 2000 sites. It is clear from the working group meetings that many decisions are pending what deal, if any, is struck.
There is a considerable amount of legislating to be enacted by Gibraltar. This is one of the reasons why it is vitally important that the transition period applies.
Gibraltar is eligible for ESF, ERDF and Life. These funds were increasingly being used for environment projects, particularly in the fields of renewable energy projects and research. Discussions are being had between the environment ministers in the OTs with a view to assessing international funding for environmental research, mitigation and research and development. The UK has so far failed to identify a source of funding that would fill this gap.
WORKING WITH OVERSEAS TERRITORIES ON THE ENVIRONMENT
Representation on Environmental matters for the OTs is being spearheaded through the OT & CD Environment Ministers’ Council. This Council has achieved representation as part of the UK delegation in the UNFCCC COP meetings.
Not only are there issues that may be particularly relevant to the OTs, but it is also true that independent countries of similar size and comparable interests, many of which are former colonies, have a voice where the OTs do not.
The Environment Ministers’ Council of the UK OTs and CDs was formed in 2015 in Gibraltar and three meetings have been held so far. Issues discussed have included energy transition, climate change, severe weather events, funding, plastic pollution, ocean protection, waste management and habitat and biodiversity conservation.
The aim of the Council is to bring together Ministers and equivalents as well as senior officials from all the UK overseas jurisdictions in order to work together to improve environmental governance and sustainable development, and to engage the UK Government as appropriate. Increasingly also, the role of this collective, with representation from across the globe, is making a difference at a global level. The Council aims to support all the territories in efforts to lead in environmental governance, and to promote environmental protection in those British territories that do not have permanent human habitation.
Collaboration at a regional or international level, whether it is bilateral or multilateral on any environmental initiative, project or agreement is important for Gibraltar and the OTs.
In the field of the Environment, and thanks largely to the work of the Council, the OTs have positioned themselves with a consistent voice, and are ready to engage with both the UK and with outside jurisdictions.
HMGoG has developed leading policies on biodiversity conservation, green energy transition and the removal of plastic pollution. Participation in International Conventions and involvement in thematic projects with regional and international partners and key to Gibraltar’s leading role in environmental governance and jurisdiction of its marine environment.
Gibraltar is committed to meeting 20% of its renewable energy by 2020 and its intention is to increase Gibraltar’s total share of electricity from renewables to 30% by 2030, rising to 50% by 2050. Solar projects are ongoing and Gibraltar is working towards positioning itself as a research centre for marine renewables. Exchange of experience and information between territories is important and one of the aims of the Environment ministers’ Council. Technical support from UK will be of interest in some territories.
HMGoG has an extensive environmental policy and management plan for BGTW. HMGoG wants the UK Blue Belt Programme to recognise BGTW and HMGoG’s commitment to provide long-term protection for the marine environment.
The UK Secretary of State’s plan to achieve protection for 30% of the world’s oceans has already been met in Gibraltar, where 100% of its waters are a protected area. Enforcement of this protection is not always easy due to the ongoing dispute with Spain. An increase in the designated territorial waters on the Eastside of Gibraltar to 12 nautical miles would greatly facilitate the implementation of environmental management plans and enhance our conservations efforts at a regional scale.
KEY POINTS
- The United Kingdom Government must continue to defend Gibraltar’s right to self-determination.
- UK must maintain the ‘double-lock’ commitment not to enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another State against their wishes. Furthermore, that the UK will not enter into a process of sovereignty negotiations with which Gibraltar is not content.
- The 2006 Constitution should be reviewed to assess what changes might be appropriate.
- Gibraltar must be decolonised in international law through removal from the United Nations list of non-self-governing territories.
- Those Overseas Territories who wish it should be represented at meetings of the Commonwealth Heads of Government.
- The EU Withdrawal Agreement and IP must fully apply to Gibraltar.
- Gibraltar must be included in an agreement on a future UK-EU relationship.
- Post-Brexit should see a continuation of the close collaboration between Gibraltar and the UK as has been experienced in the Joint Ministerial Councils
- Gibraltar is fully committed to upholding international standards on transparency and good regulation of financial services
- Gibraltar is fully committed to ensuring human rights are properly protected
- A no deal Brexit would bring environmental challenges, such as disposal of waste, but Gibraltar is determined to maintain a strong policy on protection of the environment in meeting its local and international obligations
- Gibraltar is working closely with other British Overseas Territories to protect the environment and meet global challenges in this area
October 2018
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