Amendment 6

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL] - Report – in the House of Lords at 5:55 pm on 16 January 2024.

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Baroness Bakewell of Hardington Mandeville:

Moved by Baroness Bakewell of Hardington Mandeville

6: After Clause 5, insert the following new Clause— “Human rights impact assessment: indigenous and forest peoplesThe Secretary of State must lay before Parliament, within 24 months of the passing of this Act, a human rights impact assessment on the impact of UK CPTPP accession on indigenous and forest peoples in the respective CPTPP parties.”Member's explanatory statementThis amendment would require the Secretary of State to perform a human rights impact assessment on the effect of UK CPTPP accession on indigenous and forest peoples.

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat Lords Spokesperson (Environment, Food and Rural Affairs)

My Lords, in moving Amendment 6, I wish also to speak to Amendment 12 in this group. Amendment 6 raises the issue of the displacement of indigenous people severely affected by deforestation resulting from the rush to clear forests for palm oil agriculture. The rainforests of the world are an essential source of carbon storage and provide homes to some of our most iconic species, which everyone is aware of. What is not so widely acknowledged is the effect that forest clearance has on the indigenous people who make their home in the forest. The CPTPP will remove tariffs on palm oil, making deforestation easier. The human cost will be devastating: nearly 1 billion people depend on the forests for their livelihood and 300 million people live in them. This displacement is enormous. An assessment of the impact on these people within 24 months of the passing of this legislation is essential. I look forward to the Minister’s comments.

The World Wide Fund for Nature has identified that two of the 11 deforestation fronts are covered by the CPTPP. These 11 fronts will account for 80% of deforestation by 2030. The Government’s proposed deforestation due diligence only covers illegal deforestation in four linked commodities. The US FOREST Act covers six, and the EU deforestation regulations cover seven, with other countries going further. The UK is lagging behind in this vital area and needs to do much more to protect this dwindling resource. There has to be a more stringent process to ensure that deforestation does not totally destroy the homes of those who are less able to speak up for themselves. A review of the effect on these people is essential.

Amendment 12 is in the name of the noble Baroness, Lady Willis of Summertown. She is unable to be present this afternoon and sends her apologies. I have added my name to this amendment, as has the noble Baroness, Lady Boycott. The noble Baroness, Lady Willis, spoke knowledgeably and passionately to this amendment in Committee. The countries which the Government are planning to begin trading with do not have the same stringent rules on the use of pesticides and chemicals as we have. This will undermine and undercut our farmers. It will also put the population at risk.

There are 119 hazardous pesticides banned in the UK which are used in the countries covered by the CPTPP. The border checks which the Government are proposing are not sufficient to be able to prevent goods containing these toxic chemicals from entering the country and the food chain. Some of these pesticides are known to kill bee populations and destroy aquatic ecosystems. The paper border checks which the Government are proposing rely just on documentation. There will be no physical check of goods which may contain pesticides. The Pesticide Action Network found that grapes from CPTPP member countries New Zealand, Chile and Peru may contain 1,000 times the amount of iprodione than their UK equivalent. This is a fungicide linked to cancer. Are the Government really going to expose the population to these toxic chemicals without proper physical checks? A review of the impact within 12 months is again essential.

I shall also speak briefly in support of Amendment 11 in the name of the noble Lord, Lord Goldsmith of Richmond Park. This again deals with adequate checks on goods containing sustainable palm oil. This is a vital amendment and I congratulate the noble Lord on bringing it forward. Had I realised early enough that he was putting down this amendment, I would have signed it. Its ethos is Liberal Democrat party policy and something we would definitely have wanted to support.

As has often been the case in the past, a new product is found to be useful worldwide and relatively cheap to produce. There is a rush to produce this product, with little thought given to the long-term consequences of its use. Such is the case with palm oil. It is a new wonder product that everyone wants; it is relatively cheap to produce and grows easily. However useful palm oil is, and however cheap its production, it must be sustainable. Wholesale deforestation in order to grow palm oil is extremely short-sighted, especially as we all recognise the value of the carbon storage capacity of trees. It is ironic that, at a time in the UK when the Government are setting ambitious targets for tree planting, they are also rushing to sign up to trade deals with countries which are destroying their forests to grow palm oil. I fully support this amendment and hope that the Minister will listen to the noble Lord, Lord Goldsmith, and agree to his amendment.

Photo of Lord Davies of Brixton Lord Davies of Brixton Labour 6:00, 16 January 2024

My Lords, I support all the amendments in this group. I happily added my name to Amendment 11, but I will focus on my Amendment 9. The common theme through these amendments is of raising concerns about possible issues arising from a trade agreement. We are all free- traders now, but there is a recognition that free trade should be respectful of the limits that we and other countries set to protect labour standards, the environment, food quality and so on. There is a balance to be achieved and this series of amendments raises issues of concern.

These amendments are all limited, because the Bill is limited. It is not the treaty, but just the administrative arrangements required to implement it, so it could not achieve a lot anyway. We are asking the Government to review these issues. I hope that they are of sufficient importance that they would be studied, in any event. It is possible that we do not need these amendments, as a good Government would review these issues, but they provide us with the opportunity to point out areas of concern.

My Amendment 9 concerns investor-state dispute settlement mechanisms. The investment chapter of the CPTPP contains these arrangements and allows companies to sue Governments over decisions to implement policies that impact their corporate profits, even when these decisions were made in the public interest. We debated this in Committee, and I am sorry to say that I found the Minister’s reply to our concerns less than reassuring. Referring to these arrangements, he said that that they do not

“derogate or hinder our right to regulate in the public interest, including in areas such as the environment and labour standards”.

Referring explicitly to the CPTPP, he also said that it

“preserves states’ rights to regulate proportionately, fairly and in the public interest”.—[GC 375.]">Official Report, 14/12/23; col. GC 375.]

That sounds fine.

The International Bar Association has a similar view, stating that,

“while investment treaties limit states’ ability to inflict arbitrary or discriminatory treatment, they do not limit (and, in fact, expressly safeguard) a state’s sovereign right to regulate in the public interest in a fair, reasonable, and non-discriminatory manner”.

The problem is that these phrases, “arbitrary or discriminatory treatment” and a

“fair, reasonable, and non-discriminatory manner”, are doing a lot of heavy lifting. They are all subject to interpretation. There have been real concerns that, in practice, commercial interests will be elevated above those of the public. There is so much there that needs to be taken on trust. The key point is that this clearly—and, I suggest, inarguably—is an issue that needs to be kept under close review, which my amendment does.

The problem we face is that ISDS arrangements have been used to challenge health provision, labour rights and other important regulations. This is not a theoretical possibility; there have been enough examples in practice to give rise to this concern. I quoted the CBI in Committee and it is worth expressing its views again—that there is

“a risk of the UK becoming disproportionately targeted through ISDS”, and that

“there could also be environmental implications of the UK being exposed to the ISDS mechanism”.

These are not fringe concerns but concerns of different interest groups.

In simple terms, the ISDS arrangements make it possible for firms to sue Governments for measures that harm their profits. The existence of this power has a chilling effect on regulations, particularly those designed to combat climate change.

A specific example, of which we need some account, is the attitude to the energy charter treaty, under which many cases have been brought by western companies taking action against Governments to limit their use and expansion of fossil fuels. So problematic has this become that large European countries have signalled their intention to exit from this treaty. The Government themselves have said that they are reviewing their energy charter treaty membership and

“will carefully consider the views of stakeholders”.—[Official Report, Commons, 4/9/23; col. 4WS.]

Given the dawning realisation that these sorts of clauses are an impediment to climate action and to sovereign policy-making in general, it seems wrong for us to sign up to further restrictions through this treaty. I am amazed by the modesty of the demand that this aspect of the CPTPP should be subject to a formal review so that we can see what impact it is having on government corporate relations.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

My Lords, I am delighted to speak to Amendment 10 in my name, which is in similar terms to the amendment I tabled in Committee and requests

“an assessment of the impact of the implementation of the CPTPP Chapter on government procurement on environmental protection and animal welfare, health and hygiene”.

I am grateful to my noble friend for trying to seek me out. I missed him yesterday and he missed me today. Along with the noble Lord, Lord Alton, and a number of others, we were paying tribute at the memorial to an outstanding parliamentarian, Baroness Boothroyd. I am sorry that I missed my noble friend’s attempt to speak to me, but I am grateful for the opportunity to speak to him in the confines of these deliberations.

What has changed very clearly since Committee stage is that an announcement was made by the Environment Secretary at the Oxford Farming Conference that the Government are committing to consult on new food labelling—plans that will ensure that British produce will, as he put it,

“stand out from the crowd”.

The idea is to allow changes to food labelling entitling consumers to make better decisions at the supermarket in particular, while also highlighting high-quality British produce to the public. I quote from the press release issued by the NFU, which quotes what my right honourable friend Steve Barclay said:

“New food labelling would also make it clearer when imported products do not meet the same UK welfare standards”.

I put it to my noble friend: would it not be better if we did not import food that does not meet the high UK animal welfare and environmental standards that consumers demand and our domestic producers are honoured and delighted to meet? What is the relationship between this new labelling scheme and the Red Tractor scheme, which already demonstrates compliance with all the food requirements by domestic producers?

Is it not a fact, and does my noble friend not agree, that domestic producers meet the highest standards of animal welfare and environmental protection in their production? This means they are meeting a higher standard and it is therefore more expensive to produce. This is exactly what happened in the 1990s with the decision to unilaterally ban sow stalls and tethers in the production of pigmeat while we continued to import pork produced by sow stalls and tethers for an interim period of seven years. This meant the consumer swapped high-end, high-quality, high-animal-welfare-standard UK pig production with lower, cheaper, substandard imports. After seven years, this put our pig producers out of business.

I hope my noble friend will give me his assurance today that after six months—or 12 months in the terms of my Amendment 10—an assessment will be undertaken by his department, jointly with Defra, to ensure that the trade Bill before us this evening does not discriminate against UK domestic production, particularly of meat and dairy. In addition, can he give an assurance that the food labelling provisions that Defra is proposing to consult on, and which I support, will apply not just to supermarket labelling but will somehow translate on to the food menus for food sourced from third countries in our restaurants, bars and cafés in this country? That is the main purport lying behind Amendment 10.

I remind my noble friend that the 2022 joint annual report of the Food Standards Agency and Food Standards Scotland states:

“the EU still accounts for two-thirds of all food and feed imports, and 80% of all meat and other products of animal origin”.

The Government were committed to introducing the checks and examinations at UK ports on 31 December 2023 to ensure that imports, whether from third countries through the EU or from EU countries, meet the same standards as required here. Will my noble friend confirm that those checks are now in place, as of the end of last year and the beginning of this year?

Further, will my noble friend confirm that the food and feed imported from outside the EU will have more frequent additional physical checks, rather than those currently carried out only randomly on a predefined percentage? It is, again, important to our own home producers to ensure that, while they are subject to the absolute force of law from the Food Standards Agency and Food Standards Scotland, those imports from third countries will meet the same high standards at the point of import. It is not right that we should leave it to local authorities, whose resources are extremely stretched at the moment, to do all the checks required, when these checks would be better taking place at the point of entry. At the moment, all food and feed of animal origin coming from outside the EU is subjected to only documentary checks confirming that appropriate documentation is supplied and identity checks confirming that product matches the documentation. Will my noble friend undertake an assessment after six or 12 months of this trade Bill coming into force to ensure that a higher proportion of additional physical checks than just a predefined percentage are taking place at the point of entry?

It is in the context of those questions that I urge my noble friend to look very favourably on the purport and content of Amendment 10.

Photo of Lord Goldsmith of Richmond Park Lord Goldsmith of Richmond Park Conservative 6:15, 16 January 2024

I rise to speak to the proposed new clause “Review: forest risk commodities”, which is in my name and the names of the noble Baroness, Lady Boycott, and the noble Lords, Lord Davies and Lord McNicol. The noble Lord, Lord Davies, has spoken and I thank him for his support. I also appreciated the words of the noble Baroness, Lady Bakewell, when she spoke earlier, and I strongly agree with the case she made for prioritising indigenous people. There is no cheaper or more effective solution, if we are interested in protecting nature, than backing those who have been doing that for generations. The maths and facts speak for themselves—80% of terrestrial biodiversity is in land looked after, and in some cases owned by, indigenous people, so the noble Baroness makes the point very well.

Deforestation is a major environmental crisis for so many reasons. We heard earlier from the noble Baroness that the displacement of people all over the world is causing runaway biodiversity collapse and the loss of a terrifying variety of lifeforms. Once gone, they are never going to come back. Nearly 90% of deforestation is caused by agricultural expansion. The resulting loss of habitat has caused a horrifying decline in everything from tigers and elephants to rhinos, hornbills and orangutans. Orangutans, incidentally, are relevant to this amendment because they tend to live in areas where palm oil is so prevalent; they have lost 80% of their habitat in the last 20 years.

Forest loss goes far beyond even that. The Congo basin, whose forest is disappearing at a rate of around 1 million hectares every single year, produces most of the rainfall for the entire continent of Africa. If those trends are allowed to continue, we are going to see humanitarian crisis on biblical scales. In the Amazon too—we do not fully understand the role of the Amazon in generating rainfall, but we know it generates rainfall and that that rainfall falls in the southern states of the United States, and that without the Amazon there would be huge repercussions across that entire region—it is in everyone’s interest that stopping deforestation remains a top priority.

I have not even mentioned climate change at this point. Deforestation is now the second leading cause of climate change after burning fossil fuels. There is no credible solution to climate change and no credible net-zero plan that does not include nature at its very heart. A plan that does not include nature is not, in real terms, a plan at all.

It is for these reasons I am bringing this amendment to the House today. Noble Lords have previously expressed concern that, once ratified, the CPTPP agreement will remove all tariffs on palm oil irrespective of its environmental credentials. They are right to flag this issue, which has been flagged a number of times, because in pursuing that policy we risk, at the very least, undermining the core of our COP 26 messaging on the importance of forest.

It also contradicts commitments made by the Government under Schedule 17 to the Environment Act to tackle illegal deforestation in our supply chains. Indeed, without the safeguards of the due diligence secondary legislation in place—that safeguard is not there yet and I hope the Minister will be able to provide some reassurance about when that is going to happen—it is simply irresponsible to pursue a policy of this sort.

Around 90% of the world’s palm oil is grown in Malaysia and Indonesia. It is estimated that around 1% of Malaysian palm oil smallholdings are certified by the Roundtable on Sustainable Palm Oil. That 1% makes up around 40% of all the palm oil plantations in Malaysia. The RSPO is probably the most widely recognised certification scheme. It is voluntary, and among other things it requires that palm oil is deforestation- free.

We know what is possible when a Government are serious about this issue. We have actually seen amazing efforts and results in Indonesia. It gets very little credit for the work we have seen over the last few years, but under the leadership of a number of very impressive people, not least Minister Siti Nurbaya, that country has come pretty close—it has not done it yet, but has come pretty close—to breaking the link between palm oil production and environmental destruction. I think it should get more credit for the work it is doing, because it is a model that other commodity-producing countries could learn from.

I acknowledge and welcome, very briefly, the side agreement that the UK and Malaysian Governments have signed. It commits to strengthening efforts to conserve forests and promote sustainable supply chains, in particular around palm oils. In many respects, the statement goes further than the due diligence secondary legislation that I mentioned earlier. But the agreement still relies on the Malaysian sustainable palm oil certification scheme, as opposed to the RSPO, which I mentioned earlier. The details around the Malaysian scheme are unclear and in truth it is significantly less robust than the RSPO—I do not think anyone would argue against that.

That is why it is so vital that work is done to review the impact of that agreement once it is in place. This proposed new clause is very simple, and that is what it seeks to do. It would require a review every two years that would assess the effectiveness of that agreement, alongside the impact of the CPTPP trade deal, on the sustainable production of forest risk commodities more broadly, including palm oil of course, right the way through our supply chains. The review would also look at the impact of the deal on deforestation within CPTPP nations, and the compatibility of the deal with our own due diligence regulations.

I hope that noble Lords agree that it is a reasonable amendment. It offers a practical way of reaffirming the Government’s commitment to making sure that our own supply chains are part of the solution and not the problem, as well as empowering Parliament to hold the Government to account on this issue. The new clause is supported by a number of significant environmental organisations—WWF, Chester Zoo and others—and has support from Peers for the Planet, for which I am very grateful.

Very briefly, as I finish, I will say that in my previous capacity as Minister of State, I went to Chester Zoo and saw its pioneering work on sustainable palm oil—clearing up its own supply chains but then helping businesses in the area do exactly the same. I thank it on the record for its leadership on this issue and for its work more broadly. Its Kinabatangan Orangutan Conservation Project, which has been running for a quarter of a century, involves creating magnificent nature corridors linking up those little habitats, and making it possible for distinct and previously quite cut- off orangutan populations to meet, breed and strengthen their population.

We need to ensure that the environmental safeguards we put in place, such as this UK/Malaysia agreement, are effective. That is the purpose behind this amendment. Of course, a stronger, better and easier policy would be to remove tariffs entirely on commodities from countries that have broken the link between agricultural commodities and deforestation, or conversion of important ecosystems. We know that is possible: Gabon has broken the link between logging and deforestation; Costa Rica has broken the link between agricultural commodities and deforestation, and I mentioned Indonesia earlier.

I was thrilled to see that, in the free trade agreement between the EFTA and Indonesia, there is a commitment that palm and other vegetable oils that have been produced protecting primary forests, peatlands, and related ecosystems will get preferential market access. So it is possible to build these safeguards into the primary agreement but, in their absence, we have to act now by passing something similar, at least, to this amendment. I hope that, when he responds, the Minister will be able to provide some real, meaningful reassurances that the impact of these agreements on deforestation, on our supply chain and on our role as consumers in deforestation, is properly understood and monitored, and that we are indeed part of the solution and not the problem.

Photo of Baroness Boycott Baroness Boycott Crossbench

My Lords, I first declare my interests. I will come to some notes about Amendment 11, so ably spoken to just now by the noble Lord, Lord Goldsmith. Right now, I rise to speak to Amendment 12 in the name of the noble Baroness, Lady Willis of Summertown. As the noble Baroness, Lady Bakewell, just said, she is unable to be here. I would also like to say that I support Amendment 6 from the noble Baroness, Lady Bakewell.

Amendment 12 is really very straightforward, and I cannot see any reason why the Government should not let this through. It just says that our border testing regimes must be robust enough so that we are aware of the new types of products that are going to enter the UK as a result of this trade agreement. We know that many countries in the CPTPP have products that contain levels of pesticides that exceed our safety limits, or indeed are actually banned because of their risks to human health, food safety and consumer protection, and are not covered at all by any import tolerances.

As the noble Baroness, Lady Willis, described in Committee, and as the noble Baroness, Lady Bakewell, has just reaffirmed, there are 119 pesticides that we ban that are permitted for agricultural use in one or more of the countries we are aiming to enter into a trade negotiation with. UK pesticide standards are stronger than those of the other countries and there is no expectation, I hope, that we are going to change our high standards. So, a successful trade agreement—which is presumably what the Government are after—will inevitably lead to some increase in agricultural imports to the UK. Indeed, the strength and effectiveness of our border control systems is an issue of relevance to all existing FTAs, not only to new ones.

The Trade and Agriculture Commission flags the

“likely pressure that will be placed on the UK’s border control regime” as a result of the increase in trade, in combination with the new EU border control model. Reports on the ground, including from the NFU, flag the lack of inspection of products coming into the UK, and the risk of this to our biosecurity. This amendment is simple and pragmatic. It provides an opportunity for the Government to scrutinise the existing system to ensure that it operates with maximum effectiveness.

I turn now to Amendment 11, in the name of the noble Lord, Lord Goldsmith, which is a further iteration of the one we tabled in Committee. Following on from his remarks, the purpose of the amendment is to both highlight our susceptibility to commodities linked to deforestation and to get assurances that the Government’s statutory review will consider this issue.

Since we last discussed it, the arguments have only been strengthened by the Environmental Audit Committee’s report on deforestation. It flagged that, in their first revision to the Environmental Improvement Plan, the Government committed to use their trade agreements and trading relationships

“to support the United Kingdom’s strong environmental and climate commitments”.

Despite this, in the course of the negotiations, we eliminated import tariffs on palm oil, which had been set at rates of up to 12%, from all CPTPP members, including Malaysia. So what is that going to do in terms of keeping sustainable palm oil production alive?

While it is true that we have existing agreements with many of the countries already, we do not with Malaysia and so it is of significance that this agreement will allow Malaysian palm oil—not necessarily sustainable —to enter the market with no tariff. As raised by Chester Zoo in its letter to Peers, around 90% of the world’s oil palm trees are grown on a few islands in Malaysia and Indonesia. Estimates suggest that as little as 1% of Malaysian palm oil is actually certified.

The EAC also noted that:

“While the UK is only the 15th largest contributor” to tropical deforestation, we actually have a very intensive use. This is to do with our diet, which is so largely made up of ultra-processed food—66%, in fact—that depends on palm oil, when food products are smashed back into their original chemical state and then reconstituted to make the kinds of products that so carelessly litter our shelves. It seems to me that we therefore have a responsibility in this area.

I also want to challenge the idea that we are starting from a high point. We are not. Even if the Schedule 17 regulations were in place, they would apply only to illegal deforestation. That means that if a country decides to legalise deforestation, we have absolutely no recourse to stop those products entering our market. Legal or illegal, the damage is the same, and it should be treated as such. The EU regulations that are coming into force cover both, and I note that the EAC has recommended that legal deforestation be included within ours.

I would appreciate it if, in his winding-up speech, the Minister were able to confirm that the review that the Government will carry out in two years’ time, which he referred to in Committee, will take into account these concerns; and specifically if he can confirm that the joint statement with Malaysia to tackle deforestation and the MSPO—the Malaysian Sustainable Palm Oil Certification Scheme—have been effective. I also want to note my support for other amendments in this group.

Photo of Baroness Hayman Baroness Hayman Crossbench 6:30, 16 January 2024

My Lords, I declare my interest as chair of Peers for the Planet and wish to simply record my support for the speeches that have already been made. I think all the amendments have been well argued, and I will not repeat what has already been said. The only exception to that is that I would like to say a few words on Amendment 9 from the noble Lord, Lord Davies of Brixton, on ISDS. I referred to this briefly in Committee.

The investor-state dispute settlement mechanism was brought in with those specific purposes to allow firms to bring arbitral proceedings against Governments of member states in which they had invested for actions which violate their economic rights. It did a good job at that, but I was very struck when the Minister said earlier in today’s debate that we have to look to the future, not the past. What is happening at present under ISDS provisions makes us think that perhaps the need for review is in fact urgent, and that, for the future, we need something better. My concerns are particularly around the effect that the provisions can actually have on the Government’s ability to govern, regulate and take measures of environmental protection. This is a widely held view.

Photo of Lord Deben Lord Deben Conservative

Taking back control.

Photo of Baroness Hayman Baroness Hayman Crossbench

Indeed. In July 2023, the UN special rapporteur on human rights and the environment, David Boyd, talked of the “catastrophic consequences” of ISDS for climate and environment action and human rights. We should take that seriously. As a country, we do not always have a coherent approach to ISDS provisions. On this treaty, we have agreed to side letters excluding ISDS with Australia and New Zealand, but we have not asked for a similar side letter for other countries and for other exclusions. It is piecemeal, and it is a system that has been useful but now needs to be reviewed, and is not fit for purpose in 2024. In that respect, as the noble Lord, Lord Davies, mentioned, we also have to look urgently at the energy charter treaty. I was slightly encouraged by the Minister’s colleague the noble Lord, Lord Callanan, when I last asked him on this issue when we would withdraw from the energy charter treaty, as other countries have. I asked if he might be able to announce it at COP 28. Sadly, he did not, but any announcement soon on this issue would be welcome.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

My Lords, I rise to speak to Amendment 12 tabled by my noble friend Lady Willis. I also very much support Amendment 10 tabled by the noble Baroness, Lady McIntosh of Pickering, and support her comments this evening.

As I mentioned during earlier stages of the Bill, I have been extremely concerned about the potential impact on domestic food production of the various trade deals that the Government have negotiated. Of course, it is vital that we negotiate trade deals that encourage reciprocal trade and benefit the economies of those involved. We absolutely need to do that. We in agriculture need access to global markets to have the opportunity to expand the range of excellent food products produced here in the UK. I fully respect the fact that other partners to this agreement expect access to our markets.

We are not afraid of competition. We have some of the most efficient farmers in the world, but competition must be fair. I am reassured by the Minister, in his opening statement this afternoon, that domestic standards will not change and will not be weakened. I thank him for that confirmation. However, that is not my primary concern. For those not close to the world of farming, let me explain what is currently taking place.

Farmers are about half way through a seven-year transitional period which involves the most radical shake-up of agricultural policy in over 70 years. All direct support is being removed, so that within about three years there will be no direct subsidies. Farmers will have to survive unsubsidised in the marketplace. Any future support will change to incentivise farmers to deliver public goods, mainly environmental outcomes, which is very appropriate in the light of climate change, loss of habits, et cetera. However, for farmers to survive and trade successfully in a very competitive global market, it is essential that competing businesses are able to operate under the same trading rules.

As has been stated by the noble Baroness, Lady Bakewell of Hardington Mandeville, and my noble friend Lady Boycott, within this CPTPP agreement are countries where over 100 chemicals are used that are banned here in the UK. Not only does this represent a serious commercial disadvantage for UK farmers: we have to believe that they are banned for good reason. They were harmful either to ecosystems, or to people. I am sure that exporting partner countries will give us assurances that food commodities and products sent to the UK will conform to our high standards. However, it will be impossible to audit the myriad production systems to verify that this is the case. Therefore, this amendment is necessary to protect ourselves from potentially harmful chemicals and our farmers from unfair competition. It is important not only that our standards are not diluted but that we set international standards that are applied within this important trading partnership. We have an opportunity here to demonstrate global leadership, and we should seize it. The same principle applies to animal welfare standards and to our commitment to deliver higher environmental standards. I hope that the Minister will accept the principles behind these amendments.

Photo of Lord McNicol of West Kilbride Lord McNicol of West Kilbride Shadow Spokesperson (Business and Trade), Shadow Spokesperson (Scotland)

My Lords, this group is the meat of Report. We have eight amendments in this group, and many have been ably introduced and explained. We have had detailed debates on all these issues in Committee, so there is no need to rehash all the arguments. I have tabled two amendments in this group and added my name to two others. I thank the Minister and his officials for making themselves available for discussions both before Committee and before Report. I will concentrate on the four amendments to which I have put my name. To be clear, like others, I am seeking commitments from the Minister on the quality, detail and depth of the impact assessment that the Government have committed to. We will listen to his response. The noble Lord, Lord Goldsmith of Richmond Park, said he was seeking meaningful reassurances.

Impact assessments are a good thing. Understanding the effects of any new settlement, both the positive and the negative, is a sensible way of learning the lessons, especially as CPTPP, although small in the scale of trade, is varied in terms of the countries involved. Impact assessments on ISDS, animal welfare, pesticides, commodities, workers’ rights, forestry and public services are therefore vital tools in understanding the successes and failures, the winners and losers, of this deal. If the Minister truly believes in the CPTPP and is confident that its impact will be wholly positive, surely he will have no problem with this undertaking.

I turn to the amendments. Amendment 13 deals with labour standards. The basis for this amendment is very straightforward. Unions both here and abroad have deep concerns about the inadequacies of the labour chapters and the fact that the agreement would consider an infringement of labour rights actionable only if it is proved to have a deleterious effect on trade. The fact that many of the countries we would be joining do not comply with even the most basic ILO standards compounds this structural problem. Indeed, with regard to the eight ILO conventions, Brunei has ratified only two and Malaysia and Singapore only five each. Five of the 11 CPTPP nations have not ratified the convention on the freedom of association. In Mexico, for example, companies regularly engage in union busting and in Vietnam, union leadership is often controlled by senior management. It is important to note that no CPTPP Government have ever challenged another over labour rights violations. We are concerned that not only does lowering the barriers to trade with these countries encourage the continued abuse of workers globally but it could undermine the protections we have here for the sake of competitiveness.

The other reason for this amendment is so that we can assess the potential negative effects on UK businesses. We have heard this from a number of noble Lords. None of us wants to see the undercutting of UK manufacturers and producers by forced labour or breaches of labour standards. We are all aware of the US pausing imports of goods where forced labour was used.

Amendment 14 deals with the impact of the procurement chapter on UK public services. Many have raised the issue that the negative list approach to service listing in the CPTPP could expose the NHS to further privatisation. The ratchet clause as well as the ISDS provisions could preclude the Government taking services back under public control if it affected a private business’s profits. The Government have argued that the NHS will never be on the table, but it is hard to see how that can be true if they have made no effort to take it off the table. This amendment calls for an impact assessment to monitor progress in this area.

Amendment 9 deals with the ISDS—investor-state dispute settlement—provisions in the agreement. My noble friend Lord Davies of Brixton explained this in detail. Many other noble Lords have rightly highlighted this issue in particular. Given that the Government, by implication, agree that the ISDS provisions are outdated and dangerous by signing side-letters with Australia and New Zealand to preclude their use, it seems strange that the Secretary of State for Business and Trade would reject calls to do a similar deal with Canada, a particularly litigious member of the CPTPP, as many US businesses can testify.

It is vital, therefore, that we monitor the effect that ISDS has on our standards, and that is why an impact assessment is so important. My noble friend Lord Davies called for a close review, and he is correct. He also noted the chilling effects on government decision-making, which relates to the point made by the noble Baroness, Lady Hayman, about Governments making decisions because they are concerned about their sovereign policy-making being affected by other businesses.

Amendment 11 deals with the deforestation. Again, this was well explained by the noble Lord, Lord Goldsmith of Richmond Park. The fact that this trade eliminates tariffs on forest-risk commodities such as palm oil from Malaysia is clearly a cause for concern. Through this deal the UK could incentivise further deforestation of the rainforest and other environmentally destructive practices while at the same time placing UK farmers at a disadvantage. Indeed, the department’s own climate impact assessment states on page 79:

“Deforestation in CPTPP countries, where it occurs, has been driven by production of commodities such as cattle, timber, and palm oil. The majority of CPTPP members are not considered to be at risk of deforestation, except Malaysia which has experienced a 29% reduction in tree cover over the last 20 years. This has been driven by agricultural commodities which accounted for 93% of Malaysia’s tree cover loss since 2001, implying that international trade plays a key role in the country’s deforestation”.

These are the Government’s own words in their own impact assessment, so ensuring that deforestation and other issues are dealt with properly in the Government’s impact assessment in two years’ time is critical.

With regard to Amendment 12, we must ensure that our pesticide residue testing systems function as they should. This has been picked up by previous speakers. Like many noble Lords, I am concerned about the possibility of contaminated food entering the UK market and endangering public health. The WWF, among others, has raised concerns about this deal encouraging the use of pesticides abroad which could damage biodiversity.

With regard to Amendment 8, we must ensure that the rights of performers, as with those of other workers, are not undercut by this deal. Finally, on Amendment 10, I echo what has been said previously on environmental protections. The CPTPP does not even mention animal welfare, which makes an impact assessment even more important.

All the amendments in this group represent a chance for the Minister to prove that CPTPP accession can be monitored and assessed and that Parliament can have proper oversight of its consequences.

Photo of Lord Johnson of Lainston Lord Johnson of Lainston Minister of State (Department for Business and Trade) 6:45, 16 January 2024

My Lords, I thank all noble Lords who have participated in this debate, particularly the noble Lord, Lord McNicol, for his engagement, his very good summary of the various amendments and the points that he raised. If the House will indulge me, I will go through the different points quite carefully because there are so many elements. I beg forgiveness if I do not cover every point. My noble friend Lady McIntosh laid down a very great number of requests, which I am happy to answer outside this debate, with the broad provisions to be raised where I can.

Let me stress again how seriously this Government take parliamentary scrutiny of our FTA agenda. With this in mind, a full impact assessment for the UK’s accession to the CPTPP was indeed published at signature in July 2023, which is important to note, alongside the accession protocol text and a draft Explanatory Memorandum. This included assessments of potential economic impact on UK GDP and environmental impacts. This is important. I will refer back to the Section 42 report where relevant to reinforce and, hopefully, reassure Members of this House of the benign impact of CPTPP membership on our environment and border controls.

I want to pick up on a point made by my noble friend Lady McIntosh of Pickering about supporting our farmers and agricultural producers in this country. It is absolutely at the core of this Government’s policy to do that. The reason I am excited about the CPTPP is because of what we will be able to achieve when it comes to promoting our dairy industry: the additional quota access that we will have, for example, for cheese into Canada; the opportunities we will have to sell chocolate into Malaysia, reducing tariffs significantly; the opportunity to sell Scotch whisky into many of the CPTPP countries with lower tariffs.

We can combine these trade agreements with the extraordinarily strong work done by my noble friend Lord Offord of Garvel, who is in his usual place today, with regard to supporting exporters, and with the muscle of the Department for Business and Trade, the work of the agricultural attachés, and all that we are doing to promote exports around the world. This is why we are here. This is a positive and powerful expression of the extraordinary economic reach of the United Kingdom, particularly in its agricultural sector. I understand that there are concerns, and I will cover them, but let us understand why we are here in the first place: to promote our agriculture—an extraordinarily powerful sector in this country—to expand its interests abroad and create more wealth for farmers in the United Kingdom.

I want to touch on the monitoring report, which we will publish after two years, as well as a comprehensive evaluation of the agreement after five years. This will include an assessment as to the environmental impacts. An inclusive and participatory process will be at the heart of the evaluation, providing structured opportunities for a wide range of stakeholders to share their views and provide evidence; that is, basically, a proper assessment and review.

I do not think it would be helpful to be specific on every single checkbox. I am keen to make any review useful. But I would be surprised—that is the language I wish to use—if the evaluation and monitoring reports did not cover information on: trade flows under CPTPP; utilisation of the agreement; ISDS cases, which will be important to many speakers today; an overview of the work of the committees under the agreement to facilitate co-operation and implementation—that is particularly relevant when it comes to labour standards, environmental standards, reduction of the risk of deforestation and many other areas. There will be information on the environment covering many of the issues discussed today and on the impact of the agreement on all parts of the United Kingdom.

This is important. I have been asked to make commitments at the Dispatch Box, and I am very comfortable doing so. It is vital to me as a proponent of free trade that we promote the benefits of this extraordinarily powerful multilateral agreement; I hope that will be shown in the impact assessments and in the reviews after two years and five years. My principal point about the amendments that have been put forward on this Bill is that they are unnecessary because we are doing this anyway.

I turn to deforestation and the issue of palm oil. I am very grateful to my noble friend Lord Goldsmith for his amendment and for the passion that he brings to this vital subject. I believe that he is to be celebrated as someone who has truly brought to bear some significant changes to the legislation of this country following on from the Environment Act and the secondary legislation around the obligations on businesses relating to deforestation, which we will be bringing in; I am reassured by my officials that we are aiming for spring of this year. I want to applaud the work of my noble friend and say how important it is, and how vital for the future of this country and the world, that trade does not lead to a degradation of our environment and natural habitats.

My son came to watch some of this debate. He has now left; I think the third hour was the final straw for an 11 year-old. We are doing this in order that our children will have a world to inherit, as well as a strong economy in the United Kingdom. At no point have we ever suggested that we should separate our obligations to the future of this planet in relation to the importance of free trade. Those who do that are mistaken. In my view, they are inextricably linked. The positives of free trade are so significant and the opportunity for dialogue allows us to solve these problems.

I want to touch on the point about palm oil, which is very powerful. The Trade and Agriculture Commission, for whose feedback I am extremely grateful, has noted that the Malaysian sustainable palm oil certification had become a mandatory condition since January 2020 for the palm oil industry, as has been raised. The new 2022 version prohibits palm oil cultivation on land cleared after December 2019. This is very important. Provided that this new standard is fully implemented by January 2025 and compliance with it is effectively enforced, there is a

“low risk that Malaysian palm oil exported to the UK would come from land that was deforested after December 2019”.

It goes on to say:

“Moreover, the UK may be able to enforce Malaysia’s implementation of the 2022 MPSO standard if failure to do so has an effect on bilateral trade”.

That is extremely relevant.

My noble friend Lord Goldsmith was right to point out that we are signatories to the Glasgow Leaders’ Declaration on Forests and Land Use, which commits both parties—clearly, we are looking at Malaysia in this instance—to halt and, indeed, reverse forest losses by 2030. This is the whole point about the CPTPP. It allows us to align our values with our partner countries, to raise their standards, to enable and facilitate, through the power of free trade and the wealth that it creates, the opportunity to improve their environment. I am grateful to my noble friend for pressing us on these points and I hope that I have answered his questions to his satisfaction.

Photo of Lord Goldsmith of Richmond Park Lord Goldsmith of Richmond Park Conservative

I rise to intervene, but I have been caught by the House with a nut in my mouth, which is terrible timing—if I could have thought of some medical excuse, I would have done so. I thank the Minister very much for his passionate call for harmonisation of trade and nature. He is right; there should be no separation between the two. I was pleased by his commitment that the diligence legislation will come in the spring. I know that it is not entirely in his hands, but I am pleased if that is the assurance that he has had from officials. It is important that it should come through. Without that legislation, the risk remains. It will be like closing the last hole in the bucket. I am grateful for his reassurances. I encourage him to continue to push the other departments responsible, but I thank him very much for his words.

Photo of Lord Johnson of Lainston Lord Johnson of Lainston Minister of State (Department for Business and Trade)

I thank my noble friend for his comments.

I turn to Amendment 12 on pesticides, which have been raised by the noble Lord, Lord McNicol, and the noble Baroness, Lady Boycott—and I had conversations with the noble Baroness, Lady Willis, as well earlier this week. It is very important for noble Lords on all sides of the House to know about the work that I have personally been putting in to ensure that we have the right and appropriate border checks and security, and that the agreements allow us to ensure that we have control over our borders. I refer to my opening comments a few hours back that this free trade agreement—on implementation day plus one, or accession day, or on becoming a party to the CPTPP—makes no difference at all with regard to our import controls and our ability to control our own destiny. This is very relevant. It is essential, again, to return to the Trade and Agriculture Commission’s report, which says that the

“CPTPP has no effect on the UK’s existing WTO rights to regulate the import of products produced using pesticides that are harmful to UK animals, plants, or the environment”.

It is crucial to remember that. We would never derogate our responsibilities to our consumers. I am very grateful for the points raised by noble Lords today to ensure that they can feel a high degree of comfort that this is simply not the case, and that we have not done so by signing up to this agreement.

I want to touch on some of the comments made about the practicalities of administering our border controls. I took the liberty ahead of this debate of visiting our Thames Gateway port system and was shown the operations there in relation to risk-based assessments. I think that is the right way to manage our borders. It would be impossible to check every single thing coming through. It is very important to reinforce the point that the CPTPP does not grant equivalence on exporting parties. We are able—indeed, it is considered that we have increased our ability—to audit exporting parties’ mechanisms for their own domestic testing to ensure that there is robustness around the testing processes before food is exported to the United Kingdom. We believe that, fundamentally, compliance is high. Our ongoing monitoring programme provides assurance that food on the UK market complies with our rules and is safe to eat.

The programme is led by the Health and Safety Executive, with advice from Defra and the Expert Committee on Pesticide Residues in Food. Our maximum residue levels are always set below, usually well below, the level considered to be safe for food consumption. For produce that has been declared as high-risk, special health controls are in place and checks must be carried out at import. It is important to note, and I know that people are concerned about the standards that we have rightly imposed upon ourselves in terms of turnaround times for customs, that that does not apply where there is a specific risk associated with certain types of imports—they can be suspended. At the same time there is a great degree of intelligence used to ensure, particularly with commodities, that there are risk-based approaches which allow us to assess whether there are specific areas of concern. There are lists drawn up to decide what is high-risk or lower-risk and how that can be managed.

The final point—again, this is important; I am responding with great sympathy with respect to my noble friend Lady McIntosh’s comments—is that the Food Standards Agency and Food Standards Scotland recently published data on compliance checks at the border for non-EU food and feed as part of the joint annual review on food standards. In 2022, they concluded that data on compliance checks carried out at the border showed no significant changes in compliance failure rates in recent years. The FSA will continue to closely monitor the risks. I am very aware that either this month or soon there will be additional processes relating to EU imports and so on. But we are assured that the processes are robust and I hope that people in this country and Peers in this House feel a sense of comfort at that.

Amendment 6 proposes a human rights impact assessment for indigenous and forest peoples. I really would like to stress that the UK Government are fully committed to the promotion and protection of human rights for all individuals, including indigenous people, without discrimination on any grounds. We support efforts in a range of activities—from joining important initiatives in multilateral fora to targeted support within bilateral programmes.

We have extensive monitoring and evaluation plans in place for this agreement and have already produced an impact assessment. We publish analysis that is proportionate to the scope of negotiations and our view is that further analysis in this instance is not proportionate. I also believe—and I am sure noble Lords will agree with me—that we are a leading advocate for human rights around the world. We remain committed to the promotion of universal human rights and publish an annual Human Rights and Democracy Report on our activities.

Of course, it is absolutely crucial that as a country we monitor these points. It is not necessarily effective to link this to the free trade agreements in terms of monitoring relating to CPTPP. I would just put that forward. But we continue to encourage all states to uphold international human rights obligations and hold those which violate human rights to account. I hope that statement gives a degree of comfort around that point.

On Amendment 10, we have covered some of this already in terms of the environmental protections as opposed to the import of pesticides. My noble friend Lady McIntosh mentioned the new labelling scheme. I have not had an opportunity to review that—I will, of course. It is to be noted that once a product has been imported into the country, it is difficult for there to be discriminatory labelling in terms of imported and domestically produced products—as I understand it. I would like to look at this in more detail, but predominantly the point about signing up to CPTPP is not to discriminate against imports from CPTPP countries, it is to celebrate the import opportunities that we have with our partner countries and, more importantly, to sell to the CPTPP member countries so that we can make the most of the extraordinary agricultural sector that we have in this country.

The procurement chapter of CPTPP includes a provision also found in the WTO Agreement on Government Procurement and other FTAs that exempts measures necessary to protect human, animal or plant life or health, which is understood to include environmental measures. Again, to re-emphasise, we import only from countries that we already know are managing their biosecurity appropriately. The exporting countries are audited and their production establishments are inspected by their competent authorities and need to meet specific requirements to export to the UK. So signing up the CPTPP does not open the floodgates, as it were, to a whole range of exports that have not been checked.

There are two more amendments I would like to cover. The first is the amendment relating to ISDSs; the noble Baroness, Lady Hayman, spoke very eloquently on this point, and the noble Lord, Lord Davies of Brixton, also raised very eloquently the issues around ISDSs. I have said this before and I say it again—and I mean this with no disrespect at all to noble Lords in this House—I have spent 30 years investing in many of these markets in CPTPP. The knowledge that we have of investor protections and investor-state dispute settlement mechanisms is, frankly, extremely important for the functioning of UK businesses when it comes to investing internationally. I have never understood why there was so much concern about or resistance to ISDSs. I have been told that the UK acting on its own has never lost an ISDS case. We have nothing to fear in this area.

I do not have the text of the CPTPP on ISDSs to hand, but I remember that it specifically allows you to make legislation relating to the environment and to labour and so on. We are concerned that somehow we will be boxed in from controlling our destiny. We have absolute full control. What we are unable to do is to discriminate between how we treat international investors relative to domestic investors—and that is incredibly important for our businesses when investing overseas. Frankly, it is not so relevant to investing in the UK, because we have a very strong sense of the rule of law and property rights.

I am proud that we have never had a successful case against us. I do not think we have anything to fear. The noble Baroness, Lady Hayman, asked whether there would be a review and whether we were looking at more effective mechanisms. ISDS as a principle is 50 years old, probably—even older than I am. Maybe the mechanisms need to be reviewed in terms of how effectively they are performing in protecting our businesses —frankly, that is one of the core functions—and whether or not there is additional risk. I am very comfortable encouraging that review as Investment Minister, but I do not see why there is such alarm placed around these measures in this Bill. Clearly, I would resist that amendment.

I turn to the last two points on labour standards. I am greatly appreciative of the noble Lord, Lord McNicol, for raising this point. I can assure noble Lords that the government procurement chapter of CPTPP—which is most relevant and to which this is linked, and of course we are talking about the whole treaty here—will not affect our ability to comply with any of our own commitments. In just the same way that we control our borders and our standards, the UK can continue to set its own standards and meet its obligations under the ILO. I wrote to the noble Lord, Lord McNicol—I have a copy of the letter here, and I hope it has been lodged in the Library—giving strong reassurance about the sort of dialogue that we are having with our CPTPP partners, where it is most relevant. I have stressed again that the whole point about joining multilateral treaties such as this is to enable us to engage in these sorts of debates, which enables us to drive forward our important values-related agenda, and also ensure that our workforces are not disadvantaged through inappropriate actions on behalf of other Governments. This is absolutely the core of our belief in the process of free trade, our support for the ILO and the evolution of the most recent declarations. We have a forum that allows us to discuss how these can be implemented and specific committees that will enable us to drive that agenda forward.

Lastly, on public services, it is absolutely right to ensure that we are not selling the NHS or trying to find some backdoor mechanism for derogation of our public services. This has been debated many times. There is no specific mention in the CPTPP of the NHS because, much to everyone’s surprise, not every country in the CPTPP has an NHS, so clearly when they originally drafted their provisions they did not necessarily consider including it. There is absolutely no mention of the NHS in a positive or negative sense. We have made it very clear that, apart from when it comes to the procurement for basic supplies and certain supplies—which is absolutely right, we are buying from a global market—that we protect our public services and we make that very strong commitment.

I hope that I have covered a great quantity of points. I remain available after this debate to discuss anything specific, but I ask the noble Baroness, Lady Bakewell of Hardington Mandeville, to withdraw her amendment so that we can move forward to the next stage of the debate.

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat Lords Spokesperson (Environment, Food and Rural Affairs) 7:00, 16 January 2024

My Lords, I thank all noble Lords who have taken part in this debate, which has allowed us to look at the impact of a number of issues around the CPTPP. I thank everybody for doing that.

I am particularly concerned about the announcement by the Secretary of State at the Oxford Farming Conference about labelling. I find it astounding that a label might say that the goods have not been produced to the standards that are pertinent here. I agree that it would be much better if those goods were not imported in the first place rather than relabelled when they got here.

I thank the noble Lord, Lord Goldsmith, for his support. It is really important that we deal with the issue of making sure that iconic animals do not lose their habitat. An 80% loss of habitat means that we will no longer have those iconic species.

The Minister is very excited about the effects of the Bill and the opportunities it will produce for farmers. I am afraid I am not quite as enthusiastic as he is. I hope it will be exactly as he says, but I am afraid that, as far as I am concerned, the jury is out. I will have to wait to see what happens.

On pesticides, I cannot see that testing by taking at face value a form that has been filled in, and not doing any spot testing of actual products, will ensure that toxins from the other countries we will be trading with will not find their way here. The importation of goods with pesticides in will damage our farmers. I thank the noble Baroness, Lady McIntosh of Pickering, for giving us the powerful example of what happened to pig farmers when pigmeat produced in substandard conditions was imported into this country. It undercut our pig farmers, who were absolutely wiped out.

Having said all that, I think I will have to wait to see what happens. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.