Good morning. Although the draft order is quite short, I appreciate that members have a number of queries about its purpose. As the committee and Parliament have not seen a similar order for some time, it might be helpful if I begin with a few words about the purpose and effect of the order and the international organisation that it concerns.
The order would confer various legal immunities and privileges on, or in connection with, a new international organisation—the Asian Infrastructure Investment Bank, which is a multilateral development bank. Multilateral development banks are institutions that are established by international agreements. Their goal is to provide finance and advice for the purposes of development. They finance projects by providing loans and grants to borrower countries, using funds from—or raised in—donor countries. The World Bank is a well-known example.
The purpose of the AIIB is to address the gap in investment in infrastructure in Asia. The United Kingdom Government signed up to be a prospective founding member. Prospective members have concluded an international agreement setting out the structure and functions of the organisation. The agreement also sets out the organisation’s status in international law. To enable the independent exercise of the AIIB’s functions as an international organisation, certain privileges and immunities are to be afforded to it. Those privileges and immunities will apply in all the states that become members of the organisation. As the organisation is international, no individual country should derive undue fiscal advantage from it.
The conferral of those immunities and privileges is, in effect, a condition of membership of the organisation. However, the AIIB and its officials would be expected to comply with UK law and Scots law. Some privileges and immunities relate to reserved matters and have been conferred by legislation at Westminster.
Since the committee last considered the order, its United Kingdom equivalent has been approved by both Houses of Parliament, without opposition, and the Privy Council approved the order on 11 November. However, some of the privileges and immunities relate to devolved matters. That is why this order is before the committee and subject to affirmative resolution of the Scottish Parliament.
The purpose of the order is to add the AIIB to the list of organisations that have been granted similar privileges and immunities in Scotland. Some multilateral institutions have privileges and immunities that predate devolution—they include the European Bank for Reconstruction and Development and the Inter-American Development Bank. Other organisations have been afforded privileges and immunities since devolution—these include the International Maritime Organization and the European Police College.
The draft order will add the Asian Infrastructure Investment Bank to the post-devolution list—the list in the schedule to the International Organisations (Immunities and Privileges) (Scotland) Order 2009. The nature and scope of the immunities and privileges for the Asian Infrastructure Investment Bank are set out in the schedule to the draft order. They reflect those in the equivalent Westminster order and the terms of the founding agreement.
The purpose of the draft order is to help the UK to fulfil, with respect to Scotland, the international obligations that will become effective on the coming into force of the agreement establishing the Asian Infrastructure Investment Bank. Those international obligations were entered into by the UK Government with the intention that they will take effect throughout the UK.
In entering into those obligations, there is considerable opportunity for people who work in the financial and professional services sectors in Scotland. Those sectors employ almost 100,000 people directly and about the same number indirectly. Scottish companies already have a strong background in those fields. Committee members will be aware of the success of the UK Green Investment Bank, which is based in Edinburgh. The draft order is necessary if Scottish businesses are to be able to take advantage of the potential work that membership of the Asian Infrastructure Investment Bank might generate.
I hope that that is helpful. I am more than happy to take questions from committee members.