To enable the Govt. and the committee to review the agreement further

Assembly: The joint sitting of Parliament yesterday deferred the deliberations on the framework agreement between the European Investment Bank (EIB) and Bhutan through majority votes as proposed by the joint committee.

The joint committee comprising seven members from the Assembly and five from the National Council proposed for deferment as the committee could not resolve the 13 recommendations that the Council had provided on the agreement.

The committee submitted the motion to defer the ratification of the framework agreement between Bhutan and EIB governing EIB activities in Bhutan to enable the government and the committee to review the agreement further and to be tabled again when ready.

In doing so, the committee submitted that the act of deferment be treated as an exceptional one, and not a precedent, as provisions for such matters dealing with disputes on international agreements have neither been envisaged nor covered in the legislative rules of procedure (LROP) 2011. The two houses are to discuss and incorporate measures to address such disagreements between the two houses in the amended LROP 2016.

The committee also recommended that the government develop guiding principles and overall protocol concerning matters related to international conventions, covenants, treaties, protocols and agreements.

Following the submission, of the 67 members present, 58 voted for it while six abstained and three were against it.

The joint committee chairperson and Phuentsholing’s representative, Rinzin Dorji, proposed for the deferment stating that the framework agreement was beyond the purview of the joint committee unlike other bills.

He also said that this was the first time that an international agreement has been in dispute between the two houses.

Foreign minister Damcho Dorji also spoke in favour of the joint committee’s proposal.

Emphasising its importance, Lyonpo said that the EIB was deliberated well in the assembly and endorsed with support from members after which it was submitted to the Council.

When it came back from the Council, he said the dispute was not on a few clauses but the agreement as a whole.

Lyonpo said that as Bhutan would no longer be considered a Least Developed Country, many donor agencies and countries were withdrawing gradually. As a middle-income country then, he said the country needs to clear the path for the future. “There are cases where middle income countries that were not prepared were categorised back under LDC,” he said, adding that the Council’s concerns were genuine and for the benefit of the country.

Lyonpo also said that Bhutan cannot solely rely on the donor agencies or countries, which is why the tie-up with EIB was important. “It’s not necessary that we borrow during our tenure but this would help the country in future as well,” he said.

Except for Bhutan and Afghanistan in the region, Lyonpo said the rest of the countries have joined EIB. “The terms and conditions of the EIB such as the grace period are also reasonable enough which is why it’s important for us,” he said. “EIB is a subsidiary bank, which is no different from a private bank or from World Bank and Asian Development Bank.”

Lyonpo said considering the importance of the agreement, it would be more appropriate to do a thorough review by the government and defer the agreement to another session for deliberation.

Finance minister Namgay Dorji supported the foreign minister’s submission saying that the purpose of joining the EIB is to clear the path for the future. “We will review the EIB and then take the opportunity to discuss it later,” he said.

The National Assembly passed the agreement during its fifth session, but the Council in its last session sent it back to the Assembly with the recommendations. The Council’s economic affairs committee had outlined serious reservations against ratifying the agreement.

The Council reasoned that the framework agreement was not in consonance with the country’s external commercial borrowing guidelines and that it could undermine Bhutan’s sovereignty. The framework agreement states that the EIB can enjoy full legal personality in the territory of Bhutan, including in particular the capacity to contract, to acquire and dispose of movable property and to be party to legal proceedings. The bank will also have free access to the national financial market in Bhutan, among others.

The Council pointed out that the agreement is an affront to Bhutan’s sovereignty as the agreement openly undermines national laws, regulations, policies and guidelines. Further, the resolution states that it undermines the supremacy of the courts of Bhutan, including the Supreme Court by subjecting it to the decisions of the European Court of Justice.

Although EIB is a financial institution of shareholder countries of the European Union, it also lends to countries, which are not its shareholders. Hence, when EIB carries out activities in a non-EU country, similar privileges and immunities are expected to be recognised and ensured.

Kinga Dema