Select Committee on International Development Minutes of Evidence



MEMORANDUM SUBMITTED BY THE DEPARTMENT FOR INTERNATIONAL DEVELOPMENT

  1.  The Department for International Development's strategy for its development partnership with China is outlined in the Country Strategy Paper (CSP), published in November 1998. We consulted widely on the paper before publication.

  2.  Section E of the CSP outlines the strategy which DFID proposes to adopt in light of the analysis which precedes it. We are implementing the commitments made in the paper and are looking for new areas where DFID believes it can optimise its contribution to the globally agreed International Development Targets.

  3.  The Committee asked that a number of specific issues be addressed in a memorandum prior to the hearing. These are dealt with below.

A LIST OF ALL OUTSTANDING ATP PROJECTS

  4.  Remaining commitments made under the now discontinued aid and trade provision in China are set out in Annex 1. Virtually all the work on projects under the aid and trade provision in China has been completed. The continuing expenditure mostly consists of commitments to soften the terms of loans on the basis of fixed schedules.

A LIST OF ALL CURRENT DEVELOPMENT PROJECTS AND ALL DEVELOPMENT PROJECTS PLANNED FOR FUTURE IMPLEMENTATION

  5.  The list is attached as Annex 2.

ANTI-CORRUPTION MEASURES IN DFID PROJECTS

  6.  Design of projects under DFID's bilateral aid programme recognises the need to be vigilant to the possibilities of corruption and to minimise the opportunities of it occurring. Some activities are financed under technical co-operation arrangements: these are contracted and paid for in the UK by DFID staff and are subject to government accounting procedures.

  7.  Funds provided for local costs under financial aid arrangements are dealt with by nominated local project managers, many of whom have worked on DFID or other donors' projects. These funds have to be kept in separate dedicated bank accounts and payments into accounts are only made against receipts or certified statements of expenditure. Payments are normally made as reimbursement of expenditure incurred, although there are occasions where funding is provided on an advance basis: ie when the resources to meet initial expenditure are not available. Requests by project managers for topping up of accounts are subject to an independent local check (this is normally by a UK-based TC adviser to the project) and are routed through DFID staff in London for payment. Procurement procedures and contracts for major items purchased under financial aid arrangements are also subjected to independent review.

  8.  It is the responsibility of individual project managers to produce periodic statements of the monies for which they are responsible. These statements and supporting documents such as vouchers and bank reconciliations are subject to annual audit certification by China's own National Audit Office in accordance with terms of reference set by DFID. The CNAO has been used on many donor projects. Managers are also required to produce reports on physical project activity and spending. Depending on the size of the project these reports are typically required every three or four months. Projects are also subject to physical monitoring by the relevant sector managers in the DFID office in Beijing. This should identify significant mismatch between expenditure and activity. In their visits to the project areas these staff (the majority of whom speak fluent Chinese) will also be expected to look out for any other indications or risks of corruption.

  9.  DFID has a successful project which involves skills transfer from the UK National Audit Office to the China National Audit Office. This is helping to build their capacity to undertake their responsibilities more efficiently and effectively.

WHAT ENGAGEMENT DFID WILL HAVE WITH CIVIL SOCIETY AND NON-GOVERNMENTAL ACTORS

  10.  This issue is more complex than in many other countries where DFID works. In China it is hard to draw clear distinctions between Government and non-government organisations. Also the definition and respective roles of state and civil society in China are changing rapidly: one of the consequences of a growing movement in China away from centralised planning towards a more decentralised demand-led approach means that welfare provision formerly undertaken by the state or by state owned enterprises are now being passed to civil society. Despite relinquishing some of its responsibilities, the state is still powerful in defining the role that is acceptable for different elements in civil society.

  11.  DFID's Country Strategy Paper and White Paper on International Development both commit us to a rights based approach that implies a strong emphasis on participation. In the context of China this means working with existing organisations to promote greater participation, consultation and involvement of people in decision making.

  12.  DFID is involved with civil society in a number of priority areas. Plans for implementation of the Health VIII project contain a strong commitment to participative consultation with primary stakeholders. In this and other projects we are supporting social science training to build capacity in qualitative methodologies that facilitate consultation and better understanding of user needs and demands. In the planned HIV/AIDS Prevention and Care Project, an innovation fund will support NGOs who wish to pilot innovative approaches to care and prevention. We are supporting a water project being implemented by Save the Children Fund in Tibet that also works closely with village committees and elected leaders. DFID's basic education project in Gansu will work to develop the role and capacity of village school committees to plan and implement school development and to make the committees more responsive and accountable to parents. We are also supporting a small British NGO in Shanghai to assist the Civil Affairs Bureau to establish a scheme to place and support foster children in the community. As part of our support to State Owned Enterprise reform we have ensured the involvement in project design of managers' organisations, business organisations, trade unions and the All China Women's Federation, and stressed the need for the ongoing involvement of these groups in the implementation of the project.

HOW WILL DFID ACTIVITY BE INDEPENDENTLY MONITORED, AUDITED AND EVALUATED

  13.  DFID has in place a rigorous project cycle in which all staff receive training and support.

  14.  At the time of project design, a monitoring plan is developed which identifies the stages in the life of the project at which project monitoring should take place. Monitoring will report against the project Logical Framework and work plans of those involved. The monitoring programme will normally include a major review half way through the project which considers whether the project outputs are likely to contribute to achievement of the project purpose. DFID does sometimes use external consultants to monitor progress, but the bulk of project monitoring is carried out by DFID's own staff—although key monitoring is not carried out by those who are involved in the day to day management of the project. The Head of the relevant DFID Department is required to endorse the conclusions of any major review. Independent assessments of project success—in the form of evaluations—are normally made at the end of the projects (see below).

  16.  DFID has recently introduced more rigorous "impact assessment studies" to check in a more systematic way the effectiveness and impact of DFID-assisted projects and to aid lesson learning. We are looking for opportunities for employing such studies on projects in China.

  17.  A response to the question of independent audit is covered in paragraphs 7 and 8 above.

  18.  Evaluation is a key activity for DFID and we have a specific Department responsible for managing that work. As each of our projects is completed, a Project Completion Report (PCR) is prepared which reviews project performance and achievement. This is done using a common format issued by DFID's Evaluation Department and assesses the extent to which that set of activities has contributed to the stated project purpose. At the stage of preparing that Report, a judgement is made by the individual Department whether an independent valuation would be useful. If it is felt appropriate—based mainly on whether it will inform future activities—it is commissioned and the results disseminated widely. Once completed the PCRs are submitted to Evaluation Department to ensure consistency before being added to the database of such reports. This database is systematically analysed each year to generate synthesis reports which identify broad performance trends across DFID's portfolio.

  19.  Evaluation Department also commissions independent evaluations of a series of projects, mainly the bigger ones, which are published and then feedback into the project cycle. We fully expect to commission evaluations on our major projects in China once they are finished. This will be important for feeding back into new work given that our poverty focused programme is still relatively new.
Department for International Development

December 1999



Annex 1

ATP PROJECTS—CHINA
Title Commitment (£m) End Date Description
Container Ship for China Ocean Shipping Company 6.8972007Provision of high capacity shallow draft container ship
Yue Yang: Power Station51.414 2003Provision of boilers and turbine generators
Bohai: Aluminium Plant8.802 2008Aluminium rolling plant
Dushanzi: Ethylene Plant41.179 1999Petrochemical plant
Urumqi: Pure Terephthalic Acid (PTA) Plant 39.0001999Petrochemical plant
Urumqi: Paraxylene (PX) Plant13.045 1999Petrochemical plant
Hepu: Water1.2102000* Domestic water treatment plant
Wuxi & Zhangzigang: Water2.995 2000*Domestic water treatment plants
Weifang: Sewage1.645 2000*Solid waste disposal plant
Rizhao: Water1.2352000* Domestic water treatment plant
Guangzhou: Overhead Catenary System3.265 2000Overhead power supply system for city metro
Guangzhou: Ventilation System1.314 2000Ventilation system for city metro
Jiangyin: Bridge21.100 2000Bridge construction and advisory consultancy

*  Projects with physical works ongoing.



Annex 2

LIST OF CURRENT DEVELOPMENT ACTIVITIES IN CHINA (AT 30 NOVEMBER 1999)
Name of Project Purpose Duration Amount
1.  Support to World Bank Health VIII Project To strengthen and add value to major Ministry of Health/World Bank Project (Health VIII). The project aims to improve accessibility, effectiveness and efficiency of health services for the rural poor. It covers 71 designated poor counties in seven provinces Aug 99-6 years£15.14m
2.  Gansu Basic Education ProjectTo enable more girls and boys to enter and complete the primary and junior middle school cycles in Gansu, especially in four target counties, and to reduce inequalities within the education system Oct 99-Sept 2004£11.5m
3.  Adult Education Project: HubeiTo raise language competence of key Chinese workers in Hubei 1996-2000£0.73m
4.  English Language Examinations Reform Project Assisting the National Education Examination Authority (NEEA) to reform and rationalise public English Language Examinations 1996-1999£0.417m
5.  British Council English Language Teaching Programme of specialist attachments to Universities throughout China and training of counterparts in UK, to improve teaching in ELT 1980-2000£12.45m
6.  Sichuan Urban Environment Project (SUEP) Consultancy support linked to a World Bank project to assist Sichuan authorities to prepare for major investments in water and land resources. Emphasis is on institutional strengthening in finance, policy and management March 97-Dec 99£0.87m
7.  Nuclear Safety Standards: Beijing To transfer UK best practices in design and qualification of inspection methodologies to ensure structural integrity of civil nuclear power stations Oct 96-March 2000£0.231m
8.  Guizhou and Shanxi Energy Efficiency Project (GASEE) To assist Provincial authorities and industry in Shanxi and Guizhou Provinces to assess the costs and benefits of low cost techniques for the implementation of energy efficiency measures, with an emphasis on clean coal technology April 95-Dec 99£2.1m
9.  Ocean University of Qingdao Institutional Development (QUID) To enhance the University's technical knowledge, training capacity and experience of marine disposal techniques and to improve China's coastal environment through better marine disposal of sewage March 95-Dec 2000£0.431m
10.  Study of Toxic Organic Pollutants (STOP) Strengthening the Department of Environment Science and Engineering's capacity in Nanjing University to analyse and advise on pollution of rivers by toxic organic compounds Jan 95-Dec 99£0.598m
11.  Zhongshan Institutional Development Project Strengthening the Department of Geography to enable it to meet demands for trained urban planners and environmentalists for Guangdong Province Oct 94-March 2001£0.65m
12.  China Council for International Co-operation on Environment and Development (CCICED): Working Group on Environmental Economics Assisting with the integration of environmental concerns and economic development by contributing to the working group run by CCICED Jan 1993-Sept 2000£0.645m
13.  State Owned Enterprises—Restructuring and Enterprise Development To help develop and facilitate the replication of effective approaches to socially responsible SOE restructuring and enterprise development Nov 99-Nov 2002£19m
14.  Co-operation with the Chinese Supreme People's Procuratorate To improve the performance of the SPP in its supervision of the courts and criminal procedures. In particular the project aims to improve the SPP's record in the tackling and prosecution of corruption July 99-2 years£0.208m
15.  Financial Sector Training Scheme (FIST) To strengthen the institutional capacity of Chinese financial sector organisations, both government and commercial, by offering working attachments with UK city firms, for dynamic young Chinese managers 1998-2001£3.4m
16.  Investment Appraisal Assistance Assist the Chinese state sector to make investment decisions based on objective procedures and methodologies July 1996-Feb 2000£0.806m
17.  Co-op with the Chinese National Audit Office (CNAO) Assist the CNAO to improve its audit and internal management methodologies through a programme of collaborative activities with the UK National Audit Office Oct 95-Dec 99£0.51m
18.  Judicial Studies Training Project To help develop a cadre of Chinese Judges with improved knowledge of common law systems, including studies covering an understanding of human rights issues in law July 98-5 years£0.55m
19.  Investment Training and Research Project To help establish an Investment Training Centre to support training and research in investment policy and analysis Sept 1995-April 2000£0.82m
20.  Young Lawyers TrainingTraining young Chinese lawyers in the use and application of commercial law March 89-April 2001£1.67m
21.  Shanghai Municipal Finance Reform Development of a public finance system which is appropriate to a market-based economy both as a macro regulatory instrument and as a stimulus to the economy March 94-April 2000£3.5m
PROJECTS FUNDED THROUGH NGOS

22.  Shanghai Foster Care—Care for Children
To assist Chinese authorities improve systems of child care by placing orphans and abandoned children in long term family foster care Oct 1998-3 years£621,000
23.  Environmental Health Programme in Tibet—SCF To improve the livelihoods in the Lhasa valley through sustainable water and sanitation improvements Sept 1999-4 years£825,000
24.  Tibet Education Programme—SCF To enable local education authorities to use learner centred and participatory methods in teacher training, and to improve Primary School conditions April 1998-2002£414,989
PROJECTS NOT YET APPROVED:

1.  HIV/AIDS project
To develop replicable models of HIV prevention, treatment and care in two pilot provinces to assist in the creation of a more effective national response to HIV/AIDS in China 2000-5 yearsapprox £15.3m
2.  Urban HealthTo support the ministry of Health to pilot a model for a comprehensive community based health care, which can be sustained from local resources and is accessible to all 2000-4 yearsapprox £6m
3.  Yunnan Environmental Development Programme (YEDP) To help the Government of Yunnan to prepare and implement pro-poor, environmentally sustainable development programmes 2000-4 yearsapprox £7m
4.  Water Sector Development Programme (WSDP) To strengthen China's capacity to address key institutional and technical issues constraining the availability and quality of water supply, and its equitable allocation 2000-3/4 yearsapprox £6m
5.  SOE Social SecurityTo help in the promotion of equity and efficiency in the service delivery of welfare benefits carried out by the Labour and Social Security Services 2000-3 yearsapprox £3m



 
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