Examination of Witnesses (Questions 140
- 159)
TUESDAY 9 MAY 2000
SIR JOHN
VEREKER, MR
BARRIE IRETON
AND MR
PETER FREEMAN
Chairman
140. When this Committee visited Central and
Southern African countries, we detected a very distinct problem
of over centralisation in Harare. For example, the economist in
charge of Malawi — and he was only in charge of Malawi's
economic questions, but he was not assigned any other duties —
is nonetheless located in Harare. Similarly, your Secretary, who
works within the Embassy in Zambia is bereft of any real authority
and is dependent upon itinerants from Harare coming to assess
anything. The result is that you do not get any networking. The
same thing can be said in Mozambique, and our very much increased
involvement in all of those countries suggests that there may
be need for reconsideration.
(Mr Ireton) We are in fact looking at some of the
Central African situations. We have considerably strengthened
our team in Mozambique over the last two years and we are looking
more generally to the current situation and to whether we should
be shifting the balance further to a country position. It is an
issue which, I have to say, our own Secretary of State has made
observations on.
Mr Robathan
141. I do not think I was alone in the Committee
by being very struck by the difference of impact made by the High
Commissioners themselves. To what extent does DFID have an input
into the training of High Commissioners, because clearly where
the High Commissioner is well informed and supported, the work
of your office is infinitely improved?
(Sir John Vereker) I very much agree. High Commissioners
make an immense contribution that is centrally important to us.
The short answer is that of course we are available if the Foreign
Office want us to engage in formal training, but what High Commissioners
tend to do before appointment is have a large programme of briefing
which brings them up to flying speed on the various aspects of
their portfolio. They invariably come and see us if they are posted
to a developing country, and I would expect them to spend a significant
amount of time with us. A very high proportion of High Commissioners
come and see me. I am always asked whether I want to see a High
Commissioner before they go, and if it is a developing country
I always say yes. We will have a substantial discussion about
what we are trying to do, how we are trying to go about it, what
the management arrangements are and what role we want High Commissioners
to play. I should say that the point I invariably make to High
Commissioners is that the new way in which we are operating —
requiring more work in a country, more joined up work with other
donors, more influence over governments — means that despite
being a separate government department from the Foreign Office
we need High Commissioners more, not less.
Chairman: Our experience is that when
they are working well together, departments, representatives and
the High Commissioners, then the best results are achieved.
Ann Clwyd
142. I do not know how quickly you have decentralised
this insofar as Mozambique is concerned, but we picked up considerable
resentment amongst the NGOs working in Mozambique that in fact
so many people were based in Harare. I do not know in what timescale
you made that change, or when you intend to complete it, but we
picked that up on the ground, and they thought it was ridiculous
that so many people were based in Harare.
(Sir John Vereker) It is interesting to hear you say
that, and I am not surprised. I think it is a factor that we should
take into account. As Mr Ireton says, this is a dynamic situation
in which we are constantly looking at whether we have the right
arrangements overseas. It is not wholly straightforward, and we
have also to look at what that implies on working practices in
our capacity back here, but we do have it within our sights.
Mr Robathan
143. The Departmental Report 2000 introduces
DFID's new policy performance funds for Africa and Asia and the
multilateral institution. Can you please explain to us how these
funds will work and what their objectives will be?
(Sir John Vereker) That is a very fair question, if
I may say so, Mr Robathan. The Committee will find, in DR 2000,
that table five contains, as you asked, all the figures by country,
including previous outturn, and you will find, for instance, under
Africa, a thing called African Policy Performance Funds. There
were no figures up until 2000-2001, the current year, and then
£57 million followed by £60 million, and you will find
comparably large numbers for Asia at page 131. This large allocation
reflects very largely the uncertainty involved in planning ahead
where countries may or may not be performing well enough to justify
the transfer of large amounts of money into their budgets. The
Committee will know that we have two or three country strategy
papers, most notably in Kenya and Zimbabwe, which have high and
low scenarios. Famously, at the moment, the Zimbabwe one, over
the two years covered by it, is £36 million lower in the
low scenario than it is in the higher scenario. We are not going
to allocate funds in here specifically on an assumption about
a poor performing economy such as Zimbabwe. On the other hand,
we have said that if these countries come back on track, they
will get some more. You can aggregate them into these figures.
We have always, also, wanted to keep back a certain amount of
money for planned programme aid when we cannot be absolutely sure
when it will flow or how much will be needed. The Committee is
familiar with the fact that Mozambique ended up not needing as
much as we thought it was going to need in one year. Equally,
I should think Zambia this year might need more than we had previously
thought it was going to need, and so on.
Ann Clwyd
144. I want to ask the questions about the whole
chapter on conflicts and emergencies, which starts on page 83.
You told us last year, Sir John, when we commented on the Departmental
Report and said that additional expenditure incurred as a result
of the United Kingdom's response to the Kosovo crisis should not
be at the expense of the poor in other parts of the world, that
in the event of a humanitarian crisis arriving on a significant
scale, say more than one million or so, the Treasury will provide
additional resources. Obviously, we have noticed that your contingency
reserve has been entirely eaten up by the crisis in Kosovo and
given the unfortunate humanitarian crisis since, why have you
not taken up the Treasury on its offer of additional money?
(Sir John Vereker) The short answer is that we did
receive a large amount of additional money from the Treasury last
year. This is quite complicated. The figures in front of you show
that we received £68 million from the Treasury in the course
of last year towards Kosovo, and another £3.25 million towards
the crisis in East Timor. We also got other funding in the course
of the year from the Treasury for other purposes, including HIPC,
for which we got £33.3 million. As the year goes on, the
extent to which we may need extra funds becomes partly driven
by the extent to which we are spending the budget as a whole.
So towards the end of the year, it was possible for us to draw
down for Mozambique largely because we were not needing to spend
as much on budgetary aid as we had previously planned. I believe
that the assurances that I gave the Committee last year about
the funding of the Kosovo emergency have been honoured, both in
the spirit and in the detail, by the Treasury. We think we spent
in Kosovo last year, £110 million. As I say, £68 million
of that came from the Treasury's own central reserve, £37
million came from our own reserve, £4 million came from country
expenditure which we had planned in South East Europe anyway,
and £1 million came from our humanitarian allocation. So
the Treasury did indeed fund the bulk of it.
145. The £25 million spent by your department
on Orissa, for example, how much of that came from the Treasury?
(Sir John Vereker) I believe that Orissa, subject
to correction, was managed within our existing funds because we
did not need to draw down any more for that. As I say, the deal
with the Treasury was that emergencies beyond the amount that
we agreed we would contribute to Kosovo would be funded by them
to the extent that we needed the money, but as you get closer
to the end of the financial year other resources become available
in the programme, and I believe I am right in saying that we did
not need to go to them. I am very confident that if we had, they
would have agreed. I would like to assure the Committee that our
relationship with the Treasury throughout on this has been very
straightforward and has not been difficult.
146. What proportion of your budget in the current
year has been spent on humanitarian disasters? How does it compare
with previous years, and how does it compare with other DAC countries?
(Sir John Vereker) I cannot answer that question,
I am afraid. I have no idea how much we have spent on humanitarian
disasters so far this financial year. What I can say is that we
have budgeted this year for £1.5 million a month rather than
£1 million a month. You will find something like £18
million for planned emergencies, rather than £12 million
for planned emergencies, in these figures. In terms of expenditure
so far, I am afraid I do not have the figures.
147. Can I take you to another part of the chapter,
which is support for the security sector in Sierra Leone? You
began to support that reform in June of last year. Are you now
reviewing your policy towards the support of the security sector?
What exactly is the situation there?
(Sir John Vereker) I think the short answer is, yes.
148. Right.
(Sir John Vereker) If the Committee wants a longer
discussion about Sierra Leone I will have to have it, but, quite
evidently, at the moment, we are waiting for circumstances to
become clearer and then we will review our policy, but it is important
that I say that we have not given up.
149. Can I take you to 6.8, which is Humanitarian
Mine Action? What investigations are made before you grant contracts
to companies? You probably saw the piece in the paper over the
weekend about DSL. They have been criticised by a variety of people
for their activities in Colombia and their activities with Sunline
and in Sierra Leone again. A report by a Committee that I chair
called The Business of Killing, said the main concern was that
DSL passed on information on environmentalists and community leaders
to particular organisations. What kind of investigations do you
make before you give what are quite lucrative contracts to companies
like this with, clearly, a bad human rights record?
(Sir John Vereker) Before entering into the contract
with DSL we consulted a range of government departments, as is
our normal practice. No evidence was found to suggest that they
should not be granted a contract for de-mining. All I can say
is that if you, or anyone else, have evidence that any company
is engaged in illegal activities, that evidence should be passed
to the appropriate investigative authorities. If it is not illegal,
I am not sure what it is that I am supposed to do about it.
150. All sorts of human rights organisations
have pointed to the activities of DSL in various countries. That
is clearly available to anybody, which is why I am asking what
kind of investigations you carry out before you grant these contracts?
(Sir John Vereker) Well, as I say, we consulted a
range of government departments and we found no reason not to
give them a de-mining contract.
151. I will pass on this book to you, or sell
it to the Department. The Parliamentary Human Rights Group needs
the money. I will move now to another part of the report, in the
same chapter, "Crisis in Timor." You say that DFID's
response to the crisis in Timor was a rapid one based on lessons
from the Kosovo crisis. You say quite a lot about conflict prevention
in 6.3 and in Box 6(a) you talk about the aim to assist in the
limitation of the means of waging war. A lot of the expenditure
in East Timor is in returning populations to devastated areas,
rebuilding and reconstructing that country. The point I would
make to you, and where I see a lack of joined-up thinking across
departments, is that everybody who knew anything about East Timor
was saying, before the referendum, that the militia should have
been disarmed. The clean up is as a result of the operation of
the militia in East Timor and if what you say about conflict reduction
and the strategies is to mean anything apart from nice sounding
words, surely somebody should have taken notice of those warnings?
(Sir John Vereker) I would not want to comment much
on that, except to say that it may be that our prose extends a
bit further than our reach sometimes. We can analyse, we can say
what we think ought to be done and what ought to happen, but we
are not, and never have been, close to, closely engaged with,
or massively influential in East Timor. We did our best, but we
are not Australia, we are not on their doorstep. It may be that
our influence was not sufficient.
152. We do have people on the ground at posts
in Jakarta who are well aware of the situation and well aware
of the concerns that were being expressed at the time. Finally,
I would just like to tie this up again with East Timor and what
you say about strategic export controls in paragraph 5.23. We
have previously had the discussion about examining licence applications
for strategic exports to foreign countries. "We focus on
assessing whether a proposed purchase would seriously undermine
the economy of a recipient country. To date no licence has been
refused on the basis of economic criteria." If you look at
6(e) and the crisis in Timor and what needs to be done, surely
you should have been more proactive when the subject of licences
to Indonesia was being discussed, because clearly it impacted
on what happened in East Timor and also in other parts of Indonesia
where conflict is still rife?
(Sir John Vereker) I do not think the Committee is
expecting me to go over a substantial or new answer for this,
but I should say that I think the Committee should await the reply
of the Government to the Committee.
153. As I am on that Committee, perhaps I can
pre-empt that in a way, but I am not going to. I just want to
say that some of these things do not tie up, that is all I say.
It sounds very nice. The prose, as you say, is very pleasant to
read, but across government departments and across policies, these
things do not necessarily tie up. Thank you.
Chairman
154. On emergency and humanitarian aid, Sir
John, you have a budget this year of £18 million.
(Sir John Vereker) It is a complicated thing. The
budget for the whole department is much larger than that this
year, it is £61 million for bilateral activity and £37
million for multilateral activity, but I think there is a line
which breaks that down into what is called emergency response.
Page 133, toward the bottom, Conflict and Humanitarian Aid, appears
to quote the proceeds for emergency response, which is about £12
million in there, and then a thing called Programmed Emergency
Response, which adds up to £17 million, and that is the £1.5
million a month which I am referring to.
155. I am not certain that we are right to add
those two together, but if we take £12 million, if you do
not spend that money you will utilise it for other programmes
for possibly longer-term sustainable aid, will you not? And the
reverse is the truth, that if you use more money for unforeseen
reasons, that money will have to come out of other programmes,
is that correct?
(Sir John Vereker) The latter is not quite true, because
we carry a contingency reserve, which is £70 million this
year.
156. You have a contingency reserve as well?
(Sir John Vereker) The contingency reserve would be
the first call for humanitarian emergency response which went
beyond the amount that we have programmed into the budget. You
are absolutely right, Chairman, that as the year goes on, the
distinctions become less and less important, the actual budget
head becomes less important than ensuring that resources were
used for the best possible purposes within the year. If the world
is fortunate and we have few emergencies, then our system will
find other uses for those in terms of long-term development aid.
If the world is unfortunate and we have more emergencies, we will
draw on the contingency reserve. The contingency reserve is also
there for the funding of activities of a normal development assistance
kind, other than emergencies, that are not foreseen at the beginning
of the year. That is the way that it works.
157. What the Committee is concerned about is
that you do not eat up all your money in emergencies and not have
sufficient money to do longer-term development aid. I think with
the rising budget it probably does not arise so much, but it is
an important point, is it not?
(Sir John Vereker) It is, but I think, Chairman, if
you look at the allocations that we are planning for Africa, for
instance, at the foot of page 131, you will see that we are planning
a truly massive increase in normal development programmes to Africa
from about £400 million in the year that has just finished,
to £536 million this year, to £567 million the year
after. These are very big increases and reflect the fact that
we have a satisfactorily rising aid programme now.
158. What I am hoping for is that emergencies
do not eat into those plans.
(Sir John Vereker) I think the other thing to say
is that the Treasury understands this point too. We have long
had an understanding with the Treasury that in the event of quite
exceptional emergencies, for instance, on the scale of the Bangladesh
cyclone in 1972, or Kosovo, it is perfectly appropriate for the
Secretary of State to write to the Chief Secretary and say, "We
cannot be expected to carry this on our contingency reserve. What
about it?" The Treasury is a sensible and understanding department,
as they showed over Kosovo.
159. I am sure the Treasury will be delighted
to hear that, Sir John. Thank you.
(Mr Ireton) I think it is the case, certainly from
personal memory, that I do not think we have ever had to reduce
a planned development programme, multilateral or bilateral, in
order to respond to an emergency.
Chairman: Thank you very much. Can we
move on to Tony Worthington, who wants to ask you questions about
some of your bilateral development programmes.
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