Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 160 - 169)



  160. They are still at base camp?
  (Mr Rintoul) Yes; many of them are still at base camp, one or two maybe have got up to South Col, but they are very exceptional and they have still got a long way to go. I think the thing that I would say is, it is potential trends. To me, it is completely immaterial whether the sort of report we are talking about is consolidated in their annual report or they do a stand-alone environmental report; to me, that is immaterial, the important thing is they report and they disclose. I think what you will see is, on the back of, or following on behind, a number of the departmental and associate bodies have put their neck above the parapet, for good reasons, you will see more Departments following on, and I think they will cut their teeth on green operations, they will cut their teeth in terms of disclosure and reporting, they will be much more happy about it on the operational side. And I think what you will do is, so there is a cycle of confidence and competence and the need to be built around that side of things, which is very much what Tom was referring to, but the step change will come where that competence and confidence go over then into the sustainable development reporting, which is really the end point. Because most Departments are like an iceberg, above the water-line all the obvious impacts are what people are reporting now, the operational, direct impacts are only sort of maybe one-eighth of the story, seven-eighths of it is sitting below the water-line and it is all the policy stuff, the impact on society more generally. I think that is the sort of trend that, I would say, I would not necessarily be able to see, but may be able to see the first start of that and see where it would go. So more Departments reporting, whether it is in stand-alone reports or consolidated into their annual reports; cutting their teeth, first of all, on direct impacts and operational impacts; and moving on then, from the confidence that gives, into sustainability more generally.
  (Ms MacGillivray) I think the exception may be new Departments: devolved government, the RDAs, regional government, starting with a blank sheet, they are thinking sustainability, and we are currently helping quite a number put together sustainability strategies, look at the sustainability of their operations, and so on, and I think really they are in a position to be the standard-bearers, if you like, for these kinds of initiatives.
  (Dr Woollard) One of the things that I think offers the Government a huge opportunity is what you have on your environmental website, I think. And one specific example that I think is a really good case in point is the BP Amoco `Ask Sir John', to respond to a question a day, anyone can pose him a question a day, and so he gets thousands of e-mails, and presumably he has got a group of people who sieve all these e-mails. Then he will take one of those questions, which can be really quite offensive, which can say, "BP Amoco is a horrendous company and it employs children in its supply chain," and he will then write anything from a paragraph to a page, and he has offered to do this for a hundred days, and you might think that is not the right use of the Chairman's time, but actually what they feel is it is a huge early warning system for them. They say, if they are going to China, they suddenly get hundreds of e-mails all about China, "What is BP Amoco doing in China?", or Alaska, and so it is actually a great way of opening dialogue with their stakeholders and finding out what their stakeholders want from them, on what topic, and it really helps environmentally for them to know what we should report on. I would have thought, even if Government Departments cannot produce too much in the way of very hard, quantitative, technical, performance data, or some of them can, but what they could do is certainly go down the sort of open, transparent, sort of dialogue path and actually ask, "What sort of information do you people who are on the Internet want to know about the DETR?", and where you will only be going for certain positions, those people who log on, but you will still get some sort of feedback mechanism.

  161. It sounds better than a focus group anyway.
  (Mr Adams) My last point of view would just be really, I think, I agree with my colleagues on my right, but, in a sense, if the environment is important enough that you think Government Departments ought to report on it then I think you should try to avoid the completely voluntary route which has been followed up till now, because you will be having this discussion again in two years' time, or three years' time; and actually imposing lots of incentives, inventing, thinking up thousands of incentives to get people to report, is pain, and you will be back here. Just take a short cut to the core of the matter and say, "If it's important then we should do it." Not immediately. All the words of wisdom here about the learning curves are completely valid, but five years down the line; this is what resource accounting was about, it did not come in in a year flat, sort of thing, it was a very staged approach. But I think definitely do not go naming and shaming again, it has been with us too long.

  162. The problem is, what is the alternative; the Government has no competition, there is only one Government? BP has competition, Shell, they are competing with each other?
  (Dr Woollard) I think it can work in reverse. I have one company that I spoke to about reporting, we talked about being named and shamed, and they said, "Doesn't matter; second time it's happened, don't care."

  163. Could I ask you to give some advice to this Committee. We are the Environmental Audit Committee, as you know, and we have two parts to our remit, one is to look at the policies of Government and see the public effect there, take into account environmental considerations, or sustainable development considerations as well, and the other is to audit the Government against the targets which they set themselves. And one reason we are having this particular inquiry is because we feel they are not setting themselves sufficient targets, and even if they did we would not have enough resources to audit them properly. Now, if you look at what we could do, we could go down several paths, in terms of enlarging our resources for audit, we could ask the National Audit Office to do it, you could set up an Environmental Commissioning Department, separate from the National Audit Office, as they have done in Canada, we went to see them for that reason, you could ask the Audit Commission to do it, you could ask private consultants to do it.
  (Mr Adams) You have internal audit as well, in all Government Departments.

  164. There are various ways we could do this. Have you any thoughts how we, as a Committee, might best add to our resources for doing our job, which is parliamentary scrutiny of what the Government is doing?
  (Mr Adams) I feel that it is difficult to talk about verification, and those types of things, before you have got some idea of what it is you want to verify; it is rather like putting the cart before the horse. Really, I think, you need to—

  165. What we need to verify is how far they are meeting their targets; it does not matter how good or bad their targets are, how they are meeting their targets, like on renewable energy, for example?
  (Mr Adams) Yes, but is that independent of departmental reporting?

  166. No; it embraces both really.
  (Mr Rintoul) I agree with what Roger was saying, we need to know how big the cake is before we decide how to bake it and what ingredients you need and how they cut it up. But, if one moved to more regular and routine reporting, whether it is annually or whatever, the indexed performance specifically within Government now, strictly within Government, against agreed cross-Government targets and maybe some global departmental targets, and so on and so forth, and there was a requirement on the publishing Department to have some level of verification on that report, and there might be appropriate models of verification that could be chosen by the Department, whether they went externally for third party independent, whether they use the NAO, or whatever, the information that would then come into this organisation, into the Audit Committee, would always have a level of verification and would have been audited in some way, shape or form. What you could then consider doing is not re-auditing it, but, periodically, in the same way as you have Departments in, to answer queries, is looking in detail at their practices and processes, for maybe one or two Departments a year. What you can also do, and this is where it becomes interesting with the potential Sustainable Development Commission, and so on and so forth, is have panels like this to talk to you about, "This is our raft of reports this year, this is all that has come in; go away and read them and let's have a debate about, as practitioners in this field, what it tells you, what these things say to you," to inform you and advise you and commit you for the wider debate. So it may not be as simple as who does the audit, there may be other ways of getting into that, to improve the level of assurance that you have, as a Committee, about what is going on and whether the report is honest, truthful and decent.
  (Ms MacGillivray) I think you need to actually start getting people to generate some information, before you have anything to audit, really. We did a study for the European Environment Agency, looking at the progress in integration, or mainstreaming environment into different sectors, and ended up falling back on asking questions, across Europe, as to whether a Department has an environmental management system, whether it has any sort of environmental target, rather than how it is actually performing against it; because everybody is at such an early stage, really.
  (Dr Woollard) Maybe it is self-interest speaking here, but I know, in private sector companies, if they have something that is serious enough, that they have had an incident or an issue, they will often ask a consultancy to go and really audit them thoroughly, and go to a third party. In the ERM we have 35 full-time auditors who do auditing every day of the week, and they have got to audit something like 120 sites in the next three weeks, and they do it, they will do it, and I am sure at Aspinwall, and lots of consultancies have those relatively large, full-time, professional auditors, who have audited maybe 200, 300 sites each. And if you want a very fast-track, let us not have discussion groups, and you can actually do it all in a very quick space of time and go out to—

  167. That is all the private sector, is it not, all that capacity is in the private sector?
  (Dr Woollard) Yes.

  168. There is none of that in the public sector?
  (Dr Woollard) No; that is usually companies either doing mergers and acquisitions, or a company that just has an issue, and an issue that it thinks is really serious enough that they will say, "Within two months, you will go to all of our sites and you will do an audit of every single site and you will report within two months; and we wont have any sort of debate, what we are trusting in is the professionalism of the auditors and what they're going to say, and we're going to accept the findings." That is maybe too radical a suggestion—

  169. No, it is not.
  (Dr Woollard) But it is fast, it is focused, you might not like the results, I am sorry if I am selling consultancy, but that is what we are there for.
  (Mr Rintoul) I think it is an option to be considered. There are very few organisations out there, and I do not know the structure and the resource of the National Audit Office in any intimate detail, that have the sorts of resource level that Tom was talking about, with the auditing skill-set associated with the environmental literacy. What we are talking about here is people who are either environmental or safety or sustainability auditors in some appropriate way, shape or form, you might find 30 auditors somewhere else, but have they got the skill-set, other than a basic audit process, to do it. So, if somewhere you wanted to go for a big bang, I think, for the foreseeable future, you would have to look outside the public service to bring in the resources; you would have to, you would have to.

  Chairman: Thank you all very much indeed. As you can see, that was extremely relevant and very, very interesting, and I think we have thrown up quite a lot of ideas. I am grateful to all four of you. Thank you very much indeed.

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