Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by Traidcraft

  Traidcraft welcomes the publication of this White Paper because:

    —  it is a significant and serious contribution to the debate about the potential effects of Globalisation;

    —  because it addresses those issues specifically from the perspective of their impact upon the poor; and

    —  because it contains specific policy commitments which, if carried through, will contribute significantly to the goal of halving the number of those living in extreme poverty by 2015.

  Traidcraft made eight specific recommendations to the team working on the White Paper.


  In relation to the operation of International Markets our recommendations were:

    1.  Increased pressure for greater accountability and more equitable economic policies of multilateral trade fora specifically the World Bank and WTO.

    2.  Increasing technical assistance and capacity building of LDC's regulatory frameworks.

    3.  Increased research and support for "alternative" more equitable approaches to trade.

  We therefore welcome the statements in paragraphs 238-240 about the creation of a fairer multilateral trading system and the policy commitments at the conclusion of Chapter 5.

  We welcome the section entitled "Making Markets work for the Poor", paragraphs 90-96. It is very important to develop concrete mechanisms to realise these goals. We are disappointed at the lack of specificity of policy proposals in this section.

  We are also disappointed that the paper contains no clear commitment to support our third recommendation above (although we note statements in paragraph 294-see below). The encouragement of fair trade practices with an overtly development focus, whilst small in their quantitative impact on poverty, can be very significant in pioneering and developing best practice solutions. Few social or scientific revolutions are achieved without the encouragement of innovation.


      In relation to Corporate Social Responsibility our recommendations were:

    4.  Promote voluntary social reporting by UK companies.

    5.  Promote corporate governance models that emphasise responsibility towards stakeholders.

    6.  Support mandatory social and environmental reporting by UK companies

    7.  Encourage pension funds and other institutional investors to promote "development-friendly" practices by the companies in which they invest.

    8.  Promote international standardisation of environmental and other risk reporting linked to stock exchange listing.

  We welcome the section entitled "Promoting Corporate Social Responsibility", paragraphs 197 ff.

  We welcome the commitment to evaluate the potential development impact of public procurement (paragraph 205) but are otherwise disappointed that this section contains no new policy commitment on behalf of the Government despite the obvious linkages between best practice company behaviour in relation to stakeholders and impact upon the poor.

  In particular, if the general tenet of the White Paper—that well regulated private sector trade provides greatest opportunity for the poor—is to be accepted, then robust mechanisms for company reporting and disclosure seem to be a sine qua non for keeping both governments and civil society informed about the impact of such trade.

  Paragraph 19 of the Paper says "Managed wisely, the new wealth being created by globalisation creates the opportunity to lift millions of the world's poorest people out of their poverty. Managed badly it could lead to their further marginalisation and impoverishment". One could add, "Unmanaged, it will inevitably allow that new wealth to continue to accrue to the `have's of society". Anyone who has played the game of Monopoly will understand that principle.

  We welcome the proposal for a new Development Bill (paragraph 293) and the statements in the subsequent paragraph about support for the promotion of development awareness and "support for high-risk small scale activities".


  We are puzzled about the intended role for the Commonwealth Development Corporation. Paragraph 211 says "The purpose of this partnership is to maximise the creation and long-term growth of viable business in developing countries (especially poor countries) . . .". Paragraph 223 says "To increase their primary exports, developing countries also need help to modernise their agriculture and make it more competitive". As a government-owned business controlled by DFID, CDC should be pioneering and leading the way for best business practice. It is therefore surprising to learn that CDC is in the process of divesting itself of all its agri-business activities in Africa and cutting back on its field staff. How does this help to modernise agriculture in Africa? Are we to understand from that DFID does not consider that CDC's agri-business in Africa can be viable in the long term?


  It would be churlish not to acknowledge this White Paper as a significant achievement for Ms Short and her Department. The test will be how far its policy commitments can be realised in practice, especially those which involve moving forward the practices of the EU . . ..

  . . . and the debate about links between economic growth and inequality (paragraph 27 ff) will continue.


February 2001

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 14 March 2001