Examination of Witnesses (Questions 60
- 79)
WEDNESDAY 28 JUNE 2000
SIR JOHN
VEREKER KCB, DR
MUKESH KAPILA,
MR DAVID
SANDS SMITH,
MR PETER
BERRY AND
MR ALAN
MATTHEWS
60. Fine. Okay. Perhaps someone else might want
to ask about that. I will move on. The Department is obviously
responsible for handing out huge amounts of money to selected
projects. I suspect there will always be a temptation when money
is being doled out for people to put their hands in the till,
that always happens, I am afraid. It came to me as a bit of a
surprise when I read in paragraph 3.12, which is on page 40—I
will give you time to get there—"Monitoring visits
by the Department to projects ..." was, and I quote from
the paragraph, "patchy". I would have thought you would
have rigorously had a look at these projects and checked all the
projects to see if you were getting what you had paid for. Why
did you not have a system in place which rigorously checked the
projects?
(Sir John Vereker) I believe we do have such a system,
Mr Steinberg, but it does not rest primarily on the kind of interim
reports which are asked for here. It rests on ensuring, first
of all, that we fund reputable organisations who have put forward
a robust proposal in detail with which we are satisfied.
61. I am not for one moment suspecting the reputable
organisation but there are sometimes people who are not reputable
who work for such organisations.
(Sir John Vereker) The first thing we do is we ensure
we have a good proposition from a reputable organisation in which
we have confidence. Secondly, we examine this carefully, take
an appropriate decision at an appropriate level of delegated authority.
Thirdly, we do ensure we get reports. Now we have been over already
this question of reports. I have a list in front of me of the
number of projects in each country, the number of reports we have
got. As I say, the aggregate figure I have is that we have 93
per cent of these. If, Mr Steinberg, you are suggesting that in
addition to that we should at this time have put a great deal
of our effort and frankly I would have to say organisational effort
on the part of the partners with whom we were working into producing
interim reports as we went along, I think I would have to say
that consideration of urgency and materiality have to be brought
into account when you are running in a severe humanitarian crisis.
Everybody's capacity at this time was stretched to and beyond
the limit. To do one thing would have had an opportunity cost
in not doing another.
62. I am running out of time. The point is that
when you did visit the project it says in 3.12 you recovered something
like £16,000 in unspent grants. How did you know there was
not a huge amount of money lying around not being spent? You would
not know because you had not visited the project.
(Sir John Vereker) As Dr Kapila has reminded us, in
any case of an unspent grant our systems will recover it from
the organisation concerned. The interesting thing I thought about
this part of the report—Chapter 3 of the report—was
that whenever the National Audit Office looked to see whether
projects as described were actually there, whether equipment had
been delivered, whether the money had been spent properly, they
always found it had been. The dipstick tests showed that everything
worked, under the circumstances, pretty well.
63. I am obviously coming to an end here; I
would have loved to have gone on. That is one example and then
there is another example somewhere in the Report that springs
to mind. You were sending out a huge amount of food and medical
supplies and it was presumably getting to where it was supposed
to have been, but you did not know that because you did not know
whether it had been delivered. We hear stories, I do not know
if they are true, of huge amounts of food going into the black
market because it is pinched before it gets to the people that
should have it. The fact of the matter is your Department did
not even know that food had been delivered. I can understand that
you want to do things quickly, get the food out and the projects
out because people are suffering and dying. On the other hand,
there should be mechanisms to make sure you are in a position
that nobody can defraud you.
(Sir John Vereker) I agree, Mr Steinberg, that we
can structure more carefully the documentation which proves it
and part of our standard operating procedures, in the light of
this Report, in the light of this experience, will be to ensure
that there is written documentation obtained when supplies reach
the end user. That is important, I agree. However, nothing in
this Report and nothing in our experience of this Kosovo crisis
leads us to think that any of the supplies did not get to where
they were supposed to get. If there is a weakness here it is the
weakness of our failure to keep the documentation to prove it
rather than any suggestion that it did not get there.
64. I was not suggesting that.
(Sir John Vereker) Every single dipstick test that
anybody has done has shown that it did.
Mr Steinberg: Thank you.
Chairman: Andrew Love?
Mr Love
65. Good afternoon, Sir John. I read the title
of this and it is called Emergency Aid and we have heard
a great deal about the humanitarian crisis. Before I get into
questions can I ask you how much urgency there was in this operation
because when we read through this Report the urgent nature of
it was very much the reason things happened the way they did,
but since the whole Kosovo crisis, you could say the crisis of
Yugoslavia, unravelled over a very long time, how much urgency
was there at the time of these events?
(Sir John Vereker) The movement of population, Mr
Love, after the beginning of NATO air action on 24 March, was
of a scale which was unexpected by everybody concerned with this
and it was, as the Report records, the largest movement of population
in Europe and the worst humanitarian crisis we faced in Europe
since the Second World War. It was, therefore, a matter of urgency.
Those of us who saw the television pictures, or in the case of
those on this side of the table witnessed it first-hand, the movement
of population to the Blace holding camp on the North Macedonian
border where huge numbers, up to a quarter of million people,
had been displaced from normal working lives in the heart of Europe
to be placed in atrocious conditions and conditions under which
they undoubtedly would have died if people had not taken emergency
action led us to treat this with great urgency. I do not however,
Mr Love, conclude from that that it would have been right for
us to ignore process, procedure and value for money. The Department
cares deeply about all of those things.
66. I want to come on to that. Let me run through.
24 March was the first signal of this unprecedented movement of
people. On 29 March, according to the Report, the Department made
available £10 million of humanitarian aid and then on 3 April
they asked the Crown Agents to go in, if I can call it that. What
discussions took place between 24 March and 3 April between the
Department, the Crown Agents and others in relation to the possibility
that they may have to go in? You did not just ring them up on
3 April and say, "Look, lads, you have got to go in,"
I assume.
(Sir John Vereker) I will ask Dr Kapila to answer
the question in a moment about when the first approach was made.
To flesh out the picture a bit and to remind ourselves, the movement
of population had built up over a period of a week or two after
the bombing started. In the early stages, two things. First, we
did not know how big it was going to be and we did not know if
these were internally displaced people who were going to move
around within Kosovo and be difficult to get at or whether they
were going to come across the border. It was a major part of our
activities whether the Macedonian authorities were going to let
them in. We did not know very often until they arrived at the
border. So there was much uncertainty in the early days. Secondly,
although this hearing pre-supposes that we were the people looking
after a quarter of million Kosovo refugees we are part of an international
system and there is an international system, the United Nations
High Commissioner for Refugees, which has first-line responsibility
in crises such as these and it would be wrong for us—
67. I understand the delicate discussions that
had to take place about how serious this crisis was going to be
and I fully accept that you had to go through that. What I am
rather more interested in is what discussions took place between
yourselves and the Crown Agents and others in relation to the
possibility, which may have been far away at the beginning but
soon became much closer, that there would need to be an involvement
of the Department in what was happening in Kosovo?
(Sir John Vereker) I think Dr Kapila is in the best
position to answer that.
(Dr Kapila) As soon as we realised on the 24th, or
the following day, that the potential implications of the conflict
would be a humanitarian crisis of undefined magnitude, we put
in hand our normal contingency arrangements, which is to think
amongst ourselves what are the likely scenarios and then to try
and look at our own capabilities, that of our partners and consider
at that moment in time which to mobilise. Within a day or so I
was in touch with Alan saying, "Look, we are not quite sure
what we are going to be doing in a few days' time but I think
you had better start making plans. See what people there are around.
It would be quite useful to have some of the people who worked
with us in Bosnia because it is in the same region. Why don't
you put into effect a contingency arrangement and get your people
and stocks and supplies ready and I will get back to you when
we need them." On 3 April we decided that we would activate
this contingency arrangement and then the whole operation was
launched. Between the 24th and the 3rd, essentially two things
happened, contingency planning and defining for ourselves what
was the best way to respond as part of an international effort.
68. You would accept that if an international
effort had to be mounted—although there were other partners
who would inevitably take part and the UN would take a central
role—because of Britain's position in relation to the whole
activity prior to the humanitarian effort being necessary, you
were likely to play a major role in that humanitarian effort?
(Sir John Vereker) I think the short answer to that
is yes but we did not expect the international system to be quite
as overwhelmed as it was. The Report is appropriately delicately
worded but people will remember that the scale was such that at
first international organisations found themselves less able to
respond flexibly and quickly than a bilateral agency is sometimes
able to. Because we had contracts in place, experienced people
available, and frankly a history of delegated decision-making,
backed up by robust systems, we found it easier to deploy than
our colleagues in the international organisations at first.
69. There have been discussions all the way
through this session about the relationship between the Department
and the Crown Agents and whether or not contracts should have
been in placed and whether or not there should have been greater
flexibility. Without going back through all of that, at any time
during discussions about the possibility that the Crown Agents
would need to go in, did anyone think about whether or not the
arrangements between the Department and the Crown Agents were
adequate to cover you for that eventuality?
(Sir John Vereker) Yes, indeed, and, Mr Love, it was
a reassurance to know that at all times we had a contractual arrangement
upon which we could rely. We always operated within that. You
will no doubt want to interrogate the Crown Agents' team separately
but I would expect them to have been very conscious of it too.
This was a contractual relationship but it was one based on knowing
each other reasonably well and knowing each other's capacity reasonably
well.
70. Can I just ask the Crown Agents whether
at any time they raised the issue about the likely ending of their
contract at the time when the discussions were going on about
the possibility that you would be going into Kosovo and the likelihood
that if you were in Kosovo you would be there for some considerable
time?
(Mr Matthews) Of course we did, Mr Love. We were within
a few days of a contract expiry so it was clear to us that an
extension of some sort would be required and that is what happened.
If I could also supplement Dr Kapila's earlier remark about discussions
prior to the crisis breaking. One of the remits of the emergency
response team is to keep our fingers on the pulse of disasters
worldwide. On 28 March I was in Islamabad heading for Tadzhikistan,
for a different mission, I just happened to have CNN on in my
room and saw that the Kosovo crisis appeared to be breaking, in
fact, I saw the Secretary of State being interviewed. I then took
the decision to turn round and return to Europe and within two
days we were launching air lifts. So, to use the famous phrase
from the Battle of the River Plate, "Anticipation got us
there in time".
71. I think you will find quite a lot of sceptics
around this table. None of us predicted that the Soviet Union
would collapse and I think we all recognise the inherent great
difficulties there are in trying to detect what will happen internationally.
If there is no implied criticism that you should have known earlier,
it is not coming from me, I accept the difficulties there are
in this area. All I am trying to find out is what pre-planning
had gone into the possible eventuality that would reasonably flare
up into an unprecedented humanitarian problem?
(Sir John Vereker) Two answers to that, Mr Love. First,
I am sorry to bang on about this contract but it is extremely
important to us. This contract and its predecessor served us extremely
well. It has ensured that we have arrangements in place which
we can call down responding to an infinite array of possible crises.
We have had to cope, have we not, with Monserrat, East Timor,
Bosnia, Sierra Leone, Hurricane Mitch, you name it, and having
this capacity on standby to call down is an absolutely vital part
of our preparedness. Second, Mukesh?
(Dr Kapila) If I have got Mr Love's question right
about preparedness beforehand, certainly our thinking on these
matters did not start on the 24th.
72. Of course not, no.
(Dr Kapila) Certainly I remember very well the discussions
around the Department when the Rambouillet talks were going on,
the concerns about whether or not they would fail and if they
would fail what would be the implications of that. If they failed
and there was a major crisis, which direction would the crisis
head towards. We had very extensive discussions with some NGOs,
I remember in fact chairing a meeting myself with the Department
bringing British based NGOs working in Serbia into the Department
to ask their advice on these matters, talking to the UN High Commissioner
with our embassy, our mission in Geneva and so on, partly to try
and prepare for these eventualities. In a sense when the 24th
came there was a considerable amount of information not about
the magnitude of the crisis, obviously that is unpredictable,
but certainly the broad directions we might be wanting to head
towards if this crisis kept on unfolding with the worst case scenario
in mind.
73. Let me come on to the air lift. I always
remember there was a very famous personality in British aviation
who made his money on the Berlin air lift because there were no
other companies around and we had to use him. I wonder in preparation
for the possible humanitarian effort that we would need to make
in Kosovo, did no-one think about what planes would be available
and whether there ought to have been greater competition to provide
those services?
(Sir John Vereker) If I may say so, with respect,
I think that is a very reasonable question. I think hindsight
shows us that air lift capacity and air space capacity was one
of the constraints. I am not sure we could have done anything
about it before. Let me just bring this to life a bit because
this report talks about 54 air charters and that might give the
impression of 54 separate occasions on which we chartered the
planes to go from A to B. It was not really like that, what we
were doing at any one time, we had an officer pretty well full
time on this, was trying to ensure that a limited number of planes
available—and there was only a limited number of heavy lift
aeroplanes—flying goodness knows where, picking up supplies
wherever they happened to be available at, as far as possible,
maximum capacity so as to get value for money, and then negotiate
a landing slot which had to be iterated through NATO in Brussels,
who were bombing the place half the time, and the UN operation
in Geneva which was supposedly controlling civilian air slot.
This was a horrendously complicated and difficult task, there
were many constraints. I guess—Dr Kapila may be able to
flesh this out a bit—the critical constraints, as so often,
were landing slots and air traffic control capacity in the airfields
concerned.
74. Rather than do that, because my time is
effectively up, can I ask for a note on that particular issue.
(Sir John Vereker) Sure[1].
75. Finally, a couple of quick questions in
relation to grant funding of various organisations. It says somewhere
in the report that all the organisations you dealt with were either
vetted by UN or other international agencies. Is that the case
for every single one including the local agencies that you would
use?
(Sir John Vereker) Every single agency or organisation
to whom we gave a grant will have provided a written justification
including a description of their capacity. In the overwhelming
number of cases we will have known something about them.
76. The reason I ask is looking at the appendix,
there was a number of local organisations.
(Sir John Vereker) Sure.
77. There has been quite a considerable concern
since the Kosovo crisis about some of the activities of local
people. I will not go any further, I do not want to give the impression
Kosovo is full of drug dealers or people who are on the make but
the reality is there has been some concern about that. Are you
happy that none of the monies that you have disbursed in Kosovo
have been used for other than the purposes for which you intended?
(Dr Kapila) In practical terms you are quite right,
there were a whole range of agencies working on the ground. The
arrangements that were put into place with our own specialists
in our field offices were to do detailed appraisals of those individuals.
Common sense prevails in terms of the management of those. For
example, I can remember vividly requiring some organisation under
contract locally to provide some services to refugee camps. Now
obviously we did not know these organisations from a long time
ago but the services needed to be delivered. The way the local
grant was handled would be that a sum of money would be advanced
but not the whole grant, the service would be delivered, inspected
by our own people on the ground and then the balance made over.
There were cases where the quality of the service was not good
enough or we found they were not giving us a reliable service
in which case one would have terminated the grant. There were
some projects which were therefore terminated because we were
dissatisfied with the results and we moved on to something else.
Mr Rendel
78. I would like to start on the emergency air
lift, if I may go back into more detail over that and paragraphs
2.28 to 2.32. First of all, paragraph 2.28 talks about the way
in which the contract with the two brokers was originally set
up and they were selected apparently following a competitive tendering
exercise. Do you know how many brokers were considered in that
tendering exercise?
(Dr Kapila) I believe there were at least two but
I think there may have been three or four, I cannot recall now.
We can certainly find that information.
79. There must have been at least two, there
were two chosen.
(Dr Kapila) Yes. The market in brokers who provide
this sort of service is not very extensive.
1 Note: See evidence, Appendix 1, page 117 (PAC 1999-2000/237). Back
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