Draft Asian Development Bank (Seventh Replenishment of the Asian Development Fund) Order 2001

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Mr. Tom Clarke: Before my hon. Friend goes on to that speech, may I say that the hon. Member for Hertford and Stortford made an extremely important point about sustainable development and the environment? He drew our attention to Cambodia, and the destruction of its forest. Is my hon. Friend the Minister satisfied that the Asian development fund is treating environmental awareness and policies with the importance that they deserve?

Mr. Mullin: I know a little about Cambodia. However, I cannot speak for the way in which the funds have been deployed. I can check and come back to my right hon. Friend. It is correct to say, as the hon. Member for Hertford and Stortford did, that what has happened to the forests in Cambodia, and throughout much of south-east Asia, is truly devastating. The corruption is now in Vietnam. The Thais have destroyed all their own forest cover and are working their way through that of Burma and parts of Laos and Cambodia. Often, that involves not just private companies but either senior Government officials or members of the military. All too often members of the military and senior Government officials are the same people.

What has happened is tragic. So far as Thailand and Cambodia are concerned matters are probably, I greatly regret to say, past the point of no return. The matter has been repeatedly drawn—by all sorts of people—to the attention of the relevant Government officials at the highest level. In a previous incarnation, I played a part in some of the representations that were made. A very effective non-governmental organisation called Global Witness provided a lot of the hard evidence about what was going on and who was doing what. It is a shocking story, but it cannot be laid at the door of the Asian development bank. However, I shall check out its involvement, if any, with forestry in Cambodia.

The hon. Member for Windsor asked about our representation. We have 2 per cent. of the share capital, and, if the order is approved, we will provide 4.8 per cent. of the contribution. Therefore, the biggest movers and shakers are those who provide the biggest contributions. In particular, Japan provides more than one third. The UK shares a constituency with Germany, Austria and Turkey, and we have permanent representatives alternating at the bank's headquarters. The bank is accountable to its shareholders, who are the Governments. My right hon. Friend the Secretary of State is a UK governor, and there is a board of directors, which carries responsibilities day to day. We have officials based in Manila, where we are permanently represented.

Ministers—certainly, my predecessor—attend several annual meetings. I have not yet had the opportunity to do so, and many development bank annual meetings will take place during the coming election period—if there is an election in the near future. Officials attend them, and my noble Friend in the House of Lords, Valerie Amos, will attend some annual meetings on behalf of the British Government. So we take a close interest, are represented on the board of directors and are a major shareholder.

The hon. Members for Windsor and for Richmond Park mentioned the procedure. All I can say is that this is the seventh replenishment, and the same procedure has been followed for the past 25 or 30 years. The opportunity for parliamentary scrutiny, which, in my opinion, is being carried out most effectively, is now. The procedure was examined, as the hon. Member for Richmond Park rightly said, by a Select Committee, which came to the conclusion that she mentioned. It is true that it gave its approval in laid back terms, but that is the nature of this establishment. I am not aware of any serious criticism of our procedure. I have not really heard any today, and I do not think that the hon. Lady is making any.

Dr. Tonge: If the Minister will excuse me, I was making a light-hearted contribution. The phrase

    ``We do not know its history''

amused me. We do not know the history of wife beating or of many things that happen in the world, but it does not mean that they are good and that we should continue to do them.

Mr. Mullin: Indeed, and someone from my background, with a record of scepticism towards the official point of view, would not start from the assumption that something is fine just because it has been done before. However, I take heart from the fact that a Committee of the House examined the procedure two or three years ago and was satisfied.

As the hon. Lady said, she was making a light-hearted point, and I have not heard any substantial points relating to the procedure. The hon. Member for Hertford and Stortford made an interesting speech, in which he scrutinised the activities of the bank. Our documents are really the source of much of our information, which demonstrates that we take seriously our role in monitoring the bank's activities.

Mr. Trend: I asked the Minister whether he was satisfied with the procedure, and the reason I asked that was partly because of his background. Perhaps it would be a good idea for a member of the Government to ask his or her Department whether this procedure is the best way of doing things, otherwise the question may never be asked. Because of the Minister's interest in poking around in places where he is not always welcome, I wondered whether he might ask his Department to brief him on whether this is the best way of doing it, or whether the matter should be periodically scrutinised by one of the other Committees of the House.

Mr. Mullin: As the hon. Gentleman knows, I am now an establishment figure. However, we had anticipated that someone might raise that point, and I have a note on the procedure for approving orders, which I shall read out to the Committee. It states:

    ``Essentially, the obligation does not arise until the UK deposits its instrument of subscription with the ADB, the ADB confirms that the instrument is acceptable, and that the replenishment has become effective. This happens when the ADB has received instruments that total at least 50 per cent. of the replenishment. Only then do the obligations come into existence, and only then would the Secretary of State have power to make an Order in terms of the draft.''

As I think I mentioned in my opening remark, we do not hand over the whole £84 million in one tranche and kiss goodbye to it—it is transferred in four separate tranches, and we take a careful interest in what happens to it. We are taking a careful interest in the whole focus of this bank and the other bank. I think that the hon. Gentleman is broadly satisfied, but if somebody comes up with substantial reasons why the procedure is defective, I will gladly draw those reasons to the attention of the relevant person.

The hon. Member for Richmond Park asked why China abstained. China is not convinced about the new poverty focus. It wants the previous concentration on macroeconomic growth to continue. That is a fundamental ideological difference, and I know which side of that divide the hon. Lady comes down on—indeed all members of the Committee come down on that side.

We have had a good discussion. We are well aware of the limitations that have been placed on the operations of the bank in the past. We believe that substantial efforts are under way to change the culture. We are playing a vigorous part in that, as we are with some of the other development banks and international institutions, and we will continue to do so. I am grateful to Opposition Members for having raised their points so cogently, and I hope that I have dealt with them.

Question put and agreed to.


    That the Committee has considered the draft Asian Development Bank (Seventh Replenishment of the Asian Development Fund) Order 2001.

        Committee rose at two minutes past Eleven o'clock.

The following Members attended the Committee:
Cunningham, Mr. Jim (Chairman)
Clarke, Mr. Tom
Griffiths, Mr. Win
Harman, Ms
Love, Mr.
McGuire, Mrs.
Mullin, Mr.
Sedgemore, Mr.
Tonge, Dr.
Trend, Mr.
Turner, Mr. Dennis
Wells, Mr.

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Prepared 26 April 2001