Examination of Witnesses (Questions 180-185)
MR SUMA
CHAKRABARTI AND
MR MARK
LOWCOCK
WEDNESDAY 24 APRIL 2002
180. Picking up somewhat on the area of co-operation
with other countries, and I accept that it is extremely difficult
to quantify one's achievements when you are one of a number of
partners, what it is possible to do, of course, is to insist that
the same rigorous criteria for the environmental impact assessments
should be applied in any programme where the Department co-operates
with another partner in a developing country. That is not the
case at present. What I think I would certainly seek your assurance
on is that the Department will look to making sure that is the
case and that you are not hiding behind the fact that this is
a project that is co-sponsored or that is delivered through another
party. Clearly if one were constructing a road in this country
a full EIA would be conducted and there are certain standards
below which we will not fall. I am happy to say that when the
Department is doing its own EIAs then often it will take account
specifically of, as we mentioned, bio-diversity. Certainly in
partnership it does not take control in that same way. I think
we would like to see that assurance that you will impose those
same standards even if you are working in partnership with somebody
else.
(Mr Chakrabarti) You have my assurance. What we have
done in the service delivery agreement, which is below the public
service agreement, is put in a specific target which is about
developing guidance with our partners to try and convince them
that this is the right way to go—to have an integrated strategy
in the way we have been discussing now, using the OECD principles,
which are excellent principles for the way in which we go about
this, and using the OECD forum to drive this through, so we will
carry on doing that.
181. Finally, I wanted to give you the opportunity
to develop more for the Committee some of the things that you
began to speak to Mr Jenkins about and that is on issues of governance
and the ways in which the Department is working with countries
to ensure that governance is a major element of the programmes
that you are putting into effect. It is really to give you the
opportunity to expand on what you said on that because I think
it is extremely important to our understanding of why aid is not,
as it has done in the past, simply going into a black hole and
why it is not getting sucked out into guns and to understand the
ways in which the Department is seeking to control the flow by
sorting out the procedures in the recipient countries.
(Mr Chakrabarti) Governance, as I said earlier, is
very, very crucial. We have taken this very seriously both on
the international stage at the World Bank and with other donors.
In every single country programme and every country I have seen
on the ground and in every strategy paper, this crops up in all
our discussions. I would expect us to make sure that we always
have the safeguards in place so that none of our money is wasted
through bad governance. We go through a lot of checks to do so.
We start off by a thorough evaluation of public financial management
systems and audit systems. We move on to make sure that the government
we are going to work with has a credible programme of improvement.
It is not enough to say, "We have got the systems, they are
okay," they must be committed to improving them. Then we
will look, where there are some risks left over, at whether the
potential benefits of working with that government outweigh those
risks and whether we have the safeguards in place to try and manage
those risks. Often it is a risky business. Whatever we do in the
Department we try and minimise risks that we can control.
Mr Gardiner: I will leave it there.
Chairman
182. Thank you very much, Mr Gardiner. Mr Chakrabarti,
you have been asked a series of questions about corruption. There
is no reference directly to the siphoning off of funds and of
course the National Audit Office have no audit evidence of that
because it did not relate to this country. However, the Report
has emphasised the importance of good governance particularly
in 3.28. My own personal comment on this is that it beggars belief
that a large part of our aid is not being siphoned off in corruption.
This is obviously an important issue which the Committee will
want to consider. You have resolutely failed to comment on it
by saying you have no evidence. You may not be able to answer
now but I want to push you further to prepare a note on this subject.
I feel sure that you must have some evidence of very large sums
we are handing over being siphoned off in corruption. It beggars
belief that you do not have such evidence. If you do not, given
what we know is going on in these countries, that is rather worrying.
(Mr Chakrabarti) I can only provide you with the assurance
I have already made about our internal audit systems, the national
audits and the value-for-money checks, which have not come up
with massive corruption—that I know of.
183. Do you not have any personal view from
your great experience in these areas? Are you not worried about
it? Are you not worried that if your internal audits are not coming
up with this evidence then there is some shortcoming in those
internal audits? Is this not a matter of great concern to you?
(Mr Chakrabarti) The internal audit people are first
rate in our Department. It may be of some comfort that if they
are not coming up with any large-scale evidence of corruption
it tends to show that our systems are working very well. That
is not to say the development effort of all donors does not have
some corruption involved. I cannot speak for other donors but
it does say that our £3.5 billion is well spent.
184. Mr Steinberg asked some very good questions
on aid to China and Russia. Here you have a fabulously rich country
but there are hundreds of millions of people living in great poverty.
Can I help you with your answer on that. Is it that it is not
so much our aid to countries like China which can make much direct
difference in terms of reducing poverty overall but that it can
change attitudes in certain area in terms of good governance or
policy making. Would that be a fair comment?
(Mr Chakrabarti) Certainly in a place like China the
demonstration effect helps to change policies and attitudes, but
also working with people like the World Bank we have changed governments'
policies in a number of areas over the years. We have been part
of the opening up of China on economic policy which has obviously
been of great benefit to the poor in China.
185. Thank you very much, Mr Chakrabarti, for
your first appearance before our Committee. Obviously it is a
subject we are very interested in because it is of great importance.
You have been asked a series of questions on PSAs but we still
accept that what you are doing is very important. On a lighter
note, may I say you are a great hero of mine because you are leading
the battle for fathers who hold down very important jobs to spend
more time with their families. Thank you for what you have done.
(Mr Chakrabarti) Thank you. I see it is 6.15. I should
be home already!
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