Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 1-19)

2 JULY 2003

FIONA MACTAGGART MP, MS MARGARET ALDRED, MR RICHARD TIPPETT AND MR TONY EDWARDS

  Q1  Chairman: Welcome, Minister, and if I may say so congratulations on your appointment. We probably will have a division, I am afraid, in about 10 minutes time so I will ask colleagues and the Minister, if she is agreeable, just to go and vote and come straight back. Thank you and your officials too for producing a memorandum so quickly. We appreciated that. As you know, it is an issue which we have looked at before in relation to the Cabinet Office and the Brazilian timber which they used in that.[1] It is part of our responsibilities, as you may be aware Minister, not only to question you on the Government's policies and the targets which you have set but also to follow it through. That is the audit part of our role. Is there anything you would like to say by way of a brief statement in addition to the memorandum you have submitted before we begin to cross-examine you?

  Fiona Mactaggart: I wanted to bring the apologies of the Home Secretary, who sent me as the Green Minister, as his deputy, to speak to you today and just to introduce the team of people here, if I may. Margaret Aldred is the Director General, Resources and Performance within the Home Office. At the end Tony Edwards is our head of buildings and estate management and Richard Tippett is the department's environmental issues manager. I also wanted to say briefly to the Committee that I am glad to give evidence on the issue of our new building in Marsham Street. The incident which provoked you might be one which is not necessarily the best example of it but I do feel really excited as Green Minister that this new development is going to be a real opportunity for an environmental improvement both in our use of resources in the department and also in a neighbourly sense in that the new building we are going to construct will be a huge advantage in that part of the world compared with what was there before.

  Chairman: I am sure that is true! Thank you very much indeed.

  Q2  Mr Ainsworth: Welcome, Minister. There is no doubt that almost anything that replaces what was there before will be a great aesthetic and environmental improvement. However, as you know, terrific controversy has centred on the perimeter fence and whilst many people were delighted that this country became the first to embed sustainable procurement policies for timber across Government in 2000 the whole policy appears to be in tatters as a result of presumably carelessness over the procurement of wood for this particular fence. It would be interesting to know and I would be grateful if either you or your officials could tell the Committee when it first became apparent that timber from illegal and unsustainable sources had actually been used in this contract?

  Fiona Mactaggart: I think the first thing to make clear is that the issue was not one of oversight, to start with.

  Q3  Mr Ainsworth: So it was deliberate?

  Fiona Mactaggart: If I could continue and then do ask further questions. Most of the plywood panelling which was used to surround the site and in the walkways and so on in the site was re-used; it was panels which had originally existed. There was additional panelling which was purchased. In the contract requirement that we had with the developers AGP, there was a clear obligation upon them to ensure that timber which was purchased for use in the new building conformed to the Home Office's environmental policy and that meant that it had to be sustainably logged timber and that in addition its provenance had to be able to be certificated. The problem was that the contract did not specify that requirement for timber which was used by the company to remain in the ownership of the company, as opposed to timber which was going to be used within the building itself. This was a flaw in the contract but the contract had been written at a point when that had not been thought of honestly as a requirement within Government policy. We signed off the contract in March 2002 and that was before amendments to the Government sustainable purchasing policy in relation to timber, which made it clear that not only should we ensure that timber which is purchased for use within the building and in the construction of the building which is going to stay part of the building which will come into the ownership of Government should be included but also that timber which is used by the company which is constructing it and which will remain in their ownership—and that was not covered by a contractual requirement.

  Q4  Mr Ainsworth: The contract was signed in March 2002 but in March 2001 we have the Prime Minister saying that we promised that as a Government we will only purchase timber from legal and sustainable sources and it was a clear breach of that promise, was it not?

  Fiona Mactaggart: No, it was not. All the timber which is purchased, which will end up in the ownership of the Government in this development. So anything which was to be used in the building itself has been subject to this a clear clause, which said that not only should we make best efforts but that it should happen. It was a very clear clause. There was timber to be used by AGP, who are the developers, which will remain in the ownership of AGP. For example, the hoardings, which belongs to them, some of the stuff which had been used for shuttering, for concrete and so on would continue to be in their ownership and that has not been covered by that obligation.

  Q5  Mr Ainsworth: It should have been, should it not?

  Fiona Mactaggart: It has become clear since then through updates of Government policy that it will be from now on, and indeed we have been talking very carefully to the developers to ensure that that does happen but I do not think it conflicts with what the Prime Minister said.

  Q6  Mr Ainsworth: I think that is something the Committee will take a view on, but could you actually answer the first question I asked, when did the department first become aware that there was a problem with this timber?

  Ms Aldred: After the Green Peace invasion of the site.

  Q7  Mr Ainsworth: So it was after a member of the public had walked past the site and seen a sign up saying "Timber from Indonesia"? It just strikes me that you are not particularly thorough. Given the importance of this issue, the commitments which the Prime Minister has made, the policy which has been instructed across Government to allow this sort of thing to happen seems sloppy.

  Fiona Mactaggart: We have a very robust monitoring arrangement on those parts of the contract where we had a contractual obligation and if the timber which had been purchased for the building itself had had that it would not have been possible for it to have that provision; that is very strongly monitored. You are quite right that this part of the contract was not monitored and that is a flaw and it is a flaw which has been recognised and we have been working with DEFRA to ensure since this episode that purchases which are made by AGP or sub-contractors which will remain in their ownership will in future be monitored, but until this point we did not believe we had and we did not contractually have a responsibility to monitor it.

  Q8  Mr Ainsworth: You did not have a contractual responsibility?

  Fiona Mactaggart: No, we did not.

  Q9  Mr Ainsworth: Were the model contract on sustainable procurement and the timber procurement guidelines, which are set out in the Green Buyer's Guide, applied when you awarded the original contract?

  Fiona Mactaggart: Yes, they were.

  Q10  Mr Ainsworth: It is simply that those provisions were not applied to parts of the contract where you were not going to end up owning the timber?

  Ms Aldred: They did not explicitly make it clear that timber that was going to remain in the ownership of the contractor should be covered.

  Q11  Mr Ainsworth: Was that a problem with the Green Buyer's Guide or was it a problem specific to this particular contract?

  Fiona Mactaggart: It is a problem across Government and I have been in correspondence since this episode with the Minister in DEFRA to highlight how our experience has revealed the need for more explicit guidance to Government departments that where timber is not to be purchased for the departments or for Government but might be purchased by a developer to use in the process of delivering their obligations that there needs to be more explicit guidance about how to do that, and there will be. They have recognised that and I have had a response from them precisely about that point.

  Chairman: We will break for the vote and if you could all come back as soon as possible, please.

Committee suspended from 4.00 pm until 4.10 pm for a division in the House

  Q12  Mr Barker: Minister, I listened very carefully to the very precise replies that you gave to Mr Ainsworth's questions and it would appear from your answers that technically the contract was upheld but would you not agree that while the contractor may not have breached any specific clause within the contract there has been a massive breach in the spirit of the contract?

  Fiona Mactaggart: You have paid me the compliment of saying my replies were very precise and this is my first experience in this role and I am not sure that they always have been. For example, I might have allowed the impression that I accepted that the timber that was used was illegally imported to rest and actually it was legally imported; the question is what its source was. We do have a certification of legal importation. The question is—and it is a serious question and I think the Committee is right to focus on this question—about the provenance of the timber. I do not think that this is a question of breaking the spirit of the contract. I have gained a very clear impression that AGP as the developers in this PFI are determined to demonstrate best practice as far as is possible. Indeed, for example, before this episode that we talked about AGP on their own initiative had made a trial purchase of plywood from Finland which is coming in from forests which are certificated under a European sustainability certificate in reflection of the fact that they want to do work which is to the best standards and to find new supply chains which can enable them to do that. So I do not think that this is an example of an attempt to hide behind the letter of the law. There really was genuinely a belief that this matter was not covered by it and that it might help the company to find new sources of supply, to improve its purchasing because they recognise that Government, who is their client in this particular contract (and I believe they would hope might be the client in other contracts), would expect that kind of thing and were looking at ways of getting good value timber which met the high specifications which would be in that part of the contract which we had not included but which in future we will; that timber which was for their own purposes in order to fulfil the contract, not timber which would end up in our ownership or in the building itself.

  Q13  Mr Barker: So they fully understood what the objective of the contract is?

  Fiona Mactaggart: Absolutely.

  Q14  Mr Barker: And then knowingly and willingly imported timber that they knew to come from unsustainable sources?

  Fiona Mactaggart: I do not think that is fair at all. They have not been able fully to trace the timber which came from Indonesia.

  Q15  Mr Barker: Is that not the point?

  Fiona Mactaggart: Exactly, it is the point and it is an important point and it was about a third of the timber purchasing for their own purposes. But I think we all have to recognise that we have been going through a process of massively improving the awareness within the construction industry of the issue of sustainable logging. If we go back to the time, for example, that this contract was let we were not at the point where we are now. If we go back to the point at which it was signed we are not at the point where we are now. It is a process of change and I do not think it is fair to imply that there is a cynical disregard of the ambitions of the Government in doing this. What happened reflects the state of play within the industry at present. This building is going to be an important landmark. It is going to be in many respects at the cutting edge of good practice in terms of its purchasing policies, in terms of its impact on the environment and so on and I think that what the company was doing was to try to go beyond what it thought were the requirements of the contract, beyond the requirements that we had put into the contract. We are also now looking at going beyond that and have an agreement with them now that any future purchases which they will make for their own use, although this is not required in the contract that we signed with them, will be from sustainable sources which we can monitor in exactly the way that is written into the contract for timber which is going to be used in our building.

  Q16  Mr Barker: I must say I find it very difficult to make the leap of intellect that says that they were trying to go the extra mile and went the extra mile by sourcing illegally logged timber. I simply cannot join that up despite your very long explanation.

  Fiona Mactaggart: I am sorry, they continued their normal purchasing practices.

  Q17  Mr Barker: You said they were going the extra mile.

  Fiona Mactaggart: No, what I am saying is they continued their normal purchasing practices for about half of the timber which they used, in fact for all of the timber that they used, but some of that purchasing we did not have any mechanism to monitor because it was not in the contract and we did not seek to monitor it.

  Q18  Mr Barker: But you can ask them when you are tendering, "Where does your timber come from?" You do not have to have a contract to do that, do you, just when you are talking to the developers? That is what your job must be, Mr Edwards?

  Mr Edwards: Indeed. What the Minister is trying to get across, I think, is that we were not asking that question in respect of the timber used in the construction process.

  Q19  Mr Barker: So you did not have an overall sustainable approach, you just focussed on certain narrow areas and did not actually have a macro view on the whole thing?

  Mr Edwards: We were discussing it in general terms but we were not asking them precisely where the wood came from and what was going on precisely.

  Ms Aldred: Could I just clarify one point? I think that we are very concerned about this issue but I think the suggestion that we know that this is illegally sourced timber is one that we do not have an answer to at the moment and I think that is quite important. The timber was legally imported. It was purchased by the contractor. They have not been able to provide, as they have undertaken to do, the certificates of provenance in the time that we have had but I think that certainly it has not been demonstrated conclusively that this is illegally logged timber and that is something I think we do need to take account of. It is not illegal to buy timber from Indonesia.


1   See the Committee's Sixth Report of Session 2001-02: Buying Time for Forests: Timber Trade and Public Procurement, HC 792. Back


 
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