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WEDNESDAY 4 DECEMBER 2002 __________ Members present: Mr John Horam, in the Chair __________ Memoranda submitted by Royal Society for the Protection of Birds (RSPB) and Friends of the Earth Examination of Witnesses DR PAUL JEFFERISS, Head of Environmental Policy, and DR DAVID ELLIS, Trade Policy Officer, Royal Society for the Protection of Birds (RSPB); MR MATT PHILLIPS, Senior Campaigner, and MS LIANA STUPPLES, Policy and Campaigns Director, Friends of the Earth (FoE); examined. Chairman
(Dr Jefferiss) If that is convenient and possible, it would be preferable for me; it is not essential. (Dr Jefferiss) I had a few, very brief comments on behalf of the RSPB, just to say that my role at the RSPB is Head of Environmental Policy, and in that role I co-ordinated the RSPB's activities regarding Johannesburg and led a six-person delegation there. In addition, we participated both through the Green Globe Task Force, which advises the Foreign Office, and UNED Forum, on which I sit as an Executive Committee member. I am also a member of the Development and Environment Group. I was also on the Government delegation in Bali, and RSPB was represented on the Government delegation in Johannesburg. So we have a number of direct and indirect engagements with the process; and also we produced two or three specific projects for Johannesburg, which David Ellis, our Trade Policy Officer, was briefly going to list. (Dr Ellis) Very briefly, the projects we took to Johannesburg focused on education for sustainability, on the economics of conservation, and on indicators for sustainable development, and we worked also with Birdlife International as a global partnership, with representatives from 17 of our partner organisations, many from the south. (Ms Stupples) My name is Liana Stupples. I am Policy and Campaigns Director at Friends of the Earth, and my prime responsibility with regard to Johannesburg was co-ordinating all the work of Friends of the Earth here in the UK. And my colleague Matt was responsible for co-ordinating all the work of our partner organisations in Friends of the Earth International, particularly around our corporate accountability agenda. I think the only other thing that I would mention is that because we are an international network, consisting of more groups from the south than from the north, we brought a unique perspective for an environmental organisation to the discussions at Johannesburg, and I am happy to elaborate on that if you would like. Chairman: Thank you very much indeed. Mr Thomas (Mr Phillips) A u-turning-point. It was a bitter disappointment and, frankly, from the perspective of a lot of the groups in our confederation, particularly from the global south, they felt it was a betrayal. They felt that a lot of people in the south had very high expectations of what world leaders coming together to discuss such important issues could deliver. This was billed as the biggest ever Summit, more world leaders than ever before attended a major UN Summit, and yet those people could only agree such a weak set of specific commitments, or a short number of specific commitments, and such a large number of general, vague commitments, some of which even appear to be climbing back from previous commitments made. So I think that is why bitter disappointment was the reaction that people had. Was it a turning-point; well, overall, it probably did not go back from Rio, but it did not really advance us any further, and some of the other horses in the global race, like the free trade agenda that has been coming out through the WTO process, were actually advanced through this process, which might mean that really it was put back substantially. (Dr Jefferiss) I think how you evaluate the outcome of Johannesburg depends on your starting-point and expectations. I think most expectations amongst environmental groups, and certainly the RSPB, were that it would identify a blueprint for action on commitments already made, rather than necessarily make new commitments. And I think that, to the extent that there were very few specific actions identified and that some existing commitments actually came under pressure and that there were really very few new commitments, it should be regarded as a failure. It was certainly a missed opportunity and certainly wholly inadequate to the challenge that we face; so, yes. On the other hand, I think, from a practical point of view, midway through Johannesburg itself, it looked entirely possible that it would be a u-turn backwards, and that it ended up not being quite that bad I think was a source of some relief for those who were present. But that is rather damning it with faint praise, I think. (Mr Phillips) I think I would just echo Paul's comment, that there were some extremely damaging things which were fought off. So, for example, there was a very strong push from a number of governments to make previous multilateral environmental agreements, like the Biosafety Protocol, CITES, and so on, compliant with WTO rules, and essentially subservient to WTO rules. So if, for example, it contradicted the WTO Dispute Panel then the need to protect big-leaf mahogany would come second. Chairman (Mr Phillips) By and large, it was the northern governments, so the European Union, US, Japan; so that was actually fought off, so in other words there was a kind of civil society reaction, a huge amount of lobbying, campaigning effort, which resulted in a few key governments, like the Ethiopian Government, standing up to say, "No, we're not prepared to actually see this happen." So that is an example of how things could have been worse. Yet peppered throughout the Johannesburg Plan of Implementation, there are dozens, if not hundreds, of references to the free trade agenda, and the Doha trade agreement, which really shows where the priority is from the key governments who were driving the process, and those governments see that agenda as predominantly the one where they want to get most of the gains. And so they saw a lot of potential to get something out of it, and some of that was fought off, like that particular clause within the globalisation text, which was a very important battle. But essentially those references do indicate that there is a serious issue out there which as yet has not been resolved, which is the preparedness of the international community to deal with the downside of globalisation. Mr Thomas (Ms Stupples) Matt was before this Committee and he did raise the issue of corporate accountability, and I think we felt that generally we were patted on the head a little bit, not by the Committee, but in general, and told, "Well, yes, very nice, Friends of the Earth, but that's not really what the Summit's about." I think it is testimony to how important that issue did turn out to be within the whole context of the globalisation debate, that the two 'globalisation' paragraphs, and the corporate accountability paragraph in particular, were amongst the last things to be agreed. They were also subject to a whole lot of rather interesting tactics by the US Government, for example, in the form of trying to put footnotes to the Chairman's final text, and other attempting things, to roll those paragraphs back. So I think, in fact, because the UK Government, as an example, did not actually have its agenda ready on these globalisation and corporate accountability issues, they were caught a little bit wrong-footed at the Summit itself. This is because both they and the business lobby, in fact, did not have an answer to the questions that we were raising, about, "Fine, if you only want to go down the voluntary approach, or the partnership approach, how are you going to deal with the free-riders, or" as Matt would call them, "the bottom-feeders", i.e. the companies that are not prepared to do their bit? And that question, I think, indeed did capture some of the soul of Johannesburg - rather than be formally on the agenda it was certainly in the air. And I think that showed up that, without wanting to praise our own efforts, we had identified something that other people had not been ready to debate, and that did turn out to be the undercurrent for so many issues. (Dr Jefferiss) Yes, I think that, far from being marginal to the process, trade, aid and governance turned out to be the three absolutely crucial issues to the process, and movement in one direction or other on those turned out to be pivotal as to getting movement on the particular sectoral issues, like biodiversity, fisheries, chemicals, corporate responsibility, and so on. And I think we were in a position where the US very definitely wanted trade concerns essentially to dominate over environmental concerns. On the other hand, you had a situation where members of the G77, I think, were looking for concessions on trade and aid. On trade, I think the US especially, but also the EU, were unwilling or unable to make those concessions to the G77, partly because it was felt that Doha had dealt adequately with trade, and Monterrey had dealt adequately with aid, which clearly was not a position shared by members of the G77, who felt that, in return for requests to agree specific targets and timetables on issues like biodiversity, they wanted to see specific movement on trade and aid, which was not forthcoming. And I think the result was that there was virtually no movement on trade and aid, which, central though it was, was considered to lie outside the domain of Johannesburg. There was arguably some deterioration of the position on trade, in that references to the precautionary principle were systematically weeded out. With respect to the specific sectoral issues that could be traded against the trade and aid issues, there was some slight movement forward on some issues, the sanitation target was obviously welcome, and there was some slight movement backwards, for example, the biodiversity formulation was somewhat weaker than it had been previously. So I think perhaps the net result on specific issues was more or less even, the net result on trade and aid was more or less no progress, but slight movement backwards perhaps. (Dr Ellis) I think I would just add that the Summit got off to a very bad start, with regard to trade and globalisation, because of a US/EU non-paper that was circulated, which was essentially a rewriting of the whole section on trade and globalisation. And I think, from a developing country point of view, it just cast a shadow over the whole Summit, because it looked as though developed nations were trying to forge the agenda on trade and globalisation. (Dr Jefferiss) If I can follow up briefly, because I think you have hit the nail on the head by raising trade and aid issues. I think, because the EU seems to have failed to recognise how crucial trade and aid were, its negotiating strategy with respect to all the other issues on which it did want to see targets, timetables and plans of action was extremely weak. It had no negotiating leverage on those issues. Because it had already made such concessions as it was prepared to make in Doha and Monterrey, it could not make any further concessions, because CAP reform and CFP reform were already being discussed separately within the Union. And so essentially it was hamstrung and it was asking for things without having a lot to offer in return. (Mr Phillips) Yes, I have got some comments around that area. I think our teams welcomed the fact that there were a lot of ministers involved. Ultimately, in the end, a lot of ministers did want to get involved in what was going on and did have some views. But there was certainly an approach which the Government took which did not really answer the key questions. The Government came forward essentially with a strategy which was presenting itself as wanting to alleviate the world's poverty, and seeing that as something which was not, in the first instance, a fundamental part of sustainable development. And so, as a consequence, we had, for example, Clare Short talking about the environment versus poverty alleviation as being one choice against another, and, of course, the sustainable development agenda. It is a very old hat position to take; that was the position which some governments were taking back in 1991 before Rio. The whole point about the Rio agenda and what happened at Johannesburg was it was supposed to reconcile these points and pull them together towards a fundamental strategy. The UK Government put forward an idea that it was going to solve the world's poverty problems through pushing forward on the Doha trade agenda, and it took that idea with it, within the EU, which by and large agreed and took that to Johannesburg. And I think, as Paul clearly pointed out, the G77 does not buy that, it sees it as part of a much bigger package which includes the funding, the aid side, where were the governments really committing to their 0.7 per cent GDP Aid that they all agreed to many years ago; we had governments instead pushing forward a partnership process, which many governments, especially in the global south, felt was really just sort of locking in northern transnationals having more control, more access to their services, and so on. So we saw a process where the Government's agenda which it wanted to put forward, which on the face of it had very clear, good intentions around things like poverty alleviation, actually missing the point about sustainable development and not building the connections, and in the end putting forward an agenda which I suspect they will try to push again through the Cancun Trade Ministerial, coming up in September next year. Joan Walley (Dr Jefferiss) Forgive me, are you asking how Type II voluntary arrangements might undermine Government - - - (Ms Stupples) I can make a quick comment about the GATT, using as an example the current GATS process. I think the key point to note about the GATS is that it has some elements that are unique amongst some of the WTO agreements, in a number of respects. The first is that perhaps for the first time it could start to, and I probably use this word quite deliberately, meddle with domestic legislation, so that, for example, it could start to impact on some of the key tools that we have got here in the UK to implement sustainable development. I am talking there about the town and country planning regime, or Government procurement rules, or things like that, and it is still up in the air at the moment. But I do not think the Government actually has done a proper assessment about what GATS would mean here in the UK, certainly parliamentarians have not been actively involved in it. I do not think the current consultation that is out from the DTI really has given anybody a good chance to examine what the potential impacts will be. So that is the first point, that it could severely hamper our policy choices about how we would want to implement sustainable development. The second point is that the GATT agreements have a lock-in aspect to it, so that once you have signed up certain sectors to the GATT rules then it is kind of irreversible, and I think we need to think about that in terms of keeping open policy choices for the future. And I think the third thing about the GATS is just generally about the influence it could have on the UK's footprint on the rest of the world, (which is something which we have highlighted in our evidence as being the missing element from both the UK Sustainable Development Strategy and the EU Sustainable Development Strategy). Bearing in mind the north's huge responsibility to be able to recognise its impact on the global south, decisions about GATS offer a clear way where we could be more mindful of what the GATS would mean in terms of forcing southern countries to open up their markets to northern service companies. So, in that respect, I think GATS is a kind of microcosm of what the WTO agenda may mean, in terms of limiting our ability to be able to respond in the way that we may need to in the future, to be able to address the huge challenge of sustainable development. (Dr Ellis) It is an interesting comparison to make between GATS and voluntary partnerships. It is interesting that we finish up talking about the WTO when essentially we are talking about the Johannesburg process. But I think the comparison I would like to emphasise is between the Type II and the Type I. Where is the accountability in the Type II partnerships, for example, and what is their relationship to Type I? I t still does not seem clear. And also that they should not be in any way a substitute for robust inter-governmental action at the international level. (Dr Jefferiss) I think that the extent to which the relationship between inter-governmental negotiated processes - multilateral environmental agreements, so called - and various international trading agreements is unclear, the relationship between Type II or voluntary agreements and international trading agreements is even less clear. And, as Liana says, I think, in a sense, that opens up even greater potential for WTO abuse of good faith efforts, either formally negotiated or voluntarily undertaken, to pursue environmental and social goals. And if that is the case I think that is a real problem that has to be solved. Mr Jones (Ms Stupples) I think the first point is to say that we are supporters of multilateralism, we do need a rules-based system to be able to run a globalised world. But I think the difference about some of the trade rules is that they restrict the operation of government, they rule completely on whole policy types as a 'no go' areas, whereas, within the multilateral agreements, say, on environment, they are, a consensus about, "Well, okay, we're going to agree that we will, for example, under Kyoto, gradually reduce our climate change gas emissions." But actually that is not ruling out a whole policy type, like, for example, government procurement, or wanting to use certain kinds of regulations. I think the example that I would use, which brings us back to the Johannesburg agenda, where we do see that there is a case to be able to have a new set of global rules, is that is in the area of corporate accountability. For example, you could make an argument that some of the Type II agreements are all well and good but if they were done within an overall framework of being able to establish that citizens, for example, have got certain rights with respect to big business, for example, the right to be consulted, the right to hold large multinational companies accountable for their activities locally, then at least that would start to redress the balance and set up some kind of global system for how you work in a globalised world. We would say also that it is entirely reasonable that you would want to have requirements, for example, about disclosure, so that multinational companies should be required to disclose their social and environmental impacts, etc., etc. And I think that is one of the things that we were quite pleased that managed to emerge from the Johannesburg agreement, that there was at least a door opened for those kinds of discussions to begin, about how we might be able to set up a rules-based framework around the world that is both providing some structure for big business to operate in and some rights for citizens. I think what we are concerned about is that the WTO actually takes the completely opposite approach, where it seems to be systematically infringing on the rights of citizens and democratically-elected governments to use the policy choices that they want, while at the same time giving more rights to large multinational corporations to be able to do what they want through the deregulatory agenda of the WTO. (Ms Stupples) With the permission of the Chairman, I am more than happy to prepare perhaps just one side, being more explicit about what I mean by GATT. (Dr Jefferiss) I think we are better off for having had it. I think it would have been a mistake had we not had it. I think, had the outcome taken us backwards, I am not sure. I would have said the same thing, but, given that it left us pretty much where we were, I think it was a good thing in that it focused minds, I think, around a series of key issues. Whether or not it penetrated the public's consciousness I am not sure, I think it must have done to some degree, both positively and negatively, according to how it was reported. Certainly I think it has made governments pay greater attention to the degree to which existing mechanisms have delivered or not delivered. It focused attention certainly on coming up with some new mechanisms and certainly some new energy, political energy, directed towards achieving certain outcomes, albeit voluntary, and I think the jury must still be out on those things. I think perhaps it has made the international community consider whether or not it is possible to conduct international inter-governmental negotiations at a global level across such a broad range of issues. And, if not, what are the alternative mechanisms for doing that. Are they regional discussions, are they sectoral discussions, are they sub-global discussions? Certainly I think it has created the opportunity now, and the momentum, for governments, either individually or collectively but not globally, to get together to do something substantive. I am not talking just about voluntary action to do something substantive. I am talking about the possibility of multinational, negotiated, formal, legal agreement to do something substantive. The UK is well placed to take leadership in that, the EU certainly is, and the EU, I think, in itself, can both play a leadership role and contribute, because it is a large and growing bloc of countries. (Dr Jefferiss) I will let Friends of the Earth answer as well. Obviously, there were some negative outcomes. Clearly there was no agreed target on renewable energy; at the same time there was a positive outcome in that there was a declaration, seemingly with some political momentum behind it, to take forward a coalition to develop renewable energy notwithstanding, and I understand that that group has met already, in Brazil, since Johannesburg. And, as I say, on the negative side the jury is in, on the positive side the jury is perhaps still out. Chairman (Mr Phillips) I am not sure it is necessarily the southern nations which would regard it as a disappointment; certainly, the other south, the civil society of the south, regarded it as a bitter disappointment. (Mr Phillips) That is a challenge, in part, to the whole question about the United Nations and the idea of the United Nations having a role which does involve governments coming together. One thing we have got to recognise is that, in principle, the Summit was a good idea, because essentially it acknowledged both the global nature of environmental and social issues and the need to deliver globally, nationally and regionally and locally. (Mr Phillips) That may be the case, but I do not think we want to throw out the baby with the bath water, I do not think we want to undermine the UN. And I think one of the things that Johannesburg suffered from is, it suffered from democracy. Because the UN is a more democratic system than something like the WTO and the Bretton Woods institutions, actually it does give this impression of chaos. And certainly it is also the case that when the Johannesburg Summit did not fail it was killed, there were governments who actually had an agenda which came from the outset about not having any timetables and targets; and those governments we can name, they were the United States, Canada, Japan, they did not want targets and so they actually killed off this process. And one thing we do get therefore from the wider understanding of what happened through the process is that we get to be able to point our finger at who was letting down the world, and point out the difference between a global player who does want everyone to come behind them when it is a coalition, in favour of what their interests are doing against terrorism, or for a war in Iraq, but is not prepared to do something which is in the global interests. And I think that issue remains crucially important, and we do still need to be able to have the world come together on global issues. I agree with you, there may be other, innovative ways of doing it, but unfortunately the way innovation has been addressed, in terms of these global processes in recent years, has resulted in the kind of thing which came out of Johannesburg, which was this mass of partnership processes, which really do not look like delivery of sustainable development. Mr Challen (Dr Jefferiss) I think, with respect to the UK's approach to sustainable development, they are replicated but not to the same measure. I think there is a greater degree of coherence within the UK's approach to sustainable development than there was at the global level, and I think perhaps that is inevitable, in view of the complexity of the event in Johannesburg, and I think probably the EU is somewhere in-between. It is certainly a complicated, confusing set of processes at the EU level, but they are more coherent perhaps than those at a global level. I was encouraged, actually, to read the conclusions of the Environment Council and the General Affairs and External Relations Councils, both of which seemed to recognise that there was too great a confusion of instruments and processes at the EU level, and that they should be integrated with each other and brought together - the Cardiff process, the sixth Environmental Action Programme, and Sustainable Development Strategy, and so on. And I think there is perhaps corresponding recognition at the UK level. I understand that UNED UK has been hired to conduct a process whereby consideration is given to bringing the UK Sustainable Development Strategy into conformity with targets and actions agreed under Johannesburg. In a sense, I think the recognition of that confusion and the attempt to do something about it is one of the kinds of corollary positives that I was trying to identify from the Johannesburg process. (Ms Stupples) To deal with the second one first, I thought another way that we managed to stop bad things happening is, the collective NGO victory in getting Michael Meacher to attend the Johannesburg. And I think, that was a symptom of how environment had been downgraded. It seemed to us to be more than slightly foolish to leave behind one of the best advocates for the environment and indeed the wider sustainable development agenda in the Government. So you can read into that what you will. On the one about how does the UK Government's approach to sustainable development really reflect some of the things we are talking about. If you could take just a few examples of the next layer down, of prosaic things that are on the agenda anyway that the Government has got to deal with, I am talking here about the Waste Strategy, its Energy White Paper, a new Planning Bill coming out, new chemicals legislation mooted at the EU level, there are paragraphs in the Johannesburg Summit about, for example, wanting to maximise recycling and really beginning to address this resource productivity and consumption issue. And yet, basically, a month or so after, then we had the new Government Waste Strategy coming out, which said clearly there were three options that it could have taken, about how much recycling it wants to do by 2015, and it did not take the option that would maximise recycling, it took the next option down, which would do a bit more recycling and still quite a lot of incineration. Chairman (Ms Stupples) I think that, in fact, it did ignore Johannesburg, or certainly did not take it to heart. And the point I just want to make is that why that happened, I think, was because of a good old-fashioned argument between the Treasury and those people who were dealing with waste, and so that to me indicates that that joined-up government is not there. Ian Lucas (Mr Phillips) I think definitely I have got very strong views on this, because the south is in the state, as I was saying, for a number of reasons, and some of those are internal failures of governance, for one reason or another, others essentially are because of the state of the global system. And we have a global system which is working principally in the interests of the global north, the global north is consuming most of the world's resources, the global north gets most of the benefits of those resources reallocated to them, through the repatriation of profits, the global north has the most successful transnational corporations who are able increasingly to get access to those southern markets. The Governments in the global south then are facing this iniquitous situation, and under those circumstances, where they are facing situations like crippling debt repayments, it is not surprising that those governments are desperate to seek any incoming investment of any kind. But, of course, there are two global souths, there is the global south of those governments and there is the global south of the citizens of those governments and civil society, who do not necessarily take exactly the same view as their governments about what the solutions are. You can see how a government in the south might see benefits to big cash crop farmers getting hard currency in, to help them pay off their debt, but that does not mean necessarily that the peasant farmers in that country really feel that access to northern markets is the solution to their needs, those peasant farmers are more interested in food security and food sovereignty. So you can see there are different prescriptions which come from the south compared with the north. It is true, of course, then that under the circumstances you have got a number of southern governments cannot deliver on sustainable development, they cannot do it, and of course they are desperately going to seek any form of development if it appears to be a solution. But the dice are stacked against them, and, the people who are winners at the moment, that situation is going to continue under the policies which are coming forward from the global north, so the inequity is going to continue through processes being put forward such as Doha, and going to continue unless those citizens in the south have rights to be able to challenge the things that go wrong in their area. So unless governments have a prescription for the bad practices we cannot get a solution. Sue Doughty (Dr Jefferiss) Briefly to answer that question. There is no reason to abandon it, it seems to me that good can come out of that and similar processes. I just would not regard it as a substitute for inter-governmental action. And in response to the previous question, I think the answer to your question is, "that is why trade, aid and governance were the crucial issues in Johannesburg". I think the south was looking for concessions on trade and aid, particularly on aid. If we expect them to do something they need to be funded to do it. If we are expecting them to provide better domestic governance, we have to pay them, we have to help them, through trade and aid, to do that, and that is an inter-governmental responsibility. But I think also there is a role for voluntary partnerships and business partnerships at a global level. But I just think they need to be funded, monitored and held to account. (Mr Phillips) And I think the crucial point we were making about the voluntary processes is that they just have not delivered, in terms of sustainable development. But do not believe us, this is what UNEP were saying, earlier on, I think I probably referred to it, in previous evidence, they said the majority of companies are continuing business as usual and only a small number have embraced sustainable development. And yet that is the prescription which has been put forward by the business lobby groups, that is what they said. But they did not go to Johannesburg with any suggestions about what to do about bad business practices, and they went there specifically to lobby against the idea that we need international rules to deal with international companies. And so it is absolutely clear, from our perspective, that, because the voluntary schemes simply have not delivered, we cannot assume that ever more voluntary schemes or ever more dressing-up of the same voluntarism can work. Obviously, you can see a way in which some kinds of businesses would benefit from international rules, those businesses which are embracing sustainable development and which are moving forward, and maybe those which are small and medium-sized enterprises, which count as being part of local economies, those are perhaps where the solutions should be lying. But, other than some sort of vague hope that chief executives will embrace sustainable development, what are governments going to do about the bad business practices, what are they going to do; they did not actually go to Johannesburg with any ideas about what to do. We put forward some ideas about what the solutions are, and, okay, some of the governments did not agree with us, but we did see some progress with some of the text, which perhaps opens up a door, but only if governments actually start to reflect on what to do about the downside of bad business and the downside of their corporate globalisation. Gregory Barker (Ms Stupples) There are two quick points I would make under that heading. I think Africa itself does acknowledge that problem there are references in the NEPED initiative and things like that which are talking about looking at internal governance as part of a whole package. I guess I would question your assertion that corruption is the main thing. I think definitely it is one of those issues that does play a part, but I think it could be overplayed, particularly in saying, "Well, it's your own fault, you sort out your own internal governance and then we will bring more aid, etc." I think it has got to be a little bit more sophisticated than that. But a key point that I would make in terms of what we mean when we say corporate accountability, we are talking not just about rules for big business, for example, "You have to produce audited accounts that take account of environmental and social impacts," we are talking also about setting up some kind of mechanism for rights for citizens. And this could take a number of forms, in terms of perhaps looking more at how an international environment court, or something, could operate, so that citizens actually would have a right of redress that, if necessary, could go even beyond just their national boundaries. You have got classic examples about some of the great tragedies, such as Bhopal, where because of the international structure and the way corporations can hide their liabilities, through various shell companies, you cannot actually get back to the real perpetrators. The Prestige oil spill, earlier this month, was a classic example of that, where in a new globalised world you have got all these kinds of mechanisms where companies can hide from their accountabilities. And if we can find ways that can empower citizens to be able directly to hold those companies to account then perhaps the individual foibles of particular developing country governments would have less impact. (Ms Stupples) I agree with you - foibles is too weak a word. But I am talking about how we are always going to have problems about going through governments. I think that is why we are emphasising citizen rights as well as dealing just with governments disbursing particular amounts of money. I think that is another point that we would like to emphasise. Mr Challen (Dr Jefferiss) I think we need to divide the question into different types of audience. In terms of stakeholders immediately concerned with the Summit, I think the Government's communications before and after the Summit have been inadequate. There have been communications but not enough. At the Summit itself, I would say they were pretty good, they were pretty much excellent, we met with them regularly at a high level, and I have nothing but praise. I think, particularly since the Summit, there has not been enough communication with immediate stakeholder groups. With respect to the public at large, although there was an effort to connect with the public positively, that effort I think must be said to have failed. I would not lay blame at the hands of particular civil servants or the team of civil servants who were trying to handle communications. I would say simply that there were insufficient staff and insufficient funding resources devoted to the communications effort. And, I agree, it is an opportunity that has been lost, although not irretrievably, I think. I think there is still opportunity now to retrieve it. I think the big problem faced by the Government now is that many, many, of the key civil servants involved in the process have already left either Government altogether or the department that was relevant at the time, and that applies to the most senior officials in Johannesburg. So I think pretty quickly the Government needs to put in place machinery, funded and resourced properly, to fill that gap, and I think it would be helpful also if there were some high-level political statement regarding the importance and follow-up of Johannesburg. (Dr Jefferiss) I think, behind the scenes, and particularly towards the end, running up to Bali and particularly between Bali and Johannesburg, communications in Whitehall were quite good and got better and better, and sort of peaked just before the Summit itself. There was an interdepartmental group that met regularly to discuss key issues. I believe that group is still meeting, although I do not know how much vigour it has behind it, and I know that Dinah Nicholls, who was chairing it, is going to be moving on shortly. I think corresponding communication and co-ordination at the EU level was much less satisfactory, perhaps for obvious logistical reasons, and I think that was reflected at Johannesburg itself. (Dr Jefferiss) If there is, that forum has not been established properly yet. Certainly there was an informal group of interested people who tended to attend meetings regularly, but those meetings have not been formalised, to my knowledge, since. There was one meeting on October 9 for stakeholders, but it was limited to very few environmental representatives, and the RSPB was not invited to that meeting. (Dr Jefferiss) We have asked to be included in any action arising from the meeting on October 9, and, as I mentioned earlier, I believe UNED UK has been asked to co-ordinate a process of input to revising the UK Sustainable Development Strategy. Mr Jones (Dr Jefferiss) Obviously, you would have to ask them, but I can say that my observation was that they worked extraordinarily hard. I have never seen human beings work as hard as that team worked before and during Johannesburg. I too worked very hard, from my own point of view, and did experience a certain amount of burn-out following, and I can understand if they did choose to move on because they were exhausted, but whether or not that is true I do not know. (Mr Phillips) Just to comment on this communications point, and I do not know whether I mentioned it the last time or not, but I was just very struck by the difference between what happened just before Doha, when Tony Blair got in an aeroplane and travelled round the world drumming up interest in free trade, and that resulted in a great deal of publicity about the general issues that he was trying to raise, and he combined it, of course, with a trip to South America, so there were other things going on there as well. In comparison with Tony Blair's eight-hour visit to Johannesburg, it is a very striking comparison as to where, at the highest level, the priority was put. And that is how the Government could have been on the front foot in terms of publicity. However, the other side of the coin is that the rows that came up did at least allow a debate, and so there was at least a public debate, and on the whole the public debate was greater in the United Kingdom than it was in other countries. And so, for example, the no show of George Bush sort of sterilised media interest in the Johannesburg Earth Summit in the United States, and had George Bush gone along then things would have been a lot more exciting in the US. So that kind of level from Blair would have been a bit more of a dramatic way of getting interest. (Dr Ellis) Can I just add, on the communications strategy, that we have tended, I think, in the UK to see sustainable development as something international rather than domestic, and I think one of the biggest missed opportunities was to link poverty internationally with sustainable production and consumption back home. Joan Walley (Dr Jefferiss) I think the broadest answer to that is through the education system, both in the UK and around the world. And in recognition of that the RSPB produced a Teacher's Guide to sustainable development, based on the themes of the Summit, which was distributed to all South African schoolchildren aged 11 to 14. And, although there are obvious particular structures that can be set up outside and beyond the formal education system, it seems that building sustainable development into the curriculum itself across the board is the most sensible and comprehensive way to instil sustainability into the minds of young people. Chairman: Thank you all very much indeed. That has been an extremely helpful session. Thanks for your very frank comments. Memorandum submitted by Business Action for Sustainable Development Examination of Witness RT HON LORD HOLME OF CHELTENHAM CBE, a Member of the House of Lords, examined. Chairman (Lord Holme) I am grateful for the chance to appear before the Committee, and I am grateful for your injunction, both to your members and to me, to speak up, because one of the few respects in which I am admirably qualified as a Member of the House of Lords is that I am slightly deaf, so I particularly appreciate your help on that. I think I would like to say that the Johannesburg Summit was a great deal better in its outcome than many people feared, the predictions of a breakdown were not justified, and although the targets agreed were relatively limited they were nevertheless in line with the Agenda 21 Millennium Declaration targets. There was a lot of useful interaction at the Summit, rather like the Edinburgh Festival, a lot of it happened on the fringe of the Summit rather than in the formal proceedings, but that was useful, I think, for all stakeholders, including business. And from the business point of view, we believe that it is better understood now that even if business is sometimes part of the problem it is almost invariably part of the solution to these problems of sustainable development, and therefore it is just as well that the notion of partnership and implementation of what was agreed at the Summit is now at the top of the agenda. Chairman: Thank you very much indeed, Lord Holme. Ian Lucas (Lord Holme) That is absolute nonsense, and I cannot believe it can be taken seriously by anybody who was actually at the Summit. If we had not had business attend the Summit, we would have had immediately the complaint that "Business doesn't take this seriously." The moment we got a large business delegation of companies, nearly all of whom are very committed to sustainable development, responsible companies there, then there were people ready to say, "Well now you're trying to take over the Summit." The truth is that business is just a voice, like others, in an international dialogue that goes on. I am quite certain that nobody on the UK delegation would say that they were subject to excessive influence from business in any decisions they made, and I am not aware that was true elsewhere. We spent most of our time trying to find the sorts of partnerships that we could usefully carry forward the agenda of sustainable development in the real world in which business has to live. (Lord Holme) I think it is very important to understand, first of all, why people might want to have global regulation, if I can call it that, and, secondly, what the appropriate response to it is. Clearly, there is no proper line that you can draw, in all societies, at all times, between voluntarism and regulation. That is a shifting line, it depends what works. The danger of having a 'one size fits all' global set of rules for corporate reporting, which was the proposal being announced, is patent, which is for instance that confectionary companies are not the same as construction companies, that different regions of the world have very different requirements, and that different nations have extremely different requirements on reporting. And the great danger is, if you go down what is effectively a slogan route, you end up with the lowest common denominator, a relatively meaningless thing, which becomes part of gesture politics rather than the real world of trying to encourage companies to report specifically on things that affect the sustainable development agenda. So business was not resisting the notion of reporting. Indeed the companies there are amongst those who are the keenest on companies reporting and being transparent in what they do. It is simply exercising a certain amount of care in not arriving at some gesture-led, lowest common denominator, 'one size fits all', which does not reflect the real complexity of the world. But this is a debate that will go on, and we will play our part in it to try to make it as realistic as possible. If I can add one word, Chairman, the most hopeful development is the Global Reporting Initiative, which I am sure members of this Committee are familiar with, and the value of the Global Reporting Initiative is that it is supported by all stakeholders - trade unions, NGOs, businesses, governments. Incidentally it is having a very great deal of difficulty, although making progress, I am glad to say, in trying to define, for instance, in the area of social reporting, what it is that would represent good performance by companies. So we are not talking here about something so patently obvious everybody understands what the right measure would be, that it is self-evident we should go ahead with it, there is still a lot of constructive work to be done. Mr Thomas (Lord Holme) There were 900 business representatives at Johannesburg, representing some 220 companies, so that gives the quantum of people there; and, of course, in terms of a conference, as you know, having been there, where there were 60,000 people, that is not perhaps a great many, so you could be forgiven for not falling over us. For instance, at the UK daily briefing, there were scores of NGO representatives, and perhaps two or three business representatives. (Lord Holme) Two or three is about all we could have, I think, from a national delegation, because there were only 900 of us altogether, and there are a great many countries in the world, as we are all aware, and people were going to their own national delegation meetings. But certainly there were business representatives at most of those, most of the time. We did not regard the main function, and this addresses itself to the earlier question, as being there to lobby for a particular outcome, we were there first of all to engage positively in some of the discussions, and secondly to see, when it came to the partnerships for implementation, that we were there playing our part. And when we set up Business Action for Sustainable Development, which was an international business coalition, not simply a UK one, and interestingly with quite a lot of UK leadership, with Mark Moody-Stuart, myself and others, our purpose was not to be there with our noses pressed to the window outside the Summit, but there taking part. And it was certainly not to be in the dock being accused by the more adversarial campaigning NGOs of all the evils of the world, we wanted to be there as constructive, engaged partners in the process, but we were not there primarily to lobby our way, line by line, through the text. And, as far as I know, there was relatively little of what you would call business lobbying before the Summit, because, on the whole, the job of business is to deal with what Governments decide is the appropriate policy and try to find opportunities and make a stronger basis for their own planning. That is what business has to do. (Lord Holme) I am afraid your assumption is absolutely wrong. The Global Compact, which has been criticised by some adversarial NGOs, was an attempt, two and a half years before the Summit, to demonstrate, with UN leadership, that business was engaged in these issues. Many large companies are members - and I myself am a member of the Executive - of the World Business Council for Sustainable Development, which has 160 of the largest companies in the world, who take these issues seriously, acting on them. The International Chamber of Commerce, which has 8,000 members, is seriously involved in these issues. In the United Kingdom, the ICC National Committee has a sub-committee both on the environment and sustainable development. Business is positively engaged in these issues. And really, if I may say so, you should not mistake sound and fury and campaigning slogans for engagement; we are positively engaged. (Lord Holme) Of course, you can always learn and improve, and I am sure we would at another Summit. I am sceptical myself whether we are going to have another Summit quite like Johannesburg in the next five or ten years. I think everybody will learn, because the preparatory process in which business was very involved, in Bali and New York, was a shambles. It was an extremely unfocused, unsatisfactory preparatory process for preparing an agenda for any meeting, and we have learned lessons from that, all of us, not just business but other participants, that you do not have a good Summit without a good preparatory process. Chairman (Lord Holme) I heard evidence being given as I came in about the brevity of the Prime Minister's visit, and, of course, President Chirac was there for only 18 hours, and so on, but it is quite clear that a Summit of this sort has to be pre-cooked, you have to have Sherpas, you have to have an agenda prepared, you have to have a focus on a limited number of issues, because all the nations of the world cannot discuss everything at once. And I think that it is quite clear to everybody engaged in it that there would have to be a much more coherent preparatory process involving the sort of leadership that I think, fairly belatedly, the British Government adopted, much earlier in the process, working with like-minded nations, and above all trying to get some sort of consensus between the three main political players, who are G77, the European Union and the United States. And it is probably true that in the absence of US leadership, which was very conspicuous at the Summit, it is very difficult to get international agreement, but nevertheless I think that the preparation could have been better than it was. Mr Savidge (Lord Holme) I think it is probably a fair comment that the level of engagement is higher among European-led companies than it is among US companies. There are a number of very honourable exceptions to that in the US business community, for instance Proctor & Gamble, General Motors have become very involved, but some of the US major oil companies are not involved. And it is fair to say that there is also historically a very different approach to these matters in the US, where American companies feel that a combination of the invisible hand and philanthropy represents what we would think of as corporate social responsibility, so there is a different approach to the whole matter. But, having said that, the US CIB, which is the sister organisation of the International Chamber of Commerce in the US, is now very engaged in these issues and there is a growing number of American companies, some of them in the chemical industry, Dow and Du Pont, who are increasingly engaged, as well as the ones I have mentioned. So I would say, for those who are critical of how far behind we are in Europe, let me put it this way, the US is further behind. Sue Doughty (Lord Holme) I think there is an element within the NGO community which deplores all progress, because it makes it less easy to find opponents to demonise and against whom to use arguments and against whose performance to raise money and raise membership and raise enthusiasm. Now I deplore that, because I think the only possible future for these large issues is for companies and NGOs and others to work together to try to solve them. Insofar as you have made what you call 'candid' remarks about Rio Tinto, let me simply say that three nights ago I was at a meeting where the Chairman of Rio Tinto was presented with the award for responsible capitalism, at which the Secretary of State for Trade and Industry said that she could never have imagined that a company like this could make such progress over the past few years. Her words are available on the website, you can read them, and it is a company which has certainly recognised that if you are going to be engaged in the extractive industries you had better make sure you have good relations with your stakeholders and you had better make sure, since the extractive industries, above all, raised issues of sustainable development, that you will have good policies on this matter. Rio Tinto, I think, was the first company in this country, and probably one of the first in the world, to adopt a communities policy based on long-term partnership, on transparency of mutual operation. So I am afraid the killer statistics you are producing are really a bit out of date. (Lord Holme) Let me just say, in terms of NGOs, Chairman, if I may, that the world mining industry, with Rio Tinto's leadership, has produced what is called the Global Mining Initiative, which has been very widely recognised as a constructive step forward, and in that context has just made a long-term agreement with IUCN, the world conservation union, to deal with issues of biodiversity. So I would simply ask you to be careful at recycling stuff which is increasingly out of date. I am not saying Rio Tinto, any more than any other company, has had a perfect record, but it would be better if Committees like this recognised progress and tried to encourage it, rather than recycling old propaganda. (Lord Holme) I am sorry, I am not sure I have got the point at the end of your question. I am missing something. (Lord Holme) I think that the criticism of NGOs is sometimes justified. And NGOs play a useful role, I do not want in anything I say to give the impression that they do not have a useful role to play. They do. The most useful role they have to play is as potential partners in actually making things better, rather than in so-called campaigning, and I think that the NGO community itself is going through quite a crisis of conscience, whether it is going to be engaged or distant and critical, and we work with WWF, with Amnesty International on human rights, there are many good relationships with NGOs. And I think many NGOs are torn. I hope myself that we come to a more grown-up relationship of what I would call critical co-operation, without in any way removing people's right to criticise, trying to find things to work on together. My perception is that most of the companies there are there for a mixture of reasons. Some have been criticised in the past and do not want to be criticised, so criticism works. Most of them want to attract good people to work for them, and people leaving universities now want to work for companies that they can respect and whose aims they share, so that is quite an important driver. All companies are concerned to get what you might call a licence to operate, so that they can have stability and harmonious relations around them and get on with their jobs. So there is a mixture of reasons why companies take these issues seriously. But I mentioned just now there were 220 companies there. I do not think there were hundreds and hundreds of companies who were saying, "Well, I'd like to go but I don't want to be accused of green-wash." I think it is tiresome, but that is probably the way it goes, and in that sense it is a little bit like politics, you have to take the criticism fairly philosophically. So I do not think that was a big inhibitor on companies getting engaged at the Summit. Mr Thomas (Lord Holme) I believe that the water and sanitation targets which were agreed have a lot of scope for business to get involved in partnerships, it has potential business opportunities for water companies, of which we have some very strong ones in the United Kingdom, it has opportunities for construction companies, for engineering companies and others. You will have seen in the material I sent you that one of the points of the business position at Johannesburg was that we were not pressing in any way for the privatisation of water but simply trying to find partnerships to deliver water more effectively in the third world, which is very much needed. So in the water area and sanitation there is a lot of useful business to be done, and useful in both senses, of being potentially an opportunity and potentially a social contribution. I think that on the poverty agenda many businesses would find themselves happier thinking about the creation of sustainable livelihoods than they would with the language of poverty; many businessmen would tend to assume that poverty alleviation was a matter for charities, a matter for governments. If it was expressed as the creation of sustainable livelihoods, then it is something that business can understand and identify with, because it involves training, it involves transfer of capacity of one sort or another, and I think that the poverty agenda is one, I know from personal experience, that businesses are getting more engaged in, while trying to define a way that they can do that, particularly in their host communities, in a more real way. So I think there is plenty, both in the Millennium Declaration and in the Johannesburg targets, to be getting on with. (Lord Holme) Speaking as just one businessman, I would have been very happy myself to see what I will call the right sort of renewable targets. Personally, I thought that the attempt to agree a target for 2015 and work back from that was always probably doomed, but I do think that if there had been something much more realistic, incremental targets, for instance, to say that the proportion each year of renewables should increase, that would have been real, that would have been something that people could plan against and possibly achieve. And, in that sense, I share your regret that there was not a set of what you might call real and achievable targets for renewables. If I could add one thing, Chairman, to that. I think one of the great flaws of the outcome of the Summit is that we have these long-term targets and really nothing in-between, in terms of intermediate targets and measurability. And one heavy responsibility I think rests on the British Government, which has taken somewhat of a lead in these matters, is to turn these distant, big targets into intermediate targets and to agree the means by which we can all see how we are doing against them. Because, in any terms, in terms of behavioural reinforcement of everybody involved, just to say, "Well, we're halfway to 2015 and we haven't got very far," does not do much, where if, year by year, we could see how we were doing we might have something that we could all adjust our plans and actions to better. (Lord Holme) The Business Action for Sustainable Development, as you rightly say, probably was effective, although you do not share my views as to its effectiveness, but it was probably effective to the extent that it said that it would dissolve itself at the end of the Summit and not try to establish yet another organisation. But the two main pillars of Business Action for Sustainable Development were the World Business Council for Sustainable Development and the International Chamber of Commerce; they have reached a memorandum of understanding whereby they are going to continue to work together on these issues and try to provide some of the momentum that there is a danger of being lost, I agree with you. As to your first point, about partnerships, I think it is very important to continue to demonstrate good practice, I hesitate to say best practice, but good practice, because, contrary to what a lot of people might think, partnerships are actually very difficult to do well. Because if you think how difficult a joint venture is between companies who share the same culture, think of a partnership where you have, for instance, a university, an NGO, a business, maybe a local government, different cultures, different timescales, different perspectives, so to do it well is not just a rhetorical thing, "Let's have a partnership," it takes a lot of work and a lot of effort. And whatever criticism is addressed to business, businessmen tend to want to get real about those things and say, "If we're doing it, let's do it well." So I think that the role of sharing good practice, best practice, is extremely important. Now there is some suggestion that the UNCSD might do some of that, there is also a proposal within the International Chamber of Commerce to continue to maintain this sort of database on an ongoing basis, updating it, of people who are doing it well, so that that is available as a sort of learning experience for those who might benefit from it. (Lord Holme) I have just said that I agree with it. Mr Challen (Lord Holme) Let me just speak personally. This is a UK matter, as you say, now, we have proposals here in the UK for mandatory reporting on CSR, there is no conceptual problem on the part of business with that, I think it is just very important to get it right. We have Lord Haskins' report on regulation, saying that things should be proportional, and so on, we have a whole set of principles on regulation. If we are going to have companies report, let us (a) make sure they are reporting the right things, and (b) make sure that it is not done at the expense of voluntarism. There has been phenomenal progress made in the last five or ten years, as any objective observer would say. Now you can take the view that that is a glass half empty, and in a sense it is, not all companies are reporting, not all FTSE 100 companies are reporting fully on these issues, some are reporting extremely well and extremely fully and doing it of their own free will. So the balance to be struck all the time is between trying to get what I will call a compliance-plus attitude, in which companies are competing to do well in this area, seeing it as a source of long-term stability and competitive advantage, versus a sort of reductionism, that says "We don't trust them so we're going to make them do X, Y and Z." And so I have to say that if Parliament, in its wisdom, decides that it wants to have the right sort of reporting, and a lot of thought needs to go, as I said earlier, into the social element of that, because if anybody tells you it is easy to report on social performance, it is not. It is extremely difficult to agree what should be reported on, let alone how it should be reported on, but if there were a broad, aspirational thing which said that companies ought to report in this area, many companies that I would respect are already doing it, and some would no doubt then do it as well. (Lord Holme) I do not disagree with that, but just keep in mind all the time that, on the whole, it is the larger and more often attacked companies who have made the most progress in this area. You have a very big question about how you transfer this to SMEs and how you move it down the food chain of companies. One of the ways that some people have dealt with this is by saying, "Oh, well, we're only really talking about multinationals, that they should report in a certain way." Others say, as with the Linda Perham Bill, "Well there should be CSR reporting in the UK," others say it should be done on a Europe-wide basis. From the point of view of a simple businessman,- and I have other lives, like being a Member of the other place,- but from a business point of view, what people really want above all is clarity and simplicity and to know where they are; what they do not want is to have armies of lawyers working their way through compliance documents. And if there are armies of lawyers working their way through compliance documents I will tell you who will do best out of it, it will be the very large companies who are best equipped to employ armies of lawyers working on compliance. And at the end of the day what we really want is not their compliance, what we want is companies engaged in trying to raise their game and go in for compliance-plus. So all these are really just reservations around the question of how you do what you are talking about. (Lord Holme) I am very fiercely opposed to the wrong sort of regulation. Gregory Barker (Lord Holme) Since the subject of Rio Tinto has come up, we have a clear commitment that nobody will give - - - (Lord Holme) We have been great supporters of the Soros Initiative, which I am sure, again, this Committee knows about, and was perhaps one of the failures of the British Government at Johannesburg. There were more companies supporting the Soros Initiative than there were countries, and so it was, in a sense, a failure of diplomacy on the part of the British Government. For those who do not know about his initiative, it was that companies should report their revenues in detail in the sort of developing countries you are talking about, so it is quite clear, if any money has gone missing, where it has gone missing. And that seems to me an admirable step forward, it is supported by a number of large British and other companies, the British Government set itself a mission of finding other governments who would align themselves with this very practical way of dealing with what is still, I am afraid, a big problem in some places, but it has not got very far. And one thing I have certainly urged politically is we keep up the pressure on the Government to try to find other countries who will come along with us, because, of course, we now have the OECD Anti-Corruption Code, which is being transformed into legislation here, which is a very good step forward, which certainly companies that I am involved with would support. Transparency International, who are one of the supporters of the Soros Initiative I have just been talking about, see that openness of royalties and taxes paid as one of the ways of putting pressure on corrupt host governments. The final thing I would like to say is that one of the most promising things out of Johannesburg, which has still yet to be proven, is the formation of NEPAD, where African governments themselves have recognised that there is a relationship between foreign direct investment, overseas development assistance and cleaning up their own governments, and that those three things have to go together if you are going to make a success of it. I would simply say that companies have a great interest in this working, because it does not suit companies to have an unlevel playing-field. I think, if you are a small engineering company, faced with having to get your products out of a small harbour somewhere in the world, there are very great pressures on you to conform to the local culture, and in that sense your observation is true, that companies are sometimes complicit in corrupt systems. But the sorts of measures I have been talking about would give us all a more level playing-field to operate on. Chairman: Thank you very much indeed for giving us evidence, Lord Holme. That was extremely valuable and we are grateful both for your written evidence and your oral evidence, despite the difficulty in hearing each other. Thank you. |