Examination of Witnesses (Questions 20-31)
6 NOVEMBER 2003
THE RT
HON GORDON
BROWN, THE
RT HON
HILARY BENN,
JON CUNLIFFE,
SHRITI VADERA
AND PETER
GRANT
Q20 John Barrett: Is there then a
process by which an assessment can be made after the event to
the impact that the decision has had on the poor people who are
there rather than saying "We have made the decision and we
are stuck with it"?
Hilary Benn: That is partly a
question, obviously, for the country governments themselves and
if we are taking the BTC pipeline as an example, Azerbaijan, Georgia
and Turkey, they have an interest in and an incentive to do that
because, certainly in the case of the first two, this will provide
significant additional revenue to countries where there are a
lot of poor people. Secondly, I think the consultation mechanism
which is added to nine formal layers within the IFC set up does
provide that opportunity to continue to ask what has been the
impact, how can we sort out the problems and also how can we learn
from these things in the future. I think the final point that
I would make on this is that one of the other things that we asked
the IFC to do in the case of this project was to say that in future
would it be helpful if we had strategic environmental assessments,
which did not apply in this case, because the truth is that we
need to learn from these projects how they go so that we can manage
them better in the future.
Q21 Mr Colman: Could I come in with
a supplementary question? I was very pleased to go on a visit
to Cameroon with a CPA visit led by Gwyneth Dunwoody and, of course,
much of the concerns that have been talked about the BTC pipeline
were also replicated in terms of the Chad Cameroon pipeline. The
problem there is that while again all the warm words were said,
very little was done. To what extent do you think the lessons
of the Chad Cameroon pipeline, where on the ground implementation
of dealing with issues to do with human rights, dealing with issues
to do with environmental degradation should be dealt with before
the pipeline is allowed to get started rather than what we found,
which was a number of NGOs extremely critical of the work of the
IFC and the World Bank, where they felt it had said all the right
things but had not held up the work on the pipeline until these
concerns had been dealt with on the ground?
Hilary Benn: In the case of the
BTC pipeline, of course, the work has already begun and funding
has now been found from other sources actually for the bulk of
the cost of building this particular pipeline. So in that case
it is not a question of holding anything up because it has already
started. But as I indicated in answer to Mr Barrett's question,
I think it is important that we learn from the process and obviously
the Chad Cameroon pipeline is an important example in that respect.
Linking it with the EITI that we were discussing a little earlier,
BTC has agreed to publish what it pays, Georgia and Azerbaijan
have agree to publish what they receive, and I think that is a
very important part of the process because it gives us the transparency
and therefore the accountability that I think all of us wish to
see. At the same time, yes, we have to learn from the process
and, yes, we have to make sure that the mechanisms that are in
place are effective in trying to address the problems that are
identified. Because you can have the policies, the question is
how are they applied and what impact does it actually have on
the ground and that is why we asked the IFC, in giving support
to the loan in relation to BTC, to establish a mechanism which
would ensure that there was a place where this could be done effectively
so that people can get together and then argue about whether people
are living up to what they said they would do in the first place.
Q22 Mr Colman: But, Secretary of
State, you are describing an appalling situation where for the
second time a major pipeline has gone ahead with the support of
the IFC without ensuring that there is implementation on the ground
of the promises laid down by the partners in the pipeline. Surely
one of the lessons we learn on this is that no pipeline work should
start until these requirements are met?
Hilary Benn: In the case of BTC,
that could not be the case because the people building the pipeline
decided to start the work, as I say, with financing from other
sources. They have then come to the IFC for support as part of
that process. Therefore there was never a question of the IFC
saying "You cannot start the work". Having said that,
I do hold the view, for all the difficulties which you raise,
and I accept entirely, that it is better that there is the involvement
of the IFC and in due course, if they take that decision, the
EBRD because it gives us a better chance of having mechanisms
which will address these problems than if neither of those institutions
were involved at all, in which case people choosing to build a
pipeline got finance from other sources and we would not have
a chance, we would not have a framework, we would not have a forum
in which these problems could be discussed.
Q23 Chairman: Secretary of State,
I think that is all we are going to ask about the World Bank and
the IMF. You very kindly agreed to answer some questions about
the IGC. Before you do that, can I just trespass on your goodwill
and if you do not want to answer this it is absolutely fine, but
DFID today published a short news release about funding for Iraq,
33 billion for Iraq from the international community, commitment
in Madrid, and then this works through to a reduction of 100 million
over the financial year 2004-06 for middle income countries from
the DFID budget. On the one hand, 100 million does not look like
a lot of money. On the other hand, as I understand it, it is going
to mean that a country like Peru will no longer have any DFID
support at all. Having actually been in Lima in the Summer and
seen the work that DFID was doing there, it was actually really
useful work. I suspect that the concern of many of us is not point
scoring over 100 million or whatever, it is the kind of principle
of these big humanitarian situations like Afghanistan, Iraq and
so forth, to what extent is your contingency reserve going to
get rolled over in the sense of having to find more money from
core programmes? Do you see this as a one off once and for all
or do you see more money being eaten away at the edges here to
fund Iraq and elsewhere? I think we are really just searching
after a factual explanation of what is happening rather than—
Hilary Benn: With the greatest
of pleasure. I am very glad that you raised that, not least because
I have also presented a written parliamentary statement today
referring to a news release. Do you see what I mean? Parliament
have been informed and I have informed the media in other ways.
The origin of this is really two fold. One is yes, the need to
find additional funding for Iraq, particularly around the pledge
that we made at the Donors Conference. A lot of that money has
come from the central contingency fund, our own contingency, but
some of it has come from the funding that we make to middle income
countries. As you know, technically, currently, Iraq is assessed
as being a low income country because that was the outcome of
the World Bank UN needs assessment, although we expect it quite
soon to move back into middle income country status. So that is
the first driver of this. The second is that we have a commitment
and a PSA target, as you know, to by 2005-06 spend 90% of our
bilateral programmes on the poorest countries of the world. That
means you have, within the context of a rising aid budget, and
it is obviously very important to recognise that, that the budget
is going to increase over the next couple of years by just under
a billion pounds and that is very significant. That will allow
us, for instance, to meet the target of a billion pounds for Africa.
So we have had to make the adjustment both to find some of the
money for Iraq, which is currently a low income country, and secondly,
to keep within the 90% 10% split. Now, I hold very strongly to
that because I think it is right and proper that we should focus
our effort, particularly in the poorest countries, and this is,
I am anticipating, one of the issues that we may come on to when
we look at the IGC and the EU. One of the arguments we have been
having consistently with the European Union is that in its development
spending we want it to spend more of that money on the poorest
countries of the world. Their percentage currently is about half,
whereas we are heading towards 90% and we are very wedded to that.
The consequence of that is that we have had to make some adjustment
to the programmes. I have in the statement today outlined what
that adjustment is going to be, although, to be honest, we are
still in the process of working out the precise details of that
in terms of exactly what the size of the programmes are going
to be. I would say, in relation to Latin America, two things.
One is this will still leave us, including Iraq, with a middle
income country programme bilaterally of just over £200 million.
We also, of course, make a very substantial contribution through
the multi-laterals to work in middle income countries. The last
figures we got are for 2001-02 and that was £350 million
out of our multi-lateral contribution went to middle income developing
countries. I am also keen that we should use our civil society
Challenge Fund to look at some work that we might be able to do
in some of these countries, including regionally across Latin
America. There are some difficult decisions, and I will not hide
them from you or Members of the Committee, that we have had to
take in reaching this decision, but I thought it was right and
proper to protect the 90% target for 2005-06. I think that is
very important. In truth, one of the things that this Department
has got to do is to respond to situations as they arise and Iraq
is, by definition, a situation that has arisen. It is very important,
for reasons that you probably do not want to go into this afternoon,
that the support is applied now at the time when it can make the
maximum difference to ensuring that Iraq recovers because once
we get to that point then, of course, with its history, its culture,
its wealth, its highly educated population, its middle income
history, if we can get the politics right then there is no reason
why it should not recover. But I do appreciate you raising the
question with me and I would be very happy to discuss this further
with the Committee at any time.
Chairman: Now is not the time, but maybe
some time next year we could look at what ways are there of maximising
the synergy between multi-lateral institutions, the EU and others
for Latin America because I think comments like John Battle's,
who knows Latin America better than most of us, that there are
a phenomenal number of very poor people in Latin America and I
think sometimes this notion of middle income countries, you might
have some extraction industries which are doing quite well but
most of the money goes out of the country. I fully understand
your situation, but perhaps we therefore need to work out, particularly
with the EU, how we focus this money not just in Latin America
but also in Central Asia and some of these other areas.
Q24 Chris McCafferty: Secretary of
State, given what you said about the development spending, what
is your view of EU development policy and practice being represented,
developed, implemented and scrutinised by a commissioner for development
and possibly a reactivated Development Council or a European parliamentary
committee? Will the United Kingdom Government call for this under
the IGC and order EU policy debates?
Hilary Benn: We certainly support
the idea of a Development Commissioner with full voting powers.
We are very keen that a Development Commissioner should cover
all of the development programmes, covering both policy and implementation
because, as the Committee will be aware, one of the difficulties
with the structure at the moment is that different people have
got different responsibilities and it is a bit diffuse in the
way that it works. So we do support, for that reason, a unified,
simplified development structure. We did, as a Government, agree
to the abolition of the Development Council as part of the Seville
arrangements in the interests of trying to reduce the number of
councils overall but, as you will be aware I am sure, this is
now covered by the Development Affairs and External Relations
Council. Twice a year there is a particular development focus
to those meetings and indeed that will be the case at the meeting
I will be attending the week after next. There are also continuing
to be development ministers' informals taking place, which is
a good opportunity within the ambit of the EU to bring people
together to discuss these issues and, of course, there continues
to be a European Parliament Development Committee. So the most
important thing is that there is a coherent structure for doing
the business and we would like to see that come out of the changes
that will flow from the IGC and the consideration of what the
new structure of the Commission is going to look like because,
in the end, with the right structure we can maximise the chance
that an EC development agency is going to be used effectively.
Q25 Chris McCafferty: I know that
you said that there were many other meetings throughout the year,
but do you think that formal meetings twice a year is adequate
when we are looking for changes in how the EU spends its development
money?
Hilary Benn: I could say that
it depends very much on how the time is spent. I would say from
my own experience that getting the organisational structure right,
hence our desire for a development commissioner with policy and
implementation under his or her responsibility, and making sure
that the reform programme which the EU is engaged upon works is
more important for making sure that this very substantial sum
of money you were referring to, Mr Chairman, in responding to
the last question and what I had to say on that, is more important
because I think that is where we ought to prioritise our efforts
and our energy because that is where I think we can make the biggest
difference. Having said that, there is a big argument still to
be had about the poverty focus and the truth is that with the
new accession states coming in they have brought with them, in
effect, their own new nearer abroad. One of the tensions, and
we have to be straight about it, is between those countries that
think particularly about development in the countries that are
just on their border just outside the EU, as opposed to those
who take a different view, and that includes ourselves, that the
EU actually should be spending a lot more of its money and a higher
proportion of its money on the poorest people of the world. So,
if you like, it is reflecting the logic of the 90/10 position
that we have adopted as a Department for the reasons I tried to
explain and getting the EU to move in the same direction, but
there is that tension at the heart of the discussions and they
are reflected in the General Affairs Council when it looks at
these matters.
Q26 Hugh Bayley: At the risk of sounding
a little bit too like Bill Cash for my own good, I have been comparing
Article 32-10 of the Draft Treaty with Article 1-40 of the Treaty.
1-40 says that "The common security and defence policy will
have a role in peacekeeping, conflict prevention, strengthening
international security" and then Article 32-10 says "In
the pursuit of those objectives a variety of civilian and military
means may be used, including humanitarian tasks". Our Committee
is fearful that humanitarian objectives could become subsumed
as part of a common security and defence policy, particularly
when the particular Article in question says that all these tasks,
including, of course, humanitarian and rescue tasks, may contribute
to the fight against terrorism, including by supporting third
countries in combating terrorism in their territories. If that
were to lead to humanitarian policy becoming subordinate to security
and defence policy, it might well undermine the practical and
moral foundation of humanitarian policy and it is something which
many humanitarian actors in every conflict that I can remember
have warned against. What can the UK Government do to ensure that
it is development considerations that drive development policy,
including humanitarian assistance?
Hilary Benn: As the quotes which
you have just drawn my attention to illustrate, the Treaty is
not really clear on this. I think that is the problem and therefore
it is a matter of interpretation. Obviously we seek to try and
address those inconsistencies and lack of clarity in the issue
of the text. But I share with you entirely the view that the fundamental
principle that humanitarian aid is impartial and should be based
on that is something that we must hold to. In picking up the second
part of your question, what we have got out of the IGC process,
and the development community across the EU has worked very hard
to try and ensure that this was the case, is that we have got
separate chapters on development, co-operation and humanitarian
aid which reflect, I think, a very clear legal framework for the
EC's relations with developing countries. We have now got poverty
eradication stated clearly as an objective of the Union's development
policy. We have also got coherence. In other words, that development
objectives should be taken into account in considering relations
with third countries is also a central part of the new IGC. If
I can just say in passing that the fact that it was moved from
the Development Chapter to the External Actions Chapter does not,
in our view, in any way change its effect. Indeed, you could argue
that it enhances the development perspective in considering the
work that is done with third countries. So I think those have
been important outcomes because we need a good, solid, clear legal
basis for this work, but I am very alive to the point that you
make, Mr Bayley, about ensuring that humanitarian aid is not affected
and those fundamental principles, which you rightly say the NGOs
and others working in this field hold to very, very strongly,
we understand.
Q27 Mr Battle: I am not sure whether
I should not be declaring an interest, Mr Chairman, because DG8,
as it was, paid my salary to do research on the first Lomé
Convention and in those days there was an incredible amount of
idealism about Europe's approach to development and I just fear
that in this new Constitutional Treaty that is all being washed
away and that idealism about development we need to turn into
practical action. I would just like to echo, although I share
Hugh's concerns and the whole Committee does, to put forward some
practical suggestions, if you like. Why can the Constitutional
Treaty not actually strengthen the international voice for development?
Go the other way; follow its great lead from the beginnings. Why
can it not ensure that the treaty builds relations with developing
countries that would actually set out in the 2000 EU Development
Policy Statement? Make a link to that. Why can it not build in
now implementing the Millennium Development Goals as part of the
mission of the European Union and build that into the Constitutional
Treaty? Because I think that would send a very different signal
from the one that we are getting now.
Hilary Benn: If you are describing
what I think are the achievements in the negotiation in drawing
up the new Treaty, I think we should not underestimate the importance
of the separate chapters to which I have referred and the reference
to the development objectives being taken into account as far
as external actions in the jargon are concerned and that poverty
eradication is an essential objective. It seems to me those are
all very important things. As you will know, Mr Battle, a lot
of time, effort and energy is going into the negotiation of this
treaty. There are some things in that people want out, there are
other things that are not there that people want in. In the end,
I think what matters is the legal basis and the words in the Treaty
are never going to be a substitute for political commitment. I
know that whenever you bring up the subject of a constitution
or a treaty and you discuss what the words are, people get very
exercised, and understandably so, about precisely what those words
say. But I think in this field of development, perhaps more than
any other, it is the political commitment that you can have or
not have, regardless of what the words say in the Treaty and I
would have said that the thing that we need to focus our effort
and energy on is persuading more people, more of our European
partners, to understand the arguments that we are making, in particular
about poverty focus. You raised the point of the Millennium Development
Goals, would it not be nice if we had that written in. We will
have a better chance of meeting the Millennium Development Goals
if the EU spent more of its development aid on the poorest countries
of the world. So there is a very simple thing. You do not need
change in the Treaty to do that. That is a question of political
will and it is the political will that we need in Europe for them
to move more in the direction in which we are travelling, which
is to maximise our development aid and effort in the places where
it can make the biggest difference.
Q28 Mr Khabra: As you know, the legal
basis for development co-operation was recently undermined as
a result of the amendment at the IGC Conference. This actually
has removed the differentiation between development assistance
and official aid. Can I ask you that as improving the poverty
focus and effectiveness of EC aid is a key objective for the UK
Government and consistent with DFID's latest public and delivery
agreement, could you tell me what steps has the UK Government
taken to ensure that a clear legal basis for development co-operation
is reinstated? This is a big question, I think.
Hilary Benn: Indeed it is and
the Development Co-operation Article did not specify what was
meant by a developing country, but the third countries Article
3-221 did refer to other developing countries and therefore it
was implicit that there was a distinction between the two. Then
that was removed. We are working very hard to get that back in
and I think the indications are that we will be successful on
that front because I share the premise of your question, which
is it is very important there is that clear distinction for the
reasons that you outlined. So I hope very much that we are going
to be able to get that one sorted.
Q29 Mr Khabra: But what are the reasons
actually that they take a decision like that?
Hilary Benn: Who is to say, because
there are two parallel processes going, Mr Khabra. One is the
political discussions about the big issues and then there is a
kind of legal textured debate and people look at things and refine
them and some things may be inadvertently removed or people may
not full understand what the consequences are. That is why we
are dealing with it at that level and that is why I hope very
much that we are going to be able to sort it out because we attach
great importance to that distinction.
Q30 Mr Khabra: It is more like a
political issue like the one the UK Parliament is facing at the
moment on security and foreign policy.
Hilary Benn: That is at the higher
level and this is one I hope we can sort out by administrative
means, if I may describe them as that.
Q31 Chairman: Thank you very much.
We have gone on too long but really due to circumstances beyond
our control. I think who knows to an extent what is going to happen
on this, but I very much hope you will put in a bid for an informal
Development Council meeting in the latter part of 2005 when the
UK has the Presidency because that will give an opportunity both
to looking at where we have got to with the Millennium Development
Goals because that will be 2005 and I think this Committee is
going to be trying to do some work on that in the first part of
2005, and also give you a good opportunity of taking stock of
just where you are with the constitution because it will have
been in for a bit and that would be rather a good opportunity
for whoever is Secretary of State at that time to do that. Mr
Colman is just observing that the new Leader of the Conservative
Party is doing a walkabout in his constituency at this very moment
as he has to win it to secure a majority of one. Order, order.
Thank you very much.
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