Examination of Witnesses (Questions 1-19)
MR ANDREW
PENDLETON
23 MARCH 2006
Q1 Chairman: Hello, good
morning and welcome. This is our first oral evidence session of
this Sub-Committee so we are looking forward to it. I think your
background has been more in trade than in environment issues.
I just wonder if I could start by asking you generally to what
extent these two things are balanced or whether perhaps one overrides
the other.
Mr Pendleton: I
think if you take a pro-poor focus to economic issues in general
then what comes out very strongly from that is that you cannot
ignore environmental issues. In our submission we evoke this image
that in the DNA of development you have got poverty and environment
bound in together. For instance, if you are, as DFID says, trying
to encourage pro-poor growth, you have to look at the areas in
which poor people are active economically speaking and, like it
or not, that is still largely agriculture. If agriculture becomes
unsustainable because of environmental issues, which is already
becoming the case in many circumstances, then their ability to
trade and take part in trade is severely hampered. We know that
the development of large-scale international trading can often
have a negative impact on the environment. In a sense it is a
dichotomy because you have got a situation whereby if you further
harm the environment, particularly thinking about climate change,
then you harm the very people you are trying to help. I think
you have to try and find a way in which the focus on growth does
not dominate everything else and, in actual fact, you need a focus
on sustainability at the same time. Let me give you an example
of an individual because it often helps to think of specific people
in this regard. This was somebody whom I met in the north of Senegal,
near the Senegal River, who is very, very typical of the kind
of people that Christian Aid works with worldwide. He is a farmer
growing rice and onions and his name is Mamadou Niang. He said
something to me which I thought was very interesting. He said
to me there were three things making his life and his livelihood
very difficult—and he has quite a large number of children
to provide for—and they are the fact that under structural
adjustment programmes government withdraws support and he no longer
can afford to fertilise his crops properly, that the liberalisation
of trade in his country means that because he is already struggling
to produce competitively he struggles to compete with cheap imports
that now come in largely from Europe, and, thirdly, he said the
desert gets closer every day. In a sense those three things are
making his livelihood much more difficult. I suppose that is what
I mean by poverty and environment being intrinsically bound up
together in the DNA of development. If you do something that harms
the environment then you are in fact harming the cause of poverty
eradication and development.
Q2 Chairman: I think that
has been recognised, particularly in that rather seminal report
Up in Smoke which you refer to in your memorandum, which
seems to have ended the standoff between environmental NGOs and
development NGOs. Could I ask you how DFID has responded to that
report or if you are aware of any response at all?
Mr Pendleton: I think positively.
I do not think there is anything specifically in the report that
DFID would find disfavour with as it were, but I think the concern
would be over whether the connect is there. The implication of
Up in Smoke is that we respond in a number of different
ways, that we respond in a way which allows poor people to adapt
their lives to the inevitable impact of climate change. Climate
change is not a single factor, climate change exacerbates every
other environmental problem that poor people face and so it calls
upon us to help poor people adapt to those inevitable changes,
those changes that we now cannot prevent anyway. I think it also
calls upon us to help poor people and poor countries more generally
in a sense find a path to development which does not repeat the
same level of carbon emissions that we have. If you look at India
and China, where there has been high growth and very high growth
in carbon emissions too, if that pattern is repeated in Africa
and again in China and India in order to lift those who are still
in poverty there out of poverty then you will have a problem which
will ultimately undermine what you are trying to do. Thirdly,
and this is the most important factor that I think DFID could
champion across Whitehall in a sense but also should be championed
anyway by all the departments that it concerns, first and foremost,
action on climate change has to take place here because we are
the polluters and historically we have been the polluters. We
are the ones that are largely responsible for the carbon that
is currently in the atmosphere and we are still the biggest polluters
certainly per capita. So I think in those three senses it is really
important. My sense is that DFID is strong on the adaptation work
and we do some of that kind of work with them. It has not got
to thinking about the mitigation work so much yet and it is not
making strong signals across Whitehall from a pro-poor point of
view about the need for us to take action on our emissions in
rich countries.
Q3 Chairman: What did
you make of the Budget statement yesterday in reference to extra
money for adaptation? It did not mention the word mitigation.
Mr Pendleton: I gather the Chancellor
proposed at the World Bank and IMS meetings a £20 billion
World Bank fund which I understand is about mitigation because
it is essentially about how to transfer renewable technologies
into developing countries. From our point of view that is hugely
welcome because there is another aspect to renewable energy technologies
which I think at Christian Aid we are just starting to do quite
a bit of work on, which is that essentially a lot of isolated,
rural poor companies currently are off grid and they always have
been, they have never had large-scale electricity and so in a
sense the debate about large-scale electricity generation has
not ever impacted on their lives. Smaller scale renewable solutions
may well be a very good solution to them. Almost regardless of
the climate change argument, they may well be the technologies
that those poor communities need to get energy now. What we know
about energy is that when it comes into a community it transforms
people's lives, it means that businesses can keep operating into
the evening and so they can enhance their opportunities to make
money and grow their businesses, and it means that particularly
the adults can study and so you have a great leap forward in terms
of literacy in those communities because, of course, adults cannot
study much in the day. For those reasons—and they sound
small but they are massively important—that kind of transfer
of technology is hugely important. I think we would welcome the
proposal. The measures of the Budget clearly do not go far enough
but it is a step in the right direction. Certainly the transfer
of renewable energy and sustainability technology to poor countries,
if it is genuine technology transfer, is of massive importance.
Q4 Chairman: I understand
that Christian Aid is developing its policy work on climate change.
It seems a little late in the day. We have been well aware of
the connections since Rio in 1992. Why do you think Christian
Aid is only now developing its climate change policies?
Mr Pendleton: First of all, I
would not necessarily agree that we are only now doing that. The
very first piece of work that I wrote when I walked through the
door of Christian Aid in 2000 was a report called Unnatural
Disasters where we identified—and I think we were the
first development agency to do so—the link between the increasing
frequency and ferocity of disasters that we were facing and that
we were responding to with climate change, and we made that link
largely because the UNIPCC under other pieces of work, including
work from the insurance industry, made us able to do so and able
to begin to cost that as well. We said that the spiraling cost,
something like $6 trillion going up to 2050, was something that
from a purely economic point of view could not be contemplated
or countenanced and therefore we had to deal with it. Christian
Aid has been doing a lot of internal work over the past year or
so on trying to look at where our programme work is essentially
already looking at climate change, but I suppose the partners
with which we work do not quite realise that. So those that are
working on the stewardship of natural resources and making sure
that poor people conserve natural resources such as water and
organic fertilisers and so forth, I think that kind of work is
intrinsically about climate change, it is about the adaptation
side, it is about making sure that livelihoods are climate change
proof. I do not think we are latecomers to the debate anyway,
but I think a lot of our work is intrinsically about this area,
which I think goes back to that question about environment and
development and the fact that it is a false dichotomy; they are
bound together.
Q5 Chairman: In your memorandum
you have been critical of DFID for not "climate proofing"
how it spends taxpayers' money. How good do you think NGOs are
at climate proofing how they spend their donors' money, and how
well do you think Christian Aid does that?
Mr Pendleton: It is a similar
answer to the same question in the sense that what we are aware
of is that poor people's relationship with the natural environment
is incredibly close and that actually you and I have a very close
relationship with the natural environment but we do not realise
it most of the time, but poor people do because they are short
of water and they are exposed to increasing desertification or
increasing flooding or increasing cyclones or increasing ferocious
weather patterns much more so than you and I. I think we are aware
of that and we have been aware of that through our work and intrinsically
the two things are bound together. Our sustainable livelihoods
programmes take account of that and our disaster mitigation work
takes account of that. The reason why we now have to campaign
on climate change is because we have to ensure that our supporters'
money is not wasted and I think that is why we are a part of the
Stop Climate Chaos coalition, it is that it is really important
for us to say loud and clear that the problem is created by us
and so we must look to us for the solution. The reason why Christian
Aid is a campaigning organisation anyway essentially is not because
we want to be politically a pain in the neck, it is because we
want to advocate on behalf of poor people in order to try and
shift the structures and systems that keep them poor otherwise
we could be open to claims that we are wasting supporters' money.
That is a very critical part of what we do and that is why we
are now stepping up our action with others on climate change.
Q6 Chairman: A good part
of your funding is spent on grants overseas. Do you have things
like environmental impact assessments when you are giving a grant
to some project?
Mr Pendleton: I think the honest
answer to that question is no, we are not at that stage yet, but
we are moving much more towards that. What I would say is that
as a part of trying to help our partners draw the links between
their work and climate change it is critical that we do climate
proof our investments, we very much see them as our investments,
which goes back to that point about the fact that this is a critical
argument for development agencies because we need to climate proof
the investments that we are making with our supporters' money.
Q7 Chairman: In your memorandum,
paragraph 9, it says, "In spite of the economic growth of
China and India (the benefits of which to poor people are questionable
. . . ". Could you just expand on why those benefits of economic
growth are questionable in India and China?
Mr Pendleton: The link between
poverty reduction and economic growth is unproven. There is a
very good New Economics Foundation report which I reference in
the memorandum and I urge you to take a look at and which effectively
says that for every $100 of economic growth only 60 cents goes
to poor people. There is a relationship but it is a very distant
one and so in economic terms, that makes economic growth a very
inefficient way to tackle poverty. That is not to say you do not
need economic growth because obviously economic growth brings
investment and without it investors will not invest, so you do
need a modicum of economic growth. There are two factors: the
first one is that it is inefficient in terms of tackling poverty
and so just as important if not more so are means for redistributing
the benefits of economic growth; and the second—and this
goes back to the point about climate change being fundamentally
harming poor people—is that if economic growth is achieved
at the expense of the planet then poor people will ultimately
suffer. If your aim in growing economies is to tackle poverty,
if you do so at the expense of the environment you will undermine
your efforts. I think what we need to be very clear on is that
while growth is important it is not the be all and end all. I
think the problem and, I suppose, the disappointment with DFID
is that while much of what it does in its programme is very much
along the lines of what we do and we share objectives, the over-focus
on economic growth has been thee main way in which one tackles
poverty and I think it is a problem and that is disappointing
and that is something that we need to challenge. I think what
we also need to do is to get over this idea that development agencies
like Christian Aid are anti growth and anti business. We are hugely
pro business, but we are pro a kind of business which is pro-poor.
Poor people are business people largely, they are involved in
business on a daily basis, but their businesses are being whacked
by a number of factors and they are the sort of factors that Mamadou
Niang talked about because he is essentially a businessman. I
think we need to focus on what kind of growth is good for development,
which is why I would applaud DFID's focus on pro-poor growth but
then question, therefore, where the focus on macroeconomic growth
being the issue over other growth in sectors may be important
to poor people.
Q8 Mr Vaizey: We could
have a huge ding-dong about the nature of global capitalism, but
I will focus on your relationship with DFID instead. You have
worked with DFID now for almost 30 years. I just wondered whether
you could talk about your relationship with DFID and, in particular,
what benefit you think DFID gets from working with Christian Aid.
Mr Pendleton: Christian Aid is
one of the agencies that has PPA and I think that is a development
which we view as hugely positive because we feel it is a recognition
of the positive work that Christian Aid does. Christian Aid now
has a five-year strategic framework which says what we will do
and how we will be judged by what we do over the next five years
and that identifies six different areas. The PPA is essentially
a recognition that DFID supports that strategic framework in particular
areas. They are specifically interested in HIV and in our ability
to mobilise particularly church agencies in developing countries
which are hugely important for development. So it is a recognition
of the fact we are an ecumenical agency, a recognition of the
development work that we do and it is a recognition of the fact
that we can add huge value—it is worth roughly £5 million
a year—to that, because we bring supporters' money into
that and we bring in other money and so in a sense we match and
raise the £5 million DFID gets. Overall I think it is probably
enormously good value, but it represents a partnership too. It
is a recognition of the fact that we share aims and values about
tackling poverty with DFID.
Q9 Mr Vaizey: What happens
when you have some disagreement, how do you work that out? How
micromanaged are you?
Mr Pendleton: I do not think we
are micromanaged in relation to the PPA. We have a responsibility
to report against what we have said we will do for the PPA. The
PPA is not attached to particular programme objectives, but we
obviously are obliged to be accountable for the spending of that
money. I think that is quite detached from our campaigning and
public advocacy work. For instance, we were quite critical of
some of DFID's work in Andhra Pradesh last year and that did bring
a degree of disagreement, we had quite a big debate with DFID
over that and we have a number of times in the past over specific
policy issues. The fact that we have a close funding relationship
and share objectives with DFID does not mean that we cannot disagree
and sometimes fall out over specific policy issues. I think Christian
Aid is quite a determined agency because we have a fairly clear
set of values which mean we are obliged to speak out on behalf
of poor people and to be provocative in order to try and challenge
the structures and systems.
Q10 Mr Vaizey: If you
consider specifically the environment and DFID's focus on the
environment, the sort of impression we are getting as a Sub-Committee
is that DFID's interest in the environment peaked a few years
ago and then it pretty much dropped off. Is that your impression?
What pressure can you bring to bear on DFID as it were to move
the environment back up the agenda?
Mr Pendleton: I think we can bring
two areas of pressure to bear on DFID which we can always bring,
which is in a sense we have a good day-to-day relationship with
DFID officials through the PPA, but recently we took part in a
National Audit Office audit of the PPA process and we looked at
all the different relationships we have with DFID and they are
many fold, over many different issues and so we have that day-to-day
dialogue with DFID. My argument about advocacy for change is that
it never works unless you have that element of public pressure
that organisations like Christian Aid can bring to bear on a situation.
We have an enormous amount of very vocal supporters across the
country and we have a good dialogue with DFID where we can urge
a greater focus on issues that we think are important, in this
case the environment. Secondly, what we can do through our own
public advocacy and through networks like Stop Climate Chaos and
the Working Group on Climate Change and Development that produced
Up in Smoke is an advocate in a more public sense for change
within DFID and for connections in Whitehall, which is really
critical on this issue because, as I say, the first and most important
activity that needs to take place is a reduction in carbon emissions
in the UK.
Q11 Mr Vaizey: You are
seen primarily as a development NGO rather than an environmental
NGO. Do you find your dialogue with DFID is more on development
issues? Do you think DFID could benefit more if you placed a greater
emphasis on the environment in your dialogue with DFID?
Mr Pendleton: I think now we are
and that is being greeted extremely warmly. In fact, I have had
encouragement not just from DFID officials but officials across
Whitehall in general and ministers and secretaries of state on
that issue because I think they welcome the slightly late arrival
in some respects of development agencies into the debate specifically
about climate change, but bundled into that are all the environmental
issues that I have mentioned. It is obviously critical that we
have that dialogue now. We have had an emerging dialogue on the
environment, for instance, over disaster mitigation and we are
running a five-year research programme for DFID at the moment
at Christian Aid looking at six pilot countries, including Bangladesh
and Malawi, on disaster preparedness. While again, just as I was
saying about our partners, we may not always have connected up
the issues of environment and development and climate change,
I think we have essentially been there and we have been having
that dialogue already. What we want to say about our own work
now is that it has to be intrinsically linked to the issue of
climate change and I think we would want to say that about DFID's
work too.
Q12 Mr Vaizey: Is one
of the problems that the Millennium Development Goals do not have
the environment as one of their key goals?
Mr Pendleton: I suppose so, although
if you look at the MDGs through a climate change lens then you
get some pretty scary projections. I was looking at a piece of
research that I do not cite in our memorandum by Martin Perry,
who is one of the UNIPCC, which begins to make projections in
terms of human development for the different IPCC scenarios on
temperature rises. What he is essentially saying is that some
of the areas that the MDGs cover like malaria are going to rise
dramatically with the worst case and the middle case scenarios.
In a sense what climate change does, as it does in all areas of
development, is take us further away from our goals. We only ever
see the MDGs as a useful set of targets by which to measure things
and no more than that because, let us face it, in terms of our
aspirations, they are not ambitious enough and then climate change
is something that is going to take us further away. Of course
there is MDG7 which does focus to a certain extent on the environment.
I suppose there is an argument for an MDG that focuses on climate
change, but for us the usefulness of the MDGs is as a measure
of how we are progressing. I suppose what we can say is that climate
change will take us further away from many of the human health
and development aspects of the MDGs.
Q13 Mr Vaizey: DFID has
18 environmental staff out of almost 3,000 staff. Its budget is
going to increase dramatically over the next few years. Do you
think it will be able to absorb those increases and perhaps redirect
them towards environmental aims?
Mr Pendleton: I think we would
like to see a greater emphasis on the environment and development
in DFID. In development circles in general the arguments about
sustainability and sustainable livelihoods have become unfashionable
in recent years. We have always felt at Christian Aid, because
of the nature of the work and because of the fact that we are
connected to very grass-roots sustainable livelihoods programmes
through our partners overseas, that that was a bit of a problem
and a bit of an issue. I think what we would like to see is not
just more capacity in DFID on the environment but better linkages
between the environment, sustainability, development and climate
change. I think what we see in our work with DFID on disaster
prevention and mitigation is that it is good, but there are not
the linkages between that and the need to act on the changing
climate which, frankly, if you do not do again you are wasting
your time and money. So I think there is a very strong argument
for DFID being two things, having more capacity on the environment
in relation to its own work and the work of its partner organisations
like Christian Aid and also in terms of advocacy, because DFID
could play a really important role in advocating for action on
climate change in the UK on behalf of poor people.
Q14 Mr Vaizey: What about
DFID climate proofing its own programmes? Have you got examples
of where you think DFID could and should be doing more?
Mr Pendleton: I will be honest,
as I am not a programme person, and say I do not have that. I
think the disaster prevention point I have just mentioned is relevant.
I think DFID really does need to question investment in large
scale energy projects which are carbon emitting. It is a point
we have made before about the impact of some of those projects
on poor people which, if you look at the evidence, is pretty roundly
negative. If you add the climate change argument to that, so I
am talking about some big oil and gas exploration projects, there
is a very strong argument which says those projects will happen
anyway because international investors are interested in those.
Apart from offering guarantees and assurances from public agencies,
there is no real reason why public agencies should be involved
in those. Public money in a sense, if you take the climate change
focus in particular but also the poverty focus, is not well spent.
I would also question the mitigation projects that DFID does around
those programmes in that they need to be evaluated. They could
be very valuable in the sense that they could help poor people
achieve their rights in those situations, but they could be negative
if they are simply about sugaring the pill.
Q15 Mr Vaizey: So you
think DFID is receptive to change and is listening to your arguments.
Do you think if you came back here in five years' time you would
be able to say there had been a real change in culture?
Mr Pendleton: If I came back here
in five years' time and there had been no progress both from DFID
and other government departments on doing the essential thing
in climate change, which is advocating in the UK for changes so
that we do not emit so much carbon, then I would be hugely disappointed.
I think the increasing alliance of development and environment
agencies through Stop Climate Chaos, the Working Group on Climate
Change and Development, the BOND Development and Environment Group
and so on is extremely important and I hope that that will mean
that in a sense Government has the mandate to do that and that
DFID feels strong enough in government to say this is an issue
of poverty and we cannot ignore it.
Q16 Mr Caton: Aid and
development funding from governments and multilateral organisations
is increasingly provided as direct budgetary support based on
poverty reduction strategies. Is that the right approach?
Mr Pendleton: There are positives
and negatives about DBS. I would stress again that I am not the
expert on DBS, but I did have a chat with some of those who are
at Christian Aid and I think they feel there are positives and
negatives. If you are working with a government that is co-operative
and is worthy and capable and has the capacity to deal with DBS
it has the benefit of rationalising aid and allowing government
to spend development assistance on its key priorities as agreed
with a group of donors and so it makes the situation simpler.
Where it is negative is—and this is not necessarily environmentally
related—that sometimes I think donors can use it as an opportunity
to gang up a little bit on governments and to force through certain
changes which may not be in their interests. There was an example
about a government procurement agreement that I came across in
Ghana, which had been a precondition of the launch of DBS, which
was fine apart from the fact that it had an equal treatment clause
in it which meant that the government of Ghana, after that law
had been enacted, then had to give equal treatment to foreign
companies and government procurement as it would to local companies
and in our view that is a bit of a problem in terms of encouraging
the development of capacity in local companies. There is an opportunity
through DBS to set some environmental objectives within developing
country governments and I suppose that is an aspect of condition
setting in a soft sense that we would not have too much of a problem
with given that the environment can sometimes, against all the
other priorities that developing country governments often have
to deal with, be low.
Q17 Mr Caton: Is that
not the problem, that direct budgetary support is moving away
from conditionality for very good reasons? Does that not limit
our ability to climate proof the project that we support?
Mr Pendleton: What you have to
be careful of with DBS and where it is a significant weakness
is that DBS spending by developing country governments runs the
risk of not being accountable enough to civil society in those
countries. So I think the insistence should be, if DBS is to be
the way forward, that a proportion at least goes to civil society
and a proportion to monitoring the spending of development assistance
through giving direct budgetary support to governments. We have
got partners like the Integrated Social Development Centre in
Accra in Ghana who are doing direct budget support monitoring
and that is a key part of their programme work now. If DBS is
going to be a success then civil society needs to monitor it.
Yes, I think you are right, it can make certain policy objectives
of donors more difficult to achieve. Development assistance in
general should not necessarily be about the policy objectives
of donors and that is where the conditionality debate has been
problematic in the past. There are certain conditions that need
to be set and they are that the money is spent as agreed. I think
what needs to be done is that donor governments need to set those
environmental objectives at the start so that if there is an agreement
about that and the condition is that the money is spent as agreed
then that needs to be seen to be done.
Q18 Mr Caton: You say
"if" DBS is the way forward. Does that imply that you
think perhaps more focused project funding would be a better way
forward, particularly to enable us to protect the environment?
Mr Pendleton: I think we have
always felt that where there are sufficiently strong civil society
organisations in developing countries DBS should not be given
at the exclusion of giving money directly to the kind of partner
organisations that we work with.
Q19 Mr Caton: Enthusiasm
for budgetary support at the moment tends to go hand-in-hand with
encouraging macroeconomic growth to achieve poverty reduction.
Could you expand on your reservations about macroeconomic growth
being so essential?
Mr Pendleton: It is really important
to look at pieces of work like the New Economics Foundation work
because it simply states a cold economic fact, which is that for
a lot of economic effort, which is costly to the environment,
you get very little poverty reduction. While we would want to
encourage investment in developing countries, what is increasingly
important to us as an agency is looking at what resources already
exist in a developing country and looking at how developing countries
can mobilise those. In a sense, is investment in its purest sense
in developing countries the most important thing or is the way
developing country governments regulate that investment the most
important thing? For instance, if a company from Britain goes
into a developing country to invest and demands a very low tax
regime in order to do so, is that good value for money for that
developing country? Does that undermine the value of that investment?
I think you have to look at things in the round. What Christian
Aid is beginning to do is to try and analyse investments. We have
had an analysis on foreign investment hitherto which has been
about the social and environmental impact of that foreign investment
and we have looked at things like oil projects where there have
been negative impacts, but we are increasingly trying to look
at the fiscal element of that, to say what is the value of this
investment to the developing country? Of course they bring money
and jobs and therefore may contribute to macroeconomic growth,
but what do they take away? If they are not paying a sufficient
amount of tax and if they are also avoiding the payment of tax
through that process, which very often happens, by making transfers
through tax havens then is the value of that investment a good
one? Aside from the argument about economic growth per se on which
I think it is fair to say the jury is out at the very least, you
also have to look at the story behind economic growth in a sense.
So what really is the value? How much money does stay in the country?
At the end of the day that is the critical factor and it is not
the GDP growth on the table, it is how much money stays in that
country. Capital flight is increasing from developing countries
at an alarming rate and that is something that deserves our focus.
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