Memorandum submitted by WWF-UK
SUMMARY
DFID have had a strong history of leadership
on environment and development, most notably in the run up to
the World Summit on Sustainable Development in Johannesburg in
2002. The high regard of DFID that was held by other donors meant
that at that time DFID was in an extremely strong position to
influence and shape the way in which both bilateral and multi-lateral
donors addressed poverty/environment issues.
However, WWF is extremely concerned that environmental
sustainability has significantly dropped down the list of DFID's
priorities during the last two years, with indications that current
policy and practice at DFID will continue this trend. This is
demonstrated by:
— lack of leadership on environment
and a reduction in capacity to address environment across DFID;
— recommendations from extremely good
reports on environment produced by DFID over the past five years
have not been implemented;
— DFID policies often do not directly
promote sustainable development, and there is inconsistent application
across divisions in DFID. In some cases, notably the extractive
industries, DFID positions undermine sustainable development and
poverty reduction objectives;
— DFID have taken a step backwards
on environmental screening. What were once progressive, pro-active
guidelines have been changed, with screening only now taking place
once a programme has been developed, pushing environment into
being seen as a risk rather than an opportunity;
— lack of transparency in aid spending
through multilateral funding agencies. There is little scope for
social or environmental impact assessment of funds directed through
these increasingly dominant funding routes; and
— the White Paper consultation has
put a greater emphasis on rapid economic growth to bring rapid
poverty reduction. While the Secretary of State recognises that
environmental sustainability is an issue given the model DFID
is pursuing, WWF questions whether DFID has the capacity and appropriate
screening systems to ensure that both the opportunities and risks
that environment presents to economic growth can be addressed
within its work.
WWF believes that DFID could and should lead the
international aid community on sustainable development and the
environmental imperative underpinning it, but this will require
a change of motivation and political will from the top.
1. INTRODUCTION
1.1 WWF welcomes the opportunity to submit evidence
to this Inquiry. WWF is the only environmental organisation to
hold a Partnership Programme Agreement with DFID, and as such
we are in a strong position to comment on DFID's record and achievements
on trade, development and environment. WWF's work is truly worldwide,
with offices in more than 50 countries. Our field of experience
across the developing world ranges widely, including programmes
for example on freshwater, biodiversity, climate change, forests,
trade and energy. We work in partnership across the globe with
civil society, national governments and multi-national agencies
towards our goal to build a future in which humans live in harmony
with nature.
2. DFID'S APPROACH
TO SUSTAINABLE
DEVELOPMENT
How does DFID incorporate sustainability generally
and environmental issues in particular into its work. Does the
unique definition of sustainable development in the 2002 International
Development Act have implications for the environment?
2.1 DFID's historical advantage on development
and environment is being eroded.
2.2 Historically, DFID has been a leading agent
of change in the International Development community. In the run-up
to Johannesburg Summit DFID's goals were to achieve a better understanding
of, and support for:
(i) the principles of sustainable development;
and
(ii) environment as an entry point for poverty
elimination.
DFID has pushed a pro poor agenda (supporting actions
which are aimed directly at helping poor people), the livelihoods
approach to development and supported the most comprehensive analysis
of Participatory Poverty Assessments. DFID:
— led the way amongst the donor community
on developing understanding and promotion of the linkages between
the poverty and the environment and was seen by other bilateral
donors as the leaders on this issue;
— catalysed the formation of the Poverty
Environment Partnership which has worked to harmonise approaches
to addressing poverty/environment issues across bi-lateral donors;
— facilitated joint policy positions
across the donor community on key environment/development issues
eg linking poverty reduction and environmental management; climate
change and increase vulnerability of people and nations; and
— led the way amongst the donor community
through developing an environmental screening system that ensured
that both environmental opportunities and risks were considered
at the initial planning stage of DFID's programmes.
2.3 The previous White Paper (2000) Eliminating
World Poverty: Making Globalisation Work for the Poor, stated
that environment was an important element of sustainable development
and good environmental management could contribute to poverty
reduction.
2.4 The high regard of DFID that was held by
other donors meant that DFID was in an extremely strong position
to influence and shape the way in which both bilateral and multi-lateral
donors addressed poverty/environment issues. However, as this
memorandum demonstrates, WWF is extremely concerned that environmental
sustainability has significantly dropped down DFID's priorities
during the last two years.
2.5 Recommendation: WWF believes that DFID could
and should lead the international aid community on sustainable
development and the environmental imperative underpinning it,
but this will require a change of motivation and political will
from the highest level.
Sustainable development action plan
How significant a document is DFID's Sustainable
Development Action Plan? It includes plans to pilot "greener"
country assistance strategies by 2007. What should this process
entail?
2.6 The Sustainable Development Action Plan is
very weak in comparison with previously published DFID documentation
on the environment and development links.
2.7 While the Action Plan is very welcome, WWF
is concerned that it is not strong enough to make a significant
difference in how DFID performs on sustainable development. DFID
has previously stated for example, "Economic development
depends on the environment", "Sound management of a
country's natural capital provides a solid foundation for long
term economic growth", "Two of the greatest global challenges
are the elimination of poverty and the reversal of environmental
degradation. These challenges are inextricably linked". Now
it is all about "balancing the economic, social and environmental
aspects according to the priorities and circumstances of each
country." The report gives guidance to "encourage"
environmental assessment, rather than requiring it. The report
is focused on risk and mitigating potential environmental impacts
rather than the opportunities for sustainable development. WWF
believes that every action that DFID takes in pursuit of development
should be sustainable.
2.8 On water and sanitation, the Action Plan
is missing references to the World Summit for Sustainable Development
(WSSD) commitment of supporting integrated water resource management
plans. This is a DFID responsibility. There is no suggested measurement
under the action "using our EU presidency to enhance effectiveness
of EU Water Initiative". In the list of international sustainable
development commitments, both access to energy and forest law
enforcement and governance are also missing.
2.9 In addition, the Action Plan does not consider
the role DFID plays with other donors and, in particular, their
role vis-a"-vis European Union aid. This is surprising
as 25 per cent of DFID spending goes through the European Commission,
and in light of the recent agreement on common approaches of Member
States and Commission via the "European Consensus".
The latter highlights the EU treaty objective to promote sustainable
development and its legal obligations to integrate environment
in all policies, as well as ensure coherence.
2.10 In terms of "greener country assistance
strategies" there is also an objective and a process in place
to have a common framework for Country Strategy Papers amongst
EU donors. It includes the requirement for an environmental assessment
alongside the political, social and economic assessments in the
main body of the document and a country environmental profile
as an annex. The use of strategic environmental assessments of
agreed donor plans—whether through budget support or sector
support—can also be a tool for environmental integration.
2.11 Recommendation: DFID should have a stronger
and more progressive Action Plan on Sustainable Development, which
is in line with strategies under development in the EU.
3. DFID'S ENVIRONMENTAL
WORK IN
PRACTICE
Implementation of good environmental practice
As a department that is focused on a long term
goal, poverty reduction, is sufficient account taken of environmental
limits—and the need for development to respect these—when
implementing policy? Is there recognition within DFID of the long
term impacts aid spending can have on natural resources, including
biodiversity, and climate change? Is spending directed accordingly?
3.1 DFID has not taken advice from their own
divisions on environment and natural resources.
3.2 There is concern that recent advice on biodiversity
has not yet been adopted. There was a substantial piece of work
(approximately four to five years ago) undertaken by DFID that
led to the production of two reports: "Diversity not Adversity:
Sustaining Livelihoods with Biodiversity"; and "Living
off Biodiversity". There is no evidence that any of the recommendations
in these reports were taken up by DFID. To date, there is no indication
that they have been incorporated into any of DFID's mainstream
thinking. WWF hopes these recommendations will be considered again
when the new post of biodiversity policy officer is instated at
DFID.
3.3 There have been a number of joint papers
with other agencies eg World Bank (WB), UNDP, EC. These include
"Linking Poverty Reduction and Environmental Management",
"Policy Challenges and Opportunities" (World Bank),
and "Poverty and Climate Change"' (UNDP, 10 plus agencies
signed up to this document). Again the uptake of recommendations
from these reports has been weak.
3.4 Regarding climate change, DFID commissioned
some work to analyse risk to its investments in terms of climate
change impacts and this has led to a decision to "climate
proof" future investments. As later examples in this memorandum
indicate, the application of this position is very inconsistent
across DFID divisions.
3.5 DFID invested in developing guidelines on
how to integrate poverty/environment issues into the design of
participatory poverty assessments (a research tool that is used
to seek the views of the poor in the development of some national
Poverty Reduction Strategy Papers). WWF is not aware that these
guidelines were ever published. There was no implementation of
the guidelines in target countries.
3.6 Recommendation: DFID should re-visit the
recommendations of its own research from the past five years,
and resource new research on the long term impacts of its development
strategy.
DFID's environmental expertise and capacity
Is there sufficient level of expertise within
DFID and country offices on environmental issues?
3.7 DFID have reduced leadership and capacity
on environment.
3.8 WWF is concerned about the leadership on
environment at DFID. For DFID to integrate environment across
programmes effectively, there needs to be strong leadership and
direction from the top. In 2003, the Chief Environmental Adviser
post at DFID was created, and then abolished six months later.
DFID Ministers have promised that a Head of Profession Environment
post is to be recruited (lower than the Chief Advisor post, but
still senior). WWF recommends that this post should be filled
by a motivated environmental expert to ensure strong strategic
direction on environment, and not just an administrative civil
servant to manage environmental projects.
3.9 The number of environmental advisors across
the DFID country and regional offices is declining. WWF has been
told that the environment is being integrated across other posts
in countries e.g. livelihoods advisors, with no relevant expertise,
have environment added to their portfolio, and also that countries
are not requesting environmental advisors. There is a concern
that by so called "integrating" environment in this
way the outcome could mean that environment is actually reduced
in importance, and that the expertise and capacity to address
environmental issues is significantly reduced.
3.10 When questioned on staffing recently, the
Development Minister, Gareth Thomas MP, answered that the Gershon
Review restricts the numbers of DFID's staff levels. Another argument
given by DFID for the reduction in environmental capacity has
been that their area of expertise is health and education, and
there are other donors who are best placed to work on the environment
agenda. This raises a number of questions, such as:
— Is DFID saying that in the interests
of donor harmonization, others should take the lead on environment
or that environment is not a comparative advantage area for DFID?
— When and how has this debate happened,
and was there cross-governmental or other consultation?
— Who has this expertise and are they
taking a global overview of this, so as to ensure that environment
doesn't get dropped off the development agenda of all agencies.
3.11 With the DFID budget set to increase significantly
over the next five years much of this increase will have to be
spent by external bodies. The emphasis on environment will be
to look at the multi-lateral system and see where it could be
improved to best deliver for the environment. In other words,
how could the World Bank, EU, Asia Development Bank etc, be reformed
for better performance. WWF believe that DFID may struggle to
influence these organisations given that its investment in developing
thinking around poverty/ environment linkages has been reduced
and they are no longer perceived as leaders in this area. For
example DFID had to hire a consult to review the environmental
aspects of the recently revised IFC Safeguards, due to lack of
internal capacity.
3.12 DFID used to provide training so that all
staff had a basic understanding of environmental issues, especially
on environmental screening. This was part of DFID's overall training
programme for staff. WWF believe this has now been dropped. It
should be re-instated given the move to reduce environmental expertise
within the organisation.
3.13 Recommendation: Increased capacity on the
environment is required, including senior level representation,
if DFID is to maintain its lead and achieve its own goals on sustainable
development..
Environmental Screening
How extensively and effectively is environmental
screening of projects applied?
3.14 Environmental screening is compulsory for projects
of over £1million spend, including budget support. This is
good. However, we have concern that DFID is largely using this
as a check list at the end of project development to minimise
or deflect any potential environmental risk. There is very little
transparency as to how this is done. Are the screenings done early
enough? Are they made public? How do they tackle trade-offs in
terms of pro-poor growth and environmental degradation?
3.15 It would be much more effective if screening
was used as an upstream tool, as was in previous practice, during
the design phase to ensure integration and to look at positive
environmental opportunities. We know that DFID have recently undertaken
a review of their environmental screening, and a report should
be available soon. It would be useful if this report could be
made public.
3.16 WWF was told by the Development Minister
that the use of screening means that DFID is "mainstreaming"
environment across programmes. Since the screening process is
used mainly as a risk mitigation tool, it is far from mainstreaming
the environment.
3.17 Recommendation: DFID should return to the
positive, pro-active approach to the environment, which sees environment
as an asset to be used and cared for, not as a threat.
MDGs and Biodiversity
How is DFID's work to achieve the Millennium Development
Goals integrated with the targets on fisheries and biodiversity
also agreed at the World Summit for Sustainable Development?
3.18 DEFRA takes the lead on biodiversity.
3.19 The lead is taken by DEFRA on both these
issues, according to WSSD implementation plan for UK Government
and DEFRA also has PSA targets on these two issues. However, clearly
fisheries is an issue for livelihoods and poverty reduction, sustainable
natural resource use and environmental governance. On biodiversity,
the UK Government has signed up to the 2010 target for halting
biodiversity loss and EU plans ("Roadmap to 2010").
This includes the need for coherence of external policies, such
as trade and agriculture, and strengthening support to biodiversity
conservation in EU economic and development assistance.
3.20 DFID leads on the Global Environment Facility
which provides funding for some of the multilateral environmental
agreements, including the Convention on Biological Diversity.
3.21 Recommendation: DFID should be more pro-active
in making the links between biodiversity and development, and
work closely with DEFRA to achieve this aim.
White Paper and growth agenda
How should environment, development and equity
be integrated in the proposed White Paper? Is a pro-poor, pro-environment
development agenda possible and, if so, what should be its focus?
3.22 Historically DFID has been a leading change
agent in the international development community. DFID has pushed
a pro poor agenda, the livelihoods approach to development and
supported the most comprehensive analysis of Participatory Poverty
Assessments. Poor people, through all this, consistently highlight
the importance of the environment for health, security, hygienic
surroundings, safe energy, safe housing, and access to food security
and agricultural production resources. DFID's soon to be released
environmental position paper supports this further. However, these
important linkages are not strongly represented in the White Paper
Consultation Document. The consultation also fails to openly support
the UK Government's Sustainable Development Strategy—a country-wide
and cross-Whitehall endorsed strategy.
3.23 Rt Hon Hilary Benn MP, the Secretary of
State for DFID, in his White Paper speeches, has made several
major environmental concessions including; "it's a myth that
developing countries can go for growth and worry about environmental
sustainability later on . . ." and that "we in the industrialized
world [need to] reduce our carbon emissions and other unsustainable
use of resources, if we are to stay within globally sustainable
limits". Nevertheless, DFID's commitment to the environment
through capacity and resources has declined.
3.24 The Government's current poverty reduction
agenda, reflected in the White Paper Consultation Document, is
principally focussed on macro-economic growth measured by Gross
Domestic Product (GDP). This simplistic focus on growth and GDP
as the means to alleviate poverty, fails to incorporate environmental
concerns, recognise quality and types of growth, the inequitable
and unsustainable nature of economic growth and the failings of
"trickle down" development. Poverty eradication depends
on increasing the volume and productivity of the real "assets"
available to the poor (including natural, man-made, social and
human), not only increasing a monetary measure such as GDP (Gross
Domestic Product) to the country's economy. GDP fails to reflect
inequality or the condition of the world's natural life-support
systems upon which life depends.
Recommendations
3.25 The White Paper process is an opportunity
for the UK Government and specifically DFID to drive positive
action to eradicate poverty and ensure environmental sustainability
in tandem and to demonstrate commitment to sustainable development.
3.26 Measure poverty differently, not by GDP,
but by a basket of indicators including the health of nation's
natural resources, disparities in wealth distribution and an individual's
ability to deal with vulnerability and survive disaster.
4. DFID WORKING
WITH OTHERS
How does DFID coordinate with recipient governments,
other bilateral donors and NGOs on environmental matters? Is there
consistency or extensive variation from one country to another?
4.1 DFID needs to take a consistent lead on international
initiatives on development and environment.
4.2 There are some good examples of where DFID
has taken the lead in effective international initiatives on development
and environment. For example, DFID has taken a lead role within
the Poverty and Environment Partnership (PEP) from the beginning,
this is an informal group of donor agencies working to improve
understanding and disseminate information on poverty and environment
linkages. DFID has also had an important role in the OECD Development
and Assistance Committee (DAC) environment working group and taking
forward work in DAC on the use of Strategic Environmental Assessments.
DFID is also funding joint UNDP/UNEP on the ground work on poverty
and environment. WWF welcome these initiatives, and would like
some reassurance that DFID will continue their lead on these initiatives
despite their reduced emphasis on the environment.
Opportunity with EU
4.3 DFID is unclear on its role on sustainable development
in the European Union. The Sustainable Development Action Plan
and environment position paper do not mention the EU even though
25% of funds is currently spent through the European Commission,
including the European Development Fund (EDF). The new European
Consensus, adopted during the UK Presidency last November, clearly
underlines the importance of environmental sustainability, the
multi-dimensional aspects of poverty, and the role of sustainable
natural resource use in Europe's development policy. There is
also a proposal for a Thematic Programme on environment, sustainable
use of natural resources and energy to support multilateral approaches
to global environmental challenges and a recognition that environmental
integration to date within geographic aid instruments (country
and regional spending) has been weak and must be strengthened.
WWF is calling for ministers to support a strong and well funded
environmental Thematic Programme.
Positive examples of DFID engagement with national
governments
4.4 Where DFID has had a dedicated environmental
adviser is has been able to develop strong relationships with
government and civil society. This has led to increased dialogue
between government and civil society resulting in sustainable
development being incorporated into key government planning processes
such as Poverty Reduction Strategies.
4.5 Two good examples of working in this way,
can be seen in DFID's work in Ghana and Tanzania. In Ghana, DFID
has worked with the national government, other bi-lateral donors
and civil society to develop an understanding of the importance
of sustainable development to achieving Ghana's growth targets.
It did this through supporting an economic assessment of the sustainability
of growth which is dependent upon renewable natural resources.
The findings of this study has awakened the Ghanian Treasury to
the importance of investing in sound management of the environment
if it wants to achieve its economic vision. The impact of this
has been that the Ghanian Minister of Finance has requested that
a budget statement on natural resources be prepared for the 2006
budget preparations. Additionally, there is now a natural resources
consultant in Ministry of Finance and Economic Planning who is
providing support and assistance on new ways of better managing
natural resources within the budget.
4.6 While in Tanzania, DFID in partnership with
UNDP placed a technical adviser in the Vice Presidents Office
to support the Tanzanian Government in the revision of its Poverty
Reduction Strategy Paper (PRSP) and, in particular, to ensure
that environment/poverty issues were integrated. The adviser worked
to support a process that brought together government, civil society
and the private sector actors to identify and champion the key
environment and poverty issues of importance to Tanzania. The
impact of this has been that environmental sustainability is strongly
embedded in the MKUKUTA—Tanzania's National Strategy for
Growth and Poverty Reduction. There is increasing government recognition
of how the sustainable use of natural resources can help Tanzania
achieve its poverty reduction targets.
4.7 These are both examples of the innovative
approaches that DFID has taken to addressing sustainable development.
However, it has relied on individuals and has lacked a consistent
approach across the organisation. It is unclear how the lessons
learned from these are being extended to other areas of DFID's
work. We hope that in the forthcoming workshop on Integrating
Environment into Country Led Planning Processes, DFID will make
a commitment to building on these innovative areas of work.
4.8 Recommendation: DFID must be more consistent
in its support for international environmental initiatives, and
learn from good experience in the field.
Coherence across Whitehall
How effectively does DFID work with other departments
such as DTI and DEFRA to ensure policy coherence for development
across Government, in relation to WTO and trade in particular?
4.9 DFID has identified the development of the
private sector in poor countries as a key strategy in meeting
the Millennium Development Goals (MDGs). The 2005 DFID paper on
"working with the private sector to eliminate poverty"
stresses the role of small scale business in reducing poverty
at local level and the importance of improving the investment
climate in developing countries. This perspective was echoed again
by Rt Hon Hilary Benn MP in his White Paper speech on January
19th 2006, when he stated that a key factor in promoting growth
is "getting conditions right for the private sector and improving
the investment climate".
4.10 What is largely missing from the DFID paper
on working with the private sector is the recognition that most
of the corporate driving forces behind global trade take little
account of social or environmental factors. Instead their primary
and legally mandated job in society is to deliver short term shareholder
value returns. To make trade work effectively for the poor, there
needs to be a coherent approach, right across government, which
helps to shape the conditions under which national and global
markets operate, taking both social and environmental concerns
into account.
4.11 DFID is leading the British Government's
fight against poverty. Yet DFID has not examined what role it
can play in ensuring that companies are given an enabling environment
within which to act responsibly. Such a role would need to recognise
that companies cannot act alone to become sustainable, and that
often government will need to adjust the market to address market
mechanism failures.
4.12 DFID has shown a willingness to act appropriately
in this respect in a few key sectors, as evidenced by their involvement
in the Extractives Industry Transparency Initiative (EITI), and
support for EU-wide legislation on forestry, Forest Law Enforcement,
Governance and Trade (FLEGT), and their chairing of the OECD taskforce
on Strategic Environmental Assessment. In his White Paper speech
on 23 February 2006 on "Development beyond Aid" Rt Hon
Hilary Benn MP stated that, with respect to the EITI, "we
should be looking to apply its lessons to other sectors such as
fishing or construction or forests or public procurement".
This approach would be strongly welcomed.
4.13 However, there are also many cases where
DFID's past achievements and future success will be undermined
by the activities of other parts of the UK Government. These inconsistencies
need to be recognised and dealt with. A good example of this is
the Export Credit Guarantee Department. Over the last two financial
years this department has provided loans for projects in a number
of areas that could undermine DFID's objectives. The UK ECGD is
currently consulting on whether it should give a loan to the Sakhalin
II oil and gas project in Far East Russia a project which WWF
has identified as having major negative impacts on the local community
and the environment. Despite chairing the OECD Development Assistance
Committee (DAC) taskforce on Strategic Environmental Assessment
(SEA), and the Rt Hon Hilary Benn MP stating to a select committee
in November 2003 that it would be helpful to apply this tool to
future projects of this scale, DFID has not spoken out about the
lack of an SEA for Sakhalin. DFID should be cautioned against
UK public money being used to fund phase II of this project.
4.14 The 2005 report "Pumping Poverty"
by Platform Research highlighted the social and environmental
impacts of the oil industry in developing countries. The report
also highlights the contradictions between DFID's objectives and
it's ongoing support to the oil industry both bilaterally and
through multilateral bodies such as the World Bank. In 2005, DFID
provided opposition to many of the key recommendations in the
Extractive Industry Review which would have pushed the World Bank
to become more accountable for support to the oil sector. Hilary
Benn's recent speech indicated that the G8 had asked "the
World Bank and other development banks to look at how to increase
public and private investment in cleaner technology on a major
scale—in the order of billions of dollars a year,"
yet DFID is still backing hydrocarbons.
Funding through multilateral institutions
4.15 A significant percentage of DFID funds are
channelled through multilateral institutions (a trend likely to
increase in the future). These institutions themselves often utilise
further institutional layers such as Financial Intermediaries
(FIs) to distribute funds (World Resources Institute report Lending
through FIs—Environmental and Social Challenges, 2005).
As a result multilateral development banks (MDBs) can be indirectly
supporting high impact activities such as mining or forestry,
without the mainstream safeguards being applied. This loophole
means that a growing proportion of MDB distribution of funds,
especially aimed at micro-finance and SMEs, has minimal or no
oversight. DFID needs to close this loophole and take action to
ensure that all use of financial intermediaries is subject to
the same rigour of assessment of social and environmental impacts
as other investments. To achieve this DFID will need to play a
role in building capacity in FIs to align their investments with
sustainable development.
Recognising and maximising opportunities
4.16 DFID and other parts of the UK Government
often perceive the "environment" only in terms of threats
to development. However, a more useful way to perceive the situation
would be to acknowledge that we are facing a number of global
challenges and that some of these (eg conflict and governance,
climate change, poverty) have an environmental dimension. Some
of these global challenges present significant threat, but also
some present significant opportunities. Trade and private sector
investment are critical instruments in respect of promoting good
development, based on equitable and sustainable patterns of local
growth
4.17 As a starting point the UK government needs
to encourage a trade debate that extends beyond a simple focus
on cutting export subsidies or extending market access for exports
from developing countries (critical though these things are).
There needs to be an understanding that the challenges implicit
in the statement by Hilary Benn that "developing countries
cannot go for growth and worry about environmental sustainability
later on" (White Paper speech, 23 February 2006) cannot be
simply fixed through the more thorough application of market policies.
While continuing to work for the removal of unfair agricultural
subsidies, the UK Government should also work within international
trade policy forums to recognise and promote financial incentives
as mechanisms for supporting the transition to more sustainable
production of goods and services for developing country export.
4.18 As a positive example, the UK Government
could pursue a policy of procurement that demanded preferential
access for "green" goods and services (eg low energy
technology) sourced from developing countries. In doing so, we
would be helping to move developing countries "up the value-chain"—assisting
in the development of growth premised on the export of sustainable
goods and services; a double win. This is an area of the global
marketplace that is poised to grow exponentially as we move to
a low-carbon economy.
4.19 The UK Government also needs to recognise
the increasing role of emerging economies in determining the future
trajectories of the poorest country economies. For instance, the
challenge of Chinese investment in sub-Saharan Africa should be
viewed in light of the UK's continued capacity to influence sustainable
trade and investment policies on the part of large emerging economies.
This can be achieved through:
— The UK's influence in bilateral,
regional and multilateral trade negotiations;
— The UK's role as an important source
of investment flows to emerging economies where we are investing
in businesses which subsequently invest in LDCs ;
— The role of the UK as an important
market for goods from economies like China that are often manufactured
from materials sourced in LDCs; and
— The influence of the UK in the EU,
a bloc which has vastly increased influence in the same areas
listed above.
4.20 The current rise in the corporate sector
responsibility debate provides an excellent opportunity for DFID
to pursue its development agenda through activity in the UK. DFID
needs to work across Government to promote a recognition that
the pursuit of sustainable development will require government
to adjust market mechanism failures through strong clear leadership
of fiscal incentives, regulation and adjustments to trade tariffs
and barriers.
Recommendations
4.21 DFID should engage with the Treasury, and
other departments, to shape public procurement strategies which
support the emergence of more sustainable and socially responsible
businesses in emerging countries such as China.
4.22 DFID should not support any project finance
for mega-projects that have not been subject to a strategic environmental
assessment, and should promote this position across the UK Export
Credit Guarantee Department and Multilateral Development Banks.
4.23 The UK Government should not support public
finance lending to carbon intensive projects, inconsistent with
international policy commitments.
4.24 DFID should expand its work on transparency
to include disclosure of investment contracts.
4.25 DFID should ensure that any development
funding delivered through MDBs and/or financial intermediaries
should be subject to the same level of scrutiny and rigour with
respect to assessment of social and environmental impacts as any
other investment of aid funding. This can be achieved using guidelines
recently developed as best practice by WWF and Banktrack.
4.26 DFID must lead the UK Government in becoming
far more engaged with the CSR debate, in an active and sophisticated
manner. The planned DTI international framework for CSR with NGOs
will strengthen cross departmental alignment on this issue and
DFID should actively engage with this instrument.
4.27 The UK Government should pursue a policy
of procurement that demands preferential access for "green"
goods and services (eg low energy technology) sourced from developing
countries.
4.28 The UK Government should develop a cross
developmental strategy to ensure that it consistently uses its
influence to promote sustainable trade and investment policies
in emerging economies, especially with regard to China's future
investment in sub-Saharan Africa.
5. AGRICULTURE
AND FISHERIES
The inquiry will focus on agriculture, in its
widest sense, and the use of natural resources to examine the
implications of development. For example, in view of its recently
published policy paper on agriculture should DFID be doing more
to promote the role of sustainable agriculture in rural development
and address the environmental implications of intensive agriculture?
What has been learnt from past experience in agricultural development,
particularly in Asia? What role do fisheries have in DFID's development
work and how is it ensuring sustainability of what is a widely
threatened resource? What work is being done to harness the value
of natural resources sustainably for the benefit of the poor?
5.1 The DFID strategy sees agriculture development
in areas with the greatest potential as a driver of wider economic
development that in turn will alleviate poverty. This approach
is based on a model of agriculture that is intensive and trade
driven and one which could abandon the most disadvantaged. It
hopes to repeat the growth in productivity seen in the "green
revolution" and relies on the trickle-down effect of wealth
generation.
5.2 Intensive agriculture has lead to some of
the major environmental threats facing the world today:
— It accounts for 30% of climate change
emissions;
— It accounts for 70% of human water
use;
— It causes major loss of habitat
and biodiversity in south-east Asia and Latin America;
— It is a major source of nitrogen
eutrophication of freshwater and marine environments threatening
fisheries.
5.3 Trade driven agriculture benefits companies
and economies in developed and emerging countries, more than the
developing world. Despite massively increased levels of global
trade in agriculture in recent decades livelihoods in developing
countries, even when they are sources of traded commodities, have
declined. Within countries the divergence of incomes between those
sections of society that have been able to exploit opportunities
and those that have not has also grown.
5.4 The poorest tend to be the ones living in
areas with least potential for greater production under intensified
farming systems and also the ones most dependent on the environment
to underpin their livelihoods. The threat of focussing efforts
on areas that have the greatest potential is not only that the
poorest will be left behind but also that they will be forced
into damaging the environment in order to survive.
5.5 Additionally, the remarkable expansion in
productivity seen in past decades was based on the use of inputs
produced with abundant and cheap non-renewable energy. Considering
the rapidly increasing energy prices and climate change implications
of increased fuel consumption, it must be questioned whether a
similar model of expansion can be promoted in the coming decades.
Recommendations
5.6 DFID should assess the wider sustainability
implications of promoting a trade driven intensive agriculture
model of development.
5.7 DFID should support a range of policy and
market driven mandatory and voluntary approaches to reducing the
resource use and environmental impacts of agriculture.
March 2006
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