Select Committee on Environmental Audit Minutes of Evidence


Memorandum submitted by the Department for International Development on behalf of HMG (see also Ev 153)

EXECUTIVE SUMMARY

  1.  Sustainable use and management of environmental resources is critical to poverty reduction. Poor countries depend on environmental resources to a much greater extent than richer countries. Environmental wealth—natural resources—is one of the main sources of growth in developing countries, and central to the livelihoods of poor people. The environment—and the economic growth it supports—provides jobs and incomes, and products and services. Governments and donors, working with civil society and the private sector, have important roles to play in addressing environment and sustainable development.

  2.  In February 2005, DFID published its policy paper DFID's Approach to the Environment. The main focus is on how environment contributes to poverty reduction and sustainable development in developing countries, as measured by progress towards the Millennium Development Goals (MDGs).

  3.  This memorandum describes DFID's approach to the environment and how we work with others on environment and sustainable development. It provides information to judge how effective we have been. The fourth section addresses agriculture and natural resource use specifically.

  4.  The memorandum takes into account the way in which donors have changed their approach over the last five years—towards developing country leadership; addressing the big policy questions—particularly around global environmental issues such as climate change; and achieving coherence of approaches and lesson learning.

  5.  Headings reflect the questions posed in the Committee's press release (with the question number referenced). Examples of DFID's activities are included in each section, as are examples of where DFID's approach has worked well or, conversely, has been unsuccessful (Question 12).

A.  DFID'S APPROACH TO THE ENVIRONMENT

How does DFID incorporate sustainability generally and environmental issues in particular into its work? [1]

  6.  DFID's aim is the elimination of poverty in poorer countries through sustainable development. Poor people want jobs or self-employment to enable them to have a better life. For DFID, achieving economic growth is essential for poverty reduction. This offers the best prospect for escaping poverty. But poor people also want the other things that environmental resources provide: better health, security and being less vulnerable to hazards and shocks. We aim to address sustainable development's economic, social and environmental dimensions. Addressing all three dimensions is not always straightforward, however: sometimes trade offs are required.

  7.  We published our Policy Paper DFID's Approach to the Environment in February 2006 (appended). The main focus is on how environment contributes to poverty reduction and sustainable development in developing countries, as measured by progress towards the Millennium Development Goals (MDGs). The paper describes how we integrate the environment into our work with developing countries and other donors.

  8.  The "environmental" goal is MDG 7—to ensure environmental sustainability. Weak progress towards ensuring environmental sustainability will compromise achievement of the other MDGs and undermine our wider investments in poverty reduction. Environmental management and sustainability contribute towards other MDGs, for example:

    MDG 1—Eradicate extreme poverty and hunger

    The livelihoods and food security of many rural and urban poor people depend on ecosystems being able to sustain a diverse range of goods and services. Good environmental management and sustainable use of environmental and natural resources are essential for sustained economic growth that benefits poor people.

    MDG 2—Achieve universal primary education

    Children, especially girls, spend much of their time collecting water and fuel-wood, reducing their chances of going to school. Girls' attendance is encouraged by better school sanitation.

    MDG 4—Reduce child mortality

    Diarrhoea and respiratory infections, major killers of under-five children, are strongly linked to dirty water, inadequate sanitation and air pollution.

  9.  We have developed a number of principles for tackling environmental challenges. These principles are applied according to circumstances and practicalities in country programmes, through work with other donors, and in our policy and research work:

    —  We integrate the environment and natural resources into our work—aiming to identify opportunities that contribute towards poverty reduction as well as addressing environmental risks;

    —  We support country-led approaches eg Poverty Reduction Strategies that develop capacity to handle local, national and global environmental priorities;

    —  In selected countries we support local processes that encourage sustainable development and improved capacity to manage the environment in a way that benefits poor people;

    —  We generate and manage environmental information, knowledge and learning eg developing good practice of how to improve environmental management for poverty reduction that can be used by DFID and other donors, and funding research;

    —  We support developing countries to strike effective deals through multilateral initiatives eg international climate change negotiations; and

    —  We help strengthen the co-ordination of donors' efforts and policies on the environment for poverty reduction, internationally and at country level.

Does the unique definition of sustainable development in the 2002 International Development Act have implications for the environment? [1]

  10.  The International Development Act defines sustainable development as "any development that is, in the opinion of the Secretary of State, prudent having regard to the likelihood of its generating lasting benefits for the population of the country or countries in relation to which it is provided."

  11.  Benefits to poor people in poor countries are the primary focus for DFID. Interventions with human wellbeing as a central objective—but which also aim to improve the environment—are in accordance with the Act. Many social benefits will not be "lasting" if based on unsustainable use of environmental resources, nor will they be so if development assistance causes environmental damage.

  12.  DFID focuses on sustained poverty reduction, looking for environmental opportunities that are likely to contribute to this objective, and minimising environmental risks where they are likely to undermine the objective.

  13.  We have a list of things that should be excluded under the Act. These include activities which are likely to undermine both poverty reduction objectives and environmental sustainability, such as support for supply of fur, drugs or hazardous chemicals.

Is a pro-poor, pro-environment development agenda possible and, if so, what should be its focus? [7]

  14.  We think that not only is it possible, it is necessary. Poor countries depend on environmental resources to a much greater extent than richer countries. Environmental wealth—natural resources—is one of the main sources of growth in developing countries, and central to the livelihoods of poor people.

  15.  But poor people, as they point out when asked, have inadequate access to environmental assets such as clean water, clean air, fertile land and productive plant and animal life that are essential for livelihoods and health. The problem in many countries is the lack of ways in which poor people's views on environment can be heard and responded to.

  In Pakistan, through a DFID supported Participatory Poverty Assessment (using questionnaires and interviews with poor communities) in 2003, poor people identified environmental and natural resources, including access to land and water, and a degrading natural resource base, as one of six priority areas for them.

  16.  Environmental hazards, such as floods, depletion of natural resources and pollution threaten development. Poor people usually bear the highest costs. Global and regional environmental challenges, particularly climate change, are making hazards worse, with adverse effects on poverty reduction and sustainable development.

  17.  At the same time we can not, and should not, deny poor countries the chance to grow their way out of poverty. Poor countries and poor people will use more power and consume more resources and they will need to, if they are to grow. We can help countries develop better approaches, using assets—forests, water—more sustainably, and help them to manage the environmental impacts of their growth. This includes better environmental information for economic planning, and the use of more efficient and newer technologies—for instance, clean energy.

  18.  We need also to focus on the global consequences of growth, above all in the case of climate change, because unless it is tackled there will be huge negative consequences, especially for poor countries who will be worst affected. Poor countries will need to increase resilience and adapt to such change so that hard won gains in poverty reduction are not compromised.

  19.  Three basic approaches are required to address environmental challenges for poverty reduction and development:

20.  Direct contributions to better environmental management

  We need to focus on environmental outcomes that matter most to poor people, and which are central to achieving the MDGs. This includes, for example, improved access by poor people to environmental assets, such as clean water and fertile land, and improved living conditions, as in urban slums. It can also include addressing global and regional environmental challenges, most significantly climate change.

21.  Tackling underlying institutional challenges

  Environmental problems linked to poverty are a sign of state ineffectiveness and a result of institutional failure. The environment needs to be integrated into development by encouraging sustainable use of natural resources for pro-poor growth; by addressing governance of environmental assets; and by ensuring global and regional environmental changes, such as climate change, are taken into account in development planning.

22.  Managing environmental risks

  Developmental outcomes are subject to environmental risks. Assessment of short and long-term environmental impacts is needed when making development decisions and choices, as well as during programme implementation. This is true of donor programmes as well as development planning by developing country governments.

  In Kenya DFID supports a programme that helps poor people gain better access to natural resources such as forests, scrub and other land, essential for making a living. We work with civil society organisations to better enable them to represent the needs of poor communities to government and advocate improvements in legislation to benefit poor people. The programme has resulted in greater accountability and transparency in environmental decision making; and it has strengthened dispute resolution and worked with the judiciary to improve understanding of environmental law. The programme is working with private sector natural resources users to promote their more sustainable use, and to create more and better job opportunities for poor people.

  In China we helped the Yunnan provincial government to integrate environment into policies and programmes addressing rural poverty. Our programme identified ways for poor people to better access environmental resources, such as land and forests, as well as how provincial government environmental management policies can be improved to ensure poor rural people benefit. The difficulty was getting different government departments, such as environment, poverty reduction, agriculture and rural energy, to work together.

How should environment, development and equity be integrated in the proposed White Paper? [7]

  23.  Environmental issues relevant to poverty reduction and development will be addressed in the White Paper. Work on the Paper is, however, at a relatively early stage. Consultation is taking place through a series of speeches made by the Secretary of State for International Development on different themes. The speeches and the consultation document are available on DFID's website www.dfid.gov.uk. The consultation period started on 19 January and closes on 7 April 2006.

  24.  The Consultation Document includes the following questions: How does the environment affect growth; and what can the UK and other governments do to help developing countries grow their economies while also managing the environment?

  25.  The Secretary of State's speeches have referred to the importance of the environment for poverty reduction. The speech on growth argued that environmental wealth and natural resources are a main source of growth in developing countries and central to livelihoods of poor people. Environmental sustainability featured as one of the seven essential components for developing country growth. In his speech on policy coherence, the Secretary of State referred to the challenge posed to poverty reduction by the changing global environment and the depletion of natural resources. The speech focused on the problems that will be posed by climate change, and stated that DFID needed to ensure that developing countries were part of a global solution; that developing countries needed assistance to access cleaner energy and support to develop regional or sector trading schemes; and that better information about the predicted impacts of climate change, and support for developing countries to adapt and build resilience was essential.

B.  HOW DFID WORKS WITH OTHERS

How does DFID coordinate with recipient governments? [4]

  26.  Development is more effective and sustained when led by developing countries, and where there is strong national "ownership" and the capacity to act. We encourage and support country-led approaches that integrate local, national and global environmental priorities.

  27.  DFID country programmes work on this principle, supporting countries' own priorities as set out in national poverty reduction and other development strategies. In general, however, national poverty reduction strategies have only weakly addressed environmental issues, whether at local, regional or global level. Many less-developed countries do not take an integrated approach to considering how good environmental management and accounting for environmental hazards lead to better development. Authority and responsibility for environmental management is often fragmented.

  28.  In "fragile" states, country-led approaches are more difficult or impossible either because governments are unwilling or unable to tackle poverty effectively or there are more immediately pressing issues, such as conflict. Even here environment still needs to be integrated into programming. We may do this through support to international and national NGOs, the private sector and the UN.

  29.  The role of local institutions and stakeholders is important—as drivers of and contributors to policy change; as investors in and deliverers of environmental services; and in monitoring good environmental management. Strengthened local voice can help ensure environment and poverty links are properly addressed in poverty reduction strategies and other development planning.

  30.  We work with developing countries according to their particular circumstances, such as country needs and the capacities and interests of other donors. This can includes managing risks from climate change, managing natural resources for growth, improving access to water and sanitation, improving access to energy, making links between biodiversity and poverty reduction, and tackling environmental degradation. We focus on:

    —  improving governments' abilities to better address and take a more integrated approach to environment and development, for example by making better links between planning, finance, sector agencies and environment stakeholders;

    —  enabling stakeholders such as civil society to participate in development dialogue to articulate environmental needs and influence policy and practice; and

    —  ensuring coherence of approach with other donors.

  31.  One particular difficulty in helping develop government capacity is the often weak position of environmental authorities. They can be strengthened to be more engaged in development planning processes, although there is a danger of focusing too much on environment departments at the expense of others. Successful cooperation helps improve coherence of partner government approaches.

  In Tanzania, working with the United Nations Development Programme (UNDP), we have helped government to address poverty and environment together in its growth and poverty reduction strategy. Working through the Vice President's Office, we supported consultations with local government and others, and development of poverty/environment indicators for the strategy's poverty monitoring system (PMS).

  In Bangladesh we are providing £6 million over five years to support the UNDP and the Bangladesh government to establish a Comprehensive Disaster Management Programme. This programme will help transition from relief to risk reduction, including responding to longer-term climate risks.

  Because the UK Overseas Territories are not eligible to benefit from the Global Environment Facility, DFID has established (with the Foreign and Commonwealth Office) an Overseas Territories Environment Fund. The fund supports implementation of the Territories' Environment Charters—and environmental management more generally—in order to meet local and global objectives.

How does DFID coordinate with other bilateral donors and NGOs on environmental matters? Is there consistency or extensive variation from one country to another? [4]

  32.  As in other areas, DFID strongly supports donor harmonisation and co-ordination for environmental management. We work with other donors at different levels to develop common understanding of links between environment, poverty reduction and development. We draw on—and contribute to—guidance and "good practice" of the OECD Development Assistance Committee Environet. We are working with the OECD and multilateral finance institutions to harmonise Strategic Environmental Assessment approaches.

  33.  DFID is a member of the Poverty Environment Partnership (PEP). This was established in 2002 as an informal group of bilateral agencies, multilateral agencies, research institutes and NGOs. Members include the Danish Development Agency (DANIDA), the World Bank, the Asian Development Bank, the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), the Worldwide Fund for Nature (WWF), the International Institute for Environment and Development (IIED) and The World Conservation Union (IUCN). The partnership is a forum for exchange of ideas and experience. It established a small working group for the 2005 World Summit to focus and co-ordinate efforts on raising the profile of MDG 7.

  34.  At country level DFID promotes co-ordination among donors to take a collective approach in support of country-led priorities. The approach is country specific and depends on the relative interests and capacity of the donors. In some countries there are active donor co-ordination groups. For example, in China, we participate in the Informal Group on Environment (which also includes some NGOs). The China programme also co-ordinates with WWF on its partnership agreement with DFID and in relation to the UK Sustainable Development Dialogues (DEFRA led). In other cases coordination on environment is weak, with a legacy of uncoordinated donor projects.

  35.  In the UK, we hold periodic meetings with the Development and Environment Group (DEG) of NGOs, whose members include WWF, Royal Society for the Protection of Birds, Tearfund and Practical Action. This provides opportunities to discuss key areas of DFID policy and also gather NGO input and comments. A meeting with the DEG in February 2006 was attended by the PUSS where he presented the Environment Policy Paper, and also heard NGO comments on development of the new White Paper.

  36.  DFID has Programme Partnership Agreements (PPAs) with IIED, Practical Action, WaterAid and WWF. These agreements provide a framework for activities that contribute towards mutually agreed objectives. For example, the partnership with WWF provides opportunities for WWF to bring their experiences to DFID, particularly those gained at country level. The funding provided by the agreement has supported WWF to work with donors and civil society in Tanzania to build environmental dimensions into the growth and poverty reduction strategy.

C.  HOW EFFECTIVE IS DFID'S APPROACH?

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? [2]

  37.  Developing countries should not go for growth now and worry about environmental sustainability later. However, whilst some developing countries are starting to take account of natural capital and environmental wealth, most countries and most donors need to do more to systematically address sustainable use of natural resource wealth. For example, biodiversity needs to be factored into poverty reduction but in most cases its contribution is not valued correctly, predominantly as a result of undefined property rights and lack of markets—leading to degradation of these resources.

  38.  DFID recognises that good environmental management and sustainable use of natural resources underpin economic growth in developing countries. A recent study by the World Bank[1] estimates that natural capital makes up 5% of global wealth but contributes 26% of wealth in low-income countries. In Ghana, a study carried out by DFID and the World Bank showed that renewable natural resources (agriculture, forests, fisheries) contribute almost 50% of gross domestic product (GDP). But the costs of environmental degradation were conservatively estimated to be at least 5.5% GDP (equivalent to about US$ 475 million per year or one third of total ODA to Ghana) with the most significant contributors being poor forest management and soil degradation. Ministry of Finance data suggested a wealth accumulation rate of 25% of GDP; however assessments as part of this work conclude that this figure is closer to 15% of GDP.

Ghana

ANNUAL COST OF DEPLETION BY NATURAL RESOURCE TYPE


  Note:  NTFP is non-timber forest products

  39.  The Millennium Task Force on Environmental Sustainability noted the direct factors behind environmental problems as change in land use, over-exploitation or inappropriate exploitation of environmental resources, invasive species, pollution and climate change. However, there are other underlying drivers of environmental problems. Though context-specific, we recognise the importance of addressing governance, economic and institutional capacity factors that affect poverty reduction and relate to the environment.

  40.  Climate change is exacerbating existing pressures on natural resources (eg water, forests, fish and fertile soil). It threatens to reduce the performance and resilience of developing economies, especially those heavily dependent on climate sensitive sectors, such as agriculture and fisheries. By 2025 more than three billion people could be affected by serious water shortages. We aim to help developing countries cope with and adapt to the impact of climate change. We are following up G8 commitments to improve climate data in Africa and develop climate risk screening procedures for donor investments. Pilot screening work is underway in Bangladesh to learn lessons.

  41.  Climate change is one of the four priority areas of DFID's Research Funding Framework. We have commissioned work to:

    —  Use existing data sets to identify areas of sub-Saharan Africa where current and projected impacts of climate variability and climate change are likely to be significant, poverty rates high, and vulnerability to change high, over the next 10, 25 and 50 years, at sub-national level.

    —  Assess the feasibility of developing a decision support toolbox for priority setting, monitoring and evaluation that can be used to assess cross-sectoral technology, policy and management interventions aimed at improving the adaptive capacity and coping strategies of highly vulnerable households.

  42.  DFID has joined a partnership agreement with the Canadian International Development Agency (CIDA), and the International Development Research Centre (IDRC) for a five year £30 million Climate Change Adaptation in Africa research and capacity programme, due to start in April 2006. The programme aims to minimise the environmental impact of climate change on poverty reduction. It will also assess strategies to protect natural resource capital.

  43.  With regard to climate change and energy, increased energy consumption using fossil fuels will lead to increased greenhouse gas emissions. But energy consumption by the poorest countries makes only a small contribution to global emissions. Poor countries need to increase energy use for economic growth, and poor people need increased access to energy in their daily lives. Our overriding priority for energy is to increase access, but this must be taken forward with attention to sustainability of supply and environmental impacts.

  44.  Following the G8 Summit at Gleneagles, we have been working with the World Bank on the development of a new Investment Framework to accelerate the adoption of technologies that enable cleaner, more efficient energy production and use.

  45.  There are opportunities to expand and harness the immature markets for investment in ecosystem services such as watershed management, biodiversity conservation and carbon sequestration. DFID has been a main contributor to the start-up costs of the Ecosystem Market Place. This is a source of information on emerging markets and payment schemes for ecosystem services, such as watershed management for water quality, and carbon sequestration through forestation. It will provide much-needed transparency in emerging ecosystem markets, including who is buying, who is selling and at what price. It has information on how low-income producers and communities can benefit.

Is there sufficient level of expertise within DFID and country offices on environmental issues? [3]

  46.  DFID has established the Sustainable Development Group in Policy Division to coordinate environmental policy. The group promotes use and management of natural resources and the environment in a way that promotes sustainable poverty reduction. This includes enabling poor people to share the benefits of natural resources and environmental assets such as air, water, forests, minerals and energy, and improve access to environmental services, such as water and sanitation. The group also looks at how good environmental management enhances prospects for sustainable growth. The group comprises three teams:

  47.  The Environment for Sustainable Development team is concerned with the use and management of environmental assets for poverty reduction at national and local levels. It helps DFID contribute towards MDG 7 Target 9 to integrate principles of sustainable development into country-led development policies, planning and programmes. The team works across UK Government, with non-governmental partners and with international partners. It helps DFID benefit from international best practice and promotes DFID approaches on environment, poverty reduction and development. It also promotes good practice to address environmental risks of DFID programmes.

  48.  The Global Environmental Assets team is concerned with the use and management of environmental assets that belong to everyone, not just to a local area or particular country. This includes issues such as climate change, and international agreements on forestry, genetically modified organisms, biodiversity and desertification. Work focuses on ensuring global assets are used in a way that benefits the poor, and on limiting the effects of global environmental damage, to which poor people are particularly vulnerable.

  49.  The Water, Energy & Minerals team aims to influence both domestic and international policy-making and good practice to improve access and manage water, energy and minerals for poverty reduction. It helps DFID contribute towards achieving MDG 7 Target 10 to improve access to water and sanitation. It works internationally, for example with the World Bank and EU, on policies and programmes that enable the poor to have access to energy supplies. Work on minerals focuses both on international policies on large extractive industries and on the protection of the livelihoods of poor people engaged in small-scale mining.

  50.  Our policy work on agriculture is carried out by the Renewable Natural Resources and Agriculture team in Policy Division's Growth and Investment Group.

  51.  The Sustainable Development Group is home to three groups of specialist advisers in DFID: environment, infrastructure and livelihoods. The heads of profession support professional development of those advisers and lead on policy in their areas.


  52.  A range of staff in DFID work on the environment. These include programme managers, policy team leaders and specialist advisers with environment, livelihoods and infrastructure responsibilities. We currently have 12 environment specialists. Another six advisers from the livelihoods and infrastructure groups have specific environmental responsibilities, filling 18 environment posts in total. Of these, six specialists are based in Policy Division in the Sustainable Development Group. Policy Division also houses seven other specialists from the livelihoods advisory group working on agriculture, fisheries and forestry.

  53.  Twelve of the 18 specialists working on environment are based in the regional divisions. Bangladesh, China and India offices have country-based environment specialists; and Kenya has two programme-based specialists. However many country programmes have either livelihoods (including agriculture and forestry) or infrastructure advisers, who handle environmental issues in their areas—with the support of regionally-based environment colleagues.

  54.  We have fewer environmental specialists working at country level, and more at policy level, than five years ago. The environment group is small compared to, say, our economics or governance groups. We have just embarked on a workforce planning exercise that will examine the professional skills (and skill combinations) needed to meet business needs over the next five years. Environmental capacity will be considered in this exercise.

How extensively and effectively is environmental screening of projects applied? [3]

  55.  We operate a mandatory "environmental screening" procedure for activities and investments over £1 million. It is used to identify and address environmental risks, including global and regional risks such as climate change and water shortage, associated with DFID's own programmes and activities. The procedure is an important tool for considering environmental opportunities as well as risks.

  56.  The procedure is periodically reviewed to take account of international good practice, emerging threats such as climate change, and changing aid instruments. A review of screening in 2003 revealed some confusion over when and how to screen. It found that whilst the majority of recorded screening notes were completed well, there was room for improvement. An Environment Guide was published in 2003 to provide further guidance on screening. This is available on our website http://www.dfid.gov.uk

  In India, the Orissa Public Enterprise and Reform Programme is an example of where screening has been effective. The screening process identified opportunities to mainstream environmental issues into the programme and to support the Orissa government in predicting and evaluating the direct and indirect consequences of the programme on environmental sustainability. The programme prepared a Guide to Environmental Auditing for Privatisation. All enterprises in the programme are subject to initial screening, followed where appropriate by more detailed environmental assessments.

  57.  We are carrying out a further review of our screening. This will be completed by mid-2006. Preliminary results indicate that use of the Environment Guide has further improved the screening process, but there have been inconsistencies in application and difficulties in recording.

  58.  We will use the results of the review to improve guidance for environmental screening. This includes how environmental screening is applied to new aid instruments such as budget support. In some circumstances, a high level of screening is not always possible, in particular with rapid humanitarian responses where the priority is to mobilise resources quickly and to save lives. We are looking at how to improve the screening in such circumstances.

How significant a document is DFID's Sustainable Development Action Plan? [5]

  59.  During preparation of the UK Sustainable Development Strategy (UK SDS) we worked with DEFRA and other government departments to integrate international development perspectives. The strategy was published March 2005 with a commitment that, "all central government departments and their executive agencies will produce focused sustainable development action plans based on this strategy by December 2005 and will report on their actions by December 2006, for example in their departmental annual reports and regularly thereafter."

  60.  DFID published its Sustainable Development Action Plan in December 2005. The Plan uses guidance published by the UK Sustainable Development Commission. It sets out the overall approach to sustainable development in DFID, which is to balance the economic, social and environmental aspects of what we do in developing countries according to the priorities and circumstances of each country.

  61.  The DFID Action Plan is not, however, new policy. Our mandate, policies and activities continue to be governed by the International Development Act, the published White Papers and our environment policy paper. The Plan describes how we will implement DFID commitments under the UK SDS which are to:

    —  promote international efforts to achieve the MDGs;

    —  achieve the target of putting 0.7% of the UK's gross national income (GNI) into official development assistance (ODA);

    —  increase the effectiveness of aid;

    —  work with developing countries and other donors to help integrate principles of sustainable development in poverty reduction strategies;

    —  help developing countries to give appropriate emphasis to water and sanitation in national development plans;

    —  share experiences of sustainable development with other countries;

    —  help developing countries adapt to climate change;

    —  tackle illegal, unlicensed and unregulated fishing;

    —  extend the Extractive Industries Transparency Initiative to other countries and resources;

    —  support the Global Environment Facility;

    —  support environment projects in UK Overseas Territories; and

    —  lead by example by ensuring sustainability in our internal operations.

  62.  The Action Plan is an important tool for us to help track delivery of DFID commitments in the UK SDS. Progress of all Action Plans will be monitored by the director-level inter-departmental Sustainable Development Programme Board, chaired by the DEFRA Permanent Secretary, as well as by the Sustainable Development Commission.

The DFID Sustainable development Action Plan includes plans to pilot "greener" country assistance strategies by 2007. What should this process entail? [5]

  63.  The reference to "greener" country assistance plans is in connection with action on climate change adaptation. In 2005, the G8 agreed to put climate risk management procedures in place for donor-funded development investments, to increase their resilience to climate change impacts. This is in line with the recommendations of the Commission for Africa. The UK has adopted the Commission's recommended target of 2008. A pilot phase will be implemented between now and then, working with the World Bank and other donors, to integrate climate risk management into assistance strategies for six pilot countries. We are aiming to include three DFID country programmes in Asia and three in Africa in the pilot risk assessment, to cover a range of climate risk and socio-economic vulnerabilities.

How effective so far have the existing Sustainable Development Dialogues, such as those established with China and India, been? Is this an approach that could be extended further? [6]

  64.  The Sustainable Development Dialogues, led by DEFRA, are at an early stage and no assessment has yet been conducted. The Dialogues offer a good opportunity for DFID to work with DEFRA and the FCO (and other departments where relevant) in partnership with the governments of fast developing countries.

  65.  The Dialogues are designed to strengthen bilateral ties in a range of policy areas. They aretaking place in Brazil, China, India, Mexico and South Africa—chosen for their rapidly growing economies, their increasing regional and global impact and influence, and the sustainability challenges they present. The focus goes beyond poverty reduction to broader sustainable development. Mechanisms such as ministerial and official exchanges, research and working groups will be used to share experiences and help deliver mutually-beneficial solutions.

  66.  DFID engagement will be driven by where we can most add value, and by the focus of our respective country programmes. China is at the most advanced stage and DFID's office has been a major partner in designing and setting up the Dialogue. There is scope for the Dialogues to strengthen cooperation between UK government departments. But this needs to be driven by priorities identified by partner countries themselves. The Dialogues need time to develop and demonstrate effectiveness before deciding if the approach can be extended further.

How effectively does DFID influence the work of Multilateral Development Institutions (MDIs) such as the World Bank to ensure that environmental sustainability is taken into account? [8]

  67.  DFID influences the environmental performance of the MDIs as "shareholder" and board member. With organisations such as the United Nations Development Programme and the OECD Development Assistance Committee, we influence through technical participation and/or funding. Attribution of influence is difficult because dialogues are ongoing and many other governments and stakeholders are involved. Influence over environmental issues is not always easily isolated since it is integral to wider discussion about development effectiveness.

  68.  We have had specific influence over the environmental performance of the MDIs by:

  69.  Developing and reviewing policies, strategic instruments and procedures

  We engage on the development, review and coherence of policies, plans and procedures adopted by MDIs. Examples include:

    —  The World Bank Extractive Industries Review of investments in oil, gas and mining. The environmental implications were a major consideration in the review, and it concluded that future investment should include adequate environmental safeguards.

    —  A review of International Finance Corporation (IFC) environmental and social safeguards where DFID helped shape the new IFC Policy, Performance Standards and Guidance notes through cross-Whitehall and multi-stakeholder consultations, including hosting dialogues between the IFC and others, including NGOs.

70.  Monitoring and review of specific projects and investments

  DFID maintains a watch over the implementation of MDI policies and procedures at project and country level. We review investment proposals as a Board member of the institutions.

71.  Regular engagement in forums and working groups

  We participate in the Multilateral Financing Institutions Technical Working Group on the Environment, and the International Association for Impact Assessment. This helps contribute to formative stages of policy guidance, environmental assessment tools and other initiatives.

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? [9]

  72.  Fisheries are important to economic growth in many developing countries, and the livelihoods of many poor people:

    —  Livelihoods: the livelihoods of some 30-40 million people in Africa depend on fishing.

    —  Nutrition: in sub-Saharan Africa fish protein accounts for 22% of animal protein intake on average, up to 60% in some countries.

    —  Revenue and foreign exchange: Global trade in fish products, which is dominated by developing country suppliers, is greater in value terms than tea, coffee, cocoa, sugar, bananas and rubber combined.

  73.  Fisheries are generally poorly managed and are exploited at unsustainable levels. DFID works closely with DEFRA to address the World Summit on Sustainable Development fisheries targets, in particular those related to illegal, unregulated and unreported fishing. We are supporting UK efforts to promote internationally agreed measures to tackle illegal fishing, ensuring that fisheries policies take the interests of developing countries into account. Our aim is to ensure that EU Fisheries Partnership Agreements, which underpin the EU's access to developing countries fisheries, do not threaten sustainability and are genuinely of advantage to developing countries.

  74.  On biodiversity, DFID's main policy interest is to address biodiversity where it is known to be a priority for poverty reduction. Biodiversity resources globally are not properly valued. Their preservation in developing countries (other than through absolute protection) depends on them being able to generate local and timely economic benefits. DFID is investigating the potential for generating payments for ecosystem services.

  75.  DEFRA leads on the Convention for Biological Diversity (CBD), with DFID support on poverty aspects. DFID's objective for the CBD is to ensure that it reflects the voices and needs of poor people.

How effective are funds directed by DFID specifically towards the Global Environmental Fund? [10]

  76.  The Global Environmental Facility (GEF), established in 1991, is the designated financial mechanism for the international conventions on biodiversity, climate change, persistent organic pollutants and desertification. It provides grants and concessionary funds to help developing countries protect the global environment. It also funds projects that protect international waters and the ozone layer. DFID has the UK Government lead.

  77.  The GEF partnership brings together the World Bank, specialist UN agencies such as the UNDP and UNEP, regional development banks and NGOs. The GEF is positioning itself to work more systematically with the private sector. It no longer simply finances stand-alone projects but aims to influence the way global environmental issues are handled at country level. Its lending is staged and dependent on programme performance, thereby improving the sustainability of the GEF's operations and its environmental impact.

  78.  Independent evaluation suggests that for every dollar the GEF invests, it levers more than three times as much from other sources. Since inception, the GEF has provided US$4.5 billion in grants and has generated US$14.5 billion in co-financing from other partners. DFID contributed £89.5 million under GEF-1; £85.25 million under GEF-2; and £118 million under GEF-3 (making the UK the fourth largest donor). Negotiations for GEF-4 are ongoing.

  79.  The GEF has an independent monitoring and evaluation office, which assesses the effectiveness of GEF programmes and resource allocations. The office arranges a comprehensive external study of the GEF's overall performance every four years, to coincide with the GEF replenishment cycle.

  80.  The third overall performance study was completed in June 2005. The study found that there had been progress in the GEF system in the past four years; stakeholders were more informed; and implementation had improved. The GEF has achieved significant result in its biodiversity, climate change, international waters and ozone deletion focal areas, exceeding many of its interim targets. The evaluation considered that the GEF biodiversity programme has had notable impact on slowing or reducing the loss of biodiversity. It considered the GEF to be well placed to deliver results in the newer focal areas of land degradation and persistent organic pollutants.

How effective are funds directed by DFID specifically towards the environment, for example towards achieving Millennium Development Goal 7? [10]

  81.  We estimate that in 2004-05 some £65 million of our aid (including the GEF) contributed towards improved environmental sustainability. [2]This is both direct and indirect, including spending on livelihoods and infrastructure where environmental outcomes are significant. MDG 7 includes three targets:

  82.  Target 9: To integrate the principles of sustainable development into country policies and programmes, and reverse the loss of environmental resources. Target 9 is the only non-quantitative target. It is often poorly integrated into developing country policy, implementation and reporting. The indicators (forest cover, protected areas, energy sources, carbon dioxide emissions) do not directly relate to poverty and few are routinely measured. The international community has agreed that rather than develop a separate planning and tracking system it is better to monitor the integration of sustainable development principles in existing processes. In most poor countries this means poverty reduction strategies.

  83.  Recent case studies carried out for DFID, the Canadian International Development Agency (CIDA) and the German technical agency GTZ show that poverty reduction strategies have not, in the main, handled environmental governance and management well. The World Bank has also made an assessment which shows gradual improvement. Better handling of the environment is strongly associated with broad participation by NGOs and poor people; and a coordinated donor approach, working closely with developing country governments. This is supported by our own experience. More is required, including stronger links between planning budgeting.

  84.  It is difficult to assess how much DFID has contributed independently. But there are examples of where we have been part of an effective process leading to visible improvements in environmental capacity. In Uganda, we helped the Ministry of Water, Land and the Environment to integrate environmental management into the poverty reduction strategy. In Tanzania we worked with the Office of the Vice President to ensure that poor people's reliance on environmental resources was addressed in the growth and poverty reduction strategy.

  85.  Target 10: By 2015, reduce by half the proportion of people without access to safe drinking water and sanitation. The target is relatively clear. However, there is no effective measure for access to safe water ("safety" is assumed to equate with "improved water supply" and "access" permits a two-kilometre distance from the source; both assume reliability).

  86.  DFID provides around 5% of global aid for water and sanitation, accounting for about 6% of our total bilateral aid. We published a Water Action Plan in 2005. Over three years we will double our funding (both bilateral and multilateral) for water and sanitation in sub-Saharan Africa from £47.5 million to £95 million in 2007-08. Our principal partners are the Water and Sanitation Programme (WSP) managed by the World Bank; the Global Water Partnership (GWP); the Water Supply Collaborative Council (WSCC); the Joint Monitoring Programme implemented by UNICEF and the World Bank; and Water Aid. Evaluations of a number of these organisations show them to be highly effective.

  87.  Target 11: By 2020 achieve a significant improvement in the lives of at least 100 million slum dwellers. This target is not stretching given the predicted numbers of slum dwellers—there are presently 924 million worldwide, and this may increase to two billion by 2030 if on current trends.

  In India, DFID has been a major contributor to slum upgrading programmes since the late 1970s, funding major upgrading initiatives across the state of Andhra Pradesh, and in Kolkata in West Bengal. It currently provides financial support to a range of international initiatives including the Community-Led Infrastructure Financing Facility, the Cities Alliance, a new commitment for the Slum Upgrading Facility, and various World Bank projects aimed at reducing urban poverty.

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? [11]

  88.  International and global environment is, in the main, the responsibility of other government departments. In recent years there has been a significant increase in the level of inter-departmental cooperation, for example in developing the UK Sustainable Development Strategy. DFID's interests are to ensure poverty and development perspectives are appropriately addressed in global environment, and to consider how changes in the global environment impact on poor countries, for example the debate about sustainable production and consumption in the UK.

  89.  Examples of where DFID has a significant interest but where others lead include:

    —  EU Action Plan on Forest Law Enforcement (FLEGT), where DEFRA and DFID jointly lead on illegal logging and international trade in illegally harvested timber.

    —  UK approaches to international environmental governance, where FCO and DEFRA lead, mainly made through the UN system. DEFRA lead on relations with the United Nations Environment Programme.

    —  Commission for Sustainable Development, where DEFRA lead UK involvement including reporting on the Johannesburg Plan of Implementation resulting from the 2002 World Summit on Sustainable Development (WSSD). DFID has a major role in meeting UK commitments on integrating environment into poverty reduction strategies and other national development plans; and improving access to water and sanitation.

    —  Foreign and Commonwealth Office (FCO) Global Opportunities Fund where DFID participates in the programme management committee.

  90.  DEFRA and DFID are working closely to achieve greater policy coherence in fisheries. Currently, this work is focused on implementing internationally agreed recommendations for addressing illegal, unregulated and unreported (IUU) fishing; and on ensuring that EU Fisheries Partnerships Agreements with developing countries genuinely serve the interests of poor people in these countries. This work complements that of DFID's country programmes in realising the contribution of fisheries to growth eg in Orissa State, India.

  The UK's illegal logging programme relies on close cooperation between a number of government departments (in particular DFID, DEFRA, FCO, DTI, HM Revenues and Customs), as well as effective collaboration with the private sector and civil society. An external review of the illegal logging programme in 2005 complimented this cross-departmental work. It said "the close personal links between staff in DFID and the EU is a model to be followed by others. The role DFID has had in enabling UK Government to influence the EU is exemplary."

  91.  On agricultural trade and development in the WTO, we work closely with DEFRA and DTI. The UK's position is agreed across Whitehall and ministers of all three departments, along with HMT and FCO, have come together regularly on the Doha Development Agenda (DDA). The UK was represented at the WTO Hong Kong meeting by ministers of the three departments. Prior to Hong Kong, Hilary Benn and Margaret Beckett met development and environmental NGOs to discuss progress on sustainable development in the DDA.

  92.  DTI and DFID have a shared PSA target on trade and development. The White Papers from 2001 and 2004 on trade and globalisation set out how we are ensuring that trade contributes to sustainable development.

D.  AGRICULTURE AND THE USE OF NATURAL RESOURCES [13]

What is DFID doing to promote the role of sustainable agriculture in rural development?

  93.  Ensuring sustainability is a core principle of DFID's new Agriculture Policy Paper. This highlights the environmental impact of poorly planned and managed agricultural policies and incentives and the inappropriate use of technologies. We contribute to the core budget of the United Nations Food and Agriculture Organisation (FAO), whose activities include policy development to strengthen sustainable livelihoods in agriculture, forestry, fisheries and livestock. Our new Strategy for Research in Sustainable Agriculture (2006-16) will focus on research that demonstrates likely impact on improving agricultural productivity for poverty reduction in sustainable ways.

  94.  DFID's country programmes support sustainable agriculture through a combination of direct budget support; rural livelihoods, watershed and income generation programmes; research; engagement in policy reform dialogue; and support to other agencies. This includes:

    —  integrating sustainability into national agricultural strategies and sector-wide approaches (eg Mozambique, Uganda);

    —  integrating sustainable natural resource management principles into implementation of Poverty Reduction Strategy Papers (eg Ghana, Ethiopia);

    —  supporting institutions that address environmental issues (eg Rwanda);

    —  linking international research centres directly with NGO partners promoting the adoption of low input conservation methods to improve agricultural productivity (eg Zimbabwe);

    —  helping farmers' groups and other civil society organisations to deliver sustainable agriculture extension services, for example support to 70,000 farm households in Nepal since 2003 of whom 60% are poor and excluded;

    —  funding local councils and village-level organisations to manage natural resources and tackle environmental degradation through soil and water management, use of organic fertilisers and integrated pest management (Myanmar, Cambodia);

    —  conducting water audits of rural livelihoods programmes (Andhra Pradesh, India) and assessing water balances under different land development and land use scenarios (Karnataka and Madhya Pradesh, India);

    —  supporting policy dialogue on sustainable rural development and food security (through the International Food Policy Research Institute in Ethiopia); and

    —  helping governments, producers and small enterprise networks create policy incentives for more sustainable agriculture through market based mechanisms (eg Nicaragua).

What is DFID doing to tackle the environmental implications of intensive agriculture?

  95.  DFID supports the development of good agriculture policy; reversal of perverse incentives that lead to unsustainable rates of resource extraction; appropriate use of technologies; and better soil and water management to offset the resource impact of productivity increases.


  96.  DFID works in the poorest regions of the world, few of which have achieved a high intensity of agriculture. Many poor people are trapped in low return, low-intensity agriculture. The challenge is to increase agricultural productivity, largely by making better use of the existing farmed area rather than expanding into marginal areas where the risk of land degradation is higher. Increasing productivity will help poor people build sustainable exits from poverty, and poor countries to kick-start broader economic growth and diversification. In the longer term, this will reduce dependency on natural resource based activities.

  97.  In parts of India where agriculture has intensified we are working on cropping systems that are more resilient to stresses like drought and pests. This has been effective in reducing insecticide use by 56% and increasing farmers' net income by 74% in target areas. Also in India, DFID is promoting low input and organic agriculture—where these systems are appropriate.

What has been learnt from past experience in agricultural development, particularly in Asia?

  98.  Agricultural growth in "green revolution" areas of Asia was almost invariably the precursor of broader economic growth, enhanced food security and poverty reduction. But some areas and people were excluded from the benefits, and resource management was frequently unsustainable. Evidence for this is cited in the Agriculture Policy Paper.

  99.  In "successful" green revolution countries like India, we are helping address the accumulated environmental impacts of the green revolution. We are also helping improve sustainable, low input agriculture in rainfed areas with poor communities who have yet to realise and benefit from agricultural growth.

  100.  In Africa (eg Rwanda) and Central America (eg Nicaragua), our country programmes have analysed the Asian experience to see what can be learned that is relevant to current circumstances—and to develop appropriate responses.

What role does forestry play in DFID's development work and how is it ensuring sustainability?

  101.  The UK Government recognises the importance of forests to sustainable development. They provide livelihoods for many poor people; they conserve biodiversity; they provide significant ecosystem services; and they are a rich resource of national development.

  102.  Most of the UK government's support to conservation and better management of forests in developing countries is provided by DFID. DEFRA and FCO also provide some support. DFID's contribution to forestry through bilateral programmes has averaged £18 million per year over the last five years. Countries receiving DFID bilateral support include Brazil, Cambodia, Cameroon, Ghana, India, Indonesia and Nepal.

  103.  We make substantial contributions to international forestry programmes. These include the World Bank's Programme on Forests (PROFOR) and the UN's Food and Agriculture Organisation (FAO), which hosts the multi-donor National Forest Programme Facility (NFPF). PROFOR was cited by the World Bank at the Paris Partners meeting in 2004 as one of two examples of good practice of collaborative working. DFID and other donors will continue to support PROFOR in its four main areas: finance; poverty reduction; governance; and cross-cutting macro-economic issues. The NFPF is a long-running programme supported by a number of donors. It provides effective support to civil society organisations concerned with sustainable forest management. It also supports policy reform and is having a positive impact on wider FAO's ways of working.

  104.  Much of DFID's current work is focused on addressing the governance and market failures that drive illegal and unsustainable logging. We work through the G8 and the EU, and other programmes tackling forest governance, trade and corruption. [3]In January, we announced a contribution of £24 million for this work over the next five years.

  105.  We also work on policies, markets, and financing that favour forests and poor people. This includes the development of market-based approaches to the provision of ecosystem services (water, biodiversity and carbon).

  In Indonesia, the Multi-stakeholder Forestry Programme, co-managed by the Indonesian Ministry of Forestry and DFID, is supporting transparent dialogue on new forest policies between civil society, government and business. This is achieving important governance reforms, empowering local communities, resolving deep-seated mistrust and conflict, reducing poverty, and promoting the sustainable management of natural resources. These local governance transformations are being supported by the work of the UK Government and the EU Forest Law Enforcement, Governance and Trade (FLEGT) process.

  In Cameroon, we support the Forest and Environment Sector Programme, a national programme developed jointly by the Cameroon Government, the donor community and non-government organisations. The programme helps implement new policies of participatory and sustainable management of forest and environmental resources. DFID will also support a multi-stakeholder governance facility that will enhance civil society and private sector capacity to demand accountability of government and to use the opportunities established to participate in the programme.

What role do fisheries play in DFID's development work and how it is ensuring sustainability?

  106.  Fisheries are generally undervalued and poorly managed. Current levels of exploitation pose risks to their sustainability. Potential social and economic benefits are not fully realised and opportunities for reducing poverty are being missed. DFID promotes the sustainable use of fish resources in fisheries-dependent poor communities (eg in Uganda and Bangladesh). We support the development of coherent policies, effective resource management models, and improving trade in fish products.

  107.  In the aftermath of the December 2004 tsunami, we are working with FAO, the World Bank, and the governments of India and Tamil Nadu to develop a policy for recovery of the fisheries industry in the Bay of Bengal. The policy will cover sustainable management and the equitable distribution of benefits to fishing communities, in order to "build back better" systems than previously existed.

What is DFID doing to harness natural resources for the benefit of poor people? How is DFID helping to improve access and property rights to land in specific countries?

  108.  Improving poor people's access to land and property rights is a priority of DFID's Agriculture Policy. It is also a priority for the New African Partnership (NEPAD) Comprehensive African Agricultural Development programme (CAADP), which we are supporting. In country programmes we are helping develop innovative ways to improve national land administration and policy. This includes a three-year programme with the World Bank to review and share evidence between countries and generate national policy options. We also support the High Level Commission for Legal Empowerment of the Poor, which is helping to focus international political attention on the issue.

  109.  Several of DFID's country programmes (Uganda, Mozambique, Kenya, Rwanda, South Africa, India, Ghana, Indonesia, Angola) have land programmes. There are also new regional initiatives to improve access to transboundary water resources (Southern Africa).

  In Uganda DFID has contributed to the development of the national land sector strategic plan and the creation of a Land Act, and funded reform of Uganda's outdated land registries and pilots to systematically demarcate land. Implementation of land activities is now through support to Uganda's Plan for the Modernisation of Agriculture.

  In Mozambique we lead a five donor consortium funding a Community Land Use Fund. This will work in three provinces of Mozambique to help communities engage in land titling processes.

  In Kenya we have worked with other donors to a) support a consultative land policy formulation process; b) build capacity of key local land administration bodies including local level dispute tribunals; c) lobby the government to prevent forced evictions; and d) provide support to civil society to promote networking and advocacy for pro poor land reforms.

  In Rwanda we have supported the cross-Africa LandNet network and the development of national land policy and the 2005 Land Law. Over the next two years, DFID will support implementation of the Land Law, with particular emphasis on building in safeguards for poor and vulnerable people, including support to land dispute resolution.

  In South Africa our bilateral land reform programme aims to secure access to land rights in both rural areas and informal urban settlements, with a particular focus on farm dwellers and marginalised labour tenants in the land restitution process and strengthen post-settlement support. A complementary, multi-donor funded but regionally owned and governed land facility will provide an additional draw-down resource for SADC member states.

  In India we are working to (a) help improve access of tribal and other marginal groups to common property resources; (b) support land distribution and development programmes for the poor; (c) with FAO, distribute homestead plots to the landless; and (d) engage in policy discussion on land issues with the government and other development agencies. A new project in Orissa will develop a new state land policy and land administration system (land titling & registration) to improve land use efficiency, reduce the cost of land transactions, protect the rights of the poor and improve livelihoods.

  In Ghana we and partners are working to support the government's Land Administration Project. Recognising that access to land in 80% of Ghana is controlled by a diverse range of customary tenure systems, this project aims to improve the effectiveness, transparency and accountability of Customary Land Secretariats (traditional authorities). This will benefit poor people by reducing the cost of registering land claims; cutting out excessive red tape and rent seeking; and making the land allocation process more transparent and land rights clearer and more secure.

  In Indonesia we are supporting land and governance reforms in forestry by helping civil society to strengthen farmers' voices, and encouraging local government to respond. By helping poor people to access unused state land for agro-forestry production, poverty and environmental decline are being reversed: conflict is being reduced, corruption exposed, markets are being opened, producer groups are being strengthened, local government regulations are being reformed, old mindsets are changing.


1   Where is the wealth of nations? Measuring capital for the 21st century. World Bank, Washington, 2006. Back

2   This does not reflect spending contributing towards all three MDG 7 targets due to the way DFID records its data. Back

3   Some of this work was recently reviewed by the EAC: Sustainable Timber, HC 607-I, 2006. Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 16 August 2006