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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC-1014 House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE (TRADE, DEVELOPMENT AND ENVIRONMENT SUB-COMMITTEE)
TRADE, DEVELOPMENT AND ENVIRONMENT: THE ROLE OF DFID
Thursday 23 March 2006 MR ANDREW PENDLETON MR DOMINIC WHITE, MR TOBY QUANTRILL and MS SALLY NICOLSON Evidence heard in Public Questions 1 - 66
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee Trade, Development and Environment Sub-Committee on Thursday 23 March 2006 Members present Colin Challen, in the Chair Ms Celia Barlow Mr Martin Caton David Howarth Mr Edward Vaizey ________________ Memorandum submitted by Christian Aid
Examination of Witness Witness: Mr Andrew Pendleton, Policy Manager for Environment and Development, Christian Aid, gave evidence. Q1 Chairman: Hello, good morning and welcome. This is our first oral evidence session of this Sub-Committee so we are looking forward to it. I think your background has been more in trade than in environment issues. I just wonder if I could start by asking you generally to what extent these two things are balanced or whether perhaps one overrides the other. Mr Pendleton: I think if you take a pro-poor focus to economic issues in general then what comes out very strongly from that is that you cannot ignore environmental issues. In our submission we evoke this image that in the DNA of development you have got poverty and environment bound in together. For instance, if you are, as DFID says, trying to encourage pro-poor growth, you have to look at the areas in which poor people are active economically speaking and, like it or not, that is still largely agriculture. If agriculture becomes unsustainable because of environmental issues, which is already becoming the case in many circumstances, then their ability to trade and take part in trade is severely hampered. We know that the development of large-scale international trading can often have a negative impact on the environment. In a sense it is a dichotomy because you have got a situation whereby if you further harm the environment, particularly thinking about climate change, then you harm the very people you are trying to help. I think you have to try and find a way in which the focus on growth does not dominate everything else and, in actual fact, you need a focus on sustainability at the same time. Let me give you an example of an individual because it often helps to think of specific people in this regard. This was somebody whom I met in the north of Senegal, near the Senegal River, who is very, very typical of the kind of people that Christian Aid works with worldwide. He is a farmer growing rice and onions and his name is Mamadou Niang. He said something to me which I thought was very interesting. He said to me there were three things making his life and his livelihood very difficult - and he has quite a large number of children to provide for - and they are the fact that under structural adjustment programmes government withdraws support and he no longer can afford to fertilise his crops properly, that the liberalisation of trade in his country means that because he is already struggling to produce competitively he struggles to compete with cheap imports that now come in largely from Europe, and, thirdly, he said the desert gets closer every day. In a sense those three things are making his livelihood much more difficult. I suppose that is what I mean by poverty and environment being intrinsically bound up together in the DNA of development. If you do something that harms the environment then you are in fact harming the cause of poverty eradication and development. Q2 Chairman: I think that has been recognised, particularly in that rather seminal report Up in Smoke which you refer to in your memorandum, which seems to have ended the standoff between environmental NGOs and development NGOs. Could I ask you how DFID has responded to that report or if you are aware of any response at all? Mr Pendleton: I think positively. I do not think there is anything specifically in the report that DFID would find disfavour with as it were, but I think the concern would be over whether the connect is there. The implication of Up in Smoke is that we respond in a number of different ways, that we respond in a way which allows poor people to adapt their lives to the inevitable impact of climate change. Climate change is not a single factor, climate change exacerbates every other environmental problem that poor people face and so it calls upon us to help poor people adapt to those inevitable changes, those changes that we now cannot prevent anyway. I think it also calls upon us to help poor people and poor countries more generally in a sense find a path to development which does not repeat the same level of carbon emissions that we have. If you look at India and China, where there has been high growth and very high growth in carbon emissions too, if that pattern is repeated in Africa and again in China and India in order to lift those who are still in poverty there out of poverty then you will have a problem which will ultimately undermine what you are trying to do. Thirdly, and this is the most important factor that I think DFID could champion across Whitehall in a sense but also should be championed anyway by all the departments that it concerns, first and foremost, action on climate change has to take place here because we are the polluters and historically we have been the polluters. We are the ones that are largely responsible for the carbon that is currently in the atmosphere and we are still the biggest polluters certainly per capita. So I think in those three senses it is really important. My sense is that DFID is strong on the adaptation work and we do some of that kind of work with them. It has not got to thinking about the mitigation work so much yet and it is not making strong signals across Whitehall from a pro-poor point of view about the need for us to take action on our emissions in rich countries. Q3 Chairman: What did you make of the Budget statement yesterday in reference to extra money for adaptation? It did not mention the word mitigation. Mr Pendleton: I gather the Chancellor proposed at the World Bank and IMS meetings a £20 billion World Bank fund which I understand is about mitigation because it is essentially about how to transfer renewable technologies into developing countries. From our point of view that is hugely welcome because there is another aspect to renewable energy technologies which I think at Christian Aid we are just starting to do quite a bit of work on, which is that essentially a lot of isolated, rural poor companies currently are off grid and they always have been, they have never had large-scale electricity and so in a sense the debate about large-scale electricity generation has not ever impacted on their lives. Smaller scale renewable solutions may well be a very good solution to them. Almost regardless of the climate change argument, they may well be the technologies that those poor communities need to get energy now. What we know about energy is that when it comes into a community it transforms people's lives, it means that businesses can keep operating into the evening and so they can enhance their opportunities to make money and grow their businesses, and it means that particularly the adults can study and so you have a great leap forward in terms of literacy in those communities because, of course, adults cannot study much in the day. For those reasons - and they sound small but they are massively important - that kind of transfer of technology is hugely important. I think we would welcome the proposal. The measures of the Budget clearly do not go far enough but it is a step in the right direction. Certainly the transfer of renewable energy and sustainability technology to poor countries, if it is genuine technology transfer, is of massive importance. Q4 Chairman: I understand that Christian Aid is developing its policy work on climate change. It seems a little late in the day. We have been well aware of the connections since Rio in 1992. Why do you think Christian Aid is only now developing its climate change policies? Mr Pendleton: First of all, I would not necessarily agree that we are only now doing that. The very first piece of work that I wrote when I walked through the door of Christian Aid in 2000 was a report called Unnatural Disasters where we identified - and I think we were the first development agency to do so - the link between the increasing frequency and ferocity of disasters that we were facing and that we were responding to with climate change, and we made that link largely because the UNIPCC under other pieces of work, including work from the insurance industry, made us able to do so and able to begin to cost that as well. We said that the spiraling cost, something like $6 trillion going up to 2050, was something that from a purely economic point of view could not be contemplated or countenanced and therefore we had to deal with it. Christian Aid has been doing a lot of internal work over the past year or so on trying to look at where our programme work is essentially already looking at climate change, but I suppose the partners with which we work do not quite realise that. So those that are working on the stewardship of natural resources and making sure that poor people conserve natural resources such as water and organic fertilisers and so forth, I think that kind of work is intrinsically about climate change, it is about the adaptation side, it is about making sure that livelihoods are climate change proof. I do not think we are latecomers to the debate anyway, but I think a lot of our work is intrinsically about this area, which I think goes back to that question about environment and development and the fact that it is a false dichotomy; they are bound together. Q5 Chairman: In your memorandum you have been critical of DFID for not "climate proofing" how it spends taxpayers' money. How good do you think NGOs are at climate proofing how they spend their donors' money, and how well do you think Christian Aid does that? Mr Pendleton: It is a similar answer to the same question in the sense that what we are aware of is that poor people's relationship with the natural environment is incredibly close and that actually you and I have a very close relationship with the natural environment but we do not realise it most of the time, but poor people do because they are short of water and they are exposed to increasing desertification or increasing flooding or increasing cyclones or increasing ferocious weather patterns much more so than you and I. I think we are aware of that and we have been aware of that through our work and intrinsically the two things are bound together. Our sustainable livelihoods programmes take account of that and our disaster mitigation work takes account of that. The reason why we now have to campaign on climate change is because we have to ensure that our supporters' money is not wasted and I think that is why we are a part of the Stop Climate Chaos coalition, it is that it is really important for us to say loud and clear that the problem is created by us and so we must look to us for the solution. The reason why Christian Aid is a campaigning organisation anyway essentially is not because we want to be politically a pain in the neck, it is because we want to advocate on behalf of poor people in order to try and shift the structures and systems that keep them poor otherwise we could be open to claims that we are wasting supporters' money. That is a very critical part of what we do and that is why we are now stepping up our action with others on climate change. Q6 Chairman: A good part of your funding is spent on grants overseas. Do you have things like environmental impact assessments when you are giving a grant to some project? Mr Pendleton: I think the honest answer to that question is no, we are not at that stage yet, but we are moving much more towards that. What I would say is that as a part of trying to help our partners draw the links between their work and climate change it is critical that we do climate proof our investments, we very much see them as our investments, which goes back to that point about the fact that this is a critical argument for development agencies because we need to climate proof the investments that we are making with our supporters' money. Q7 Chairman: In your memorandum, paragraph 9, it says, "In spite of the economic growth of China and India (the benefits of which to poor people are questionable ...". Could you just expand on why those benefits of economic growth are questionable in India and China? Mr Pendleton: The link between poverty reduction and economic growth is unproven. There is a very good New Economics Foundation report which I reference in the memorandum and I urge you to take a look at and which effectively says that for every $100 of economic growth only 60 cents goes to poor people. There is a relationship but it is a very distant one and so in economic terms, that makes economic growth a very inefficient way to tackle poverty. That is not to say you do not need economic growth because obviously economic growth brings investment and without it investors will not invest, so you do need a modicum of economic growth. There are two factors: the first one is that it is inefficient in terms of tackling poverty and so just as important if not more so are means for redistributing the benefits of economic growth; and the second - and this goes back to the point about climate change being fundamentally harming poor people - is that if economic growth is achieved at the expense of the planet then poor people will ultimately suffer. If your aim in growing economies is to tackle poverty, if you do so at the expense of the environment you will undermine your efforts. I think what we need to be very clear on is that while growth is important it is not the be all and end all. I think the problem and, I suppose, the disappointment with DFID is that while much of what it does in its programme is very much along the lines of what we do and we share objectives, the over-focus on economic growth has been thee main way in which one tackles poverty and I think it is a problem and that is disappointing and that is something that we need to challenge. I think what we also need to do is to get over this idea that development agencies like Christian Aid are anti growth and anti business. We are hugely pro business, but we are pro a kind of business which is pro-poor. Poor people are business people largely, they are involved in business on a daily basis, but their businesses are being whacked by a number of factors and they are the sort of factors that Mamadou Niang talked about because he is essentially a businessman. I think we need to focus on what kind of growth is good for development, which is why I would applaud DFID's focus on pro-poor growth but then question, therefore, where the focus on macroeconomic growth being the issue over other growth in sectors may be important to poor people. Q8 Mr Vaizey: We could have a huge ding-dong about the nature of global capitalism, but I will focus on your relationship with DFID instead. You have worked with DFID now for almost 30 years. I just wondered whether you could talk about your relationship with DFID and, in particular, what benefit you think DFID gets from working with Christian Aid. Mr Pendleton: Christian Aid is one of the agencies that has PPA and I think that is a development which we view as hugely positive because we feel it is a recognition of the positive work that Christian Aid does. Christian Aid now has a five-year strategic framework which says what we will do and how we will be judged by what we do over the next five years and that identifies six different areas. The PPA is essentially a recognition that DFID supports that strategic framework in particular areas. They are specifically interested in HIV and in our ability to mobilise particularly church agencies in developing countries which are hugely important for development. So it is a recognition of the fact we are an ecumenical agency, a recognition of the development work that we do and it is a recognition of the fact that we can add huge value - it is worth roughly £5 million a year - to that, because we bring supporters' money into that and we bring in other money and so in a sense we match and raise the £5 million DFID gets. Overall I think it is probably enormously good value, but it represents a partnership too. It is a recognition of the fact that we share aims and values about tackling poverty with DFID. Q9 Mr Vaizey: What happens when you have some disagreement, how do you work that out? How micromanaged are you? Mr Pendleton: I do not think we are micromanaged in relation to the PPA. We have a responsibility to report against what we have said we will do for the PPA. The PPA is not attached to particular programme objectives, but we obviously are obliged to be accountable for the spending of that money. I think that is quite detached from our campaigning and public advocacy work. For instance, we were quite critical of some of DFID's work in Andhra Pradesh last year and that did bring a degree of disagreement, we had quite a big debate with DFID over that and we have a number of times in the past over specific policy issues. The fact that we have a close funding relationship and share objectives with DFID does not mean that we cannot disagree and sometimes fall out over specific policy issues. I think Christian Aid is quite a determined agency because we have a fairly clear set of values which mean we are obliged to speak out on behalf of poor people and to be provocative in order to try and challenge the structures and systems. Q10 Mr Vaizey: If you consider specifically the environment and DFID's focus on the environment, the sort of impression we are getting as a Sub-Committee is that DFID's interest in the environment peaked a few years ago and then it pretty much dropped off. Is that your impression? What pressure can you bring to bear on DFID as it were to move the environment back up the agenda? Mr Pendleton: I think we can bring two areas of pressure to bear on DFID which we can always bring, which is in a sense we have a good day-to-day relationship with DFID officials through the PPA, but recently we took part in a National Audit Office audit of the PPA process and we looked at all the different relationships we have with DFID and they are many fold, over many different issues and so we have that day-to-day dialogue with DFID. My argument about advocacy for change is that it never works unless you have that element of public pressure that organisations like Christian Aid can bring to bear on a situation. We have an enormous amount of very vocal supporters across the country and we have a good dialogue with DFID where we can urge a greater focus on issues that we think are important, in this case the environment. Secondly, what we can do through our own public advocacy and through networks like Stop Climate Chaos and the Working Group on Climate Change and Development that produced Up in Smoke is an advocate in a more public sense for change within DFID and for connections in Whitehall, which is really critical on this issue because, as I say, the first and most important activity that needs to take place is a reduction in carbon emissions in the UK. Q11 Mr Vaizey: You are seen primarily as a development NGO rather than an environmental NGO. Do you find your dialogue with DFID is more on development issues? Do you think DFID could benefit more if you placed a greater emphasis on the environment in your dialogue with DFID? Mr Pendleton: I think now we are and that is being greeted extremely warmly. In fact, I have had encouragement not just from DFID officials but officials across Whitehall in general and ministers and secretaries of state on that issue because I think they welcome the slightly late arrival in some respects of development agencies into the debate specifically about climate change, but bundled into that are all the environmental issues that I have mentioned. It is obviously critical that we have that dialogue now. We have had an emerging dialogue on the environment, for instance, over disaster mitigation and we are running a five-year research programme for DFID at the moment at Christian Aid looking at six pilot countries, including Bangladesh and Malawi, on disaster preparedness. While again, just as I was saying about our partners, we may not always have connected up the issues of environment and development and climate change, I think we have essentially been there and we have been having that dialogue already. What we want to say about our own work now is that it has to be intrinsically linked to the issue of climate change and I think we would want to say that about DFID's work too. Q12 Mr Vaizey: Is one of the problems that the Millennium Development Goals do not have the environment as one of their key goals? Mr Pendleton: I suppose so, although if you look at the MDGs through a climate change lens then you get some pretty scary projections. I was looking at a piece of research that I do not cite in our memorandum by Martin Perry, who is one of the UNIPCC, which begins to make projections in terms of human development for the different IPCC scenarios on temperature rises. What he is essentially saying is that some of the areas that the MDGs cover like malaria are going to rise dramatically with the worst case and the middle case scenarios. In a sense what climate change does, as it does in all areas of development, is take us further away from our goals. We only ever see the MDGs as a useful set of targets by which to measure things and no more than that because, let us face it, in terms of our aspirations, they are not ambitious enough and then climate change is something that is going to take us further away. Of course there is MDG7 which does focus to a certain extent on the environment. I suppose there is an argument for an MDG that focuses on climate change, but for us the usefulness of the MDGs is as a measure of how we are progressing. I suppose what we can say is that climate change will take us further away from many of the human health and development aspects of the MDGs. Q13 Mr Vaizey: DFID has 18 environmental staff out of almost 3,000 staff. Its budget is going to increase dramatically over the next few years. Do you think it will be able to absorb those increases and perhaps redirect them towards the environment aims? Mr Pendleton: I think we would like to see a greater emphasis on the environment and development in DFID. In development circles in general the arguments about sustainability and sustainable livelihoods have become unfashionable in recent years. We have always felt at Christian Aid, because of the nature of the work and because of the fact that we are connected to very grass-roots sustainable livelihoods programmes through our partners overseas, that that was a bit of a problem and a bit of an issue. I think what we would like to see is not just more capacity in DFID on the environment but better linkages between the environment, sustainability, development and climate change. I think what we see in our work with DFID on disaster prevention and mitigation is that it is good, but there are not the linkages between that and the need to act on the changing climate which, frankly, if you do not do again you are wasting your time and money. So I think there is a very strong argument for DFID being two things, having more capacity on the environment in relation to its own work and the work of its partner organisations like Christian Aid and also in terms of advocacy, because DFID could play a really important role in advocating for action on climate change in the UK on behalf of poor people. Q14 Mr Vaizey: What about DFID climate proofing its own programmes? Have you got examples of where you think DFID could and should be doing more? Mr Pendleton: I will be honest, as I am not a programme person, and say I do not have that. I think the disaster prevention point I have just mentioned is relevant. I think DFID really does need to question investment in large scale energy projects which are carbon emitting. It is a point we have made before about the impact of some of those projects on poor people which, if you look at the evidence, is pretty roundly negative. If you add the climate change argument to that, so I am talking about some big oil and gas exploration projects, there is a very strong argument which says those projects will happen anyway because international investors are interested in those. Apart from offering guarantees and assurances from public agencies, there is no real reason why public agencies should be involved in those. Public money in a sense, if you take the climate change focus in particular but also the poverty focus, is not well spent. I would also question the mitigation projects that DFID does around those programmes in that they need to be evaluated. They could be very valuable in the sense that they could help poor people achieve their rights in those situations, but they could be negative if they are simply about sugaring the pill. Q15 Mr Vaizey: So you think DFID is receptive to change and is listening to your arguments. Do you think if you came back here in five years' time you would be able to say there had been a real change in culture? Mr Pendleton: If I came back here in five years' time and there had been no progress both from DFID and other government departments on doing the essential thing in climate change, which is advocating in the UK for changes so that we do not emit so much carbon, then I would be hugely disappointed. I think the increasing alliance of development and environment agencies through Stop Climate Chaos, the Working Group on Climate Change and Development, the BOND Development and Environment Group and so on is extremely important and I hope that that will mean that in a sense Government has the mandate to do that and that DFID feels strong enough in government to say this is an issue of poverty and we cannot ignore it. Q16 Mr Caton: Aid and development funding from governments and multilateral organisations is increasingly provided as direct budgetary support based on poverty reduction strategies. Is that the right approach? Mr Pendleton: There are positives and negatives about DBS. I would stress again that I am not the expert on DBS, but I did have a chat with some of those who are at Christian Aid and I think they feel there are positives and negatives. If you are working with a government that is co-operative and is worthy and capable and has the capacity to deal with DBS it has the benefit of rationalising aid and allowing government to spend development assistance on its key priorities as agreed with a group of donors and so it makes the situation simpler. Where it is negative is - and this is not necessarily environmentally related - that sometimes I think donors can use it as an opportunity to gang up a little bit on governments and to force through certain changes which may not be in their interests. There was an example about a government procurement agreement that I came across in Ghana, which had been a precondition of the launch of DBS, which was fine apart from the fact that it had an equal treatment clause in it which meant that the government of Ghana, after that law had been enacted, then had to give equal treatment to foreign companies and government procurement as it would to local companies and in our view that is a bit of a problem in terms of encouraging the development of capacity in local companies. There is an opportunity through DBS to set some environmental objectives within developing country governments and I suppose that is an aspect of condition setting in a soft sense that we would not have too much of a problem with given that the environment can sometimes, against all the other priorities that developing country governments often have to deal with, be low. Q17 Mr Caton: Is that not the problem, that direct budgetary support is moving away from conditionality for very good reasons? Does that not limit our ability to climate proof the project that we support? Mr Pendleton: What you have to be careful of with DBS and where it is a significant weakness is that DBS spending by developing country governments runs the risk of not being accountable enough to civil society in those countries. So I think the insistence should be, if DBS is to be the way forward, that a proportion at least goes to civil society and a proportion to monitoring the spending of development assistance through giving direct budgetary support to governments. We have got partners like the Integrated Social Development Centre in Accra in Ghana who are doing direct budget support monitoring and that is a key part of their programme work now. If DBS is going to be a success then civil society needs to monitor it. Yes, I think you are right, it can make certain policy objectives of donors more difficult to achieve. Development assistance in general should not necessarily be about the policy objectives of donors and that is where the conditionality debate has been problematic in the past. There are certain conditions that need to be set and they are that the money is spent as agreed. I think what needs to be done is that donor governments need to set those environmental objectives at the start so that if there is an agreement about that and the condition is that the money is spent as agreed then that needs to be seen to be done. Q18 Mr Caton: You say "if" DBS is the way forward. Does that imply that you think perhaps more focused project funding would be a better way forward, particularly to enable us to protect the environment? Mr Pendleton: I think we have always felt that where there are sufficiently strong civil society organisations in developing countries DBS should not be given at the exclusion of giving money directly to the kind of partner organisations that we work with. Q19 Mr Caton: Enthusiasm for budgetary support at the moment tends to go hand-in-hand with encouraging macroeconomic growth to achieve poverty reduction. Could you expand on your reservations about macroeconomic growth being so essential? Mr Pendleton: It is really important to look at pieces of work like the New Economics Foundation work because it simply states a cold economic fact, which is that for a lot of economic effort, which is costly to the environment, you get very little poverty reduction. While we would want to encourage investment in developing countries, what is increasingly important to us as an agency is looking at what resources already exist in a developing country and looking at how developing countries can mobilise those. In a sense, is investment in its purest sense in developing countries the most important thing or is the way developing country governments regulate that investment the most important thing? For instance, if a company from Britain goes into a developing country to invest and demands a very low tax regime in order to do so, is that good value for money for that developing country? Does that undermine the value of that investment? I think you have to look at things in the round. What Christian Aid is beginning to do is to try and analyse investments. We have had an analysis on foreign investment hitherto which has been about the social and environmental impact of that foreign investment and we have looked at things like oil projects where there have been negative impacts, but we are increasingly trying to look at the fiscal element of that, to say what is the value of this investment to the developing country? Of course they bring money and jobs and therefore may contribute to macroeconomic growth, but what do they take away? If they are not paying a sufficient amount of tax and if they are also avoiding the payment of tax through that process, which very often happens, by making transfers through tax havens then is the value of that investment a good one? Aside from the argument about economic growth per se on which I think it is fair to say the jury is out at the very least, you also have to look at the story behind economic growth in a sense. So what really is the value? How much money does stay in the country? At the end of the day that is the critical factor and it is not the GDP growth on the table, it is how much money stays in that country. Capital flight is increasing from developing countries at an alarming rate and that is something that deserves our focus. Q20 Mr Caton: Hand-in-hand with your reservation about economic growth is almost a direct opposition to trade liberalisation as a way of helping development. DFID obviously takes a different view. In your experience in Christian Aid have you seen benefits of trade liberalisation as well as the downside that you very convincingly gave us with the example of a particular farmer earlier? Mr Pendleton: Of course. Christian Aid is in essence neither pro nor anti liberalisation. Trade liberalisation is a policy tool that governments can use in their trade policy in different ways at different times, the climate change debate being a very good example. If you decide as a developing country government to grow your renewable energy sector rapidly and you are a non-producer of renewable energy technologies, you would be utterly insane to place high import tariffs on imports of the things that you need to do that. If you are a developing country that chooses to specialise in the development of computer technology you would be insane to place high tariffs on the imports of the things that you need. However, if you develop a very successful domestic industry by working through liberalising certain aspects of your import regime then you might want in the future, in order to help the development of that industry, to raise tariffs in certain areas. Where I think import liberalisation has been particularly damaging is in the areas that are most important to poor people such as agriculture. If you have got a large glut of agriculture commodities already on the market which are cheap because they are subsidised at source and then you are forced, as was the case in many developing countries, by the structural adjustment to lower your import tariffs it is pretty obvious what is going to happen and it has happened, it has harmed the livelihoods of poor people. All we are saying in essence - and it is always my aim to try and take the ideology out of this debate and look at the practicalities - is that liberalisation is a tool which can be both a positive and negative thing. If it is used in the right place at the right time it makes sense. If it is used in the wrong place at the wrong time it can be disastrous for poor people and it has been. Q21 Mr Caton: You have been very critical of DFID when it comes to their trade and development policies in the past. What are your main concerns, and have things changed in the last year? Mr Pendleton: The rhetoric has certainly changed across government and in DFID on trade liberalisation because I think the rhetoric has moved from liberalisation is inherently a good thing because the textbooks tell us it is to we must be careful about how liberalisation is undertaken and it must be sequenced. I think the problem with the sequencing argument and in a sense the problem with a lot of trade agreements is that they straitjacket developing countries. If your aim through the development of trade and through eventual liberalisation is to tackle poverty then I think what you need to take account of is that the import tariffs may take a kind of zigzag, so they may go up and down. Our fear is that through being strong advocates, as DFID is, for things like agreements at the WTO and to a certain extent an Economic Partnership Agreement between the EU and African, Caribbean and Pacific countries, it does not take account of the fact that if you put countries in a straitjacket of a trade agreement then they are going to struggle to be able to invoke the trade policies that they need to do in the interests of their development and so again it goes back to that argument which I think has been heard particularly in DFID and the rhetoric has moved but I am not sure that policy has necessarily moved to follow that. Q22 Mr Caton: Do you think trade liberalisation in developing countries is going to have an impact on climate change and emissions? Mr Pendleton: When you overlay the increasing carbon emissions in countries like India and China over their economic growth you get a kind of echo in a sense and carbon emissions go up as economic growth goes up. In a sense the kernel of truth at its heart with the climate change debate is that we really do not have a choice over this. The fact that I have questioned growth from the basis of a poverty eradication point of view --- I hasten to add that that does not make us anti growth, it means that we need to question growth for growth's sake. Just creating economic growth does not tackle poverty. Then I think you need to add in the further change of climate growth and carbon emissions and what you need to do at the very least is to begin to ensure that development is clean in developing countries. That means not just making sure that African countries that are at a low stage of economic development and are not growing very much at the moment are provided with the wherewithal, the resources and the financing to begin to do their development on a clean path but that also India and China are strongly supported and encouraged to do so, I think that is critical. There are still an awful lot of poor people in India and China in spite of their economic growth and if we are to make those people less poor then we have to do that in a way which does not further harm their environment. China and India are also highly sensitive in terms of their ecology and the poor people that live in the most vulnerable parts of the country are the ones - and they are largely the poorest people in those countries - who are once again going to get whacked by that if we are not careful. Q23 Mr Caton: We are told that changes in land use are responsible for between 20 and 30% of manmade carbon emissions and that most of this is in the developing world. Is this something Christian Aid has looked at? Mr Pendleton: No. Q24 Mr Caton: Do you think you might be looking at it? Mr Pendleton: It is certainly something we need to consider. What we have to be careful of in the climate change debate is that we do not have our priorities skewed. We are clear about our priorities, which is that we are here to tackle poverty, but what we are also becoming increasingly clear about is that if you tackle poverty at the expense of the environment and particularly in a way which further harms the climate then you will undermine your efforts. So I think it is really important for us to take account of those two facts, but I do not think that changes in many respects the priorities for our work, which is about trying to sustain people's livelihoods, people who are at the very bottom of the ladder of humanity and whose livelihoods are very fragile and very vulnerable to any kind of change and require constant help and assistance at the moment. What we do not want to do is to be doing that forever. As we always say, we are an organisation that essentially wants to go out of business. We do not see that happening any time soon. Essentially if we are to give our supporters good value for money we do need to take account of climate change, but I think we need to be careful about how that sometimes may skew our priorities too. Q25 Mr Caton: Looking at agriculture, there are significant climate change impacts due to the use of air freight, added water use, water pollution and yet intensive agricultural production for export is argued by some, including our Government, as vital for poverty reduction. What is your position on that? Mr Pendleton: My position is that it is probably not. It can be in some circumstances. What poor people need probably more than anything else is jobs and things that give jobs to poor people is obviously a good thing. Our view of large scale intensive export orientated agriculture is that it is largely a rich man's game in developing countries and does not touch the lives of many poor people and then you are back into the economic growth argument and again you have to decide whether or not you think growth is a good thing for poverty reduction in and of itself. I think our reaction to that is not necessarily, but you cannot be unequivocal on that because, of course, it may do in certain circumstances and good kinds of large scale projects where people's human rights and labour standards are set reasonably high can provide good livelihoods for poor people, so I do not think we would rule it out. The issue for us is very much about how you secure people's livelihoods who are very much below that level and who are subsisting on their own or who are not even landowners and work as day labourers or whatever or, increasingly in the informal sector, when they go to cities, how you secure their livelihoods and begin to move them up the economic and employment ladder in a sense. I think for us the game is very much about the value with which I suppose smaller scale, domestically generated entrepreneurship might be nurtured. One of the things we are looking at in the whole investment argument - and we are working with people like the Co-operative Bank on this at the moment - is how investors here capitalise small scale projects in developing countries which have a much clearer demonstrable benefit for poor people, are much more pro-poor and will also have a much gentler impact on the environment, because they will be working through organisations perhaps like us where we have got years of experience with our partners of the sustainable use of natural resources in the production of agricultural crops and it is a tough one because the Co-operative Bank, for instance, invests its south focused development money in things like World Bank bonds at the moment. Our argument is that if you are in IFC bonds you are not necessarily benefiting poor people. So we are working with the Co-op and we are just about to make a joint announcement with them about the fact that they will no longer invest in IFC bonds, and we will probably do a joint conference with them later this year looking at how to invest in the things that poor people are doing so you can encourage that kind of business-led development, private sector-led development, but in a domestic, small scale sense rather than in this big growth, foreign investment-led way. Q26 Chairman: Last year we had two major conferences, one in Hong Kong and the other in Montreal. Do you think these conferences occurred in two parallel universes? Was there any connection that you could perceive between them that was quite clearly being made by the UK Government? Mr Pendleton: Not as far as I can see. There is a reticence at the WTO to take on the climate change and environment debate. It is there, there is a committee within the WTO that considers it but not from the point of view of how environment/climate change applications might ultimately be trade restricting because, of course, the WTO is about removing things which are trade restricting. There is a disconnect there and I think that is important because I think we have to raise the issue of climate change at the WTO and raise the issue of trade in COPMOP. Q27 Chairman: In UK terms do you see DFID's role as being key to that? Mr Pendleton: It is key to that because DFID has a presence at both and so it is key to making those linkages. What I cannot say because I do not know is whether you have the same staff going to each, I suspect not and whether if you do not there is a good linkage within DFID about those staff talking to each other. What I know from Christian Aid, a big organisation, is that that may well not take place and that would be a very good thing because I do not think those two agendas can be divorced from one another. Q28 Chairman: Is it different NGOs that cover each or do NGOs like Christian Aid try to be there at both? How would the NGO world try to make this linkage? Mr Pendleton: We were not in Montreal. We have been at COP Summits before. We nearly always have a presence at G8 Summits. Obviously both climate and development were linked at the G8 Summit in Gleneagles and because of that focus on trade we have had a presence at WTO Summits in recent years. There is a linkage and there is a linkage because we have much smaller resources, there are fewer people and so the people that tend to do those things, such as myself, are one and the same. Q29 Chairman: Andrew, thank you very much for your evidence this morning which has been very helpful and comprehensive. Mr Pendleton: Thank you very much for asking us to come along. Memorandum submitted by WWF-UK Examination of Witnesses Witnesses: Mr Dominic White, Government Aid Agency Manager, Mr Toby Quantrill, PPA Development Office, and Ms Sally Nicolson, EU-International Relations, WWF European Policy Office, WWF-UK, gave evidence. Q30 Chairman: Good morning and welcome. I wonder if I could start by asking you, as an environmental organisation, if you could give us a quick summary of your interest and concerns about development issues. Mr Quantrill: Andrew has done quite a good job for us in answering that to some extent. We do not recognise the stand-off that you mentioned with respect to the Up in Smoke report. We do not feel that the distinction between environment and development in international terms is a true one. We also think it is a false dichotomy. The way we like to look at it is in terms of a set of global challenges that we are facing. We believe that there are a number of global challenges out there and climate change is obviously one of them, but there are others such as governance issues, conflict of security issues and so on. Many of these global challenges have an environmental aspect to them, eg poverty, as has been very well articulated by Andrew. From a WWF perspective, we feel that in terms of natural resource management, ecosystems, health and so on in the areas in which we have expertise, we can bring that expertise to bear on these much bigger challenges, but there does need to be a coherent and co-ordinated approach to tackling these challenges. We need to work in partnership with development agencies, with governments and so on in a way that allows us to find common ground, to negotiate where there is dialogue needed, to find a compromise if necessary and to move forward on some of these issues which are urgent. Q31 Chairman: I hear what you say. Obviously the NGOs are working on Make Poverty History, but the consistent message that came out to the public was just about poverty reduction, I cannot recall any significant message about the environment creeping into that and that has perhaps spawned Stop Climate Chaos to try and replicate that for the environment. That does suggest to me that combating poverty is still always going to be a more emotive pull on people. Do you share that view? Mr Quantrill: I guess with large campaigns such as Make Poverty History you are looking for a few simple messages, but I do not believe that the agencies involved in that would have excluded environment from their thinking on poverty in that they needed very specific areas they could campaign on. Certainly Stop Climate Chaos is now showing that there is a large coalition building around climate change. There are other coalitions in existence looking at that, for instance the Corporate Responsibility (CORE) Coalition which involves both environmental and development-type agencies, there is the Trade Justice Movement and there are very strong coalitions building up around both management and freshwater resources. I would also draw attention to the fact that in terms of the White Paper consultation that is going on at the moment, the Development and Environment Group of BOND (the British Overseas NGOs for Development) has brought together a single input to that consultation. We have got an input that will be going in very soon, I can give you copies if you are interested, to which we have 36 signatories, covering both environmental and development agencies, including people like Oxfam, NEF, ourselves, RSPB and a whole range of others. We are finding consensus, which is not to say there is not dialogue required, but on key issues we would see that there is. Ms Nicolson: Last year the World Summit on the Millennium Declaration happened where clearly the environment and development were brought together very strongly. The sustainable environment was a large part of the whole development chapter and the UK Government were there with other donors and many other countries from around the world bringing together the importance of delivering on the Millennium Development Goals holistically. You cannot achieve poverty reduction without the other aspects which include environmental sustainability. Q32 Chairman: You are an environmental organisation that receives funding from DFID. Could you explain how that came about and what it is for? Mr White: The WWF has been working with DFID even before when it was the Overseas Development Administration, since 1986 and was a recipient of its early joint funding scheme. It was in 2000 when DFID developed these Partnership Programme Agreements which, as Andrew explained, is very much based around common strategic aims and objectives where DFID identified the role of civil society in environmental management for the purposes of development and poverty reduction. Objectives shared by DFID and the WWF form the basis of that strategic partnership. Q33 Chairman: Are you involved because of DFID's commitment to the environment or simply because they have not got the capacity? As we have already heard, they have 18 environmental staff out of nearly 3,000. Are you being brought on to fill a gap? Mr White: I hope it is not seen like that. This is not a sort of service delivery agreement where we have to deliver certain outcomes that DFID are not able to do. It is more established around working through civil society as a strategic development mechanism in terms of holding governments to account in-country and, of course, for the poorest who depend on the environment directly the organisation of civil society to advocate their needs in terms of environmental management that underpins their development prospects is critical. So the support of WWF as a civil society organisation in developing countries and empowering and working with local civil society groups is what underpins the principle in the Partnership Programme Agreements that DFID has with the UK civil society organisations. I do not see it as a stopgap for DFID or an excuse for DFID in that sense. Q34 Chairman: Presumably you would like to see them employing a lot more environmental staff. Mr White: I think it is imperative and I do not think they can ignore that fact. We are still hoping that they fulfill their commitment to replace certain environmental capacity. If, as we anticipate, the budget for DFID increases dramatically in the near future, which is expected, then we would have serious concerns that they would be able to deliver the development that is required in terms of sustainability without some more environmental expertise to underpin some of their core policies and programming. Q35 Chairman: How closely do you think environment and development NGOs are now working together? It seems to me, even from the evidence from Christian Aid, that there now seems to be far more of a crossover even internally on these things. Is that how you see it? Mr Quantrill: That is definitely how we would perceive it. We are starting to articulate our thinking in terms of global challenges rather than in terms of aid development as an ordinary environment issue. I have mentioned the fact that we are able to work together on the submission to DFID's White Paper process. That is not to say there are not areas where further dialogue is needed. Climate change is driving that, but climate change is not the entirety of that debate. Climate change exacerbates existing issues. Let us take water resource allocation and the management of resources especially trans-boundary, that is going to become a more and more critical issue. It already is and it will continue to be so. If climate change patterns evolve then it is more and more likely that that will become a source of potential conflict and so there needs to be increasing investment in managing that. The governance of natural resources can actually be quite a strong force, both economically an improvement and for reducing conflict. Q36 Chairman: To what extent do you think that this message is beginning to resonate with your members having to start off with all of the UK population because in the past development has always been about something overseas, usually the Overseas Development Agency and that sort of thing? Are you telling your members that we have to take tough measures here to do with a global problem? Mr Quantrill: Yes, WWF is stepping up its work on sustainable consumption production processes in the UK as well as internationally, so we are taking that message to our members and beyond to the public more and more strongly. It is evident in the work that we do, in the messages that we put out that there is a lot more work to be done, but we are certainly already working hard on that. We perceive there are two sides to a development process, there is the international side, what happens out there, but development starts at home and you have to deal with consumption issues if you are going to deal with poverty issues. We are one of the agencies that are working on both sides of that equation. Q37 David Howarth: Can we ask you some questions about your view of DFID, especially its policy implementation. You said that DFID does a lot of good studies and we have a list of about nine of them to about February of this year, and a lot of good recommendations come out but not very much seems to happen. Can you give us some examples of that sort of recommendation and perhaps say why you think the policy words did not become real actions? Mr White: There are a number of examples and we have always been very complimentary of DFID's ability to produce excellent analysis of the issues, debate and discussion around environmental matters. One of the most significant reports that it recently put forward was the Linking Poverty Reduction with Environmental Management, a multi-agency paper with UNDP, World Bank and the European Commission, for example. There is nothing at fault in this document in terms of the understanding of the discourse on the environment and its imperative for development, but what we do not see is the follow-up in terms of action that carries that forward, for example. Similarly with an evaluation that they had in 2000, looking at whether they had mainstreamed environment within DFID and there were a whole series of recommendations. We perfectly agree with all of that, but again they have not really been acted upon. Their environmental screening guide has been downplayed and perhaps diluted in terms of how well that is utilised within DFID recently, as well as a whole range of excellent papers on climate change and adaptation, poverty and the environment, biodiversity et cetera. All of that we absolutely commend DFID for producing and articulating. I think the answer to why, therefore, we do not see the follow-up is somewhat more complex, and it comes back to perhaps some fundamental failings in corporate governance in DFID in terms of the fact that there is no senior director within DFID responsible for the environment. You see excellent support for a number of these issues coming from the ministerial team, but not necessarily carried through the department wholesale. We need some senior level responsibility for answering and responding to environmental concerns, we need some performance measures in place that allow DFID and incentivise DFID to keep environment in mind and respond to monitoring and performance against those measures; so representation in PSA or service delivery agreements would be welcomed in terms of having a reference point to check DFID on. Environment is a cross-cutting issue, it is incredibly complex because you are dealing with extremely complex systems and you cannot measure progress on environment as tidily as you can measure maternal mortality or the number of inoculations or some other health or social data which is more readily available. That is not an excuse, however, to not tackle some fundamental issues around environmental management. We feel that without this corporate acknowledgement in terms of senior management representation, performance measures and therefore the impetus that that would generate to bring in environmental capacity that is available to all country officers as well as the divisions - the policy division and regional divisions - within DFID in the UK is critical. It is not acceptable that Latin America, West Asia, South Africa, the Middle East have now a dedicated environment advisory capacity, and we really have to ask DFID quite hard, which we do, how can you actually continue with the development pathways that you are eschewing without actually having some expertise that might be able to highlight the opportunities as well as, obviously, some of the risks of certain development interventions which they are proposing. Q38 David Howarth: Can we try and tease out some of those different candidates for causing what is going on? We have also noticed the fact that the secretary of state makes excellent speeches, but not much happens even as a consequence of those. Presumably, the point about the organisation of the department has been put to the secretary of state, so I was wondering what your impression is about whether this is a problem of political will or whether it is a problem of resources, that more expertise is needed that cannot be found in existing budgets? Mr White: You are quite right, ministers have made excellent speeches on the linkages between environment and development and we applaud that. Probably what we would see, I think, is that within the department's structures if there are priorities that DFID have to make when reducing the staff cadre they are not defaulting to a prioritisation which does not bring environment into that mix. Without senior lever representation and staff responsible for that at the high level, there is no one to actually uphold the necessity to keep the environment capacity within the DFID policies, programmes and staff. Ms Nicolson: If I can add to that, they did, a couple of years ago, announce that they would be appointing a chief environmental adviser and made a quite fanfare about it in terms of we recognise how important environment is to our work, to continuing development of poverty eradication, and within six months that post had disappeared. It seems to be very strange, as if we have actually done it, within six months we have actually measured environment. It seems to me that there are very mixed messages, both to the staff within DFID, I would have thought, as well as to recipient countries and as well as to other agencies with whom they work. Q39 David Howarth: Is there a problem about cascading down the concept of sustainable development as containing both poverty and environmental aspects? What do you think the secretary of state and the department mean by sustainable development and is there in fact a gap between the two? Mr White: The secretary of state in a number of his recent speeches in this round leading up the White Paper consultation has constantly underlined and underscored the link between the two and that you cannot pursue macro-economic growth strategies and pick up environmental issues later, it is not a win win situation. I have every confidence that the secretary of state actually understands that and is convinced about the necessity for sustainable development that includes that type of analysis. I would not question necessarily that the Department does not agree with him, it comes back to this more fundamental issue, almost cultural issue, and when you are pursuing increasingly direct budget support strategies which tend to follow and support the general growth agenda, often in countries the ministries responsible for environmental issues and management are not strong ministries and they are not really having a strong voice at the table of their government and therefore are not picked up in bilateral development discussions in the same way. Therefore, without that voice coming through from national government, representing environmental interests and concerns in development, the bilateral agencies do not necessarily respond to that either. What we would like to see is approaches from bilateral agencies, and DFID particularly, which start addressing that disparity and strengthening the ministries in government which have these cross-cutting agendas in particular, and strengthening them so that they can start addressing the disparity between investment for environmental aspects of growth as well. Q40 David Howarth: When you say in your memo that the environment is not a strong suit, not a forte of DFID, that applies to other governments in other parts of the world as well; it seems the whole business of interaction is one where the environment is not at the table. Ms Nicolson: It is very, very often the environment department within governments that is the weakest department, has the weakest voice, because the environment is not necessarily costed into the national counts and therefore it can often be sidelined. Clearly, this has shown up very much in the poverty reduction strategy papers whereby governments have decided on their priorities, which are often very short term and of course completely right in terms of achieving health targets, food security targets, poverty alleviating targets and it is much easier in a political sense to think about achieving those things and sending the money for that than possibly some of the longer term environmental trade-offs that might occur because that is going to be further down the line. Q41 Chairman: The last of the nine documents that David mentioned was DFID's approach to the environment, published in February of this year. What is your view of that document? Mr White: There was consultation on the development of that document through the Bond network and I must say we feel that earlier drafts, perhaps, more strongly represented some of the issues that were necessary to be addressed. It is still a very good articulation of a lot of those issues and DFID have shown a lot of good intent in the text that they have presented. We are anxious that, rather like a lot of these past documents that have come through which have articulated the discussion around environmental development, it will go the same way as what we described before. There is very little capacity to really see through some of the commitments made in that document and if this is upheld in their policy on environment then, unfortunately, we do not hold out much hope that actually they are going to be able to implement half of what they say in that paper as well. Q42 David Howarth: On that there is a view, as you have just mentioned, that through the progressive draft document even that document seems to be watering down the environmental commitment. Do you think that is a conscious decision or do you think it might even be taking into account the problem of implementation that we have been talking about and that perhaps they are just being more realistic about what they can achieve, given their past record? Mr White: Which may be cart before the horse, because what we need is the firm commitment in the narrative about what is required and then the capacity to follow suit, not we cannot have any staff because we have got number cuts and therefore we cannot do development properly because of the staffing issue; they need to say this is how we need to achieve development sustainably and therefore we need the staff capacity and competence to follow that. I would hope it was not for that reason that it appears to be somewhat diluted. Q43 David Howarth: It would be absurd if it were. Mr White: It would. Q44 David Howarth: Just going back to the point about how to get the environment at the heart of policy-making within DFID, what can be done? You have mentioned an appointment at director level, what other change in structure and policy could be carried out to bring the environment into the heart of government decision-making? Mr White: Within DFID I have described some of the internal issues which I think could be addressed to at least ensure that DFID was not just making the right policies on paper but also being able to follow them through in terms of having the expertise and capacity to do so. In national countries where environment is weak often it is an extremely difficult challenge because of course you are dealing with ministries that preside over the management of a lot of extensive natural resources which have intrinsic values which are easily mismanaged, and often these ministries are subject to quite a lot of corruption as well. The Government's issues around environmental resource management are extremely challenging and underpin, for example, the whole development dilemma in the Congo which is actually largely down to fighting over natural resources. The conflict issue that arises from the natural resource base does not lend itself very easily to delivering development work through those ministries which are embroiled in the conflict surrounding the management of these resources. Q45 David Howarth: What about domestically here, is there a problem with, for example, the 2002 Act which makes poverty reduction the aim and does not seem to mention anything else, or with the Millennium Development Goals themselves? Does there have to be a public announcement of a change in direction, something firmer than just ministerial speeches that might help? Ms Nicolson: The Act does talk about promoting sustainable development but it does not go on to define it. Q46 David Howarth: That is a problem. Ms Nicolson: Clearly the UK Government has recently done a revised sustainable development strategy and has defined it, that it is about human well-being within ecological limits, so it is something that is a cross-cutting commitment. Clearly, DFID should not be doing any development that is not sustainable and I think there are good examples to look at, perhaps, in other countries, for example Sweden, where they have legislation which promotes coherence across government so that they are integrating the environment into all of their policies and they have a separate unit reporting to the prime minister on this. There are other examples one can look at on the way to do it, but whether it requires rewriting the International Development Act, I am not sure. Mr Quantrill: As we have already heard from Christian Aid there is consensus among the development agencies and I do not think there is any reason why the existing Millennium Development Goals should not include an emphasis on environment because we see the two things are so closely linked. What we would like to see, perhaps, is DFID acknowledging that more strongly and more publicly, bringing the development lens as it were to a number of other debates around trade and so on. For instance, climate change was a big one where we saw, from our perspective, listening to Radio 4 I heard a public fallout between DTI and Defra over climate change but did not hear DFID's voice on that, yet they of all departments in government should be representing the voice of the poor, the people who are going to get hit by climate change. Where was their voice on that? In terms of what they should be doing, publicly linking these issues in the public's mind more and more would be good stuff, and they are going to see the NGO community, the civil society, doing that increasingly and they need to start thinking how they are going to be taking that step themselves. Q47 David Howarth: Can I just bring us back to another specific example of a backward step that you have mentioned and that is environmental screening, the million pounds plus projects that are screened for their environmental effects and guidance issued. You mentioned that this seems to have gone backwards, that it seems to have increasingly become a bolt-on project. Can I just ask you to comment first of all whether that is a correct interpretation and, secondly, why it has happened? Is this yet another example of the requirements appearing to DFID to be too onerous and therefore the aspirations have been reduced to meet what they think are realistic possibilities? Mr White: DFID set out a pretty comprehensive guide to environmental screening which was designed to be addressed up-front at the beginning of what they call concert note stage in the design of programmes and projects that they were getting involved with. What we do understand now - and it is difficult for us to have a full picture of this - is that the screening is seen very much as a tick box exercise and in fact has been branded by some of the internal staff as an environmental screaming exercise, which I think somewhat reflects the misunderstanding and the discomfort that traditional economists may have, for example, with having to consider someone else's agenda. The thing about cross-cutting issues is that everyone has to consider whether it is an environment agenda, human rights or governments you cannot get away from them. What we now believe is that there is a tick-box exercise which people see as a hoop that they have to jump through at the end of the process, very much feeling that it is in line with risk management and having to consider that thing called environment at the end of the process, rather than looking at the positive opportunities that the environment may present to a development strategy which could actually lead to a much more long term, sustainable solution for the poorest, developing itself around environmental limits and considering the safeguards but also being able to develop sustainably from that. There is the question why again, why is it not being seen? To be fair, we are aware that DFID are in the middle of a screening review, to look at the screening process and see how they could perhaps strengthen and improve it, we hope. We are not sure what the outcome of that review will be but we would hope that they are able to reinstate the importance of it in terms of DFID developing long term sustainable developments. In terms of why there is this percept ion, I suppose some of it just comes back to personal beliefs and priorities within the department that actually environment can be dealt with later. Q48 Chairman: Is the view still held - and a lot of it was denounced as inappropriate - that if you have development then you can do the environment at a later stage, which is very old-fashioned. Do you think that is still an important ideological position within the department? Mr White: Unfortunately, that may well be the case. The secretary of state does not think that, he has underlined that several times in his recent speeches for the White Paper, so perhaps there is that disjoint of that view and the line that we do not have a department perhaps follows some of the thinking of the secretary of state in that respect. Q49 David Howarth: The final point, you mentioned the individual country offices and the lack of any expertise in a wide range of them. Would it be a solution to have regional expertise, would that be an adequate compromise, if each individual country had someone at least inputting environmental concerns on a regular basis across a number of different categories? Mr Quantrill: Perhaps you need to look at the type of development that is being proposed and see where is the volume of effort required and being taken by DFID, whether it is on a country basis or on a regional basis. What we do not want to do is just stretch the environmental expertise so far through any region that they are actually not able to do the right job properly, and highlight opportunities as well as safeguards in terms of the development and interventions that are being pursued. That may help, certainly where we have got regions where DFID does not have any capacity at all, but I would not necessarily say that is the only way to look at it. Q50 Ms Barlow: You have been critical of DFID's increased focus on rapid economic growth as a way of ensuring rapid poverty reduction. Can you go into some more details? Mr Quantrill: I think we would echo quite a bit of what Christian Aid has already highlighted, that we are not opposed to economic growth per se; we recognise that most of the poorest countries in the world desperately need increased economic growth if they are going to be able to meet even the most basic human rights of their people. What we are worried about is perhaps the potential contradictions between a single-minded focus on macro-economic growth and some of the environmental imperatives that we perceive. What we are looking for is answers as to how some of the extremely strong rhetoric around the need for extra sustainable growth coming out from the secretary of state is going to be put into practice; our worry is given the staffing issues, given the current mindset perhaps of elements of DFID, they will do what they know how to do best which is creating the economic growth at state level and perhaps not be in a position to be able to ensure that that growth is properly distributed, such that it can actually cause poverty reduction and ensure also that it takes account of the environmental issues. Just to give a couple of examples, we talked about the fact that DFID is not investing in the capacity of environmental ministries in countries necessarily, yet governance of natural resources can drive economic growth and it can drive growth that is far more equitable and sustainable. For instance, a recent report from the OECD on illegal and unregulated fishing showed that sub-Saharan Africa is losing over a billion dollars a year as a result of illegal fishing off their coast. A huge amount of catch has been taken out of those countries as a result of, essentially, weak governance and weak capacity to manage those resources appropriately, and also international issues. I was reading in the Financial Times a couple of days ago that water allocation and poor water management governance globally is costing one per cent of global GDP estimated. Huge amounts of money have been taken out, all of which could be used for paying for education, health and so on. If you miss that environmental aspect and miss the opportunity to develop the capacity to manage these resources appropriately, you are missing an opportunity to promote macro-economic growth but also to turn economic growth into an equitable and sustainable growth which is obviously what we say we need. Q51 Ms Barlow: What about trade-offs between growth and environmental degradation? Is that a concern to DFID? Mr Quantrill: There always needs to be an open dialogue. There are not necessarily the trade-offs that people seem to think, most people would say that the trade-off debate is held on the assumption that environment is a barrier to development, a barrier to growth, but I hope we have demonstrated that we do not believe that is the case, it can actually be a promoter of growth, a promoter of development. In most cases that trade-off is probably a false assumption, but where there are potential trade-offs - and there are some out there that we ourselves are debating - the important thing is that you bring both issues to the table and you have sufficient capacity of analysis and data to make the right and informed choices, and that those choices are being made by the countries that have the greatest stake in them. That is why we emphasise the importance of developing the capacity of countries to get their analysis right, understand their own wealth in terms of what wealth they hold in their own natural resources, how they govern that wealth and how that wealth can create growth. When they have that benefit you can have that dialogue and decisions need to be made locally, but we are confident that those decisions would then become potentially quite different from the ones that you have talked about taking. Ms Nicolson: You can use strategic environmental assessments which help have a discussion and a transparent, open decision made because people are informed about the different options, the very short term options and the long term options. Q52 Ms Barlow: Do you think that DFID is engaging in that dialogue effectively? Ms Nicolson: We believe that certainly they have been promoting the use of strategic environmental assessments very strongly at the international level with other donors, at the OECD level; it is not clear to me how they are currently being used within DFID, their environment policy paper suggests that that is a tool that is encouraged - which is the word that is used - but I have not seen on the website an example of how it has been used, an SEA on a particular policy or programme. In fact, under EU recommendations, EU law, SEAs are required for large governmental groups, so this is something that DFID has been encouraging but it is again something that does not seem happening within the department. Q53 Ms Barlow: Can I move on to DFID's position on the extractive industries? You have been quite critical of this but can you go into more detail? Mr Quantrill: It is not my specific area, but we certainly are concerned that DFID has been involved in funding, whether directly or through multilateral agencies, large scale extractive programmes that are contradictory to its position on climate change potentially and also are contradictory to its goals in terms of development and poverty reduction. There is a very good report which I would recommend to you entitled Pumping Poverty by a platform which again has got quite a large buy-in from a coalition of different agencies; that highlights the fact that often these large scale programmes, while on paper they may look to be economically positive, the overwhelming impact on poverty, on people's lives at the local level is negative. If we are going to be talking about a withdrawal from funding and support for such things we do need to be looking at alternatives, we recognise that, so it is important that any withdrawal or reduction in support for these large-scale programmes is matched by additional resources for investing in alternatives, alternative economics and alternative energy sources. That would be our clear position, but we would like to see a much closer scrutiny of the way in which these programmes are planned and I think the strategic environmental assessments would be a part of that. Q54 Chairman: I am just wondering if you can you mention one or two examples which illustrate this issue, perhaps on fossil fuels? Mr Quantrill: The one that I know we are working on at the moment would be Sakhalin, the oil programme, but beyond that I would not want to go into detail in particular. Ms Nicolson: There was a case called the BTC - again I cannot remember what it stands for - which is the construction of a pipeline across the Caucuses and Turkey which clearly had DFID support but clearly the proper safeguards have not been put in place, both environmental and social. We were very concerned about their support for that which seemed to kind of go ahead without a proper public dialogue. The World Bank had an extractive industries review which was a stakeholder/expert process that was set up, rather like the World Commission on diamonds, to look at what the World Bank should do about extractive industries in the future in terms of investment, and we were surprised that DFID were not being much stronger in terms of pushing for the World Bank to be investing far more in renewable technology and energy efficiency but were still suggesting that the World Bank should continue, almost business as usual, in terms of hydrocarbons. Q55 Ms Barlow: Staying with the extractive industries, do you think DFID's position on these industries is affected by other government departments such as the DTI? Ms Nicolson: It possibly could be, but we should be looking at a holistic government approach, and going back to the climate change issue, as well as our own mitigation here, the thing that we should be investing in is clean energy because we have a responsibility in terms of the energy that we are investing in and promoting now. The Export Credit Guarantee Department, for example, which is very much part of the Government, any support it should be giving should be for sustainable programmes. At the moment they have a target of 20 per cent or something to actually ring fence for clean renewables, but I think everything that they should do should be along the lines of all the international credit finance. Q56 Ms Barlow: You have talked about the effects of climate on the poor in particular earlier. Do you think there is a clear distinction by DFID on how it factors climate into its work, in that it is happy to accept the need to adapt against climate change but appears unwilling to accept the need to minimise those effects which you have spoken to so far? Mr Quantrill: Are you talking about mitigation issues in terms of action? Q57 Ms Barlow: Minimise the climate impacts on the poor, as you have mentioned, on the very people that you are trying to help, minimise really the effects of how it spends its money. Do you think this is fair? Mr Quantrill: Yes, at the moment there is a very strong rhetoric of adaptation, but we are also seeing strong acknowledgement in recent speeches by the secretary of state that there is a responsibility from us with respect to consumption; we have seen that, he has acknowledged that, we would like to see how that gets turned into a set of policies. I have talked about the voice within government; we would like to see DFID, for instance, leading internally on its own carbon budgets, becoming a carbon neutral organisation, which would no doubt be a big thing. It should also be, for instance, pushing on Government procurement policy; Defra has done a lot of work on greening the public procurement policy, but there is a role there for DFID to start talking in terms of making public procurement policy a road to sustainable development as well, so also bring that aspect into the dialogue there and it could be a very big push in terms of helping to develop green technology in developing countries and so on; for instance, not just saying you need to make your procurement policy green, but saying we should be treating procurement from developing countries. That should put out a strong message and could be seen as a strong approach. There are a number of ways in which they could push that agenda locally as well as in the international programme. Q58 Ms Barlow: Is there any interest as far as you have seen in energy policy as one of those areas, for example, is there enough emphasis on renewable and on small scale solutions? Mr Quantrill: They are working in this area but we would like to see a lot more. One thing I would like to flag up is the opportunity created by the clean development mechanism under the Kyoto Protocol, and we think DFID are not paying anywhere near enough attention to the opportunity that poses as a development mechanism. At the moment it is seen as an offset mechanism within carbon emission trading, but it could actually, if it was tweaked in the right way and given the right set of standards, become a very powerful mechanism for the kind of development initiatives in terms of renewable energy, but we are not seeing that. From WWF's perspective we promote the gold standard in respect of these types of projects that can be invested in under the clean development mechanism; we see that Defra has taken that up in terms of its own voluntary carbon offsetting, but we would like to see DFID push that, for the gold standard or something like it to become part of a set of compliance policies. There are potentially hundreds of millions of pounds of investment flows going into clean technology. At the moment that is largely a wasted opportunity, it is going into a whole variety of projects, many of which we would be quite dubious about, and largely into existing large emerging economies rather than into the very low income countries, but it is a mechanism which could be given more attention in that respect. Q59 Ms Barlow: Finally, there is a very strong emphasis within DFID on the importance of liberalising trade for poverty alleviation, but there is quite a wide spread of perception that trade liberalisation will have a significant detrimental effect on the poor that you have mentioned, particularly in developing countries and also on the environment. Is wholesale liberalisation a blunt instrument from the point of view of DFID and contradictory really to its focus on alleviating poverty? How would you estimate the effects that this could have on the environment? Mr Quantrill: There are certainly question marks over the pursuit of liberalisation as a blunt instrument. We share the interest in the NAF report and that whole way of thinking that Christian Aid has articulated, we would also be looking at that because there is a big environmental perspective to that argument that the promotion of macro-economic growth alone is (a) not a particularly efficient way of producing poverty reduction; and (b) potentially by the time you get anywhere near the type of poverty reduction we are looking for, you would have had a huge impact on the environment if you go down that road. So you do have to take that into account and I give an example of an area of concern: if you were to remove subsidies that allowed a massive investment flow into commercial agricultural production - and we are doing a lot of work on thirsty crops, on high water use crops across the UK - if there was a massive expansion of those crops, that could have huge impacts on downstream users in areas where those crops are invested in upstream. You have to look at those issues before you go down that road, not to say that removal of subsidies is not the right thing to do, but just that those issues need to be taken into account and the countries involved need to have the data and capacity to make that analysis and to make their own decisions about how they want to pursue liberalisation - and we would probably share Make Poverty History and so on around no forced liberalisation. The important thing is that that whole process involves the right information, the right analysis. Ms Nicolson: Certainly it is to do with thinking that trade is a tool - whether it is sustainable development or poverty alleviation or economic growth - and how it is used. There is not necessarily a one size fits all thing, but we do need to think very much again about sustainability impact assessments which is a legal requirement in terms of the EC which does have competency on trade. Q60 Chairman: A significant amount of DFID aid is spent through multilateral bodies like the World Bank and the EU. Do you think they are any better at incorporating environmental concerns? Ms Nicolson: There is not a perfect solution, unfortunately, and I do think with something like environment, which is a cross-cutting issue, the Department of Trade will say we will put all our money through them and we know the environment will be taken care of, is something that every donor in every country needs to think about in terms of development. The World Bank does have some environmental and social safeguards, of course, and they have been at times promoted as being very good practice, but the question is the practice; when they are put into practice, do they happen? The EU most recently during the UK presidency came out with something called the European Consensus which is a review of the EU development policies - which they have not done for five years or more - which points very strongly to the need to integrate natural resources management into development policy as well as to look at particular issues where there are global and environmental challenges, whether the EU as a whole, Member States and the Commission together, can look at how they can make a difference in terms of climate change or illegal logging or fisheries management, or good water management. It is a question of working together with others to ensure that the environment principles and standards are the best, the use of good environmental tools such as strategic environmental assessments, and I think the use of, say, the 25 per cent that DFID currently spends through the EU should equally be scrutinised by the EU Court of Auditors to look at how the environment has been treated within that. We should not just assume that that is in place, you have got your safeguards in place so that is all right, we should continue - Members of Parliament, ourselves, watchdogs - to ensure that the environment is considered properly within the development agenda. DFID has done an awful lot in terms of how important environmental sustainability is to poverty reduction and we would like to see them maintain that lead in terms of other European Member States. They look to DFID in terms of its experience and its cutting edge expertise on this issue. Q61 Chairman: You have called for ministers to support a strong, well-funded, environmental thematic - I am not sure what a thematic is but we are hearing about lots of strange words - within the EU Environmental Development Fund. Could you give us a bit more background on that? Ms Nicolson: Yes, it comes back to this new development policy that was adopted by the Council during the UK Presidency and it includes certain areas which the EU as a whole - Member States, the European Parliament and the Commission - believe are important and cannot be always dealt with through a country-led approach. The bulk of the money of course is always going to be spent through country-led approaches on country priorities, and that is where environment issues are required - in fact there is an obligation under EU treaties to mainstream the environment within those - but there are certain areas like governance, like human rights where they believe that these things perhaps need to be tackled in a different way by the environmental thematic, as the phrase goes, a programme on environment, natural resource management and energy. That is going to be looking at particular things they could do in terms of promoting millennium development goals on sustainability, looking at things which cannot be dealt with necessarily at a country level, and these things are shared resources, very often, they are global challenges, and they need to be dealt with in a very co-operative inter-regional, or intra-regional manner. If you think about something like illegal logging and timber resources, the forest law imports governance and trade issue, which I am sure you are familiar with, it might be about advising Russia on trade between Russia and China in the EU, looking at consumers, looking at producers, looking at forests which are natural resources of importance to countries, to regions and ultimately to the planet, so it cannot be just dealt with at a country level. The EU thematic is therefore one way, perhaps, to promote environmental issues on the development stage. Q62 Chairman: Do you think there is any sense of urgency in these multilateral organisations to deal with climate change - in the World Bank, the IMF, the EU for that matter - and is DFID bringing any sense of urgency that you might be aware of into those arenas? Ms Nicolson: In my experience of working with DFID for a good many years now I have seen them certainly bring that sense of urgency, I have seen them work at EU level, I have seen them work at UN level in terms of really pushing for some of these things. For example, before the World Summit in Johannesburg one of their real priorities was to make sure that MDG 7 on environmental sustainability was not ignored but was brought back into the debate, they would ensure that the order of the MDGs could be treated holistically rather than one being achieved at the expense of the other, it is not about cherry-picking. I do think that they certainly have done this, I think that perhaps they have been rather slow on climate change, it is only very recently that they have picked this up as such an important issue and it has been on the global agenda for much longer - after all, it is not an environmental issue, it is an environmental, social, economic and everything else issue. I personally have got a lot of respect and admiration for many of the staff in DFID with whom I have worked who have taken forward environmental issues, climate change, forestry and water. Q63 Chairman: Do you think the balance between what we support through multilateral agencies and through bilateral agencies is the right one as it stands? Ms Nicolson: There is a lot to be said for the so-called donor harmonisation agenda at OECD level which is where the big donors are saying we cannot keep doing things separately and putting different reporting requirements, different onuses on recipient countries. They want us to get our act together in terms of how we work together, but I think there will always be an added value in having bilateral support as well as support going through the big UN agencies or the World Bank. I do think that we as the UK should continue to be pushing, whether it is at World Bank or UN level for the coherence of the activities to make them more effective - for example, Gordon Brown is now on this UN panel on coherence between environment, development and human rights across the UN system and that is something we really need to make sure we encourage. Q64 Chairman: Do you think the global environmental facility is an effective delivery tool? Ms Nicolson: I think it is a very important delivery tool, it is mostly very effective. Again, DFID has been very supportive of GEF, I have seen them argue hard for replenishment of the global environment facility. Before Johannesburg they made extra voluntary contributions because they believe it is an important way forward in terms of global commitments, in terms of global public goals that nobody is individually responsible for but where we do need to work together in a co-operative fashion. DFID has also tried to encourage the US, for example, to wake up to its responsibilities in this respect. Q65 Chairman: Do you think the international push that DFID is making on these issues is the result of the work of just a few individuals, or is it more institutional, ingrained in its very being. Is it down to one or two visionaries at the top, perhaps, or do you think that the whole department is really all pulling in the same direction? Mr White: They have dedicated resources to work on global environmental assets, but they are few and I think a lot of what we see is the direct result of those individual efforts. I do not see, necessarily, that some of these commitments are institutionally supported throughout all echelons of the department, but there again equally supported at ministerial level. Q66 Chairman: If that is the case and they are not quite so influenced by the people at the top all the time, what other influences are there? Is it other departments, the Foreign Office, people out in the field? Where do the other influences come from? Ms Nicolson: They come perhaps from other donors. We mentioned in our evidence about the Poverty Environment Partnership which has got many donors; they do a lot of very interesting work there in promoting the poverty and environment links. They can come from other countries - I know in terms of China, for example, my knowledge is that the Chinese government particularly said in terms of our development co-operation and economic co-operation we have got plans to deal with poverty ourselves, we have a plan in place to eradicate poverty over this length of time and we are investing in that. Where we want help, where we want to work with other donors is in terms of the environment, so that influence can come from many different places. Chairman: That brings us to the end, so thank you all very much for giving evidence this morning. It has been very useful once again. Thank you. |