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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1014-ii 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 30 March 2006 DR MARK AVERY and MS JOANNA PHILLIPS DR CAMILLA TOULMIN and MR BILL VORLEY Evidence heard in Public Questions 67 - 130
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee Trade, Development and Environment Sub-Committee on Thursday 30 March 2006 Members present Colin Challen, in the Chair Ms Celia Barlow Mr Martin Caton David Howarth ________________ Memorandum submitted by the Royal Society for the Protection of Birds (RSPB)
Examination of Witnesses
Witnesses: Dr Mark Avery, Director of Conservation, and Ms Joanna Phillips, Head of Trade and Development, the Royal Society for the Protection of Birds (RSPB), gave evidence. Q67 Chairman: I would like to welcome you both here this morning. We are very grateful that you could make it. Can I ask you, to start off with, to give us some background as to why you - what seems to me to be basically a sort of UK-focused organisation - are getting so involved in development issues now; why does that really fall within your remit? Dr Avery: I am very happy to do that. The RSPB spends about ten per cent of our money on conservation work outside the UK, so that is about £6 million a year. We do that because there are 10,000 species of birds in the world and 1,000 of them are threatened with global extinction; most of them occur outside of the UK. The cause of those potential extinctions, which apply obviously to wildlife across the board, not just birds, is basically the way we are living on this planet, the way that our species lives unsustainably. There are six billion people on the planet; we use about 55 per cent of the renewable water resources of the planet each year, humans consume about 40 per cent of all the photosynthetic activity of the planet. The population is going to increase to ten billion by the end of this century and that is what causes problems for the environment, which has knock-on effects for people but causes the high level of extinction that we are experiencing at the moment. If all six billion of us lived with the same resource use as Americans, we would need three planets to support ourselves already, so the future does not look that great, unless we can find a way to reduce consumption in the so-called developed world and help poorer parts of the world reduce poverty, but reduce poverty in ways which lead to more sustainable existence on this planet. Clearly, DFID's role in being a UK department which helps to reduce poverty across the world is an important way that the UK influences that whole agenda and so we engage actively with DFID. It is not the government department with which we have most to do, because, as you say, most of our work is within the UK, but we have regular meetings with ministers, with officials, we respond to consultations and we attempt to influence what DFID is doing on the world stage. Q68 Chairman: Is that mainly in environmental areas, or development; is it across the board? Dr Avery: I suppose you would say it is mainly in environmental areas, but we would see the environment and development as being absolutely inextricably linked, or they should be. I suppose one of our worries about DFID is whether those linkages are made within DFID strongly enough. Q69 Ms Barlow: You have highlighted the World Summit for Sustainable Development and you have said it is the focus for a great deal of work from DFID. Could the same be said of yourselves? Was the WSSD the catalyst which was needed by many to link environment and development, not just here but internationally? Dr Avery: We attended the World Summit; we sent a few staff there. I think World Summit was a step forward and certainly I think it helped the world to address environment issues and development issues together. I think DFID has realised that; although I suppose our worry is we are not totally sure whether DFID has completely got that message. Our concern about DFID would be not about what it says, because, many of the things that DFID says, the current Secretary of State says all the right things, I think, about the environment and sustainable development and I think he has a higher environmental profile than some of his predecessors, so it is not what DFID says at a high level, it is what DFID does. We would say as well that the sustainable development team within DFID is a pretty strong team, but we would have some doubts about whether those staff have enough clout to make sure that the messages which came out of the World Summit are fully integrated into everything that DFID does. I think some environmental staff within DFID, and there are fewer of them now than there used to be, would feel that they are fighting a bit of an uphill battle to get some of the linkages between the environment and development made within DFID. One of the big things which did come out of the World Summit was the fact that economic growth alone cannot be the answer, cannot be a sustainable answer to the world's problems. We would be concerned that DFID's management board seems to be dominated pretty much by economists with a background in the IMF and the World Bank. That, I think, is valuable experience but it is difficult for us to see where the environmental champions are within the management board of DFID and that may have given rise to what we see as an unfortunate emphasis on GDP, increasing GDP as a way of reducing poverty rather than a wholly rounded, sustainable development approach. The World Summit did come up with Millennium Development Goals and the environment is one of those goals; ensuring environmental sustainability is Millennium Development Goal number seven, so it is in there but whether it is tied absolutely into all the others in the way that it should be we are not entirely sure. I think the Millennium Ecosystem Assessment summarised this quite well, and I will quote; the Millennium Ecosystem Assessment said: "The long-term success in meeting all of the Millennium Development Goals depends on environmental sustainability. Without it the gains will be transitory and inequitable" and we very much believe that. Our worry is that it is true but the important phrase there is "long-term." Long-term success in reducing world poverty, increasing the standards of living of people in poorer parts of the world, does depend on linking the environment to poverty alleviation in the long term, but the temptation is always to ignore the environment and longer-term issues in the short term, and we are a bit worried that DFID has lost focus on that real link between a good environment and alleviating poverty. Q70 Chairman: You mentioned the Summit's production of these eight Millennium Development Goals; do you think environmental sustainability, which is number seven on that list, is prominent enough? Perhaps I can ask a little supplementary to that, whether you think that what we understand by 'environmental sustainability' is adequately defined by the UK Government? Dr Avery: Is it prominent enough, well, it is there, it is in the list; it is up to individual governments to make sure that they give it the prominence it deserves. Agreeing with the Millennium Ecosystem Assessment, we would say that producing a healthy environment is essential to producing a healthy future for people and that meeting the other Millennium Development Goals has to be based, long term, on environmental sustainability. Do you want to come in on that, Jo? Ms Phillips: I think one of the concerns is that it is very difficult to see MDG7 as just one of the Goals, whereas how you do things, how you meet the other Millennium Development Goals, has a major impact on environmental sustainability and there is not necessarily a clear framework to ensure that all of the Goals are met coherently and simultaneously. We recognise that is a challenge but it is also an essential component which needs to be addressed. I think, in terms of how the environment has been defined or is recognised, there are conceptual problems, particularly with people perhaps who do not have environment as a key component of their training. It is not helped necessarily by shortening environment to environmental protection, for example, because that tends to put it in a box which can alienate a lot of people. Really what we are talking about is, yes, environmental protection, as one aspect, but also looking at the sustainable use of environment, looking at the opportunities the environment provides for development but also at the challenges and threats, but not focusing wholly on those threats, so there are issues of chemicals, there are issues of climate change, biodiversity loss, lots of issues that are core to development concerns. Q71 Ms Barlow: You mentioned a lack of training. Would you say this lack of training in environmental issues goes all the way through DFID, or is it particularly in the field of this problem, is it in the choice of projects as well as in the field, or is it just in the choice of projects? Ms Phillips: I would find that difficult to answer. I do not know enough about training programmes in DFID. I have heard it said that there is a need for better training to ensure that environment is seen as a core competency throughout DFID but particularly in senior management. That is particularly important in country offices, where often it is the personal interest of the lead officer in environmental issues which results in them being addressed, rather than it being an actual core competency across the board, so it happens on more of an ad hoc basis. Dr Avery: Another point we made in our evidence was that the number of environmental advisers in DFID has been reduced very dramatically over the last few years. That does not seem to coincide very well with the messages coming out of the World Summit, that environmental sustainability has to be threaded through the whole of poverty alleviation, and it does not chime very well with the very good words that the Secretary of State says about the environment. When you look at how many people there are with an environmental training in DFID able to try to influence their policies from within, there are far fewer now than there were even a few years ago, and that seems a mismatch between the external rhetoric and what is happening within the Department. Ms Phillips: That is particularly the case in the country and I think that there are good environmental advisers and there are good livelihoods advisers, economic advisers, natural livelihoods advisers, but increasingly they are being asked to cover a range of issues which perhaps they do not have the capacity, the time or the expertise to address. Q72 Ms Barlow: Do you have any figures for the cutback, the Gershon saving, or whatever? Dr Avery: We believe that there were 35 environment advisers in 2004 and there are 18 today, which is a pretty dramatic reduction in two years, and there are various posts which have not been filled or, to our eyes, have been downgraded within DFID. Q73 Chairman: We are just about to become inquorate for a little while because one of our members has been delayed in traffic and another of our members has to go into the House, I think, for a short while. We have got two minutes, and then I will have to interrupt the proceedings whilst we wait to become quorate again. I apologise for that, in advance. It is one of the vagaries of a one-line whip day. Just to return to the Millennium Development Goals, one question I would like to ask you is about the trade-off between the various Goals. It seems to me, looking at the complete list, that many of the others, excluding number seven, you can put very clear figures on. If you want to reduce child mortality you can put a figure on it and then you can see whether you have met that or not. Promoting gender equality and other things also might be quantifiable. "Ensure environmental sustainability" seems to me to be pretty vague, and if we look at issues such as biodiversity and climate change either it is a huge challenge or it is difficult actually to pin down what we mean by maintaining biodiversity, is it saving so many species, or whatever? I do not know if anybody has actually put their finger on it, have they? Dr Avery: I think, at the World Summit, it was agreed that one of the targets ought to be to slow the loss of biodiversity by 2010, and, within the EU and its work across the world, the EU has agreed to try to stop the loss of biodiversity by 2010. I think it is true to say though that because there is a lot of biodiversity out there it is quite difficult to measure it. Q74 Chairman: We do not really know how much biodiversity there is, do we, because we see all the time that there is a whole new species, particularly in the oceans, for example, areas we have not explored, so we cannot actually define it? Dr Avery: I think we could come close enough to measuring it and I think the approach which has been developed in --- Chairman: I am afraid we are now inquorate. There followed a short break from 10.30 am to 10.39 am. Q75 Chairman: We are back in business after that period of contemplation. Following on from that last question, I was asking about the trade-offs between the MDGs and that specific one on sustainable environments. I guess, helping that process along and giving us a greater edge to understanding the sustainable environments issue, the United Nations Millennium Ecosystem Assessment has now been published and I wonder what your view would be on what may be the most important outcomes of that for the environment and for development? Dr Avery: I am happy to comment on that. If I could just go back and finish the answer I was giving, with the extra time for thought that we were given. You were asking about how difficult it is actually to measure biodiversity and biodiversity loss well, and I think there are several approaches to that. One, I think that we could learn the lesson that economists teach us, that they use very simple indicators, so we talk about, in the UK, for example, the FTSE 100 Index. I do not really have any understanding of what that means but we hear it on the radio every day and it has gone either up or down, and this is good or bad. Biologists need to develop indicators a bit like that, which are simple but meaningful indicators of what is happening, and that has been done in the UK. There is a 'quality of life' indicator based actually on birds, but it would not have to be on birds, and Government publishes the results each year on whether that index has gone up or down. We need a similar approach to the world's biodiversity, so that each year we can have a measure of whether there is more or less biodiversity in the world and get an understanding of the causes of that. I think there is a role for DFID in this, in that it is not very clear at the moment which UK government department has responsibility for trying to meet that goal outside of the UK. Because it is the seventh Millennium Development Goal, it would make sense if that responsibility was given to DFID and I think that would help them have a more rounded environmental view. Also I think that indicators of biodiversity loss ought not to be just about numbers of species and extinction but they ought to try to measure what are called ecosystem services. Which comes on to the Millennium Ecosystem Assessment, not just the fact that we should not be losing species, because it is a ridiculous way to live on this planet, but if we destroy ecosystems then we are destroying the life support system for many people on this planet. By chopping down rainforests we will create floods, soil erosion and actually make the life of poor people more difficult; so developing good but simple indicators of how much of that ecosystem services has been lost, and is being lost, would be a good way to measure the loss of biodiversity. The message from the Millennium Ecosystem Assessment is that we are trashing the planet, that we are living on the planet in a way which is not remotely sustainable and that the effects of a loss of ecosystems and species is going to be felt most severely by many of the poorest people on this planet and it will make their life more and more difficult. In terms of the way that DFID has picked up the messages from the Millennium Ecosystem Assessment, generally I think it would be true to say that the world has not picked up the messages as well as it should have done, and that may be because the messages are so depressing and suggest such huge problems that we are facing. We would say that DFID has made a lot of reference to the Millennium Ecosystem Assessment in what it has said and in their written material, so there are plenty of signs that they are aware of the implications, but we would have some worries about whether the true messages really have struck a chord with DFID. The examples we would give on that would be that we believe DFID's focus on economic growth for poverty reduction kind of misses the point, it misses the point that, long term, we need to move towards environmental sustainability, not just increased economic growth. The fact that DFID has reduced its funding for environmental projects is worrying, because it suggests, again, that type of approach has lost favour over the last few years. As we said before, we do not see much evidence that the environment is absolutely a part of DFID's thinking in everything it does. The reduction in the number of environmental advisers, which we have mentioned already, sends absolutely the wrong signal, if DFID is taking account of Millennium Development Goal number seven. To some extent, I think the fact that the environmental issue most talked about by DFID these days is climate change is good but it is worrying at the same time. I think generally we are moving towards a position where climate change is seen as almost synonymous with environmental problems and that the big issues of habitat destruction, which will have massive impacts on wildlife and people, are being sidelined slightly. That is not to say that the RSPB is uninterested in climate change, we believe it is a massive problem, but it is becoming the only thing that people talk about when they talk about the environment, and there is a sign of that in the way that DFID addresses the Millennium Ecosystem Assessment tool. Q76 Chairman: Do you think that last year's Make Poverty History campaign actually made it more difficult for DFID to take a holistic view of environment and development issues? Ms Phillips: I think that Make Poverty History was a necessary and vital campaign to raise poverty up the public and political agenda. I think, potentially, we could have done more to mainstream environment through the messages but, interestingly now, in the post-MPH phase, environment and how to address environmental concerns is becoming a lot more prominent and is being seen as more the issue of today. I think we are seeing that in a joint submission that we have just made to the DFID White Paper consultation, where we have a number of major development NGOs putting their name to a joint development and environment statement, which says these issues have to be addressed coherently and simultaneously, it is not an either/or situation. Really it is a false dichotomy to think you can do development and then fix the environment later; you cannot do that. Going back to the Millennium Ecosystem Assessment and developing countries, I think one of the key issues is in helping developing countries, supporting them, to understand, recognise and value what their natural asset base is, so they do know where their natural wealth lies and then can manage that and use that sustainably and appropriately. The work that the World Bank has been doing on the wealth of nations, the work that the World Resources Institute has done most recently, all is pushing in that direction. The move that DFID has shifted towards, I think, rightly, in really supporting in-country demands, means that has to work more effectively and more efficiently so that developing countries themselves are able to manage their resources well. Q77 Mr Caton: We have started touching on the next subject we want to focus on, which is development funding. Poverty Reduction Strategies, direct budgetary support, are becoming increasingly important, in terms of development funding. Do I take it, from what you have just said, Ms Phillips, that the RSPB supports that direction of travel? Ms Phillips: On the whole, supporting states to become self-sufficient and more effective, I think, has to be welcomed. I think the concern is that there is not a 'one size fits all' situation and direct budget support is not going to be appropriate in all situations. Direct budget support has to be underpinned by ensuring good governance and that includes ensuring environmental governance as well, and I think that is where some of the shortcomings in the system could lie, potentially. It is supporting that move to have strong in-country capacity to address governance issues across the board and to ensure that large pot of money, that direct budget support, means it is spent in a way which delivers sustainable development. I think, on top of direct budget support, we need to recognise that is not always the case and in most developed countries there are budgets and funds to enable and support environmental action on the ground, and we need to make sure that there are means to support that in developing countries as well. One of the big concerns is, with the shift to direct budget support, where we are seeing environmental resources being degraded at an incredible rate, forests being lost at an incredible rate, it does not match necessarily with the time it takes, the sort of slow process of building effective governments and governance systems, so you need not only direct budget support but other aid funding mechanisms to be able to balance that. Q78 Mr Caton: With the direct funding support though, completely agreeing with what you are saying about needing to tie the environment in there, have we not got a problem, because DFID, for very good reasons, is reluctant to go back to conditionality, as I say, for very good, historical reasons? Do we need to re-open the idea of conditionality, to talk about environmental conditionality, because otherwise some of these third world countries may not give it the priority that we would want to see? Ms Phillips: I think often there is a misconception, when we talk about no conditionality, that we mean no discussion at all of the basic premise under which money is going to spent. What DFID has signed up to is no financial policy conditionality which relates back to the problems associated with the structural funds, etc. DFID is very much supportive of creating effective states and what we need to be supporting are accountability mechanisms within the spending of resources that are agreed between the recipient country and the donor countries to ensure that money is spent well and effectively. Personally I feel that probably it is wrong to call that 'conditionality'. There needs to be some accountability, and I think as long as it is a fair contract agreed between partners then that can help towards ensuring that money is being spent effectively and ultimately is reaching the poor. Q79 Mr Caton: The deal between partners when one of them is the donor and the other is the recipient is not an equal one, is it? I am just thinking of how it would be viewed by the governments of developing countries, whether we call it 'conditionality' or not, if we are trying to tie in what some, at least, might perceive as western priorities. Do you see there could be a problem there? Ms Phillips: I think it is very important to recognise there, and DFID and others have shown, that a lot of western priorities, if you are talking about the environment, are vitally important to the poor. A responsibility of DFID is to ensure that the voice of the poor is heard, and having open, democratic, transparent processes and ensuring that civil society is engaged in the setting of strategic priorities and targets can help ensure that happens. Dr Avery: I think you are absolutely right to say that this is difficult and I think DFID is right to have moved away, for a long time, from the worst of a colonialist approach to giving money, but if UK taxpayers' money is being given to other countries to alleviate poverty then surely we want that to be done in the most environmentally-sustainable way rather than in an unsustainable way. Although that is a difficult route to find a way of achieving, that must be DFID's responsibility, to find a way that they can justify giving UK taxpayers' money, in a way which will enhance environmental sustainability and Millennium Development Goal seven, rather than leading to a further reduction in the planet's assets. That is difficult, but that is the route we ought to go down, which is why giving DFID a more formal responsibility for meeting Millennium Development Goal seven probably would help in their thinking. Q80 Mr Caton: One possibly positive initiative that you mention in your memo is a meeting held on 23 March on environmental management and country-led development planning. Was that useful, and what is going to come out of it? Ms Phillips: Yes, it was very useful; it was a very open and frank discussion. It was under Chatham House rules. There will be a report with key recommendations. What I can give you are some of my reflections of the discussions. It was definitely recognised that this is a big problem and it is shared by many donors, including DFID, and there are no easy answers. I think there was a general feeling that environment is not being well mainstreamed, that there is a need for sound information to challenge the status quo and to manage challenges but also to find opportunities. A lot of it is about finding the relevant information that is particularly relevant to those that are steering the strategic decision-making processes, so making it relevant to head economists, for example, and getting the incentives right, getting the arguments right. Also learning lessons from good practice but recognising that there is not 'one size fits all' so looking for useful entry points, like climate change, governance, vulnerability, actually to show the relevance, and working with governments. As I mentioned before, there really are country-led demands, so it is about ensuring that the environment ministries or departments have a voice, have a seat at the table, and recognising that donors can have a key role in convening and in requesting and supporting those ministries to have the right information, to have a seat at the table. Many of the other points I have mentioned before, but they came out again, that often it depends on the interest of the country programme office head, so trying to ensure that they are well educated and versed about the environmental links is important and ensuring that there are environmental advisers and there is environmental adviser capacity within the donor community. That does not mean necessarily that every donor needs to have that, but within a system of donor harmonisation there needs to be a lead donor, there needs to be somebody who is taking responsibility for ensuring that the environment message is being heard and listened to. That does not mean a technical expert necessarily but it means somebody who can understand the cross-cutting nature of environment issues and the relationship it has to other sectors or other policies, and staff shortages are increasing the risk of environment not being addressed. Really, overall, the environmental capacity has got to be seen as a core capacity of governments to manage public assets and donors really do need to help champion that cause and share learning from our experiences. It can be incredibly costly to get it wrong, and that is one of the perversities of GDP. It can show as a GDP increase, where you are patching up mistakes and problems, but some of those problems now are irreversible, when it comes to biodiversity loss extinction and the impact on ecosystem services, and of course climate change. We cannot afford to make those mistakes, from a position of global responsibility, as well as supporting national governments really to address the interests that are important to the poor. Q81 Mr Caton: Thank you. We look forward to seeing that report. You acknowledged also in your memo that most of DFID's focus is still on project funding; you highlight the fact that funding goes mainly to large projects managed by consultancies. Can you give us examples of these projects, and you imply that there is a problem with this approach; can you describe what that is? Ms Phillips: Rather than give specific examples, maybe it is useful for me to highlight DFID's recent project completion synthesis report which analyses their projects and programmes from 2002 to 2005. There, it shows that the number of projects which have focused on the environment has fallen from 12 per cent to four per cent and that there is an absence of comment on the environment as a key cross-cutting issue. One of the problems it is difficult to talk about how the environment is addressed in specific, big projects and programmes is that we have not seen DFID's review of its environmental screening process, which we are eagerly awaiting; it would be really useful to see that. One example of major DFID support that we were concerned with and unhappy with, as an example, was the Nam Theun 2 dam in Laos, where we felt the environmental impact assessment and social impact assessment of that clearly showed that there were serious environmental and social issues linked to it. Really it was focusing on short-term economic gain, which we felt was largely unsustainable and have concerns that DFID are supporting issues like that. In terms of working on big projects with large consultancies, which is a symptom of an increasing budget and having to work effectively to use large pots of money, we have several concerns linked to that. One is the loss of institutional memory and there is a real difficulty ensuring that lessons learned from experience are maintained within DFID as a knowledge base and are taken from the field into policy. Large consultancy projects quite often produce a report at the end of the day, which sits on a shelf and then everything which has gone into that is lost. Also it means that DFID's direct contact with the poor is decreasing, so they are less able to respond to their key constituency. A lot of DFID's reviews, including the PCR report, highlight that strong personal relationships are crucial. DFID puts a lot of focus on capacity-building and on support, and having ongoing relationships is vital to that. Q82 Mr Caton: Is it the large-scale consultants that you would like to, if not be taken completely out of the picture, have less of a role, or is it that you would like to see smaller, more focused projects? Dr Avery: I think the former and I think we would like to see large projects, and we could give you an example of one large project which the RSPB has been involved in, it might sound like a slightly self-serving example but I think it does illustrate some of the points that we have been trying to make. We have been involved in a project in Sierra Leone where the President of Sierra Leone stated that, and I am quoting here: "Our efforts to defeat poverty would be in vain if environmental degradation and natural resource depletion continue unabated." He mentioned that recently RSPB reached an agreement with the local communities and the Government to buy the logging concessions of the Gola forest - the Gola forest is a very important rainforest in Sierra Leone - so that the forest would remain in perpetuity. A trust fund is being set up for this purpose and the proceeds to be used to pay for the concession and for the development of the human communities surrounding the Gola forest. The President said: "For Sierra Leone this is a unique and welcome development which helped us to conserve our forest. While we extend gratitude to the RSPB, I would like to appeal to the international community to support the project as well as environmental protection for other areas." We are not giving that example to show that the RSPB is involved in this, but DFID do not have a funding stream to which we can go to say "Would you like to be involved in this project?" and we cannot find a funding stream easily available anywhere else in the UK Government to support that type of project, which protects biodiversity and is clearly, in the words of the President of Sierra Leone, helping local communities as well. That type of project is a big project but that appears to be off DFID's agenda. As I say, it sounds slightly self-serving but I think it is an example of the type of big project which we would like to see DFID helping people to undertake. Ms Phillips: I think it is the shift between projects like that, which are still necessary to major programmes, which perhaps are struggling to ensure you have got that sound partnership, stakeholder engagement which actually reaches down to the local level and has ongoing benefit and has left a really strong legacy behind, in terms of building skills and capacity. Q83 Mr Caton: You have been very complimentary, as indeed have others in evidence they have submitted, to DFID's past work on sustainable development and environment in particular. What has gone wrong; is it simply that they have halved the number of environmental specialists, is it a change in culture, what is the difference now? Ms Phillips: DFID has had a very strong environment and sustainable development focus that can be applauded, and still does have a strong environment and sustainable development team and has just published a very good environment approach position paper. I think, within DFID, the environment and sustainable development team has lost focus. I think that has come about partly through the shift to direct budget support, although DFID, I think I can say more confidently now, is recognising that shift has strengthened the role of economists potentially at the expense of environment advisers and the sustainable development agenda and there is a need to redress that balance. I think that the move to direct budget support was possibly a knee-jerk reaction to the problems of previous aid modalities linked to project funding, etc., which do have shortcomings, but we need to ensure that the problems with that are addressed now and looked at and that DFID's voice and capacity on environmental issues are not eroded further. Q84 Mr Caton: You think that DFID have recognised that they have got out of kilter, to some extent, between economics and environment. Having recognised that, is there any evidence that they are trying to do something about it? Ms Phillips: Not yet. Dr Avery: No. I think our worry is that the economists have won and that they are macroeconomists and their focus is on increasing GDP and the short-term fix for poverty, rather than the long-term sustainable fix, and that would be our worry. Chairman: We are going to explore this a bit further, I think. Q85 David Howarth: There is another aspect of this, going back to the specifics of how DFID is staffed, and this mystery that you have raised and we are concerned about, can I raise with you the particular mystery of the Chief Environmental Adviser post, which seemed to appear, to last six months and then disappear. I am just wondering whether you can summarise for us what you think happened and why it happened? Ms Phillips: The what and why it happened. DFID had in post a very good and very strong Chief Environmental Adviser, who I think was very challenging to the status quo that had evolved within the organisation. I think it is a real shame that post was lost. I think it is vitally important that a senior management role is focused on the environment agenda as a core aspect of sustainable development. I think, without that strong, technically competent and dedicated internal ambassador who can sit at the senior decision-making table then the issues will be hard to keep on the table, on the agenda, and I think that, potentially, DFID's environmental approach paper could be really challenging to deliver. Dr Avery: We do not really know why it happened but the signal that it sends is most unfortunate, it is unfortunate within DFID, the signal that it sends, it is unfortunate to external stakeholders, to other governments and international institutions. It is probably more appropriate for you to ask DFID why it happened, but we and I think generally the NGO community see it as a very retrograde step and we can only see it as downgrading the environment in DFID's thinking. If it was not supposed to do that then maybe DFID could explain to you why we got that wrong. Q86 David Howarth: You would be very sceptical of any claims that it was just a reorganisation on efficiency grounds; you see this as a way of excluding environmental concerns from key decision-making opportunities? Dr Avery: As I said, we cannot say what the motives were but the effects are that it does marginalise the environment and that cannot be something that we would see as good. I would hope that it is something that DFID does not see as good, but that is a question for them. Q87 David Howarth: DFID now is trying to put in place a different sort of post, Head of Profession Environment. That post was created in April of last year but it has not been filled, it is still vacant. One thing for us to get clear is how that post is different from the Chief Environmental Adviser, what kind of level of decision-making, what task does that post have, compared with the Chief Environmental Adviser? Ms Phillips: From my understanding, it sits at a different level of hierarchy and influence within the organisation. It is within the Policy Division and in theory has a cross-cutting role across the Policy Division, but, as Mark has said, we felt very strongly that there was a need to have a more senior, higher-level influence sitting side by side with the Chief Economist and with the Chief Scientist. The Chief Scientist position was a very welcome addition, but to ensure sustainable development we feel having that Chief Environmental post is absolutely vital, and that needs to work not only across policy but also across the regional offices and divisions as well. Dr Avery: The fact that post is not filled may say something about how potential applicants see its clout within the organisation, presumably. Q88 David Howarth: Precisely. It is this lack of access, you would agree, would you not, that is part of the problem about filling this; most people do not feel it is senior enough? The other part of the question is, Head of Profession, there are not that many environmental professionals in DFID in the first place, we are talking about 18 out of nearly 3,000. Is there any need for that sort of, I suppose, bluntly, bureaucratic post? Ms Phillips: I think our feeling is very much that you need to have a technically competent individual in post to be able to make the appropriate environmental links, and a bureaucratic position probably is not the most effective use of resources. Q89 David Howarth: Obviously, you would prefer the Chief Environmental Adviser post to come back? Ms Phillips: Yes. Q90 David Howarth: Perhaps connected with that is another problem we perceive, which is the gap between ministers' rhetoric on the environment, which is often very good, and what DFID does, the events on the ground. We are trying to explore how this comes about, why it is. I wonder if you have any thoughts about why there is this gap between the very good things that ministers say and then this rather different way in which DFID behaves? Dr Avery: It is quite difficult to answer that, I think. We have said already that we think the economists have won with DFID; that is how it feels to us. I would not doubt the good intentions of the Secretary of State, but we do feel that somehow this is not joined up within DFID any more, as much as it used to be, and that may be where we are worrying too much, but I think this is something that we and your Committee ought to look at for the future. That is a question for DFID really, that if they are treating the environment seriously and if they are going to live up to the very fine words, and I mean that, and good words from the Secretary of State in many speeches, do they have the systems and the staff in place really to deliver. Nobody would say that tying sustainable development thinking and the environment into poverty alleviation is easy, it requires a lot of effort and it requires more than just fine words, it requires the right staff and the right processes within the Department to do it. Our worry at the moment is that, going forward over the next few years, which are crucial for biodiversity and people in the world, DFID is not perfectly set up to deal with those challenges. Q91 David Howarth: This victory of the economists, do you see that as having happened centrally or at country level, or regional level, or both? Dr Avery: As we have said, it is quite noticeable that the management board of DFID has on it several people with World Bank, IMF, Treasury backgrounds. Clearly the senior managers' board of a department has a lot of influence and seems to be feeding through, through some of the speeches made by DFID ministers which focus on GDP growth, we would say, to the exclusion of a rounded approach to sustainable development. Q92 David Howarth: One of the things which have been put to us is that obviously there are conflicting priorities, there is environment, economic growth, and we can talk about other matters, they can be reconciled with effort but, in reality, that is not what happens. You talked about this being difficult to do; so is it a question simply of the line of least resistance, that what officials do is take the easiest line to follow, and that does not include this difficult work? Dr Avery: I think we touched on this probably in an earlier answer, before you joined us, but I think it is because a truly sustainable way forward is difficult and has to be long term, whereas the economic approach, increasing GDP, can be seen as a quick fix but it is not a quick, sustainable fix to the problems of poverty around the world. Q93 David Howarth: DFID's budget is rising but the environmental influence on the way that budget is spent, from what you are saying, appears to be falling, which means that, in environmental terms, the budget increases might even be detrimental, environmentally. How would you sum up what you think DFID should do, to make sure that does not happen? Ms Phillips: I think it is vital that DFID updates and reviews its environmental guide, that it gets environmental screening processes functioning properly; at the moment, we have heard that they are seen very much as a chore, they are not necessarily addressed on time or coherently. I think partly they are seen as an add-on rather than as providing valuable opportunities to meeting Development Goals effectively. I think, in DFID's drive to deliver effective aid, environment has to be seen, environmental sustainability has to be seen, as a core component of that. We need to ensure that we have got the performance targets, the training, the capacity in place to embed the knowledge and understanding within all of DFID's core staff and ensure that the environment advisers have the time, the resources and the capacity to be at the table when important decisions are being made. Dr Avery: I suppose one way of doing that would be to give much greater prominence to Millennium Development Goal seven in DFID's work and make sure that is seen as being the basis for DFID's work in helping countries to meet the other Millennium Development Goals. If that were the case, I think DFID would have to reverse the haemorrhaging of environmental staff within the Department. Q94 Chairman: Thank you very much for those comprehensive answers and no doubt they will be very useful to our Committee. Dr Avery: Thank you for the opportunity. Chairman: Thank you. Memorandum submitted by International Institute for Environment and Development Examination of Witnesses
Witnesses: Dr Camilla Toulmin, Director, and Mr Bill Vorley, Head, Sustainable Markets Group, International Institute for Environment and Development (IIED), gave evidence. Q95 Chairman: Good morning. It is good to see you here. We understand that you are a policy research body with a wide variety of funders, from national governments and multilateral organisations to businesses. Could you outline briefly what you do, as an organisation? Dr Toulmin: We are a policy research institute, set up in 1971, non-governmental; we do a mixture of research and action, linked to a range of policy domains, both within a series of developing countries and within a number of developed countries and globally. We choose areas of research on which to work where we and our partners feel that we can make a shift in the way in which policy is designed or the way in which certain practices are carried out. We are not an academic research institute, we are focused very much on seeing how research in a particular field can help achieve a shift in thinking and a shift in the way that policy is designed. Q96 Chairman: What is the important link between environment and development, in your view? Dr Toulmin: We see environment, taken in its broadest sense, as being absolutely critical to any kind of development. Environment is basically those resources on which all human life depends, it is the soils, vegetation, air, climate, water, so those resources are key, both for us in the developed world but even more so for those in the developing world. Q97 Chairman: In your memorandum you express serious concerns that progress towards all the Development Goals is being hindered by underinvestment in environmental assets. How big a driver do you think the MDGs are for DFID and for other bodies? Dr Toulmin: I think the MDGs have become a hugely important driver for all development activity at global and at international level. That has been a good thing, in lots of ways, in that it has allowed development agencies to focus their mind on a clear set of targets, rather than what happened before, which was very much a kind of voguish shift of thinking from one year to the next, so it has provided these long-term Goals around which the development agencies can focus. I think the drawback of the MDGs is that it tends to focus on a specific set of goals that are relatively easy to quantify, in things like health, water and education, whereas the environment MDG, MDG7, frankly, is a bit of a ragbag of various things, some of which actually are very difficult to quantify. I think this comes back to the point that environment means different things to different people, and as a consequence we do not have a very clear set of goals and indicators on which we can focus. Q98 Chairman: Are you familiar with DFID's definition of sustainable development and, if you are, do you think a lot of it is satisfactory, or adequate? Dr Toulmin: I think that all of us find definitions of sustainable development unsatisfactory and inadequate in some ways, but they do provide an arena in which we can argue about the relative importance of short and long term, of environment versus broader development. Q99 Chairman: Perhaps I can rephrase the question and ask you whether or not you think that, as far as the UK Government is concerned, there has been a retreat from that famous Bruntland definition back in the seventies, that DFID is going to retreat from that very stiff challenge, in terms of the definition, they are looking for softer definitions these days? Dr Toulmin: I think what one tends to see is that the UK Government is very good at the rhetoric and flagging up the importance of environmental issues, they are very good at producing nice documents. I think what is less clear is the extent to which that apparent commitment, in terms of strategy and policy, then gets translated into implementation. So far as we see it, in large part that is the result of this kind of track, if you like, which a lot of development agencies - of which DFID is emblematic - face, which is that they have got a commitment to spend an increasingly large proportion of GDP on development aid while at the same time having fewer and fewer people in the personnel establishment to do that, and this strong focus on the MDGs. That is pushing the whole aid machine towards the provision of direct budgetary support, government-to-government transfers of funding, which then makes it a lot more difficult to do the sensible, environmentally-related stuff, which happens, very often, very much at a more local level. We see the dilemma that DFID faces as being to do with having a strong apparent commitment to environment but not having the structure, being faced with aid architecture, if you like, which actually makes it very difficult for that to be carried through in practice. Q100 Chairman: Do you see any attempts to overcome that? What could be done to make MDG7 more prominent in their thinking? Dr Toulmin: I think probably it requires two things. One is really the highest-level political support for environment and sustainable development, which I think we heard from Hilary Benn. He is extremely good at emphasising the importance of sustainable environment, the huge importance of climate change, in terms of achieving long-lasting development, and also as an equity issue within the world as a whole. I think we have got that support at the highest level. I am not sure that you have got the same level of support within the structure as a whole, and I think that is evidenced by the abolition of the position of the Chief Environmental Adviser. I think somehow DFID needs to be encouraged to take environment right back into its absolutely central functions as an organisation and to make sure that this strong focus on poverty in the MDGs has got a strong parallel track on sustainable development and environmental issues. You need that kind of political championing within the organisation, and allied with that I think you need a bit of creativity and imagination in terms of how best you deliver on those sorts of environmental and agricultural commitments. That then needs a bit of rethinking about ways of funding, and particularly finding alternative routes of funding are not necessarily through that direct budgetary support process. Q101 Chairman: You have published a report recently called The Millennium Development Goals and Conservation. One of the areas it is focusing on is a report on the ecosystems services, a new phrase I am not sure I am entirely happy with, but there we are. Is this really the way forward, for developed countries to pay for environmental goods and services, such as carbon sequestration, in developing countries, or do you think it is simply a last-ditch attempt to get the environment included in the MDGs and the development agenda as a whole? Dr Toulmin: The work that we have been doing on ecosystems services shows that there are only limited circumstances in which that kind of approach, of markets for environmental services, there only certain circumstances in which those markets do generate both good environmental benefits and good poverty equity benefits. That is to say, this idea that markets can produce a whole set of environmental benefits is a much too simple ambition. Very often what happens is that you can get lots of environmental benefits but it is at the expense of a lot of equity and poverty-related goals that you might seek to achieve. Q102 Chairman: Is that because the market is too powerful within whatever fora we are talking about here, or actually should we have market mechanisms nevertheless but with a much stronger framework? Dr Toulmin: If you take something like the Clean Development Mechanism, which, as you know very well, is offering markets for carbon sequestration services, in cases like the CDM what you find is that there is such a high transaction cost in getting into the market in the first place that I think there is only one CDM project in the whole of sub-Saharan Africa. There are economies of scale which mean that a lot of smaller, poorer countries cannot get access to that market. In other cases what you find, like for markets for watershed services, is that, unless you have got strong institutions and governance systems in place, the poor communities which you might have thought might benefit from these payments for watershed services in fact do not gain those payments because other, more powerful actors within the system are able to appropriate them. Those benefits from markets do need very strong institutions at local level if they are to have this beneficial equity impact. Q103 Chairman: Do you think it would be simpler and more productive perhaps simply to impose environmental conditions on governments which receive our budgetary support? Dr Toulmin: Possibly, yes. My feeling is that it is useful to explore various different channels, in terms of achieving objectives. In some cases regulation may work best, in other cases markets may work best, in other cases some sort of mix of the two. I do not think you can have a hard and fast policy or instrument that is going to work well in all circumstances. Q104 Chairman: Has anybody done a great deal of research on that? We are told increasingly and I have read one or two recent DFID documents saying how wonderful the markets are in delivering all sorts of goodies, but a great many people, of course, take the view that direct budgetary support with environmental conditions would be far quicker. Is there a body of evidence of which you are aware, is there some of it which DFID actually looks at before it makes the claims for market-based mechanisms? Dr Toulmin: We did this study a couple of years ago of over 200 examples of ecosystem markets, called Silver bullet or fools' gold?, which does a review of how these markets of ecosystems work, in a whole variety of different contexts. As I say, in summary, that came up with a view that there are only limited circumstances in which you get a win both for the environment and for poverty and equity objectives, therefore that this ambition to use the market in all circumstances was too strong, that one needed to moderate it with other mechanisms, particularly strengthening institutions, governance and maybe a more regulatory approach. Q105 Chairman: One of the issues that you have highlighted is that very often environmental goods and services and their benefits to the most poor are not properly accounted for and therefore are difficult to include in such things as Poverty Reduction Strategies. How do you suggest this could be addressed? Dr Toulmin: I think this goes back to the question about how best to engage with and support a whole set of actors outside central government in the many countries in which DFID and other donors operate. Many of the key environmental issues are handled on a day-to-day basis by local people, local institutions, local government, local organisations, and somehow DFID and other donors need to find a way of being able to listen, to learn from and to support action at that sort of level. There are examples of where DFID has joined with other donors to set up funding mechanisms and support mechanisms which do provide for that kind of lower-level set of activities. One much-quoted example is the infrastructure fund in Mumbai, in India, which is a joint DFID-Swedish SIDA fund. That sort of innovation in aid delivery, in terms of financial and other technical support, is something which I think could be followed more often. That would provide a means by which the donors could be supporting a set of institutions that government may not have necessarily as a priority but which is a very important part of the broader civil society and local government infrastructure. Q106 Chairman: With DFID's emphasis on macroeconomic growth as the main way of getting people out of poverty, how do you think their efforts, in terms of delivering the MDGs at the very local level, are being implemented; do you think they are doing a reasonably good job there or should they perhaps refocus a bit more? Dr Toulmin: Our feeling is that more refocusing is absolutely necessary. The third of our booklets, of which you referred to the second, was the focus of our conference at the end of last year, called 'How to Make Poverty History: the Central Role of Local Organisations'. What they are saying there, which pulls together a lot of evidence from partners around the world, is that we must find a way of strengthening and providing not just finance but a variety of other forms of support too. Local government, local associations, a whole variety of local organisations, actually are the ones which, day to day, will help deliver the MDGs, in practice, and somehow we have got to find our way out of this trap created by a very large amount of money going through a very limited funnel into central government. Not unnaturally, central governments are not that keen necessarily on dispersing a lot of money down to local organisations, particularly when they are not under their political control. There are examples as I suggested in the case of Mumbai, there are also examples from west Africa and southern Africa where a joint donor fund is made available for these more meso- and local-level initiatives. I would suggest it would be good for DFID to innovate further in that field, if indeed they do want to get down to this more micro level, where the changes in the delivery of the MDGs, most of those, actually will either happen or not happen. Q107 Mr Caton: As has been mentioned, you receive funding from various countries, a number of different countries. Which are best at integrating environment and development? Dr Toulmin: I think none of them is perfect and none of them finds it easy. In fact, we have been discussing with colleagues in Denmark and in Ireland and in DFID how to help make that integration work better. I suppose one might say that if they realise that there is a problem probably they are one step ahead of those who do not realise they have got a problem. Q108 Mr Caton: Are there any examples of particular countries dealing with a particular issue or a particular project in a way that we can all learn from, in terms of bringing environment and development together? Dr Toulmin: I think probably you could find those examples through the OECD DAC ENVIRONET, which tries to build a sharing of experience and good practice amongst the different donor agencies, or through the Poverty Environment Partnership, which again draws not only on donor agencies but a range of UN and multilateral organisations. I cannot pull an example out of my head just immediately, I am afraid. Q109 Mr Caton: Fine; we will look at that. Let us think of DFID. What are its strengths and weaknesses in this area? Dr Toulmin: I think its strengths have been this very necessary integration of environment into its sustainable livelihoods approach, which is something which evolved over the last, I suppose, five, eight years, from a situation maybe in the mid 1990s where you had a very strong natural resource focus. What they did then was to say, "A focus on natural resources is fine, but we need to see how those natural resources are drawn into an understanding of how people make an income and their livelihood strategy more broadly." I think that was a very strong, positive aspect of DFID's development and focus. Another has been this championing of the Poverty Environment Partnership, which has been a very valuable international platform for different agencies coming together to share experience on some of the difficulties of getting environment flagged up within their own organisations. That held a really good event at the Millennium Summit last September, really to bring in a number of people to try to flag up where environment was central to achievement of the MDGs, so it was good, as a high-level political platform. I think, equally, the sort of championing that we have had of climate change has been a very important element of the development agenda; it has been something that Hilary Benn has been very good at focusing on in the last few months. In terms of weaknesses, I think there is this fundamental mismatch between the sorts of person resources and aid mechanisms that you need to do good environmental work and the current structure and direction in which DFID is moving and there is a sort of fundamental mismatch there. What you tend to find is that there are some country programmes where you have got really good environmental activity going on, but largely that is because you have got somebody interesting and good in position in that particular country, rather than as a result of a more systematic policy, so it is patchy. Q110 Mr Caton: For what sorts of projects does DFID fund IIED? Dr Toulmin: I can give you a couple of examples. One has been looking at watersheds around the world and looking at whether or not markets for watershed services make sense in these different contexts. That has been going on in six different countries, from Asia, Africa, Latin America, and coming up, as I say, with this much more muted enthusiasm for market mechanisms for achieving both environment and social goals. Another example is work which was concluded recently on looking at different ways of securing property rights for poor people in Ethiopia, Ghana and Mozambique, coming up again with a set of recommendations for how to design systems of land registration that are most likely to benefit poor people, so a very strong policy focus. Mr Vorley: There are two other, quite large projects, which DFID is supporting with networks of partners, around market governance and the position of smaller-scale producers and agriculture and food, as large supermarkets and food processors move in to middle- and low-income countries and how you can keep some sort of market access for smaller-scale producers in that. That is quite a large project. Another one is a partnership between IIED and Natural Resources Institute in DFID to try to make sure that the standards which supermarkets impose here in the UK, including environmental standards, do not marginalise the very producers who are supposed to benefit from the 'trade not aid' agenda and this mantra of making markets work for the poor. This is leading DFID into very interesting territory, of sitting down with Tesco, Asda, Marks & Spencer, here in the UK, to see if the developmental benefit of procurement from places like Africa can be maximised without losing the environmental benefits of having a private sector standard in place. That is a joint venture rather than just giving IIED money and saying "Get on with it." Q111 Mr Caton: You are also funded by Defra, I understand. What sorts of things do you do for them; is it along the same lines, or is it completely different? Mr Vorley: It has been along the same lines. That programme of work has now finished and I am not sure if we do get any support from Defra at the moment. Q112 Mr Caton: I am referring to your 2005 Annual Report, so it may be that it is there no longer? Mr Vorley: Yes, that is right. Again, it was a sort of multi-stakeholder process around benchmarking the private sector players in the food industry to try to raise standards rather than drive a race to the bottom, whereby you would scour the world for the cheapest food with the lowest environmental and social standards associated with that. Dr Toulmin: In relative terms, DFID is a far more important source of funding for us than Defra. That has been one of our principal sources. Q113 Mr Caton: How much funding do you get from DFID? Dr Toulmin: Over the last five years, I suppose we have got between 20 and 35 per cent of our funding from DFID and that will go up next year because we have got a partnership agreement with DFID now, one of these PPAs. Q114 Mr Caton: Steve Bass, who is one of your senior fellows, was appointed as Chief Environmental Adviser by DFID but the post was lost after six months. Perhaps you have a unique insight into what happened. Why do you think DFID thought it so important to appoint an adviser and then, within six months, wanted to phase out the post? Dr Toulmin: We were completely perplexed by that. When he was appointed back in June 2003, Steve was completely taken aback, some months later, to find that position was being restructured out of existence. I can only imagine that it was for some kind of general restructuring process which all organisations, for some reason or another, choose to go through. We can all interpret it in various ways. I choose to interpret it as a desire to demote environment within the context of DFID's overall policy and I think that is the interpretation most people gave to that particular demotion. They did not demote the Chief Economic Adviser and I interpret that to mean that economics matters a lot more than environment, but that is my personal interpretation. Of course, Steve came from IIED, and I suppose, to a large extent, with him now back at IIED, we are the beneficiaries of that whole process, since he had a bit of time in DFID which has given him huge insights into how the organisation works. He is back in IIED now, working 30 per cent of his time for DFID but the rest of the time on issues related to environment, MDGs and broader development activity. Q115 Mr Caton: That is a small benefit compared with a major loss, it seems to me, in what you are saying? Dr Toulmin: Yes, that is right. It is a private benefit for IIED but a much larger collective loss. Q116 Mr Caton: Going back to funding, why does DFID fund you and other organisations; is it because they have not got the expertise to do the work that you do, or is it something that would never be done in-house anyway? Dr Toulmin: I think, in general, if you look back, since Thatcherite times there has been a shift of work from within central ministries into research institutes and NGOs, which might have been done, 20 or 30 years ago, by staff in those central ministries. I think, in part, there has been certainly a shift of funding which in previous times might have been done as a core government function. I think it is also because the kind of work that we do I would hope added value, to understanding by DFID staff, both at headquarters and in field offices, contributes to their understanding of some of the policy options that they face and how they can carry forward particular areas of work more effectively. For example, we have been doing quite a lot of work on questions of land administration, particularly in the context of the Ghana programme, where DFID has got a significant investment in the work of the Ministry of Lands and Forests, so there is a very direct feeding-in, in that case, to a specific body of work that DFID wants to take forward. Mr Vorley: The trick being, of course, that if you are not in any organisation, if you do support policy analysis and research which then is fed back into an organisation, that is churning staff frequently, or does not have a large capacity to observe that, at the central or the country level, there are problems of internalising that and one is inclined to go through repeated lesson-learning, sometimes, would you say? Dr Toulmin: Indeed, and quite often, when you appear with a short report, people say, "Oh, well, I don't have any time to read that." Again, I think it is this constraint on a really very limited number of people having to do a huge amount of work, and that means there is relatively little space for the reflection and thinking and questioning of alternative routes, that really there is not very much time for that. Mr Vorley: I think this partnership model around the UK retail sector could be an interesting model to look at, where rather than devolving or contracting research it is done as a joint venture between DFID and partners; that could be quite an interesting way forward. Q117 Chairman: If I can follow up with a couple more questions on the staffing issue, we have been told a number of times of this famous number of 18 environment staff out of 2,927, or something like that. I am sure that if we ask the Minister, when he comes to an evidence session, the question "How do you cope with environmental issues with only 18 staff?" he is going to tell us that actually environmental issues are integrated into everybody's work and that all 2,927 will always be thinking about environmental issues as part of their overall work. If that were the answer, how would you rate it? Dr Toulmin: It is like all of these mainstreaming issues, is it not? If you have a bit of that background yourself then I think you do mainstream internally in that way, but I think if you come from a different kind of background, particularly if you come from a sort of mainstream economics background, it is much harder to have that sort of innate screening or understanding of environmental issues. When you look at a particular issue or project, that is not necessarily the set of questions that you are going to be asking yourself. I think what most organisations find is that once you mainstream and get rid of the environment experts, you get rid of gender experts, you get rid of other, more specific experts, then actually you lose the prod and the prompt which means that people keep those issues front of mind. Again, if most of the emphasis is going on transference of money to central budget support then these more diverse, locally-based, specific environmental issues just tend to get neglected. Mr Vorley: Just a defence; something like agriculture, which has a huge environmental and natural resource ingredient into it, is back on the map, fairly and squarely, in DFID, so I think it could be an overstatement to say we are down to 18, because with agriculture back in, both in research and policy, there is considerable environmental analysis and policy rushing in behind that. Q118 Chairman: The work for which DFID funds you, how is that disseminated amongst DFID's staff; do they get any feedback? Dr Toulmin: It is disseminated in a variety of different ways. It depends a bit on the nature of the work, but, for instance, the work that I referred to on watersheds, there is a lot of contact between the research groups in each of those six countries and the DFID offices where that work is going on. Similarly that is the case with the example that I gave of looking at how you can secure land rights most effectively. In fact, we chose those countries - Ethiopia, Ghana and Mozambique - specifically because we knew there was either a strong DFID interest or a strong governmental interest within those countries into which the research results might feed. It is a bit more patchy in terms maybe of headquarters feedback. Again my impression is that people are incredibly hard-pushed for time, so that, for instance, when we had this big conference on land, in Africa, in November 2004, which brought together more than 100 people from different parts of the continent, including three ministers of land, we did not get anybody from DFID except a part-time consultant. That struck me as rather surprising, given the importance of the land issue in the African continent. We did get people from the Commission for Africa, but I was surprised not to get anybody from DFID itself. I was told, that day there was just nobody available because of the pressure of a whole set of other commitments. I think, on the supermarkets front, you have been having much more of a --- Mr Vorley: In the headquarters, yes, but it is the opposite way round; there, you would talk to DFID offices in Kenya or Uganda and would be encountered by people who are interested very much in theory and want to support the work but spend all their time servicing the direct budgetary support and do not have much time for the smaller, more diffuse but very important work around smaller-scale producers and natural resources and market access. Q119 Ms Barlow: You have highlighted a few DFID projects which you feel are environmentally effective, particularly in India, China and Kenya. Could you explain briefly what those are and why you think they are effective? Dr Toulmin: The one in Kenya, which in fact is run by an ex-IIED staff member, in fact we seem to be providers of environmental advisers to DFID, is focused very much around trying to strengthen rights over land and forests, particularly. Given that Kenya currently is going through this very interesting process of both constitutional reform but also trying to get a land reform process underway, so that work has been trying to support the consultation process within the country around how you get the rights of different kinds of communities properly reflected in whatever kind of legislative reform on land and forests and other natural resources takes place. That is necessarily a rather slow, consultative process and DFID has been very good, I think, at persuading the Government that it is better to go slower and to engage with a broader set of interests than to try to rush legislation onto the statute book which does not necessarily have such a strong buy-in from those different constituents. Q120 Ms Barlow: Can you tell us of any other projects? Dr Toulmin: On the China and India fronts, those were examples that a couple of colleagues came up with and I do not have the chapter and verse in front of me, but I would be very happy to provide that for you. Q121 Ms Barlow: Thank you; that would be very helpful. You have mentioned the need for DFID to convert the generic case it has made for investment in the environment for poverty reduction into specific projects. Can you suggest how you think it should do this, how you can convert the generic need to highlight the environment in poverty reduction into a sort of specific game plan? How would you suggest they go about that? Dr Toulmin: As I say, I think it takes us back to trying to understand what leads to good environmental management in practice and good environmental management which also is good for poverty reduction and income generation for poor groups. That then takes you back to issues to do with institutions, governance, very often secure access and property rights and a lot more locally-based sets of activity. As I say, there is the example of the Mumbai investment fund. There is the example equally of this joint fund which has been established in Mozambique, where again DFID and Swedish SIDA have joined forces to set up what is called a 'land fund' which will support communities trying to secure firmer rights over the lands around their community, and in particular help them in the negotiation process with foreign investors seeking access to those resources. That kind of joint approach, with one or several donors, in terms of making funds and other forms of technical support available, is a route which I would strongly urge DFID to go down. Then perhaps they could rely on another donor somewhat more for that technical assistance and back-up in-country if they are better equipped, in terms of available people and advisers, whilst being able to shift this money out of their central budgetary support model and into a more locally-accessible form of support. I think what everybody recognises is that it is not just money that counts, it is not just finance that brings development; certainly finance is useful, but finance by itself may often bring a perverse form of development. It is only when that finance is allied to an understanding of how you strengthen both institutional but also political systems at sub-national level that you have got some chance of development being both more equitable and more sustainable. Q122 Ms Barlow: To continue on that theme, you describe a 'resource curse' at macro level and a 'poverty trap' at micro level. Can you explain exactly what you mean by that? Dr Toulmin: I think that is again this fact that you have got, obviously, particularly in countries which have got the resource curse, as a result of huge amounts of revenue flow coming in at the top, highly concentrated, and the oil and gas producers and some of the major mineral producers, particularly are referred to as 'resource curse countries', and very little in the way of a mechanism by which ordinary people can gain access to or have their views heard, in terms of how the allocation of those resources takes place. The Government, with its sponsorship of the EITI, obviously is trying to help shift resource curse countries towards some greater recognition of the need for transparency and accountability in the use of that money. Our feeling is, that sort of redistribution and changed allocation does not come from above, very often, it comes as a result of stronger argument and mobilisation from people below. That is why putting more money into strengthening civil society groups and a whole variety of local-level structures, including media and other ways in which you can hold government more firmly to account, will be essential, in terms of turning around the resource curse into something which does bring really positive benefits, as the case of Botswana shows. Botswana is a very good case for where the resource curse does not apply. If one finds reasons for that, it is to do with political culture, it is to do with the relatively small size of the country and it is to do with a whole set of social and cultural factors which mean that people in power feel responsible and accountable for their population, to a very large extent. That sort of accountability and responsibility seems to be absent in a very large number of other countries. You have something to say on the resource curse, too. Mr Vorley: Only to make the point that DFID has its own resource curse at the moment, which is this larger budget which it is having trouble spending, other than through these very centralised projects, which do not tie in very well with the very local nature of environmental issues, whether it is access to resources or exclusion from assets. It could be that you could use the natural resource curse language for the current state of DFID in environment. Q123 Ms Barlow: You feel that, at the moment, the management board of DFID does not maintain an environment risk profile or carry out any horizon-scanning to inform long-term development. Do you think this has anything to do with the actual composition of the management board, all five members of which have primarily an economic and financial background? Dr Toulmin: I think that is an inevitable consequence of that, yes. That said, I think it has been quite helpful, with the White Paper process, that there has been a series of more long-term scenario planning exercises, which have included environmental considerations within some of those scenarios. I think that if your senior management are all macroeconomists and if they all come from a sort of World Bank/IMF school, that gives you a particular sort of view on the world and that gives you a set of assumptions about what development is, what matters and how it happens. Inevitably, if you have a different composition then you are going to get a rather different set of assumptions and set of directions in which the organisation might go, within the constraints of HMT saying, "You've got to spend more money with fewer people." Q124 Ms Barlow: You say that this reflects in actual country offices, where they face few incentives to employ anyone but economists, governance advisers and administrators. Can you expand on that a little? Dr Toulmin: There has not been the sort of high-level emphasis on economics and natural resource issues and the personnel required to take those forward as there has been on things like economics and governance. It is just a difference in emphasis, essentially. Q125 David Howarth: You have mentioned agriculture several times, which obviously has a large role to play in rural development and poverty reduction. I wonder whether you could summarise for us your view of how agriculture could be an effective tool for development and poverty reduction? Mr Vorley: I think DFID has got it right, to some extent, that focusing on agriculture as a productive sector, rather than as a refuge for people who cannot get to the city, for instance, is a good policy push and with the emphasis on areas where you can get productivity growth. Definitely there are gaps in there, as we point out in the submission, doing that to the exclusion of agriculture's role in poverty reduction through self-provisioning, for instance, rather than growing for market, that the role of agriculture as a safety-net, when you get through economic cycles, clearly is missing from the policy strategy. We also point to the fact that the natural resource base behind agriculture, and of course behind agriculture's ability to deliver on sustainable poverty reduction, the soil and water conservation, for instance, now has gone off the radar, after being very high in there in the eighties and part of the nineties. You have to be careful not to make a complete shift to the marketing end of agriculture without attention to the resource base. Another part that I find missing is the issue of commodities. Commodities have a huge role in poverty reduction and, as you know, commodities have been through some drastic price declines, yet now there is so much interest in commodities, as feeding fuel as well as food, and I do not think we have got our brains around this at all. Now that the agricultural frontier will start to grow again quite fast for fuel and food production, how you get the sustainability message in there, it is really tricky. You know the WTO is a very blunt tool for getting a sustainable commodity, a commodity with any preferential trade for commodities which are being grown sustainably, because of all the alarm bells of protectionism which go off. For sustainable commodities, do we put all our eggs into the industry baskets, we have got industry groups getting together to say do we have a round table on palm oil or on a sustainable soya bean project. There are so many question-marks around this and there is so much danger of natural resource depletion that I think it behoves DFID to invest in research here, really to find out what the leverage points are in sustainable commodity production to get ahead of this issue, otherwise we are going to be running behind it. Q126 David Howarth: Your conclusion about what DFID's policy is, and DFID you say has a commercial focus aimed at national economic growth, which is the point we were making all along, but your conclusion is, to remind you of it, "the problems faced by poor people in accessing environmental assets are not addressed as a priority; neither are the impacts of agribusiness gaining preferential access to such assets." Is that an environmental point or is it also a distributional point? What makes you conclude that? Dr Toulmin: It is a bit of both. One of the things that we feel is very important is the way in which you understand access to resources. Environment is as much about institutions and governance as it is about anything technical, and the question of access to resources and strengthened rights to land is essential if you are going to get agriculture playing its role, in terms of providing incomes and livelihoods particularly for poorer groups. I think that many African governments at the moment feel that they must attract urgently a lot of foreign direct investment, and this kind of investment promotion activity we feel occasionally to be at the expense of the rights and livelihoods of poorer communities. Which is where the case of Mozambique is a particularly interesting and important one, because there DFID and Swedish SIDA are coming in behind local communities so that they can negotiate better those terms on which foreigners come in and gain access to their land. We are worried about agribusiness being in a much stronger position in their negotiations with government and that governments may not respect the rights and interests of their local communities, in terms of access to water and access to land, when they see the potential gains that can be made by letting a private investor come in. Q127 David Howarth: Do you see that having a resource depletion consequence in itself, and why is that; is that because governments themselves are not particularly concerned about resource depletion issues, and when negotiating with agribusiness corporations tend to let that go by the wayside? Are you saying, in contrast with that, that locally-based organisations and people have more concern about the resource base; is that the point you are making? Dr Toulmin: There is the question of equity around who controls and continues to gain benefit from those resources, which is an important issue. I think it is also the case that local farmers are likely to have a longer-term interest, very often, in those resources. To be honest, people in government often may be seeking a short-term gain from allowing people access to certain key resources rather than thinking about the longer-term consequences, because that is not particularly of interest to them, that is not where they are going to be living and relying on for the next generation or so. I think the other important thing to say is that this term 'commercial' often can be a bit of a minefield. In west Africa, most farming is done by smallholders and they are thoroughly commercial and they are fully engaged in the market, and this idea that you contrast commercial with small-scale farming and, small-scale farmers, they are subsistence commercial farmers only, is a false dichotomy and one which I think then leads one to think that smallholders will never be able to enable a country to develop. In practice, certainly in the west African context, most agricultural production, most agricultural exports, have come from precisely that supposedly backward, subsistence-oriented, smallholder sector, who have been remarkably innovative in lots of ways. Q128 David Howarth: Can we look a bit more at DFID's documents; there are two documents, the Strategy for Sustainable Agriculture Research and its Agriculture Policy Paper. The Policy Paper is particularly interesting, I think; it mentions the possible environmental impact of different approaches to agriculture but then kind of fades out and does not seem to say anything about what to do about it. Then it goes on, and this is a statement which I think struck all of us, it makes the statement that sustainable agriculture is "unlikely to drive productivity gains up the scale required to meet market demand and tackle poverty on a world scale." I wonder if this is a central policy point about sustainable agriculture? Mr Vorley: There was a huge debate, as you may know, in the consultation process which led up to that report. The fact that it is still in there is shocking, because here sustainable is being equated with organic, I would assume, and, as you and I would agree, agriculture will not be sustainable if it does not meet the growing needs of the increasing populations and deal with the resource base. It is a contradiction in terms. Q129 David Howarth: Yes, because it raised the question, if it has no potential, why are they spending so much money on it? The other matter you refer to several times is land tenure. Could I give you a chance just to say what your approach would be to land tenure issues, why it is so important in poverty reduction and rural development, and how you see the Government's approach and whether it is different from yours? Dr Toulmin: That is very much my special subject, so you are going to have to stop me talking, if I ramble on. I think the whole land tenure issue, land and property rights issue, in the African context, is particularly important at the moment, largely because land is coming under increasing competition and pressure and because, in many parts of the continent, there is absolutely no formal documentation of land rights, a situation which some people can take advantage of in order to try to claim those assets for their own. Consequently, a large number of governments have been thinking about how they should try to bring a bit of order to the whole land and property rights field and now are thinking about whether or not they should go down some kind of titling approach or simpler systems of registration. Much of the work that we have done, some of which has been with DFID support, has been to see how you can get good lessons from practice on the ground, feeding into policy design and new legislation, in many parts of the continent. In fact, the meeting I was at in Addis, that I have just now come back from, was an Africa Union-wide meeting to see how you could get all African heads of state signing up to broad principles which would govern the way in which land and property rights should properly be handled at national level. I do not think that I have any particular grumbles with DFID's approach to land administration and land tenure. I would like to see just a bit more of it. There is good work going on in support of the process in Ghana. There has been good work going on in South Africa. As I say, there has been good work in support of the process in Kenya. What I think needs to happen is that there is greater focus on these difficult political institutional issues within DFID as a whole, because they are absolutely at the heart of protection of property rights for poor groups and hopes for income generation and poverty reduction associated with that, as well as broader environmental management. I think there has been hesitancy perhaps within headquarters, because I think DFID was rather traumatised by the whole Zimbabwe situation. I know that, certainly in Clare Short's time, it had the effect of people saying, "Oooh, we just don't want to go there any more," because obviously what happened in Zimbabwe was extremely going in the wrong direction, in terms of what one would hope for, in terms of an accountable process of land redistribution. Q130 Chairman: I will have to draw the session to a close because we are about to lose our quorum again, I suspect. We do have some outstanding questions, and we were delayed a little bit earlier in the session, indeed before you came, so if that is okay for us to write to you with those three or four questions perhaps outstanding? Dr Toulmin: Yes, and there are one or two things that I promised to provide you with more information on, the China and India examples. Chairman: Yes. Thank you very much for your evidence this morning. I hope you have not got too much jet-lag to deal with. It has been a fascinating session. Thank you again.
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