Select Committee on Environmental Audit Minutes of Evidence

Examination of Witness (Questions 80-98)



  80. There is going to be an awful lot of work to achieve that in the time available?
  (Ms Hewitt) Yes.

  81. What do you see, and obviously we hope this will not happen, but if you fail to get agreement again at Doha, if the talks break up, what do you see as a consequence of that?
  (Ms Hewitt) It would be a very real setback for the World Trade Organisation and for the world economy; but we are not planning for failure, we are working incredibly hard to make this a success.

  82. On environmental matters, with Europe and the developing countries, there are some differences of view, and obviously these have a bearing, and have had a bearing, on how the developing countries see the whole agenda, about their take-up, about their opportunities to evaluate what is on the table, and the resources they can actually put in to considering these options, which for very small countries are quite different. How can you manage to allay the concerns of these countries about environmental protectionism and the whole raft of things that they want to really turn over and investigate in that limited period?
  (Ms Hewitt) It is a very big challenge, and there is no doubt at all, for many of the developing countries, they see the European Union putting this very big emphasis on the environment and they see it as protectionism. And part of what we have been seeking to do is really to reassure people that the environmental concerns that our public have and that we share as a Government are not a disguised form of protectionism, they are about ensuring sustainable development, right across the world, in everybody's interests. And what we are seeking to do is to clarify the relationship between the WTO rules and the multilateral environmental agreements, we are trying to clarify the status of labelling initiatives, under the WTO rules, so that voluntary labelling schemes do not risk falling foul of the WTO rules, and we want to look at the role of the precautionary principle within the multilateral trading system. Those are big and difficult goals, and we will just go on, both individually and through the European Union, seeking to win an understanding of our goals there as well as support for them.

  83. And how do you see the role of the European Union co-ordinator in all of this?
  (Ms Hewitt) I think Commissioner Lamy has played an outstanding role in advancing the negotiating position, advancing the goals of the European Union as a whole, and he has developed a very effective working relationship with Robert Zoellick, the American trade negotiator, and that has been very helpful in getting the preparations to the point at which they now are.

  84. Do you think that is going now as you would want to see it and you are reasonably comfortable now about that?
  (Ms Hewitt) We are making good progress. The issue of implementation, for instance, which I referred to earlier, was a huge barrier two months ago; we have made very real progress on that. We still need to make more progress on the environmental questions.

Mr Gerrard

  85. You said that you saw a new trade round as absolutely critical for developing nations. I think, when the Committee looked at this issue before Seattle exactly the same thing was being said to us then, a new trade round is critical for developing nations. But the view that was coming, I think, from developing nations was, `Well, before we go into a new trade round we want to really see what has happened, we want a proper evaluation of the outcome of the last round;' how confident are you that that sort of view will not still be there?
  (Ms Hewitt) Some countries, particularly India, are still taking that position; it is one reason why the implementation issues were so important. On evaluation, there is some work already being done on evaluation, there are, of course, issues, like the multifibre agreement, where the phase-out will not be completed until 2005, so it is actually too early to evaluate. What I hope we can persuade other developing countries, or those who are still concerned about it, is that it is worth moving forward, not just in implementing the Uruguay Round agreements but actually starting to negotiate new agreements and giving that fresh impetus and confidence really to the world economy, and also strengthening the rules-based framework for world trade, which is absolutely crucial to protect the interests of developing countries and to prevent protectionism in the developed countries, which is a very real barrier to developing countries' development. We are, as all of you will know, probably the main proponents of reform of the Common Agricultural Policy within the European Union, we have to reform the CAP in the interests of the new entrants to the European Union as well as developing countries, and, frankly, if we can get agreement at Doha that will strengthen our hand in achieving that goal as well; but, of course, there are different views on that within the European Union, we have to manage that.

  86. I understand the point about the need for a rules-based system, because people from developing countries will say to you, "We don't want a system which has no rules, it's a question of what the rules are." There was a slightly different issue last time as well, which was not just that there would be a comprehensive new round but what came out of it, and fears that what was going to be the outcome would be a single package which it would be demanded that a country would sign up to, just a single undertaking that everybody would be expected to abide by, and that was another source of worry for some developing countries. How would you like to see this new round develop, if it does get off the ground, because Doha is going to be more about whether a new round happens than what the new round actually consists of?
  (Ms Hewitt) Yes; clearly, we are not going to start the substantive negotiations at Doha. There is considerable merit in the principle of nothing is agreed until everything is agreed, because it then enables you to do deals across this very complex organisation that moves the whole thing forward rather than allowing countries to take the pieces they particularly want and not contribute to the rest of it. But I think within that overall strategy it is possible to have some flexibility; and, for instance, on the issue of trade in services, which is part of the permanent negotiating remit of the WTO, and therefore, in a sense, not an issue for Doha, there is already a very clear principle within the agreement that each country decides for itself which services to liberalise. Now, in the context of Doha, part of our objective is to get the so-called new issues, competition and investment, onto the agenda, because we think part of bringing developing countries into a good framework for world trade is to ensure that they have some sound rules on investment and competition, and certainly, particularly on the competition side, that will help on foreign direct investment. But it is an issue of concern to developing countries, partly because they fear they do not have the capacity to deal with that, the issue I referred to earlier, so there are suggestions there not only that we have a couple of years of preparatory work before we negotiate but also that we might have a similar opt in, opt out procedure, once we get into those substantive negotiations. So I think there is room for flexibility on matters like that.

Joan Walley

  87. Just to touch briefly on climate change, and you referred, and I think the whole Committee agrees with you, to the Herculean effort that our Deputy Prime Minister made in respect of Kyoto. Can I just ask you two questions on that: (a) will you be out at Marrakesh at the next summit, and can I also ask you how the DTI is preparing work for that, and how you are working jointly with the position that our Deputy Prime Minister has, in respect of taking further forward the climate change talks and discussions?
  (Ms Hewitt) We very much support that; obviously, we are not the lead Department in those negotiations but we strongly support the Deputy Prime Minister and other colleagues in seeking to move beyond Kyoto, and in particular to persuade our American colleagues to sign up to multilateral agreements on that. We have, in particular, a joint team with DEFRA on climate change, and that is working on the preparations for Marrakesh.

  88. And will you be going to Marrakesh yourself?
  (Ms Hewitt) I do not think so, but I have not specifically looked at that yet.

  89. I think we would be interested to know if you were going?
  (Ms Hewitt) I will certainly tell you.

  90. Good. And really one last thing: export credit guarantees. Could you just tell me, first of all, in a wider perspective, how you track the environmental sustainability in respect of decisions which DTI makes in respect of export credit controls and guarantees?
  (Ms Hewitt) The Export Credit Guarantee Department has been looking at basically how it greens its own operations. In December last year, they published a statement of business principles, and if you have not seen them I would be very happy to send them, I will send them to the Committee; but they included a commitment to look at the environmental impacts of the projects they were being asked to support, as well as the social, human rights and health and safety impacts. Obviously, it depends on the particular project, but need I mention the enormous amount of environmental assessment work that is going on in relation to the Ilisu Dam project, which is, of course, still outstanding. Now in January of this year the ECGD introduced an enhanced environmental assessment system, and the aim of that is to ensure that all the projects they support comply with internationally accepted environmental standards, including, for instance, those used by the World Bank. They have got a dedicated unit that deals with their business principles, and that includes qualified engineering and environmental experts. So there is a lot going on there to make sure that we do not fall into the trap of giving export credit cover to projects that actually are environmentally damaging, which is something that, of course, has happened in the past.

  91. Given, as you quite rightly say, the enormous controversy that there is about the Ilisu Dam, and the way in which there have been assessments done by other Departments, including the Foreign and Commonwealth Office, and so on, and given what you said earlier on about the events of September 11 and how the coalition needs to be underpinned by an economic relationship, how do you square that with the environmental assessment in respect of the Ilisu Dam from within the DTI? What conditions would you feel would have to be absolutely minimum in respect of environmental sustainability, what mechanism have you got for making sure that you are not going to be bull-dozed into a decision to support it at any cost?
  (Ms Hewitt) The criteria for that decision were spelled out by Stephen Byers last year, and they include the environmental assessment and the human rights impact. Now I am sure you will have seen the very substantial pieces of work that have already been produced on the human rights and on the environmental impacts of that particular project. We have commissioned from independent consultants an evaluation really of those assessments; no decision has yet been made.

  92. Could I ask who the independent consultants are?
  (Ms Hewitt) I am afraid I do not actually have that information with me. I am sure it is not secret.

  93. It would be helpful to have details of who the consultants are, and to have details as well of the remit and the specification that was given to the independent consultants when they were asked to undertake this environmental assessment, because, presumably, events have changed since 11 September and I think we need to see that within the wider context. It would be helpful to have those pieces of information?

   (Ms Hewitt) Let me see what further information I can let you have on that. As I say, the criteria were very clearly spelled out, and those have not changed.


  94. In one of your replies, Minister, you did say there had been an environmental impact assessment of the decision by your Department on the MOx issue; is that right?
  (Ms Hewitt) No. Sorry, what I said was that our own view of that project had been based both on environmental assessments and economic assessments; the decision, of course, was one for the Secretary of State for Environment.

  95. And she, Mrs Beckett, would have done an environmental assessment of that?
  (Ms Hewitt) Certainly, environmental assessments were done, and they were taken fully into account in making that decision.

  96. What would be useful is if we could have sight of those?
  (Ms Hewitt) Yes; let me see what further I can send you on that.

  Chairman: Thank you.

Mr Savidge

  97. If I can return to the Ilisu Dam, I got the clear impression from your predecessor that he felt that the conditions that had been set were most unlikely to be met. You do not feel in a position to indicate to us what your present feelings are?
  (Ms Hewitt) The criteria were very clearly spelled out by Stephen Byers; they have not changed. But we have not made a decision.

  98. He certainly indicated to me that he felt that it was most unlikely the criteria would be met. I wondered if, given the sort of canards one gets in the press, you could at least dismiss the story, that I think was in the Sunday Times on Sunday, that there might be some rather unpleasant deal done in order to please the Turkish Government and keep it in the coalition, despite the fact that, all the evidence, of course, was to the contrary? I wondered if I could give you the opportunity to lay that fear to rest?
  (Ms Hewitt) I did not see that piece, but I am sure you know a great deal better, as do I, than to believe everything we read in the Sunday Times, particularly that kind of story, from the sound of it.

  Mr Savidge: That is why I was giving you the opportunity to respond to it.

  Chairman: Secretary of State, thank you very much indeed for your attendance today. We are most grateful for your evidence. Thank you.

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