Examination of Witnesses (Questions 160
WEDNESDAY 6 MARCH 2002
MP, MR ANDREW
160. Because we do not have sun, and frankly,
we do not need them.
(Clare Short) Yes, but this is a myth.
161. It is not a myth; it is a reality.
(Clare Short) It is not. Please. This is very important.
This is a specific example of the Northern thinking projecting
on to the south.
(Mr Bennett) The whole issue of energy is one that,
as you well know, the prime source of energy in most developing
countries at the moment is wood, charcoal and other sources. Solar
energy has many attractive features, particularly for small electronic
kits and things like that, but as you well know, there is a big
problem storing that, because the sun is not out when you want
the energy most.
162. Not in most of the world we are talking
about. The sun is rather more pervasive in the poor countries
(Clare Short) The sun is not out at night when you
want light, for example. That is the storage point.
163. Of course not, but it is during the day
when you are doing the cooking.
(Clare Short) This is a man who has spent a lifetime
working on these issues.
164. With respect, is it not very dangerous
to take an adversarial view to environmental questions, when in
fact some of the things which are being done technologically in
the Northern world are absolutely applicable to the Southern hemisphere,
the poorer world, even more than the Northern?
(Clare Short) I do not believe, Chair, with respect,
that I am taking an adversarial view.
165. You seemed to be taking an adversarial
view to what Joan Walley was saying.
(Clare Short) Yes, but she was quoting an answer I
gave to a question as though that was really problematic, and
I was explaining why I gave that answer. The interest in renewables
and the rest in my Department is great. In fact, we are working
on an energy strategy, which is coming to me in March, and we
will probably share with you, and that will work through all these
issues very carefully. Then it is becoming adversarial between
us. I quite like that way of proceeding. But we have thought through
and do very sincerely mean these positions. I understand the good
intentions of people who think that every poor family in the world
could have a solar panel and that might solve the problems of
the world, but it is not as easy as that, as Andrew Bennett is
trying to explain.
(Mr Bennett) Solar energy has been shown to be very
valuable for providing power at particular times at particular
levels, but the types of energy needed for cooking and the various
other sorts, the need at the moment is filled by fuel wood and
charcoal, and in some cases animal dung. There are of course other
sources of renewables, for example, wind energy. I attended a
meeting the other day where people were advocating very strongly
the provision of wind energy.
166. It is more expensive.
(Mr Bennett) As solar is expensive, wind is expensive.
167. Wind is more expensive than solar in these
parts of the world we are talking about.
(Mr Bennett) It is all more expensive than fuel wood
and what is currently being used. Therefore, we do have to look
very closely at how one would meet that differential in cost and
the reliability of supply. Nobody is against renewable energy.
Indeed, there is an awful lot of work going on. But at the moment
it does not offer the same flexibility, and it is more expensive,
and until such time as one can find ways of making it both practically
and affordably available, we do need to recognise that most of
these communities will continue to rely upon their more traditional
sources of energy. The important thing is that they do grow trees,
and they do replace them in the first instance, because trees
not only provide fuel wood but they provide fodder and other amenities.
I am not trying to turn the question. I just think there are no
single silver bullets, and we have to move forward logically.
Let us find the source of energy that works best and find ways
of ensuring that it is affordable.
(Clare Short) We are talking about countries with
a GDP of $200 a head. Ethiopia is significantly less than that.
If they are making their poverty reduction strategy and deciding
as a country how they are going to grow their economy, how they
are going to invest in education, health care, energy, transport
and so on, it is all priorities. If a renewable is more expensive,
they are unlikely to go for it, because every farthing is stretched
to try and take forward the provision of services to people.
168. Underpinning my question is the issue of
corporate accountability. It is all very well to leave things
to voluntary arrangements, but it is how we link into that the
issue of corporate accountability.
(Clare Short) As you know, there is an OECD Convention
that is voluntary on corporate accountability. There is more and
more interest amongst big corporates in social and environmental
responsibility codes, both because as transnationals really become
transnational and invest massively in their labels and titles,
they cannot afford the damage to their reputation of the exposure
of some sort of sourcing that is destructive, or child labour
stories or environmentally damaging stories. So more and more
companies are interested in cleaning up their act and being socially
responsible, not just because there is some well-meaning director
or two, but out of their own self-interest, which I think is good,
because it is more sustainable and long-term. The experience of
companies that have gone down this road is that it makes you a
more effective company, that as you manage more carefully all
the resources you are managing and all your staff across the world,
it is also economically beneficial and tends to lead to better
investments and a better managed organisation. That whole field
is moving forward very rapidly. We engage with it seriously in
all parts of the world. We have this ethical trading initiative,
for example, that we now have £100 billion a year turnover
of British retailers in membership. It is a partnership with NGOs
and the trade union movement, funded and supported by my Departmentnot
large amounts of funding, but just helping it to organise itself
and go forwardcleaning up the supply chain right across
the world, with monitoring. I think that is fantastic, because
£100 billion annual turnover is a lot of resource, and if
you get the big companiesand most of the big British retailers
are in itvoluntarily but objectively monitored cleaning
up their supply chain in terms of labour standards, that is a
heck of a lot of human beings whose lives are improved. So we
are doing a lot of work on that. Since the new code on pension
funds we are beginning to ask them simply to record whether they
have an ethical code. We are beginning to look at how we can work
(Mr Foy) The issue of whether or not we should be
applying the Convention on transnational corporations for corporate
social responsibility has actually been around for quite a while;
it is not something which is particularly new. I think the question
we and colleagues in the DTI have struggled with over the years
has been to identify what in practical terms it could achieve
beyond the power of the market, which is far more important and
far more influential in determining the way in which corporate
entities direct their resources than any amount of legislation.
There are two practical issues which are worth bearing in mind
here. The first is that the stylised notion of transnational corporations
as having a Northern home with Southern associated entities is
rapidly changing. Many of the large transnational corporations
are actually now Southern-based, and there are intricate webs
of organisations which would make tracking such arrangements very
difficult. Also, many of the worst offenders regarding corporate
social responsibility are Southern-based, not Northern-based.
Those of us who work in the forests sector are well familiar with
the actions there. The sense really is what could be practically
achieved beyond market-based consumer approaches in terms of applying
169. I was interested to hear what you were
saying about not seeking to impose necessarily Northern standards
on Southern developing nations. In that context, I was also interested
in your reply to Gareth Thomas, when you said, after Michael Fabricant
had spoken, "We really need proper privatisation under good
regulation." If we are not seeking to impose Northern standards
through regulation, does that not leave this equation rather lopsided,
and are we not in fact now transplanting the environmental agenda
set in Rio with a new trade agenda which will perhaps emerge at
this summit, something perhaps which is more related to things
called the Washington consensus, for example, where the north
seeks to create its own economic terms with the south?
(Clare Short) No. For example, in India, if you take
energy and electricity, you have state-owned, very inefficient,
highly subsidised electricity provided virtually free to rich
farmers for irrigation. You have constant power cuts, the lack
of availability of electricity, which is a constraint on economic
development, which is crucial to the poor. If your population
growth is faster than your economic growth, you get growing poverty.
The public revenues that should be being spent on health and education
services for the poor are being sucked into massively subsidising
electricity supplies. We as a Department have been engaged in
India in trying to support electricity reform in order to release
the revenues in order to get health and education for poor people.
So we are not coming at it because we think it is some kind of
theoretical good idea; we are trying to help countries run their
economies and their public finances in a way that enables their
economies to grow beneficially and provide decent public services
for people. We are not coming at it for a theoretical reason;
it is a very practical reason in order to improve services for
poor people and reduce poverty.
170. Minister, I want to take you back to an
earlier characterisation you made when you described the Northern
green environmental agenda and the Southern development agenda.
The Committee understands what you mean by that, and you have
gone on to describe it in more detail later on, but surely you
will concede that it is not quite that simple, that deforestation,
soil erosion, problems of inundation from sea water are predominantly
third world problems, because the Northern world is rich enough
to take care of these things. The environment is a third world
issue, every bit if not more than a Northern world issue. Characterising
a Northern agenda as the environment agenda, some of us on this
Committee will think of one or two Northern countries which we
do not necessarily associate with the green agenda. Is there not
a danger that, however sincere your view of pushing forward this
developmental process and readjusting the level at which we look
at the environment, some countries in the north, and some very
rich countries in the south perhaps, will wish to use it in order
to avoid their environmental commitment?
(Clare Short) No. I think the truth is very important
and very powerful in all things, and even if sometimes it creates
strains and paradoxes, we have to work through it. We cannot not
speak the truth because some badly intentioned nation might exploit
the truth. If the nation I think you might be talking about would
listen to me more about development, it would please me greatly.
I do agree with your first proposition, that deforestation, soil
erosion and so on are massively important questions for developing
countries and poor people but, for example, what we know in our
forestry work is that poor people will continue to chop down trees
and use the resources of the forest if they are desperate and
if they have to, and even to get land that is soon sterile if
they have no choices. But if you give them some control over the
resources of the forest and the future of the forest, they will
manage it sustainably. If they have no power, and some corrupt
company is coming and stealing all the logs and destroying it,
then they will take as many logs as they can take. So the issue
of how you deal with the erosion of forestry gets down to due
respect for people who live in the forest. You look at their lives,
you think how can they live in the forest in a way that the forest
can be sustainable, and their lives will be better. The environment
is crucial to poor people because they are so dependent on it
for fishing, for wood, for food. They make their own lives out
of the environment. I do a lot of meetings around the country
on the development agenda of the UK, and a lot of very well intentioned
environmentalists and ecologists come to those meetings, and they
frequently say, "Trade has got to stop. No transnational
investment." They mean it. They are very sincere. They are
living in a country with all the fruits of multinational capital
in every high street. They arrange their meetings on the internet
and have their mobile phones and their Nike trainers, and they
have a well-intentioned rural idyll in their head about Africa
and Asia, and people being close to nature and close to God, and
not wanting their life despoiled by development. There are a lot
of people like that. They mean well, but in the mean time African
children are dying. People desperately want enough development
so that their lives will be better but that is respectful of their
environment. I want to try and encourage environmentalists to
turn the telescope round the other way and ask, "How can
the poor of the world have a better life within a sustainable
planet? How can we support and guarantee the changes in the way
we manage the planet that guarantees development to them in a
way that will be respectful of the environment?" The poor
people who live in rural areas, which is still the majority of
the poor, though the world's population is urbanising very fast,
are much closer to the environment than we are. They live in it,
beside it, and use it in order to survive. I hope you understand
my answer. I am not having a fight here for the sake of having
a fight. I have this argument all the time, and people constantly
say, "Oh, no, we don't want any trade with poor countries.
They should hide behind their tariffs. Development is too materialistic."
That is all wrong. That is sentencing the poor of the world to
be marginalised and impoverished for all time. I have this battle
endlessly with well intentioned people.
Mr Jones: I do not think you need to have that
battle with this Committee.
171. I am a little bit concerned from the evidence
we have been having as we go towards the Johannesburg summit as
to whether anything will be achieved there at all. The reason
I say that is because I can see very clearly where you are coming
from, Minister, and I can see very clearly how the other aspects
of sustainable development you want to see strongly pushed forward
at Johannesburg need now to come more strongly forward. It is
clear that we have lost a lot of opportunities in the ten years
since Rio to push the agenda within a sustainable context. That
is something that needs to happen. But the one thing that could
be said in favour of Rio was that it very definitely put the environment
at the top of the world agenda. Nobody much knew about sustaining
the environment and degradation of the environment before Rio.
It may have been a Northern process, but it has been a process
that has prompted the technological changes that we saw in Germany,
which could be of benefit to developing countries. What will happen
in Johannesburg? It seems that there is this tension between the
Northern environmental agenda and the more Southern-based development
agenda. It is also clear that the majority of the representation
of the national governments that will be therethe NGOs
will be differentwill still be environment ministers. You
will be there, and you have written to other OECD ministers asking
them to take an active role as well. Is there not a danger that
this whole thing will collapse into a mess and we will lose sight
of trying to keep these key principles of sustainable development:
the economy, the social development and the environment? If Rio
could be blamed for putting a little too much emphasis on the
environment, Johannesburg will not succeed in getting that social
development side of the agenda, because it is going to implode.
(Clare Short) I think you are right about Rio, and
I think it was a big shake for the world. It did come out of the
Northern agenda, saying, "Think about the environment."
I think it was very symbolic that Mrs Thatcher, now Lady Thatcher,
went. She had never said a lot about the environment, but the
power of that summit is an example of it shifting the conversation
in the world, and that was important. But that was an environment
perspective. Maybe the world had to go through this. It was not
a sustainable development perspective. What I am really hoping
for, and I am optimistic about, is that out of Johannesburg we
will get a sustainable development perspective, so that having
broken through and to get people thinking about the environment,
that will become a more sophisticated understanding.
172. Hopeful or optimistic?
(Clare Short) Hopeful. It could go wrong. UN conferences
can always go wrong. My biggest fear, to be honest with you, is
that if the financing for development conference in Monterrey
goes wrong, and if the international atmosphere sours, Johannesburg
will start with a sour atmosphere. There are real dangers here.
173. Is not the other danger, Secretary of State,
that because of this fear of failure, which Mr Prescott was very
concerned about on Monday when he came to this Committee, has
meant that our ambitions are so low, because we are afraid of
failing, that almost nothing will be achieved from that point
of view either, from Monterrey or Johannesburg?
(Clare Short) No. My own view on Monterreyand
we have put a lot of work into thatis that the document
encapsulates the best possible way of promoting development for
the poorest countries and people. Quite a lot of the preparatory
process is building a new commitment and consensus in the world
about how best to do development which will most rapidly reduce
poverty. I think that has gone well. The danger is that the developing
world is expecting pledges of more development assistance, and
that might not be forthcoming, and that might make people quite
bitter. If the atmosphere is bitter after Monterrey, that is the
atmosphere in which we will go into Johannesburg. Then I do not
quite know where it will be. You all know what the current state
of the world is. There are some very bitter and harsh things going
on in the world. If that all started playing in, we could get
some very nasty UN conferences because of that atmospheric. But
I am still hopeful, and I personally think it will be a big achievement
if out of Johannesburg we get, ten years on from the achievements
of Rio but with just environment, a new shake in the world agendait
is interesting that Tony Blair committed to going early. It had
that power to pull him inthat commits to sustainable development
rather than environmental protection. Whatever the specifics,
if there is that mind set shift in a significant way, and there
is more and more understanding across the north, among radical
young people, that we have got to work to guarantee development
for the poor sustainably, rather than a lot of the well intentioned
energy going into an almost anti-development agenda, I think that
would be a great gain, and I do think changing ideas in the world
at a time like this is very powerful.
174. I appreciate that, and I think it is an
interesting conundrum for what you are trying to do in the north.
You have set yourself up to try and change some thinking around
how the development agenda is dominated by the north. It inevitably
is, because this is where the money is. That is one of the difficulties.
I appreciate Monterrey is coming up first. How much will international
aid, that is to say, the grant money agenda be there? Surely,
if we are going to change some of the perceptions and the ways
that we are trying to achieve sustainable development in developing
countries, one of the things that we have to do, if we are not
going to impose our environmental standards on them and hold them
back because of that, as a quid pro quo, is that we have to perhaps
fork out a little more to help them along the way so that they
can meet minimum environmental standards sustainable within their
own economies, but that will also help us trade at an open and
fair trade level with those developing countries. None of that
can be achieved without money. How realistic is it that serious
talk of money will be there in Johannesburg, or is that going
to be flushed out at the other conferences, Monterrey and into
the World Bank and will that in itself not lead to a great deal
(Clare Short) This is the danger. This is the very
serious danger. We need more and better aid. We need a change
in the mind set about what aid is for, not for hand-outs and projects,
but to help countries have the capacity in their systems to manage
their economy, to regulate their banks, to run health care and
education, to have the capacity of a capable modern state, and
we should see aid as an investment in helping countries put those
kinds of conditions in place, and then grow their own economies
and run their own services. We and some others have moved very
much in that direction. There is 50 billion of aid in the international
system. Both the World Bank and former President Zedillo of Mexico
have done studies about how much aid is needed to get the world
to meet the Millennium Development Goals, as they are now called.
The lowest estimate is a doubling of the 50 billion. Actually,
of the 50 billion we have, it could be increased in value if it
were better deployed. Particularly the EC's money is skewed and
is moving more and more away from the poor, for example. My own
view is that the optimistic scenario for Monterrey would be a
commitment to more and better use of aid, and actually, if everyone
were to focus more on where the poor are and backing reform, because
that is where aid is most effective and brings very significant
advances, we could increase probably by 50 per cent the current
50 billion in value. I think it would reconnect with our public,
who would see aid being effective and would be more supportive
of it. That is what we are working for, but the climate is not
good. The US are not planning significant new commitments, though
they have talked about something on education. Let us keep hoping
and working. Germany is currently going through a difficult time
and is not proposing any increase. Japan is cutting, and Japan
is a very big provider, the second biggest economy in the world.
This makes Europe's position crucial. There has been an effort
going on through the Commission, well led, to get Europe to be
on the front foot, and promising a commitment that European countries
will all agree by 2006 to increase at least to the European average,
which is 0.33, and then of course the average will go up and you
could commit that everyone would move forward again, something
which just offers more and better, and that battle is going on
in Europe at the moment. In terms of Monterrey, that is where
things are, and the real funding thing is Monterrey.
175. You have already referred extensively to
the UN Millennium declaration of the goals that are clearly at
the heart of what you want to see happen in the future, and I
heard Kofi Annan say very much the same thing last week. You talked
in your memorandum to the Committee about the need for practical
action to carry forward the agenda to achieve those goals. This
is really, I suppose, what the conferences are about during the
course of this year. How can practical action be takenI
have to mention thison a morning when the United States
has imposed protectionist tariffs? What effect will that have
on the atmosphere in the lead-up to the Monterrey conference so
far as taking forward the agenda that you want to see, Kofi Annan
wants to see, and I want to see?
(Clare Short) We have had battles through the WTO,
on bananas famously, and hormone beef and so on, so this is not
the first, but this is very big, and it is a crude defiance of
WTO rules. The US, because it is such a big country and such a
wealthy country, finds it difficult to believing that cooperating
on a multilateral rules basis system should apply to the US. It
is very difficult, but we have to keep working at it. My greatest
fear about the World Trade Organisation is that the rich countries
will break away from it, saying, "We can reach bilateral
and regional deals; we don't need a rules-based system,"
and the poor countries will not get the trading opportunities
and their chances of securing development. This is very serious.
If it can be resolved within WTO rules, that is good for the world,
because it means we have a system where even the biggest and richest
countries, if they apply those rules, have a process for sorting
things out. If we do not resolve it, and if it endangers the authority
and future of the WTO as one of the multilateral bodies through
which we have to manage our sustainable world, then I think we
are in trouble.
176. Secretary of State, can we talk about supporting
the international preparations for the summit and the role your
Department has played in that? You have already told us that you
have written to all OECD development ministers to encourage a
high level of attendance at Johannesburg. Can you give us some
idea of the sort of response that you have had to that?
(Clare Short) We have had a great flurry of replies,
basically positive, and I think the letter was useful in that
lots of development ministers who do engage in this discussion
started thinking, "Oops! I had better get more engaged in
the preparations for Johannesburg." I think it helped to
prompt that and that was useful and good.
177. No-one has said they are not coming?
(Mr Foy) All the countries will be attending, and
development ministers. At least half have indicated at this stage
that they will all be attending.
178. Will DfID be seeking to engage the general
public here at home about the world summit, or are you concentrating
most of your efforts externally?
(Clare Short) We are agreeing a communications strategy
with DEFRA. This is another of my many obsessions. All the NGOs
think they have to go to the summit, because these are intergovernmental
bodies. Proper accountability is through parliament and civil
society at home, and each country should be accountable for what
it does at international meetings in that way rather than people
thinking the only influence they can have is if they can get on
a plane and travel there, which is very much the atmospheric often.
So yes, I am very keen, and obviously we need to engage parliamentarians
more, and they should check on government positions before they
go or when they come back. That is proper accountability.
179. That is why we are having this meeting
(Clare Short) I know, but it needs strengthening right
through the system. Lots of these international conferences are
mysterious and do not get discussed in parliament. That is a real
malfunction as global agreements become more and more important.
So yes, we have been working with DEFRA on a communications strategy.
My Department has over two years had a series of development fora
across the country, drawing in some of these people with whom
I have these discussions, just to talk about where we are, and
we have a paper on sustainable development. That is one of the
three issues we are taking right through the country on this round.
We are trying hard to do that.