Examination of Witnesses (Questions 40-55)
MR JOHN SAUVEN, MR ANDY TAIT, MS KATE HARRISON AND MS ANNA JENKINS
WEDNESDAY 1 MAY 2002
40. The second area that I want to go into is government procurement policy. I want to preface it by putting on the record a parliamentary question which I asked on 14 February, which was answered by the Cabinet Minister suggesting that there were proper contracts in place, and the subsequent Prime Minister's question which I asked, which, for your information, has been corrected now on the order paper, and I think we now have a situation whereby the Deputy Prime Minister has written to the Chair of our Committee and to myself. For the record, he says that he will see there is a full investigation into all the circumstances surrounding the procurement of timber for this project, ie the Cabinet Office. It is currently under way and a report will be made to the House of Commons when this has been completed. What I am interested in is looking at that report, which is now under way, to see how that can do precisely the things which are needed. Have you had any contact at all with the Office of Government Commerce about the way in which any contract for any government department, be it Ministry of Defence, or public-private partnerships at local government level, might be a standard contract that could then be used across the board, and if you have not, might that be something it would be helpful to do?
(Ms Jenkins) I have had no contact with the Office of Government Commerce. I work reasonably closely with Rachel Shotton of the WWF, who deals with government matters on timber procurement. I cannot answer for herobviously she is not herebut I do not know of any contact she has had with the Office of Government Commerce.
41. In respect of the Cabinet Office particularly, it seems to be the case now that something might have been specified in respect of windows and doors but not the rest of the work. Do you have any comments on that?
(Mr Tait) I think the answer specified that it was doors and door frames which should come from a certified source and nothing else, which does seem a very strange situation for a contract, that you are interested in some of the types of wood but do not care about the rest of it.
42. Is that normal?
(Mr Tait) Certainly not in our experience. The reality is that I do not think even that part of the contract for the Cabinet Office can have been met.
43. Even the doors and door frames?
(Mr Tait) Exactly. Greenpeace has been checking where timber is coming from. We know who supplies timber of this type and it has not come from any certified sources.
44. Imagine two scenarios: either it did not come from a certified source, contrary to what the contract might have said, and the stuff has already been made and it is there. What do you do? Do you burn it? Do you put it on a waste tip? Or do you put it in the Cabinet Office and say, "This is the last time HM Government will ever use anything which is unsustainable"?
(Mr Sauven) One maybe should go on the plinth in Trafalgar Square.
(Mr Tait) To be clear on the state of that contract, certainly the information that we have is that the contract has not been completed, and sapele wood from Cameroon is still being provided for the doors. If that is the case, and if our information is correct, I would suggest that there is still time for intervention and for that contract to be cancelled, which we think obviously should happen in a situation where the contract did specify that wood should be certified.
(Mr Sauven) This is not really rocket science. You were told in February that all of the timber being used in the Cabinet Office was from legal and sustainable sources. You have now been told that those were only the requirements for the doors and door frames. Balfour Beatty put out a statement after our action saying it was only required for the doors and windows, and the suppliers are saying no certified timber was supplied at all and does not exist in the countries where the timber came from. We made a phone call to the timber supplier before we came into this meeting asking if there was any FSC timber that matched exactly the qualities of sapele, and they said that there was, and they had quantities of it in stock and they could have easily supplied it. All they needed to do was make a phone call. It is months now, with all these strange PQs, different statements from different companies and so on and so forth, which makes it a lot more complex and confusing than it actually is. All it requires is a phone call saying, "We need some FSC timber for a government refurbishment project." This is something that the chairman of Timbmet was saying at a public meeting last week, that one of the problems they face as timber suppliers is that very often contractors and other people come to them at the last minute, demand a whole lot of timber at extremely short notice, and expect it all to be delivered at 9 o'clock the following morning. If you really want to deal with this issue seriously, it has to be much higher up the agenda in terms of clearly specifying what it is that you want, making sure the contractors are clearly following those orders and that the timber suppliers are given an adequate amount of time in order to source that timber. Otherwise you are inevitably always going to be in a situation of very confusing contracts, very loosely worded, full of loopholes, always done at the last minute, and you end up with a situation like we have with the Cabinet Office.
45. I finally want to look at the way that could all be done. We have a system of green ministers. We have a requirement from Michael Meacher that there is this proper reporting from green ministers across departments. We know that only seven green reports have been done. How would you, if you were sitting in the Cabinet Office, make sure that this is given absolute priority and that the instructions were given right the way down the supply chain and properly checked at each level. Is that feasible? Is that the kind of detail that would be needed?
(Mr Sauven) Yes. I come back to what I was saying about Alan Knight of B&Q. You should get him in. He solved this problem for a very large company involved in a very large number of product lines. He offered his services. Setting up these sorts of systems is right up his street, so that people understand exactly what you are talking about from top to bottom. For example, we received a letter from the Cabinet Office, from Peter Dickin, the Deputy Project Sponsor, who said, "Approximately £260,000 worth of Sapele wood has been procured by the contractor's main supplier, Timbmet Limited, from Cameroon, Central African Republic and Ghana. Timbmet Limited is certified by the Forest Stewardship Council and is also a member of the WWF 95+ Group." Therefore, all the timber is all right. That is not all right at all. You cannot certify a company. His mistaken view is that because this company is a member of WWF 95+ Group, all the timber that is being supplied is FSC-certified. This is nonsense. There is obviously a huge amount of confusion that runs through government civil service in terms of how this system works and how it should be enforced.
(Ms Jenkins) I think I should explain that there are two types of certification broadly: forest management and chain of custody. So you apply a standard of good forest practice in the forest and you check against that standard. That gives you your forest management certificate. The tracing of that timber from that forest to its final destination is chain of custody. Each step of the way there must be an audit. If the timber is to be sold as FSC-certified, or the door in B&Q is to be sold as FSC-certified, it must be covered by what is called the chain of custody. In this case the mistake was made that Timbmet do hold an FSC chain of custody, but it only covers certain species that they sell, such as the jatoba. It obviously does not cover the sapele because that is not certified. Lambeth City Council have just made refurbishments to a housing development, and the contractor they used held FSC chain of custody. In that way they were sure that the timber that was supplied for that project really was FSC, and that it was put in the places that they wanted it to be put in, and that was audited independently.
46. Just so that I am clear, it is right, is it not, that our understanding of this particular contract is that there was no provision within the contract that only wood from well-managed sources should be used? So the government contract did not have the appropriate starting point. Is that not the first issue we should deal with? Every contract that the government has from now on should include a clause to this effect.
(Mr Tait) And, frankly, you should not necessarily trust your civil servants when they tell you that it has been included.
47. That is not the case at the moment, clearly.
(Ms Jenkins) No, and this is exactly the help that WWF were offering, because they have worked with local authorities for some five years now, helping them to properly specify what they need in a way that is legal and understandable.
48. This goes right throughout the chain of government, not just national government but into local government as well, whose procurement practices are often greater than central government. You mentioned Lambeth. Have you any other examples of good practice that spring to mind?
(Ms Jenkins) Horsham District Council are building an enormous sports centre, and they have moved mountains to ensure that they get certified timber into that contract, and they are achieving it. I do not know the final percentage that they will achieve, but I know that they literally emptied warehouses within the UK. They have made some of the biggest deals in certified timber that have been made.
49. What about any experience of PFI contracts where that has taken place? One of the incentives behind PFI is to reduce costs in terms of a public sector comparator. Would the pressure on PFI contracts force that kind of work out, or should we be specifying in more detail or requiring better specification across a range of contracts, for example on PFI?
(Mr Tait) I think that is right. That should be specified. I do not think any of us here are in a position to comment or have experience of those directly. Rachel Shotton from WWF works most closely on these kinds of issues, and it would certainly be worth her addressing them.
(Mr Sauven) It is important to create a level playing field so that when contracts are going out for tender, it is very clear that this is what is being specified and this is what is expected. Then everybody is dealing on an equal basis. What would also really help is if there was more transparency, so that if companies were having problems or could not deliver, that this was publicly available information, or certainly there should be some committee or group looking at some of these contracts. I think the case is that contractors will automatically say, "Oh, it cannot be done. It is not available. It is too expensive. It does not exist," etc. Those are standard lines we hear all the time. I think it would be very useful, because we can challenge all of those and prove it is not the case. What we really need is much more transparency, and much more transparency from the Government as well. It is actually, as you know, quite difficult to get information out of the Government in terms of what it is doing in its own procurement policies.
(Mr Tait) the other side of that and the line that we get time and time again from the timber industry itself is that there is no demand for it. Still, two years down the line from these Government commitments, they are not selling the certified timber that they have. They are not getting the demand in contracts, which is a strange situation, given the commitments and requirements they have at the moment.
(Ms Jenkins) That is correct.
(Mr Sauven) This is a really key point. It is a kind of chicken and egg situation. There is not the demand, so there is not the supply. There is not the supply, so there is not the demand. We have been working with logging companies in the Amazon that want to become FSC-certified or have become FSC-certified and they find no demand for their products because they are competing against all of this illegal trade. The Government could really change things. The public sector is a huge buyer. We could really create a demand for this legal and certifiable timber.
50. Is it because it is more expensive that there is no demand for it?
(Ms Jenkins) No, not necessarily. Some products are more expensive, but it tends to work like any normal market sector: when there is a limited supply, the price is quite high, but as more supplies come in, the price is forced down. Certainly you will find nothing in the major high street retail park/DIY sheds that is more expensive. All of them price it at the same price. There are certain products which you will pay more for today, but others are found to be even cheaper.
51. There are quite a lot of building projects going on around here at the moment. There is the Treasury refurbishment, the Ministry of Defence, even Norman Shaw South, which is just next door. Do you have any information on any of those projects?
(Mr Tait) Not surprisingly, given our recent activity, we have been looking at these fairly closely, and in fact, a whole series of parliamentary questions went down from Joan Walley in February, including asking questions about the MOD building, the Treasury building, the Norman Shaw South building, and also the DFID building. Our experience with the Cabinet Office suggests that the answers that we are getting to the questions may not be accurate.
52. You have the same suspicion of other answers that you had with the Cabinet Office?
(Mr Tait) I think we have every reason to have the same suspicions. Certainly in the case of the DFID refurbishment, Greenpeace did receive information that the same type of sapele used in the Cabinet Office was also used there. Whether that is accurate or not, I cannot confirm 100 per cent, but that is the information we have received, and it is worth checking out.
(Mr Sauven) I think there is a problem. When Joan was given a PQ reply in February saying it was all legal and sustainable, you just go away and say, "That's good," clap your hands and say, "The Government is honouring its procurement policy" whereas in fact it was as far away from the truth as you could possibly imagine. There is a real difficulty in getting accurate information about government procurement policy as practised rather than what it says.
53. Could I ask you about your comments on the Ancient Forests Summit in the Hague, which you were very disappointed with? What should that have done that it did not do?
(Mr Sauven) These are processes, and I do not think in reality you can expect one meeting to solve all of these problems. It is very difficult when you get 182 nations or whatever together to get agreement on this. There are lots of issues. Some countries fight tooth and nail over issues for example of national sovereignty. There are lots of complicated politics. I think the encouraging thing that came out of the CBD meeting in the Hague was the fact that the EU took a very good position. We saw new positions coming out of France and Germany which were much more in line with the previous positions that the UK had taken on these issues. We saw major countries like Russia, with big ancient forest areas, coming on board as well. It is a process. The reason why we were disappointed is because there were no binding international agreements, for example, on ancient forest protection, on cleaning up the timber trade, on putting new money on the table to pay for forest protection and sustainable development. These were issues that we would have liked to see common international agreement on. But they are ongoing. The agreements that we have recently witnessed between the UK and Indonesia, the discussions at the G8 and in Johannesburg on illegal logging and so on are progressing; people are becoming more aware of the issues; it is getting higher up the agenda; it is being taken more seriously. From that kind of perspective there are certain positive signs as well.
54. There are positive sides to what you say, but nonetheless, it is going very slowly by comparison with the global trend, as you mentioned in your opening statement.
(Mr Sauven) Yes, and that is where I think that the UK, as one of the largest importers, for example, of tropical hardwoods, could play a really key role in putting words into action and being a leading example. It has some very powerful allies now in Europe and in other countries.
55. What about the United States?
(Mr Sauven) The United States has not signed the Convention on Biological Diversity, so we have the same problem that we had with the United States on Kyoto with the CBD as well. As a country, as you know, it does not like signing international agreements, and that is the problem.
(Mr Tait) I would just add in relation to the United States that on the mahogany issue they have acted within the last few months and seized a number of mahogany shipments which were suspected to be illegal from Brazil. I think that is in the region of about eight now. So there has been some positive action individually, if not through international fora. One of the things that may be worth considering is that it is always going to be extremely difficult to get binding international agreement with so many countries involved, but there are opportunities for action individually, as nation states, or within the EU. One of the things that has come up on a number of occasions now is the situation which we have currently that if there is 100 per cent proof of a shipment of timber that is illegal, that is not covered by CITES, Customs still do not have the power to stop it. What we need to consider is a change in the law, preferably at UK level so we can set an example, and it is something that can be done quite quickly, followed by action at EU level, so that the laws can be changed to allow the relevant authorities such as Customs to seize timber shipments if they have very good reason to believe that the timber aboard is actually illegal. That power does not exist at the moment. There is obviously a lot of technical detail that needs to be worked out, but I would suggest that may be a way to get stronger, more definite agreements in the short to medium term than looking at multilateral international fora.
(Mr Sauven) This was actually looked at by the EU states at a conference last week in Belgium, but again, it is a chicken and egg situation. The UK say, "There is no point in us acting unilaterally if the EU do not do it because the shipments will just go from the UK to Europe." But what is also important is for countries to lead, and where one country does something, other countries will hopefully follow.
(Mr Tait) Someone did an interesting parallel on this quite recently when questioning the Government about why legislation was not introduced here to try and stop timber shipments that are illegal, and obviously the same answer came back that it would just go via the EU, but if you look at the situation with the drug laws and the fact that countless amounts of drugs still get into the UK, this is not the intent, and actually the Government is intent on doing something about this; it is committed to doing something about this. That same intent in terms of actual legislation does not exist at the moment in respect of timber.
Chairman: Thank you very much indeed. Thank you for drawing all this to our attention. It is very valuable work in our job of auditing the Government's performance against what it actually says. You could not get a more graphic example of work that needs to be chased up.