Select Committee on International Development Minutes of Evidence


Examination of Witnesses (Questions 120 - 139)

TUESDAY 12 FEBRUARY 2002

PROFESSOR IAN DAVIS, MISS SARAH LA TROBE, MR ANDY ATKINS, MS MADELEEN HELMER AND MR JONATHAN WALTER

Chris McCafferty

  120. This is really a question that is directed to the Netherlands Red Cross. I would like to know the reason behind the creation of the Centre for Climate Change. A lot of the dialogue this morning has probably provided the answer to that, that simply there is a need. What will the centre actually do? What do you hope that it will achieve? What will be the benefits to developing countries?
  (Ms Helmer) The reason we established the centre was in fact not so much because of what has been contained in the discussion we have had this morning. The reason lies very much in the work done by the IPCC, particularly the second report and the third report which came out at the beginning of last year. The data of the Intergovernmental Panel on Climate Change, which we know applies to our field of operations, formed a prime motive in setting up this centre because we realised very much that if all this comes true and the signs are so serious, there will be more floods and more droughts and the numbers of people affected will be beyond our imagination. Humanitarian organisations are the first to deal with this situation. The combination of the awareness of those two issues prompted us to develop this initiative. I must admit that it is easy to realise that this is a problem for us to deal with rather than to elaborate on what it means for our organisation and expertise. It is not an issue that automatically enters the minds of our own people. That partly has to do with the history of and the culture around climate change: it has been seen very much as an environmental issue. People say that because it is to do with the environment they do not have to deal with it, other ministries will deal with that, other politicians and experts will deal with it. It is a self-confirming circle. We are concerned about that, we are in the wrong box, so to speak. We need to get out of that as soon as possible. We feel that we must raise awareness. I receive clear comments from my colleagues telling me that climate change is something for the future that will be dealt with under the environment and that we have more pressing things to deal with. That is fair. I find it very difficult to go to my colleagues in Africa and raise the alarm bell of climate change when I know we can hardly deal with the humanitarian problems of the HIV/AIDS epidemic. Who am I to tell them there is another urgent issue coming up? That is the kind of day-to-day problem that we have to deal with in terms of the climate centre; we have to respect and acknowledge that and further elaborate on how to deal with climate change, although I must say that the HIV/AIDS experience is another driver for us because we acknowledge that we were too late on that catastrophe. We do not want that to happen again.

  121. What other sources of expertise are available to decision makers and do you anticipate a dialogue? I imagine that you hope that the centre of excellence will be a source of expertise for decision makers throughout the world. Are there any other sources? Are there any similar centres available?
  (Ms Helmer) We do not claim to be a centre of excellence in that respect as a scientific institute. We have learnt from our preparations over the last year that there are indeed many centres of excellence, both in the field of disaster studies and climate change. We think our added value is in operational skills, which are as important as scientific skills. We feel that our role could be to intermediate between those two expertise. That comes from the history of your hearings here, that there is so little interlinking between different expertise and experience. That is where we hope to have a facilitating role. I give you a concrete example, and we are still in the preparation phase; we hope that in three to five years' time we will have a more solid opinion to give you. To give you an example, if there is a dengue epidemic coming up in south-east Asia, which is the case at the moment, people there are worried about why this is happening there. They are looking at the health angle. We know that dengue is related to other things as well; it is known to be related to climate change and change of weather patterns. It might be helpful to bring the expertise of both together so that people in the area can predict it at the soonest time and be best prepared for what dengue might mean in the near future and the longer future and have plans in preparation and that the experts in dengue, from wherever they come, can provide their scientific back-up to that situation. We think that the local experience of people from our organisation places us in the good position as we are all over the world at the local level. We have made so-called Vulnerability and Capacity Assessments of the experience of people on the ground. This is done in more than 100 countries now at local level and that can be translated back into international negotiations, such as within the framework of the UNFCCC where we are concerned that the environmental angle is dominant. Little interest has been shown in work done on the humanitarian angle of climate change. We hope to play a role there as well as acting as a kind of intermediary with our local experience and international connections.

  122. How do you relate to a government department such as DFID here in Britain?
  (Ms Helmer) We are not there yet. We have had contacts with the European Commission very briefly, with the World Bank, our own Ministry of course, the UNFCCC and the GEF. One of the things we have noted is that, when it comes to development policies and climate change, the policy papers that are written and the policies that are implemented are largely related to mitigation in developing countries. I know from our own Ministry that they acknowledge that adaptation should be higher up the agenda but they still find it difficult to find the angle to it. It is the same with the European Commission. Germany has recently shifted its position. Before policymakers were not interested in investing in adaption because that does not solve the problem of climate change. The general thinking now is: yes, we have to relate to adaptation because we are not able to solve the problem and we must deal with the consequences of it. So you see a shift occurring in a number of "DFIDs" in other countries. But there is still a long way to go. For example, in the Netherlands and at European Commission level there is very little interaction between the development department dealing with climate change and the humanitarian department. The people dealing with climate change in the development department have an environmental angle. When you come from dealing with mitigation and have to turn to adaptation, that is more or less lost and I do not blame them for that. It would make more sense to look at the humanitarian department and their expertise with disaster preparedness than to look at adaptation in particular. That makes more sense in terms of concrete experience but apparently that has not happened in many development agencies. I think there is a world to win there.

  123. So there is a role for an expert in climate change sustainability within, say, a department like DFID?
  (Ms Helmer) Yes, but then looking particularly at the humanitarian expertise we and DFID and many other development agencies have in terms of the humanitarian angle.
  (Professor Davis) I find I look at Holland and Germany with a lot of envy because they have moved a lot further than we have in Britain in developing close dialogue between government, academic groups, NGOs, etc. We could do far more in Britain in that area. In the light of this increase in vulnerability which we are all observing (whether it is due to climate change or to population growth or urbanisation), DFID should establish a very strong focal point, a national focal point, for mitigation and preparedness. The reason is that disasters are growing at a fairly heroic scale. I have been in Teheran recently and they were predicting a moderate earthquake in Teheran with something of the order of 500,000 deaths. It is unbelievable to think of that kind of prediction and yet there are such vulnerabilities in cities that we are going to see some fairly terrible casualty statistics in future years. This proposed focal point would be a well-resourced body which can really establish good dialogue, both with NGOs, academic groups and with DFID's own regional offices so that the expertise is there and dialogue is established and institutionalised. We have a national committee in Britain called the Advisory Committee on Disaster Reduction. DFID has an observer on that committee. I think that is just the starting point. We need to move a lot further forward in this area. I am sure that the work I have done in mitigation over the last ten years could have been far greater if I had worked more closely with government. We have had a decade of natural disaster reduction and throughout the decade DFID did support this work very effectively. They provided DFID staff for the national committee all the way through the IDNDR, and there was a budget for providing support for mitigation. Much of the present policy of DFID has been to fund the multinational groups like the World Bank and the UNDP who have received a substantial amount of DFID money to support mitigation/preparedness. Yet there is a need for accessible budgets to which NGOs and Academic Groups can gain access to conduct important applied research to strengthen this whole area where Britain has great expertise and a tremendous amount to offer. I think we could do far more together, and the situation is fragmented at the moment. The leadership in this area probably has to come from DFID.

Tony Worthington

  124. What I was going to cover I think has been covered, so I will not go over that. I get the impression that at the stage a disaster occurs there are now improving response mechanisms to bodies like OCHA, ECHO, DFID and so on at that stage. I am not at all clear what happens in the recovery phase about the allocation of responsibilities. You have tended to talk in terms of government but you then also mentioned the World Bank. That is the first time the World Bank or major credit institutions have been mentioned. Is it your perception that after a disaster has occurred, which may well indeed lead to further disasters, there is a mechanism in place to bring in not DFID kind of money but major capital money, major infrastructure money?
  (Professor Davis) Yes, and that is happening. For example, the World Bank allocating major grants to Gujarat at the moment, as are the Asian Development Bank, and they have attached very stringent conditions. They have said "we will give this money as long as you strengthen your disaster management system", so there are strings attached. This money is coming in to finance infrastructure, rebuilding and so on and so forth, so there is a deluge of money coming in although it might not be enough because the demands are so great. We are watching a growth of the private sector in this field and these large funding bodies becoming very active players, in particular, the development banks, who have a key role to play in this area and they are aware of it. They are sometimes in competition with each other and perhaps things are not as synchronised as they could be but perhaps that is the nature of the international scene. In terms of the government control of recovery, it is probably best that that is dealt with by some kind of task force to try to bring together the different sectors but, as soon as possible it is best for reconstruction to be the business of the Ministry of Housing, the Ministry of Agriculture, the Ministry of Water Resources etc. It is best for it to be dropped within the existing systems so that there is no super ministry established, as it were, which is trying to deal with all the recovery process. It has got to become part of life, part of the normal political process, and the normal development process. I do sense that one of the neglected areas of this subject is the management and integration of recovery, just as mitigation is another neglected area. The one area that is not neglected is relief.

  125. Let me take the specific recent disaster in Goma in the Congo where there is no government basically.
  (Professor Davis) Yes.

  126. Next to Rwanda, two states involved with a primitive kind of government. I cannot see what is going to happen there to mitigate the tragedy that occurred because of the earthquake.
  (Professor Davis) The UN have a role there, of course, and there are NGOs performing a role and presumably local institutions involved. The local community showed remarkable resilience in disobeying the advice to move to another country, they went straight back in as soon as the lava flows ceased because they believed that was in their best interests and the aid had to follow them. Here there were well motivated communities, and I agree with you that without a government it is going to be very difficult. This is a Somalia type situation and I wonder who fills the vacuum in that kind of context. The most obvious answer is that the UN have a presence there and we must look to the UN as the best of the worst solutions in such circumstances. Without a government it is going to be very difficult to get a natural lead for that kind of recovery process.
  (Mr Atkins) If I can just add, I think our experience is that unless you prevent people helping themselves then they will. So, government or no government, if the locals have a way of sorting their problem they will try very hard to do so. The good news about Goma is, despite all the problems of governance there, that there are local community organisations working, and Tearfund, and I am sure other NGOs, actively funding them to do that work. I think there is hope for Goma. There are other situations where a combination of circumstances prevents the community helping themselves. The community may judge that the best risk avoidance procedure is to cross the border but they are prevented from crossing, that sort of thing, and that is where things get very, very dangerous indeed because people cannot help themselves, the logical option is closed off to them. That has not happened in Goma fortunately.

  127. The imagery that we have had all morning has been of rural disasters. I suppose water has been most frequently mentioned as the cause of a rural disaster but increasingly the percentage of people who are living in very, very large conurbations is going up and there must be disasters that occur there. I am not sure what you do in disaster preparation and mitigation there, or response?
  (Professor Davis) If you take the terrible landslides that happened in Caracas a few years ago, which were due to phenomenal rain fall, you could say there were two kinds of mitigation needed. One is direct mitigation, trying to show people how to build on steep slopes, and land use planning controls to try to stop them building on dangerous slopes in the first place. Thus there are these direct measures to try to develop safe environments by a combination carrots and by sticks, sometimes it is law, sometimes it is public awareness, sometimes it is training, all sorts of things. Then you have indirect measures which are trying to strengthen rural development so that people do not feel the necessity to go to Caracas in search of work. Professor Huq in earlier evidence to this Committee said that he did not believe you could stop urban migration, and maybe he is right, but I think there is a very good reason for trying to do so by encouraging rural development to seek to arrest this propulsion of people to cities. They migrate to urban areas because they believe the options are better, and they are probably right, but they do not need to leave rural habitats if there could be counter-magnets in place. I think we have got to see mitigation as a two-pronged affair. You have got to deal with the immediate problem on the slopes of Caracas and Rio, you have got to deal with these problems that happen in these highly congested cities subject to every conceivable kind of disaster, but you have also got to address why they are making these migrations. Maybe the indirect process is a better core development but they are needed just as much as some kind of integrated strategy. A government deals with the cosmetics of unsafe conditions but it should also seek to deal with the causal factors in an integrated manner.
  (Ms Helmer) One of the issues that is related to the motives of people and what is of extreme concern to us is the lack of awareness about what is happening and the great gap we see between what scientists tell us and the lack of sense of urgency about what is happening. Also, when you look at the commitments governments have made under UNFCCC on education, public awareness and training, it is the least developed agenda item of negotiations and it is something we seem to under-estimate as a soft issue, that it will go along the way, and of course the negotiations on emission reductions, etc., are politically more important. But for us awareness is the first thing needed to have to make people act in terms of increasing their resilience and being better prepared. I think also development agencies, and all of us, can do a lot more. It is a problem. How can we even imagine that our energy use is causing parts of Antarctica to break off or sea levels to be rising by metres and tens of millions of people having to disappear from where they have lived for centuries. It is almost beyond our own human capacity to deal with this but still we have to. I think that is the kind of urgency we need to get into our own way of dealing with it. We should not be the Cassandras of the world, we should discuss this together. It is not an instant disaster like Chernobyl or Bhopal or others, which could change the whole world, and we saw how 11 September which has changed the whole world. Climate change is not a similar kind of disaster but still the impact is of the same kind. We should do a lot more in terms of getting this message across to our own colleagues, to the general public, in the north and in the south.

Hugh Bayley

  128. Could I go back to Mr Walter's example of cyclone shelters in Orissa. You told us that they cost of $77 per life saved. How is that calculated? Is it the number of people who sheltered in shelters divided by the cost of building the shelters?
  (Mr Walter) Yes. It was not just the cost of building the shelters, it was the cost of all the associated activities, of training, of building disaster awareness and preparedness. The shelters are not just a physical thing, they are a whole—

  129. Is that really a fair cost because that assumes that every one of the people who sheltered in the shelters would have died if they had not been in the shelters?
  (Mr Walter) The Orissa Government claims that the shelters saved 40,000 lives. If you were to compare the figures in Bangladesh, in 1970 you may have heard before that up to half a million people were killed in a cyclone there; in 1991 about 130,000 killed; and then in a similar cyclone in 1994 the death toll was down to a few hundred. I think there is a role.

  130. I am asking some hard headed questions because however much money the international community has to spend on disaster relief we obviously want to make sure that it is spent as cost effectively as possible because the most cost effectively it is spent the more mitigation and prevention and protection will be provided. On the face of it, even if one assumes that all those who sheltered would have died had they not had the shelter and the preparation, the comparison you made, $77 cost for each life saved, $1,600 the cost of a life not being saved, that only is a cost effective intervention if you can guarantee that every shelter that is built would be used and would save lives and that you would never build a single shelter in an area that does not have a cyclone. The whole point of these events is that they are unpredictable. It may well be that in that particular case it was a very cost effective measure but is it not important that you apply brutally strict cost effectiveness calculations to ensure that money is properly spent?
  (Mr Walter) I think the danger of applying brutally strict cost effectiveness calculations is you would then lose sight of the humanitarian imperative, which is that saving lives is a good thing whether you save money or not.

  131. But actually if you spend money less cost effectively you let more people die. Surely that is a humanitarian imperative too? It must be ethically right and right from a humanitarian point of view to use whatever resources you have to save the maximum amount of lives. Does that not mean that you must do a cost effectiveness evaluation?
  (Mr Walter) Yes, I agree, I just think that it is extremely difficult to be very, very precise about defining the cost of something which does not happen. There is a preventive logic in trying to quantify something that does not happen.

  Hugh Bayley: Of course.
  (Professor Davis) If I may just comment. Some of the evidence coming in for this global review of disaster reduction is really on that point. The Canadian Government have said that we need to know far more about the cost of disaster losses in Canada in order to know how much money they can justify for mitigation. We need much more precision on this issue, and we are struggling to get accurate data. We are looking at three areas here. Firstly, we are looking at direct losses, the damage to buildings. Secondly, we are looking at indirect losses, the loss of livelihoods, the loss of markets and so on, and we are looking at intangible losses, death and stress to families and so on. These three areas can all be quantified to some extent, but it is not so easy with the last one. If you take, for example, buildings, we know that it costs about 20 to 25 per cent more to make a house cyclone resistant than to have a house that is not resistant. It costs extra to insert window shutters, put better hurricane straps on the roof etc. You could, of course, calculate in Fiji the most hurricane prone areas of the country and work out what that cost would mean and then you could work out the normal cost of recovery and so on, so you could do those kinds of sums. I think you are completely correct in your questioning and if we are going to see major improvements in mitigation we have got to develop improved economic indicators, we have got to get much more precision into this business, and then we can present to governments and say "here you are, here is the evidence". Of course, there is always this question of when will the earthquake, hurricane, landslide, or flood happen in that precise area and there are lots of question marks about the location of future disasters. We know Dhaka is going to be flooded and we know Chittagong is going to be affected in a future cyclone that roars into Bangladesh. There will be areas where we can predict with tremendous confidence that disasters will happen. I think the economists have a lot to contribute here. It has been very interesting to see two British economists, Ed Clay and Charlie Benson, working consistently for the World Bank on precisely this issue. They have now produced up to 12 reports looking at the economics of disaster mitigation and that work that has been done, particularly by the Overseas Development Institute and the Institute of Development Studies from Sussex University, is very important in this area and they are world leaders in this field.

  132. I was very taken by your ladder but it is at stage two of the ladder that you talk about cost benefit analysis as an indicator, it seems to me from the ladder, of the beginnings of a serious debate about how one deals with disasters rather than grandstanding about "we must do something". I am surprised that it does not appear as a guiding principle or a frame of reference for stages two and five.
  (Professor Davis) I think it probably should. At the moment that is pretty notional as to where I put different elements in the sequence. I think it is vital to have statistical evidence to support the mitigation since in many cases there is a convincing case to be made for it. When I talk to economists they say that sometimes it is very hard to make a strong case, for long return yet high impact events. For example, Jamaica has not suffered a major hurricane since Hurricane Gilbert back in the late 1980s. Disaster authorities in Jamaica say "in a sense we need another disaster to fuel our budget because people are saying that if they have not had a hurricane in all that time, is there a need to spend money on strengthening school roofs?". This is the difficulty when you are not getting repeated punches, in a sense, to justify effort and expenditure. It does require a whole lot of effort. Maybe arguments might have to be used other than economic ones in that particular context. I think you are quite right, the justification for it should be fundamentally at the beginning of the process.

  133. Before people go away horrified at my questions I should say that I accept also that it is not simple and if you have unpredictability it is very difficult to make a tight economic costing but where you do have data—everybody seems to be nodding to that—where you can make an assessment you should make choices based on whatever data are available.
  (Professor Davis) Yes.
  (Miss La Trobe) In this whole discussion about cost effectiveness and relief, I would just like to add that from our experience in relief and development it is important to take a long-term view of relief and try not to reconstruct risk. I know a long-term view of relief can be quite a controversial argument but we see that it is important for the prevention of future disasters. That is not just focusing on technical fixes but building in risk protection.

  Hugh Bayley: Absolutely.
  (Miss La Trobe) It is not always easy for relief agencies to do this. If the national policy denies people land then the relief agencies might not have much choice but to put up shelters in bad places. For example, our disaster response team noticed in Honduras that there were people in tents down the dual carriageway there and they had got pit latrines dug into the central reservation. You could say that is bad relief but the people did not have any land to go to and the landowners were not releasing it. As far as is possible relief agencies need to take a long-term view of relief but it is difficult sometimes.

Ann Clwyd

  134. Most of the areas that I was planning to cover have already been asked. Listening to you talking I think of Montserrat because one of the first reports by this Committee when it was set up was on Montserrat and we went to Montserrat when the volcano was still erupting. What I found extraordinary was that there had been plenty of scientific reports written about what might happen in the future, I think it was about 20 years since the last volcano, but nevertheless the Government of Montserrat went ahead and built a brand new town on an area where scientific reports predicted they might be right in the path of another volcano. When we tried to follow through as to who was responsible in the Department for International Department, or the ODA as it then was, it was very difficult to find who had read the reports, who had acted on the reports' findings and so on and so forth. That was obviously an element of human error in not taking sufficient notice of the scientific predictions and yet still going ahead with building a brand new town which was engulfed in the volcanic ash when the last volcano took place. Do you think there is a difficulty in scientists communicating their concerns adequately to people? They also had a Disaster Preparedness Plan but unfortunately very few people on a very small island knew how the plan was going to work so, again, when you tried to find out who had communicated what to whom you found there had not been any communication. Montserrat was an island that we had responsibility for. It is all very well for us to criticise other countries in the world for not doing this or that but actually Montserrat was a prime example of where in our own Government in the past people have not acted in an adequate way.
  (Mr Atkins) I wonder if I could come in there. I am not familiar with Montserrat sadly but in other places I think you find something quite mundane, that people are so taken up with the urgencies of daily life that they are quite unable to deal with the mega catastrophe, creeping climate change, volcano, whatever it is, that so changes the parameters in which they are working, that they cannot begin to conceive of how to deal with the implications. I think one can be affected like that in a development NGO, or government department, or whole government, actually failing to grapple with an enormously different context that is out there because they are so caught up in the day-to-day minutiae of government, business as normal and so on. I think it speaks of the need for a real mind shift and the question is how do we bring about that mind shift to allow people to have a longer term horizon. There may be corruption at play, there may be inefficiency, there may be all sorts of other things, but much of it is the burden of just trying to get by at the local level, day-by-day and so on. We also have to be careful that we do not put all the onus for change on the developing countries, even if we are funding them, because, to go back to something my colleague said here, it is largely the western countries producing carbon dioxide leading to the atmosphere change, global warming and so on. I think there is a very real need for governments and civil society organisations to up the ante really on issues of sustainable consumption, energy use and so on. That may not be the focus of this Committee but it would not be fair to ignore that part of the equation and only concentrate on local developing country initiatives. Tearfund is, in its own small way, and we may have been late off the ground too, trying to educate our own supporters. The development agencies themselves cannot put their hands up and say "we are adequately aware of these threats". The threat of climate change is very, very big and we ourselves have only recently begun to grapple with what this means for the poor that we seek to serve.

Chairman

  135. It comes back always to poverty, does it not, that the poorer the country the poorer the groups are and the more fragile and less able they are going to be to cope with changes, threats, disasters? That is a recurring theme.
  (Mr Atkins) Yes, it is a vicious circle.

  136. One cannot escape from the fact that this is an integral part of tackling poverty.
  (Professor Davis) Just to come back on Montserrat, it does seem that there was a planning issue. This town of Plymouth was planned and it had a hospital, for example, which was approved by DFID to go into that area and the decision to build the hospital in that location ignored the volcanic risk assessments which had been undertaken. This demonstrates that disaster planning is a long way behind environmental planning. If we go back about 20 years, Environmental Impact Assessments (EIA's) were initiated, which are now normal practice. I am quite sure an Environmental Impact Assessment was done for Plymouth, but what has got to happen is that the terms of reference for these EIAs has to expand to include a Hazard Impact Assessment (HIA). It has got to be built into it, and there have got to be some teeth in this process so that whoever is doing the EIA will look at the hazards and they will consider it and that will be a key area in disaster prone areas. We just see the need for a new mechanism, a new planning requirement, which could be a very useful thing for DFID or the people involved in the dependent territories to look at. I am attending a meeting of the governors of some of these independent Caribbean territories, they are having a briefing day sometime in May, and one of the topics is about Environmental Impact Assessments post Montserrat because I think people are aware of that kind of pressure. It is always perplexing to me, working in disasters for about 30 years, to see what a low priority decision makers give to planning issues relative to hazard threats but it is probably because other topics weigh so much heavier. I see such issues through a tunnel of disasters and risk and so on whilst other people are seeing a multitude of other factors. Perhaps those of us in this community have got to be a bit more understanding and aware of that different dynamic. It would be very encouraging if your Committee could really strengthen the need for the importance of a wider remit so that we do not get more towns like Plymouth being devastated. We have got to move on and learn from these mistakes. They are painful lessons for the people who ignore them.

Mr Colman

  137. This is really about the private sector investment and the insurance industry. Clearly you described Plymouth in Montserrat which was an area where there was no real private sector investment and, therefore, the private sector investors did not have a requirement to make sure they had insurance policies to insure their factories or whatever else. Are you finding that there is a getting together within the World Business Council for Sustainable Development and organisations like Swiss Re and Munich Re to discuss these issues saying, if you like, to the public sector "do not build that city there because we are not going to build factories there because frankly they are uninsurable"? Are you getting any sort of linkage between the private sector and the insurance and reinsurance industry and the public sector in terms of this long-term planning that you were mentioning?
  (Professor Davis) Just to say that I think that it is encouraging, for example, in Britain to see insurance premiums being related to the occupation of flood plains and we are now going to see people who live in flood plains paying more for their insurance and that will become a good incentive not to live in dangerous areas. That is salutary. We see in the Caribbean, for example, a very interesting development in insurance cover of the Commonwealth Disaster Management, CDMA, which is a form of mutual insurance scheme where one country is covering another against natural disaster risks. CDMA has now become established. Certainly insurance is a powerful tool. In Barbados, you can get quite a significant reduction in your insurance premium if you follow the building codes. In another project, The Red Cross went into an arrangement with the Royal Sun Alliance in the Caribbean over training people in hotels and if the hotel chain had training, which the Red Cross provided in disaster preparedness, they cut their insurance premium because there was less likelihood of damage. An exciting project in Fiji reduced insurance premiums if people undertook proper cyclone resistant housing. Here is a powerful tool which could be used far more frequently. Instead of punishing people for not living in the right place with land use controls, it is an incentive, as the home-owner saves money. I think the insurance industry has a major contribution to make in this area and it is beginning to happen. It could happen much more and it would be very encouraging if your Committee could stimulate the insurance companies and encourage them to do more and provide the necessary incentives.

  138. Mr Walter, do Swiss Re and Munich Re subscribe to your report? Do you run articles from them?
  (Mr Walter) Yes, we have run a few articles by members of Munich Re, boxes, and we have used some of their data. The Provention Consortium has been set up between the World Bank and a number of private sector operations to try and cross the different sectors. I understand from contacts within the World Bank that the insurance and reinsurance industry is still a bit cagey about getting involved, they are not at the stage of committing resources to this yet. I think there is still a big problem in the very poorest countries that cannot afford insurance premiums at all.

  139. The UNDP initiative from 1999 was to address this with the European insurance companies and that might be one you might want to pursue. In the evidence that was given to us by the Cranfield Disaster Management Centre you mentioned this six week course which you are running, and I see that is still going on at the moment.
  (Professor Davis) Yes.


 
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