Highlights of meeting with UK Secretary of State for International Development, Hilary Benn

October 2005

5 October 2005 | Minutes

Participants: Trisha Rogers, JDC; Chris Bain, CAFOD; Paul Valentin, Christian Aid; Steve Tibbet, Action Aid; Oliver Buston, DATA; Peter Frankental, Amnesty International; Roger Higman FOE; Stephen Tindale, Greenpeace; Sony Kapoor, Tax Justice Network; David Woodward, NEF; Steve Mandel, NEF; Lucy Baker, BWP; Matt Philips, SCF; Stephen Doughty, World Vision

DfID: Chris Young, Gavin McGillivray, Justin Williams, Nicky Jenns and Amanda Rowlatt.

Treasury: Stephen Pickford, Tom Naylon

1. Introduction from Benn regarding UK objectives at WB/IMF annual meetings

  • Above all aiming for an agreement on debt;
  • Looking at what the Bank could do regarding the Africa Action Plan and Millennium Review Summit;
  • Trade: aiming to increase political pressure in order to arrive at a deal in Hong Kong;
  • Conditionality: Executive board will review new principles;
  • Aid effectiveness: How to use aid more effectively?
  • Climate change: Aiming for an energy investment framework by Spring 2006

2. Africa Action plan

  • C.B: Welcome the recognition of Africa, but does not go far enough on trade. Boosting trade is important, but countries should be deciding on the pace of their own reforms.
  • P.F: Chad-Cam- the environmental and human rights agreements of states are being seriously constrained by host government agreements/ stabilisation clauses. Human rights should be ring-fenced, and the responsibility of IFIs, TNCs etc as part of their due diligence should be upheld. Benn acknowledged this point but pointed out that it was hard to know that to do about it.
  • L.B: Welcome integration of poverty reduction in infrastructure, but concern that safeguards are being overlooked in large infrastructure projects e.g hydro, extractives. Benn replied that IFC safeguard review documents are imminent and that UK has stressed that language on standards etc should not be weakened. There are a number of things that they are concerned about and would like to hear from civil society following the release of documents.

3. Climate change

  • S.T/R.H: Ref to “Up in Smoke” report and “Africa Up in Smoke”. A more proactive strategy is needed. The way to make sure that money flows into renewables is to constrain (Bank) lending on fossil fuels. 90 per cent of Bank energy lending is still in fossil fuels. Targets and timetables are necessary.
  • Benn: Need to look at how funding is used. Ref to Bonn commitments- Bank announced a 20 per cent increase over the next 5 years. This is a start, as is Kyoto. Need also to draw in major emitters, such as China. At WB meetings will look to carry forward G8 commitments.

4. Voice

  • T.R: Lack of progress on this, how to move forward?
  • Benn: Louder voice is needed from developing country members at the board level on this. Institutional blockages. UK’s position on conditionality has made progress on this issue, it is a practical way of approaching it. The deadlock is on structural changes, and he is open to suggestions regarding this.
  • S.T asked which countries are the sticking points. Benn replied that it’s no one country or another, rather lots of different views and no consensus.

5. Debt

  • Benn is “resolutely committed to irrevocable cancellation”.
  • T.R: Question of how to demonstrate additionality and guarantee it?
  • Stephen Pickford (Treasury): on the Fund side they are looking for internal resources: 1) core Fund resources (?) 2) Donor resources for PRGF. 3 legal concepts of uniformity and treatment. Not sure if HIPC qualifies. Donor resources – PRGF trust funds – 43 different countries have provided PRGF. Dutch, Belgians, Swedes and Norwegians are all unconvinced about additionality and therefore may scupper the deal if they feel it is going to reduce aid flows.
  • S.K: On question of odious debt, there are black and white cases (e.g IMF in DRC) where current lending practices are “odious”. Need guidelines in place for current lending practices to avoid this. Need to deal with “justice case for debt relief”.
  • C.B: Has taken 10 years to reach a “useful” deal on debt. Initially perceived as unrealistic, but this is now a favoured way of aid in many cases. Would like to put forward the suggestions for a fair, open, authoritative and independent body to look at debt, and take the decisions away from the Bank and Fund e.g UN or other auspice.

6. Conditionality

  • S.T: Would applaud UK government’s conditionality review in para 31 of G8 communiqué. Question of how much political capital UK should put in to the Bank’s review of conditionality, and “reviewing the review”. What meetings have they had with counterparts?
  • Benn: Progress was made on the review- the Bank’s recognition of “ownership” is central and there is now less use of conditionality than in the past. Not all countries on the Bank board think the same as the UK government. Question of how the Bank should reconcile a clear commitment to ownership and future behaviour. They will renew the new policy and come back to it at future meetings.
  • P.V: Christian Aid welcomes British government leadership, but conditionality is indirect, and often involves a “ratings system” (CPIA) via the back door, based on a country’s willingness to privatise.

7. User fees

  • M.P: Great progress, education should be free and high quality. Need UK weight on this to continue progress already made.
  • Benn: DfID wants “free access to basic health care services and education”. UK aid commitments published on a 3 year rolling basis, trying to encourage others to do the same.

8. PRS

  • S.D: 2005 review of first generation of Poverty Reduction Strategies being discussed at WB/IMF this week. Needs to be much greater accountability and civil society engagement in country in second generation. Need policy and practice commitments – UK needs to push for this. Benn agreed with this.

9. Innovative sources of financing

  • S.K: welcome airline tax, and fact that UK has more active role, as French and Germans. Need a currency transaction tax for development financing; capital flight and tax avoidance; half of tax havens have a relationship with the UK. Ref to Tax Justice Network report. Benn said would try to read it. Have been active on innovative sources- IFF immunization has been launched since the last time we met.