Highlights of UK NGO meeting with Secretary of State for International Development, Hilary Benn Wednesday 18 October 2006

Participants:

DFID and Treasury

• Hilary Benn, Secretary of State
• Mark Lowcock, Director General, Policy and International, DfID
• Chris Hindley, World Bank policy, IFID, DfID
• Sally Taylor, Head of IFID, DfID
• Clare Harris, Climate change policy, DfID
• Jonathan Ockenden, Global Policy Institutions, HM Treasury
• Howard Taylor, Office of Hillary Benn

NGOs

• Lucy Baker, Policy and Networking Officer, BWP
• Peter Chowla, Policy and Advocacy Officer, BWP
• Trisha Rogers, Director, JDC
• David Woodward, new economics foundation (nef)
• Jesse Griffiths, Policy Officer, Aid and accountability, ActionAid
• Olivia McDonald, Senior policy officer, ChristianAid
• Kate Peart, Policy Manager, World Vision UK
• Abi Masefield, Head of policy, PLAN
• Zoe Wildig, Policy analyst, CAFOD
• Michael Hammer, Executive Director, One World Trust
• Katy Webley, head of education, Save the Children UK

Agenda

• Singapore, access and CSOs
• Conditionality
• Anti-corruption framework
• Odious and illegitimate debt
• Clean energy and the Environment Audit Committee (EAC)
• Education in LICUS
• Bank internal governance
• IFC Safeguards

1. Singapore (LB, TR)

   • CSOs asked when DFID/UKDel staff knew about the blacklist. NGOs welcomed HB’s public pronouncement in Singapore on the importance of working closely with civil society, but deplored other leading figures (High Commissioner and Governor of Bank of England) for excessive praise of Singapore’s hosting with no mention – or even hint – of the exclusion problem. TR explained that DFID referred her to the FCO who were prepared to get engaged only for the UK national blacklisted rather than on the general principle.
   • NGOs requested assurances that this won’t happen again.
   • NGOs requested that the ‘Memorandum of Understanding’, between the World Bank/IMF and Singapore authorities, which includes that all accredited NGOs be allowed access to the country, be made public.

   HB response

   • We didn’t know about it before you did, we raised the issue in Singapore and made public comments about CSO participation.
   • Our efforts helped get people reinstated.
   • Requested clarification on the Memorandum of Understanding.
   • HB committed to follow up with Wolfowitz.

2. Conditionality(OM, JG)

   • NGOs welcomed HB’s statement in Singapore on withholding of £50 million due to conditionality concerns. Would lie to know what are the triggers for releasing this remaining £50m of IDA 14
   • What is UK expecting from the report the Bank is supposed to prepare, how will it be different from previous reviews?
   • What are the UK’s strategies for IDA 15?
   • How will UK push the no conditionality agenda, Norway conference?

   HB response

   • Originally withheld £100m. First £50m released b/c of harmonisation progress, next £50m will be when I am satisfied with progress on implementing good practice principles of conditionality
   • It is unclear how the GPP are being applied, so I am eagerly awaiting the Bank paper (due in November) and want to read it.
   • Clarified that conditionality debates are not about NO conditionality but about the right type of conditionality
   • We haven’t thought about IDA15, it depends on what happens now
   • Not sure I will personally go to Oslo because I am busy, but we think it is important. However we don’t have much of a role any more – we have made our position public. CSOs in other countries need to work to get their governments to change their stances, we can’t do it.

3. Anti-Corruption (ZW , KLP, AM)

   • NGOs welcome the outcomes of the Singapore meeting and the role the UK played in ensuing further elaboration of the strategy, thorough consultation process and board oversight
   • What is the current status of the paper, do you expect another version?
   • How will the consultation process be taken forward
   • A number of donor, both bilateral and multilateral are currently in the process of developing governance strategies, some of these include the commitment to undertake governance assessments. The DC also discussion division of responsibility between donors, do you see this happening at a global or at country level and specifically how will the UK’s Quality of Governance Assessment align with the work of the Bank given the Paris commitments?

   HB response

   • Consultation is important and has not been right so far and we are awaiting the process to read the paper that goes to the board for the Spring meetings.
   • The Development Committee had a genuine debate about the anti-corruption framework. Everyone agrees on the problem; they differ on how to address it and on how the Bank will apply its policies in practice.
   • DFID view: Corruption is important, but you can’t get up and walk away from countries.
   • (ML): The board discussion is next week, but the words in the framework are not the end goal, implementation is the key thing here.
   • Operational focus is more important than worrying about the wording in the paper. Consistency and predictability are important.
   • On governance assessments, we are going to look at the work others, including the Bank do, we won’t recreate the wheel. Are seeing some Bank officials on Friday and will discuss it with them.
   • HB: We will divide up the work between Bank staff and some governments.
   • Also see the review of the role of Division of Institutional Integrity (INT) as central to this debate – a report is expected in January.

4. Odious and Illegitimate Debt (TR, DW)

   • What is DFID doing to make the World Bank look at the issue of Odious and illegitimate debt? What is happening with the Nordic sponsored research?
   • HB recognised that there has been poor borrowing AND poor lending but “those who borrow also carry responsibility”. DFID wants to encourage developing countries to take responsibility for their own policies (mirroring our desire for country ownership and reduced conditionality)
   • HB stated that there is a big problem in how you define odious debt and that borrowers carry responsibility. You could end up putting people off lending.
   • TR responded that at the moment they are taking all the responsibility. She gave the example of a power plant in an earthquake zone in the Philippines which has produced no electricity. This is a question of due diligence of the lender
   • HB said the Bank is doing a study on “odious debt”.

5. World Bank’s clean energy investment framework and the UK’s environmental audit committee report (LB, DW, OM)

   • On the World Bank investment framework: Laudable rhetoric on links between climate change and poverty etc. But definition of clean energy includes large hydro, nuclear and untested coal. Also, Bank is still channelling money into fossil fuels= GHG emissions= climate change.
   • The investment framework doesn’t do enough for decentralised renewables and and is too focused on large hydro which has its own negative environmental and social impacts.
   • We are worried about DfID support for extractive industries, esp because of their impacts on climate change.
   • What does he think about the response to the Environmental Audit Committee statement that DFID’s climate change and energy policy is incoherent?
   • Can you give us the DfID response to the EAC?

   HB response

   • EAC report wasn’t balanced. It was disappointing because DFID has done a lot to take on board climate change in its recent White Paper – a whole section on renewables. This is huge progress for DfID compared to previous White Papers.
   • Developing countries are investing in energy and driving the process (China builds one power station every 10 days), we need to work in the rich world to reduce our emission which have caused the problem and provide space for developing countries to use energy and develop, we need to look at how we can support them.
   • Energy policy is about choices and there are negative and positives for each choice CEIF is designed to help in adaptation and energy investment so that developing countries can improve energy situation. World Bank has committed to increasing the funding for renewables by 20% each year, since 2004.
   • The Stern Review on the economics of climate change is imminent.

6. Education in Fragile States (K)

   Fragile states account for one third of the world’s out of school children and more than half of the global financing gap – but fragile states do not receive proportionate amounts of DFID’s education aid. Will at least half of the UK’s new aid for education be allocated to fragile states in comprehensive spending review?

   HB Response

   • Funding depends on the capacity for progress, we have to work where we can be effective. We are funding long-term education plans so we work where that is possible. Allocations will be decided in due course.
   • Agreement with Mozambique
   • Side event at Singapore
   • We are also encouraging other countries to make long-term commitments to education funding.
   • It is a question of balance – to use resources effectively and not just commit to certain percentages. We have to channel resources to where they will have an impact.

7. World Bank structure and governance (MH, PC)

   • What is the UK doing to promote a presumption of disclosure for WB and IMF policy making and documents, understanding it as a matter of evolving policy and not as a ‘constitutional’ matter for the organisations.
   • What is the UK doing to think about breaking the link between Bank and Fund governance structures and the power associated with capital shares held in these institutions? What innovative proposals is it considering?

   HB response

   • We absolutely support transparency but there is no support for it across the board. We push for transparency always and our pressure helped to ensure the publication of the CPIA scores.
   • We agree that this is a matter of evolving policy and can be progressed without returning to the articles of agreement.
   • On governance we are not wanting for innovative proposals or good ideas, we are wanting for demand for more voice from those without a voice. Low-income countries are not demanding more of a role in policy making. Making this voice heard and visible is not just a matter for states but also NGOs promoting changes must be able to demonstrate that they represent a global voice and voices from the south.
   • DFID is committed to transparency and accountability – got the CPIA published (with strong UK and US pushing against strong resistance). Need support from other countries – please tell us anything practical UK can do internally and support publicly.

8. IFC Safeguards (LB)

   • We are disappointed with the response to the IFC safeguards review letter. We discussed DFID’s response to the IFC safeguard policy review at our last meeting. You requested further information on it. We wrote a letter (signed by 10 UK NGOs) detailing concerns on process, human rights, extractives and climate change.

   HB response

   • Apologised for a document that was published too late
   • He defended the letter response because the safeguards are already done and in place, so no point debating them anymore. We should look to the next stage of implementation and review and bring the concerns up again.