Foreign Affairs Committee on June 4th, 2012

[The Chair, Conservative, Dean Allison]

We're going to start our second round, for five minutes. We'll start with Mr. Dechert.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

Thank you to our guests for being here today.

Mr. Guarino, I know you don't have much time left, so I'll ask you a question directly.

In your opening remarks to us you mentioned that Coke has partnered with USAID in 42 water projects in 27 countries. I wonder if you could tell us some of the details of those projects, how Coke and USAID are working together to supply new water and sanitation projects.

Also, could you describe to us how, in your opinion, the cooperation between Coke and USAID results in a better or different result from Coke and the U.S. government acting independently on those projects?

[John Guarino]

Generally the way these projects with USAID work is that whether there's a sanitation issue with the water or water scarcity in the communities we would be serving, there would be a list of where these places were, and we would work with USAID to ask what we need to put in there in terms of first cleaning the water. Second would be how many places we can get it to if we can't have it pumped or piped into every location in that community. Can we set up three different wells or pumps, if you like, people can come to until there is something there?

One aspect is physical infrastructure to get clean water and get it into people's hands. The other ones would be bigger projects maybe, in terms of the watershed or in terms of water harvesting. We use the expertise of USAID and their funding. We would jointly fund these.

The other area would be not just the watershed but rain harvesting. What are the ways to do that?

We do a lot of things ourselves, but we always seek expertise. They have a lot more expertise than we do about the best way to harvest rainwater in some of these areas and use it and treat it. I'm not a technical expert. I can certainly get a lot more information for you about how those partnerships work.

In terms of your last question, about how we work with USAID and the benefits of it, USAID is very good at what they do. They're very focused in those areas where they operate. We are not the experts, in that we are a business first and support the community second. They allow us to be more effective. We take their expertise on how we can do things properly in that town. They have a lot more of the resources to actually get it done. So it's a little bit more of marrying our objectives and funding them with money, and their people who know how to get things done. They have the engineers, or whatever it is, to deal with the water issues a particular town or village may have.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Is it fair to say that both Coke and the U.S. government brought different skills to the table, and by combining those skills you got a better result for the people in those countries?

[John Guarino]

Yes, I think that's fair to say. It's a combination of the two.

As I keep saying, for anything, we can't do it on our own. I don't think anybody can do it on their own in this world. We have to find the right partnerships, businesses, communities, NGOs, governments.... Everything is different. It's not one-size-fits-all.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Okay. I wonder if you could tell us a little bit more about Project Nurture. You say that you're helping more than 50,000 farmers in Kenya and Uganda grow mangoes and passion fruit for locally sold fruit juices. Are you just helping them by buying their produce, or is there more to the program? Are you helping them actually grow those crops?

[John Guarino]

The project just started about a year and a half ago, because we realized, as we were expanding our juice business and were able to distribute more widely in Africa, that we were importing fruit into some very fertile areas. Mangoes, particularly, were coming from India to Africa, which we thought was really not what Africa needed, given that properly managed, it can be a very bountiful agriculture market.

We had two approaches. One was guaranteeing that we would buy the output and that we would get it up to quality standards. It required our research and development people and all of our agricultural experts working with the Bill and Melinda Gates Foundation, which actually provides the training and everything else. We provide the specifications. We work with them in the communities in terms of looking at the soil, what needs to be added to the soil, and how to plant. In many cases it's farming 101.

Again, it's a partnership. The NGO is able to go in and do the week-by-week evaluation. We're not in there every week on every farm checking these things. That would be done by others.

It's a combination of both. We buy the output, but up front, we're working with the NGOs and giving them what we need and are then giving them the training, the tools, and the fertilizer or whatever it is. It all comes together as a package.

[The Chair, Conservative, Dean Allison]

That's all the time we have.

Thank you very much for taking time out of what I'm sure is a very busy schedule to come here to join us today. We'll let you step away from the table, Ms. Banks, as well, and we'll continue to proceed with our questions to Mr. Haga.

Thank you once again for taking the time.

[John Guarino]

Thank you very much. It was my pleasure to be here. It was an honour.

[The Chair, Conservative, Dean Allison]

We're going to continue.

Madame Laverdière, you have five minutes, please.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Chair.

Thank you to our guests. I am sorry I was late. It was beyond my control.

Mr. Haga, thank you. One of the points you raised in your remarks seems very interesting to me and should be repeated: most of foreign aid is useful. However, what we most often hear tends to indicate that it's always a failure. It's because, often, the focus is on the failures. However, this is not true of all foreign aid.

Now, regarding the cash on delivery aid process that you mentioned, I would be curious to know more about its functioning

My first question is on the British experience in that area. According to what you say, standard tests are used to predict the number of children who will graduate. Those standard tests, are they approved by the British government? Is Ethiopia deciding which tests to use, and can it modify them at will?

[James Haga]

I appreciate your question.

I'll provide you with some details.

To your question, certainly the way in which, in this case, those national examinations are envisioned is set entirely by the Ethiopian government. Ethiopia's National Educational Assessment and Examinations Agency is the body that is responsible for managing that. A core element of the way in which this cash-on-delivery model is designed is that it deliberately does not allow, in this case, the British government to set all of those particulars in how the goal would be achieved. It's really just to say you set this goal and we will help you fund this work if you're able to achieve benchmarks along the way.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much.

This raises the issue potentially of quality. Of course I figure that for the Ethiopian government it would be easy to make a very easy test that loads of children would pass and then cash in on the results. I have those types of questions, because how do you report on that? Also, if other countries are funding education at the same time and then the Ethiopian government, to take that example, achieves those results with the help of other countries and then gets rewarded somehow from the U.K. government for what it has achieved—I don't know, I'm thinking aloud—is there a risk that some countries see that as double-dipping? If they do it without the help of other countries, then there's a serious challenge, because in many African countries to get the resources to attain results you need the resources. They don't have it to start with. So I don't know if you want to comment on that.

[James Haga]

I think that there are, quite frankly, a lot of complexities to how this is operationalized. As I said, I highlighted the pilot that is currently being undertaken in Ethiopia. It is the only pilot in the world being undertaken. So that gives you an indication as to how significant even the number of dollars dedicated to this style of aid are. It is in the early stage, so it is in effect experimental. It is an investment in innovation, and with any investment in innovation there is the possibility of failure. We think that is okay, particularly at a time when you're balancing that investment such that it isn't going to account for such a massive proportion of your aid envelope.

In terms of the specific question in terms of other sources of aid coming in from different donors, in this case the emphasis is on the result. So this contract of cash on delivery wouldn't necessarily meddle in with other donor contracts. That even being said, different donors engage in different ways, some through budgetary support, some through earmarked dollars for particular programs. It's up to the Ethiopian government to use the resources it has to achieve that particular result. I don't have the perfect answer to your question, but in this case it's trying out a new concept of a relationship between the donor and the partnered government.

[The Chair, Conservative, Dean Allison]

Mr. Haga, that's all the time we have. We're over time a bit, but I wanted to hear the bulk of the answer.

We're going to move over to Mr. Van Kesteren, for five minutes, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Chair.

James, it's good to see you again.

For those who don't know, James introduced me to Africa, along with Mr. Goldring, who was on this committee before. And introduced to Africa we were. We went right into northern Ghana. We stayed in the city of Tamale. That was quite a trip, I must say.

Anybody who is introduced to Africa should get introduced to Africa that way. It wasn't a five-star hotel we stayed at; we travelled in taxis with the locals, and it was an incredible experience. I know it's something I will always remember and cherish for the rest of my life. We've built a great bond and friendship as a result. I want to publicly thank you for that experience, and for the hard work that you did.

We went to Ghana, and we did meet with some of the others in Engineers Without Borders. I remember one person in particular we were going to visit, and he had a case of malaria. I believe his parents were from my riding. He asked me not to tell his parents that he was sick because he didn't want them to worry. However, I think they did find out a few weeks later.

James, tell us a bit about what the organization is doing in that area. I want you to tell us about the water project that you've developed there.

[James Haga]

If it's okay, Mr. Van Kesteren, I'll give another example, something that is burgeoning for our organization in Ghana.

For those who don't know the country of Ghana, it is coming out of the gates strongly right now. In fact, it's sort of entering into middle-income status. They've discovered oil in the last few years, and they have been drilling and finding ways—they've been partnering with the Norwegian government—to ensure they're going to use those revenues that are generated in responsible long-term ways. The Government of Ghana is actually quite a remarkable example.

That being said, the northern region of the country is particularly underdeveloped and much poorer than the south, and that's where our organization works. Obviously Ghana, in part, is a bread basket for Africa—for western Africa, at least—and there is huge agricultural potential in that part of the country.

One of the biggest challenges is a lack of business skill from within agricultural communities. It is often very small-scale, very subsistence-based farming. So we partner with agricultural colleges. Dave, you met the director of one of these colleges, Dr. Bempong.

We partner with these colleges to work with their students and farmers in the regions throughout rural northern Ghana to equip them with business skills—small things, like bookkeeping, understanding markets better, and helping to facilitate market connections. That's so people who have a great deal of expertise in growing crops in that region are also equipped with the right set of skills to make sure their product reaches market, that they're getting a fair price for that, and that they're connecting to regional markets, and at times international markets as well.

This is something we've been very actively involved with, training thousands of Ghanaian entrepreneurs and farmers in the northern part of the country.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

You're still taking young engineers there, graduates, and they're still working with the locals.

This is actually part of a larger study that we've developed, which is finding out how businesses can assist us. Are you seeing any example of that?

I know you and I and Peter took a drive on one Sunday. We wanted to go down to the coast and the capital city. We went right to the ghettos and right to the slums. If we saw anything, we saw a whole bunch of wonderful people, especially young men, who had the strength and the vigour to work, but there were no jobs.

Do you have any ideas for us? How can we engage organizations and businesses like Coca-Cola to set up there, to get the economy going? We saw a real need there, didn't we?

[James Haga]

I would say, first and foremost, that all of us as Canadians, and I'm sure the folks from Coca-Cola and others from non-governmental organizations as well, have a shared common interest: we want people's lives to be improved upon. I think there is an absolutely vital intersection there between the public sector and ensuring that there are responsible governments that have accountability to their citizens so there is a functioning democratic system, and also so that at the end of the day people have livelihoods to be able to live the lives they want to live and to be able to get themselves out of poverty.

I think all of us have jobs here in Canada—well, not everybody in Canada has a job, but certainly everyone in this room does—and we're fortunate to have them. That is what Ghanaians want. That is what people the world over want. So I think there are particular roles that governments and foreign aid dollars can play to help establish an environment in which development is truly possible. That is an absolutely vital role to play and a role I think governments are very well suited to play.

That being said, I think it is imperative that Canadian companies and other international firms find creative ways to be engaging, not just in the business they're engaged in, but in allowing some of those benefits to reach the people.

In Africa, in particular, we're not seeing huge amounts of foreign direct investment from Canada, particularly outside of some particular sectors, so I think finding ways to increase that relationship would be really appreciated by a lot of these countries and their governments and their entrepreneurs.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Ms. Brown, you have five minutes.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you very much, Mr. Chair.

James, it's very nice to have you here. I'm sorry, I didn't mean to ignore you in my first round, but I knew you were going to be staying with us a little longer. So I ask to be excused.

[James Haga]

My ego's bruised, but....

[Lois Brown, Conservative, Newmarket—Aurora, ON]

I won't comment.

You and I have had some conversations in my office, and you've brought some information to me on the cash-on-delivery aid, which I read. I have a few questions, and I wonder if we could pursue them a little.

First, you've given us only one example of a project between the U.K. and Ethiopia. Madame Laverdière opened up truly a whole basketful of questions by asking about other contributions from other countries.

Has Engineers Without Borders latched onto this as their primary goal for getting aid diverted? Why would you do it just on the basis of one project in one country? What kind of empirical evidence is there that this should be the way we should be delivering aid?

[James Haga]

It's a good question.

First, it's not, in our organizational view, the be-all and end-all. The work we continue to operate is in fact not an illustration of this model. We are not engaging in this model, because we are, quite frankly, a different kind of organization, and this is something in which the primary actors involved, at least at the first point, are governments.

That being said, our interest in the cash-on-delivery idea has to do with how that fits into a larger conversation about innovation in development aid. This is an example we believe merits further examination, and if it is done it will illustrate that the Government of Canada is investing in and putting its support behind innovative delivery mechanisms for aid.

So an important way to think about this is not that we start diverting significant proportions of our aid financing to cash-on-delivery aid, but instead to say there is a need for risk-taking in foreign aid if we're going to see transformative effects. So let us try this idea, because there is substantial support behind it. There's been a huge amount of discourse on this for the last couple of years and a number of people of great prominence in the international community, to name a few, have supported it. I'm actually forgetting her name, but there is the finance minister from Nigeria, who recently ran for the presidency of the World Bank. She is a big supporter of this idea, as is former Secretary-General Kofi Annan. As well, some of the top brass at USAID have in fact been looking at this as well, as have some other governments around the world.

It's not to say it is the be-all and end-all; it's just to say there is a pilot being done right now, and Canada has an opportunity to get in on this early-stage idea in order to build the evidence base that could then be used to really have an effective new model of aid delivery.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

If I could be so bold as to say, Canada does take transparency very, very seriously. We've signed on to the IATI, the International Aid Transparency Initiative. We've shown our commitment to that.

Coming from the other side, I can see why a government from another emerging economy would say “Yes, of course, give us the money”.

Right now we have the ability to hold you accountable. You have projects. I've got a whole raft of projects here where Canada has signed agreements with Engineers Without Borders. We've got contributions for envisioning the end of extreme poverty, for instance. We have global citizens in the classroom. We have connecting with Africa through fair trade. We have volunteer sending, 2009-14. We have international internships. These are all projects that the Canadian government, through CIDA, is funding with Engineers Without Borders.

Why would we not hold you accountable when you are a trusted partner with CIDA? You've demonstrated in the past your ability to use the money wisely. You've shown you can take on a project and you're a Canadian organization, so why would we not hold you or World Vision accountable?