Commonwealth Development Corporation

– in the House of Commons at 9:38 pm on 14th February 1984.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]

Photo of Dennis Canavan Dennis Canavan , Falkirk West 11:05 pm, 14th February 1984

I welcome the opportunity to have a debate on the involvement of the Commonwealth Development Corporation in the Philippines.

The Philippines is of major strategic importance to the United States of America and her allies, including Britain; and, to maintain its economic and military interests in the Philippines, it has been necessary for the United States to increase its bilaterial aid to the country throughout the seventies, and multilateral aid, mainly from the World Bank, of which Britain is a major contributor, has also greatly increased. Despite this, there has been a steady deterioration in the economy, making it necessary for other sources of bilateral aid to the Philippines to be called upon. The British Government appear to have responded to this.

In 1979, Britain's aid budget to the Philippines was in the region of £25,000 per annum, mainly in the form of funding for projects in the voluntary sector, and scholarships for Philippines Government personnel. However, despite considerable constraints on the aid budget in recent years, there has been a dramatic expansion in bilaterial aid from Britain to the Philippines under the present Tory Government. In 1982, the Commonwealth Development Corporation granted a £5 million loan to the private development corporation of the Philippines. In January 1983, the CDC granted a £6·4 million loan to the NDC/Guthrie Corporation for the development of a palm oil plantation, and further investments are expected. The CDC is currently negotiating an investment into palm oil in partnership with the Philippine Government, and the British Government have promised a £20 million trade aid deal if the Davey Steel Mill Corporation wins a £129 million contract. Effectively, such bilateral and multilateral aid programmes are topping up a repressive anti-democratic regime that has, since the assassination of Benigno Aquino on 21 August last year, lost all popular support in the country, and has been internationally discredited.

British interest in palm oil investments in the Philippines began in the seventies when the Guthrie Corporation, at that time British owned, carried out feasibility studies to determine the profitability of plantation development in the province of Agusan del Sur on the isle of Mindanao. In 1979, 40,550 hectares of land in this area were set aside for plantation development by the National Development Corporation, which is the main instrument of the Philippine Government to make lands available for large agribusiness projects.

In April 1980, Guthrie incorporated with the NDC to form NDC Guthrie Plantations Incorporated, or NGPI, for the purpose of establishing an 8,000 hectare palm oil plantation in Agusan del Sur. In October 1981, Guthrie was bought out by the Malaysian Government. In January 1983, the CDC granted a £6·4 million loan for the expansion of the plantation.

This loan has been the subject of considerable controversy since January 1982 when, while it was still under negotiation, it was reported in The Observer that the management of NGPI was employing a paramilitary squad, known as the Lost Command, as security guards on the plantation. More than 30 farmers were reported to have been killed by the Lost Command as it forced people off their lands to make way for the plantation As the protest grew, and human rights campaigners argued that British taxpayers' money should not be used to support such projects, Sir Peter Meinertzhagen, general manager of CDC, visited the area and returned saying that there was no real problem.

In August 1982 the Catholic Institute for International Relations published a booklet outlining the appalling human rights violations in connection with the activities of the Lost Command, and it concluded that CDC should not invest. In November 1982, an all-party delegation of Members of Parliament and representatives of several voluntary agencies met the Minister's predecessor, Neil Marten, to express their disquiet about CDC's loan to the project. During that meeting, a petition signed by 1,000 local farmers and NGPI workers was presented to the Minister protesting against the plantation.

The matter was raised again in the House on 7 December 1982 when the Commonwealth Development Corporation Bill came up for amendment. Before the debate Sir Peter Meinertzhagen had wrongly advised the then Minister that Bishop Morelos of Agusan supported the project. Bishop Morelos subsequently wrote to the Catholic Institute for International Relations stating that he did not, and does not, support the project. During the debate, the Minister acknowledged the widespread concern about human rights violations associated with the project, and ordered that there should be proper negotiations for improved human rights guarantees.

A month later, during the parliamentary recess, the Minister announced that the CDC loan to NGPI would go ahead. The agreement was signed despite the unchecked continuation of human rights violations. Several conditions were attached to the granting of the loan, one being that the Lost Command should be sacked and replaced by an independent security force. A new security force took over in May 1983, but the Lost Command has continued its association with the project.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

The hon. Member for Lewisham, East (Mr. Moynihan) says that it is not true, but perhaps I can quote some examples. In April 1983, the Lost Command monopolised the sale of rice on the plantation. On 1 May 1983 the leader of the Lost Command, Colonel Carlos Lademora, was invited to give a talk at the third anniversary celebrations at the plantation. Between]. and 14 May the Lost Command was responsible for the murder of one plantation worker and the arrest and torture of eight others. In July, 12 farmers were gunned down by the Lost Command and other villagers evacuated the area, which was an expansion area in the plantation. On 6 January 1984 the new security force was disarmed by a force of unidentified men, and the Lost Command was seen on the plantation shortly before this event.

Hon. Members may argue that members of the Lost Command have now been integrated into the local Philippines armed forces; but this, rather than curtailing its activities, has only legitimised them. There has been no attempt to bring any member of the Lost Command to trial, as far as I know, nor to compensate the families of the victims of its activities. Perhaps the Minister could tell us whether there are any plans in that direction.

The Commonwealth Development Corporation had effectively waived responsibility for the Lost Command's activities, which have been most apparent in the expansion areas of NGPI. In mid-1983, a new company was formed called NDC-Guthrie Estates Incorporated, or NGEI. This was to cover the second phase of expansion in an area of 4,000 hectares. The CDC says that its loan, and thus responsibility, is to NGPI and the 4,000 hectares already planted out to palm oil, not to NGEI. Numerous complaints have been received of harassment of farmers by the Lost Command in the area covered by NGEI.

Other conditions laid down by the CDC in the granting of the loan were fair employment practices, safe working conditions and a substantial out-growers scheme. There is no such out-growers scheme. Workers on NGPI receive only the minimum daily wage which, at the current exchange rates, is about £1 a day. I am informed that there is no trade union. Clearly, the conditions attached to the loan have not been met. In view of that, will the Minister say whether there are any plans to stop the drawdown on the loan or to ensure that the conditions will be met at a future date?

About 600 families, or 3,000 people, have so far been displaced by the plantation, and 150 heads of family have made legal representations to local lawyers for payment of compensation. How on earth can the Minister stand by the claim that he made in a letter of 17 November of last year to his hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) in which he said that nobody had been evicted, that all land had been acquired legally and by consent and that compensation had been paid for it?

Photo of Dennis Canavan Dennis Canavan , Falkirk West

No, I will not give way. This is my debate and I initiated it. If the hon. Gentleman wishes to make a point, I dare say that he will be able to use another opportunity to do so.

The CDC is currently negotiating a further investment in palm oil in a neighbouring area to that of NGPI called Loreto. This investment will be made in partnership with the National Development Corporation to develop a 5,000 hectare plantation and a 3,000 hectare outgrowers scheme. In July 1983, it flooded the area with comic propaganda—books in the local dialect—idealising its plans for the area. This propaganda literature was clearly intended to win the local population over to the idea that the takeover of their land by the corporation would be a good thing.

Between July and September, 25 letters containing more than 1,500 signatures were sent to Sir Peter Meinertzhagen asking the CDC not to invest in the area. These letters came from tribal people and settlers who farm the area and who do not want to lose their lands. Again, however, I am informed that these letters were ignored by the CDC.

The CDC says that much of the land in Loreto is uncultivated. Is the Minister aware that these so-called uncultivated areas are in fact farmed by the Manobo tribal group who have inhabited the area for more than 400 years? The plantation, by taking away their lands, will have devastating effects on their culture. Is the Minister further aware that a tribal leader by the name of Datu Dwindi has been tricked into signing away 1,000 hectares of tribal land by a local military official? This is one of several allegations of land-grabbing in the Loreto area which would appear to refute the CDC claim that only land willingly sold will be bought. The situation arising from speculation in the area is clearly beyond its control.

Will the Minister answer a number of questions? For example, how much money do the Commonwealth Development Corporation propose to invest in the Lorato project? When does the Minister expect to receive the CDC proposal for this investment? What return does the CDC expect to receive from the investment? Is the Minister aware that there is a para-military group operating in Loreto serving the interests of the local mayor, who supports the CDC's plans for the area?

Last September a delegation from the parliamentary human rights group visited the Philippines. It consisted of my hon. Friend the Member for Battersea (Mr. Dubs) and the hon. Member for Lewisham, East (Mr. Moynihan), and I understand from their report that they returned satisfied that the CDC was meeting its obligations regarding the safeguarding of human rights. However, their visit was, understandably, of short duration and I believe that for at least part of the time they were the guests of, or were shown round by, representatives of the Philippine Government, the British Embassy and representatives of the CDC. I believe that they spent only one day in Loreto, where in the presence of an armed escort they met the local people. They were unable to meet leading human rights workers in the area, who feared being identified as opponents of the project following the recent death of the parish priest, who some believed in the area, rightly or wrongly, was killed by the Lost Command.

During the visit of the all-party human rights delegation, I am informed that 52 hectares of oil palms were slashed down on an NGPI plantation by peasants out of frustration at having no legal recourse for their protest against the corporation. Following the visit, NGPI workers who spoke with the Members of Parliament have been threatened and harassed by members of the Lost Command.

In May 1983, Michael Morgan, the British ambassador to the Philippines, reacted strongly to a letter which was written by a group of British volunteers reasonably protesting at the human rights violations taking place at NGPI. He threatened to withdraw the entire VSO programme from the Philippines. Will the Minister make it plain why a telex message was subsequently sent to Derek Nesbit, the local CDC representative, from the CDC management in London, wrongly advising him that one of the volunteers, Belinda Coote, was channelling information to CIRR regarding human rights abuses in connection with CDC's investments, and wrongly advising him of her work base? Will he say through which channels CDC received its information about this volunteer? Shortly after the incident the volunteer was denied a previously approved extension of her contract.

Photo of Mr Alfred Dubs Mr Alfred Dubs , Battersea

My hon. Friend will appreciate that it is impossible, although I spent some time in the Philippines, to deal with the many points that he has made in a short intervention. Having been briefed, when I set out to go to the Philippines, I was predisposed to come to the same conclusions about the CDC project in Loreto as those to which my hon. Friend has arrived. The evidence gained during my visit, albeit a short one—I was seven days in Mindanao—made me feel that it would be dishonest to come to any conclusions other than in line with those set out in the report. Experience in the Philippines made me change my mind, for my initial views were quite the opposite.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

I am not doubting the integrity of my hon. Friend or that of the Tory Member who accompanied him. However, I have presented certain evidence of which the members of the all-party delegation may not have been aware. There is evidence subsequent to their visit that people have apparently been threatened and harassed by members of the Lost Command. The members of the delegation must admit that their opportunities for collecting evidence to the extent that they would have liked was somewhat limited by the circumstances of their visit. Perhaps that was the result of circumstances which were beyond their control. Nevertheless, those were the circumstances.

The CDC came to be "Partners in Development" with their host countries. The partners that they speak of in this instance are the Philippine Government, the National Development Corporation arm of which has, since its inception in 1935, gained a notorious reputation for land grabbing and non-payment of compensation. Does the Minister seriously think that the Philippine Government, who have probably been responsible for assassinating the leader of the opposition; a Government who have no popular support, as shown by the recent surge in anti-Government demonstrations; a Government who have dislocated an estimated 500,000 in a so-called anti-insurgency drive; a Government who currently hold in excess of 2,000 political prisoners without trial and who cannot in any circumstances be relied upon to uphold human rights, are a fitting "Partner in Development"? By allowing this sort of aid to go to the Philippines, are we not propping up a corrupt and discredited regime?

If the CDC succeeds in investing in Loreto, other corporations such as Keck Seng, Dunlop and Boustead Holdings are expected to follow suit, with the result that 40,550 hectares of tribal land in Agusan del Sur will be turned over to plantation agriculture against the wishes and interests of the thousands of people who farm that area. Does the Minister seriously feel that this is an appropriate precedent to set with British taxpayers' money? I think it is not, and I speak as one who had consistently spoken in favour of increased overseas aid which will go to help deserving people in the Third world. In this instance, I do not believe that the necessary criteria are being fulfilled, and I therefore call for a complete and immediate withdrawal from all plantation investment schemes by the Commonwealth Development Corporation in the Philippines and an end to support for an anti-democratic and reviled regime.

Photo of Mr Timothy Raison Mr Timothy Raison , Aylesbury 11:25 pm, 14th February 1984

The hon. Member for Falkirk, West (Mr. Canavan) has just taken up 20 minutes of the time available, and he will therefore understand that it may not be possible for me to answer immediately all his points.

It seemed to be sad that he should pick up pieces of tittle-tattle and use them in that way. He has no justification for talking about the sad death of Father Cesar Legaspi in that way. I understand that the bishop of the diocese has told the British ambassador that he has no reason to believe that that was anything other than an accident. It is wrong to make an innuendo without any basis. The essential point as far as the decision about the re-engagement of Miss Coote at the end of her contract was concerned was made by VSO and no pressure was put on her by the Government to reach that conclusion.

It is, as the hon. Gentleman reminded the House, just over a year since I replied to an Adjournment debate proposed by the hon. Gentleman on aid to the Philippines and the role of the Commonwealth Development Corporation in particular. As I said a year ago, we do not regard the treatment of human rights in the Philippines as beyond reproach. There are infringements of human rights in many countries, and these issues are all too often closely associated in particular with developing countries. Development is a long-term business, and no development more so than that in which the CDC is involved.

As the House knows, the CDC has made a lasting and in many ways a pioneering contribution to productive agricultural development in the widest sense. It would be wrong to suggest that it approaches its task of development in anything other than a serious spirit and with a genuine concern for the relief of the poverty and the true development of the people in the areas in which they work.

The hon. Gentleman attacked the old notion that we should be engaged in aid to the Philippines, but essentially we are talking about what can be done to help the poor people in a very poor part of that country. Authority for the CDC to operate in the Philippines was given by the then Minister of Overseas Development, the right hon. Lady the Member for Clydesdale (Dame J. Hart), and announced in Parliament in 1977 during the life of the last Labour Government.

Mindanao was already at: that time seen as being in greatest need of the kind of development the CDC could offer. Trees were being felled ruthlessly, with little attention to replacing the tree cover and conserving the soils. Shifting cultivation, particularly through immigration from other islands, had begun to aggravate the problem. While trying to identify suitable areas and local partners, the CDC committed a £5 million loan to the Private Development Corporation of the Philippines, designed to encourage that corporation to undertake more agricultural financing.

As the House is aware, in 1979 the National Development Company was designated as the agency to undertake large-scale agricultural development projects. In 1980 the then British Guthrie Overseas Holdings Ltd. signed a joint-venture agreement with NDC to develop an 8,000-hectare oil palm scheme in Agusan del Sur. [n May 1981, the joint company, the NDC/Guthrie Plantations Inc., approached CDC for finance. Agreements for a £6·4 million loan were finally signed in 1983 after my predecessor, Sir Neil Marten, following very careful investigation, had declared himself satisfied that there was no justification for him to withhold his consent.

I will not go over the history of what happened, because I made a full statement in the Adjournment debate a year ago, and time is short. I outlined then the undertakings that CDC had negotiated with NGPI covering the installation of a new security force, the protection of employees from harassment and the conditions of employment generally.

I have been able to confirm that the new security force was installed on 16 May 1983, well ahead of the deadline agreed between CDC and NGPI. The raising and training of this force was closely monitored by CDC's representative in Mindanao, and he continues to monitor its muster and deployment as well as its new recruits. The British embassy in Manila has also kept me in close touch with developments.

NGPI has honoured its undertaking in all other respects, and CDC was able to make the first disbursement of its £6·4 million loan towards the end of August. A further disbursement is likely to be made before the end of the current quarter, which would leave an undrawn balance of somewhat over half the total amount. Disbursement of this balance continues to be subject to the observance of NGPI' s undertakings.

The hon. Gentleman mentioned trade unions. I gather that trade union elections were won by the Philippine Association of Free Labour Unions in 1982. The results were challenged in the courts which recently upheld the PAFLU's win. The way is therefore open for the establishment of a union on the estate. NGPI set up joint consultative committees pending the formation of a union.

The really important point, in addition to the safeguards which have been introduced to cover the rights of the people there, is that good physical progress has been made with the project.

Indications are that the quality of the palm is excellent and test harvesting is about to commence in preparation for commercial harvesting when the oil mill is commissioned in May. That will bring real benefit to the people of the area.

There have been allegations about the acquisition of land. I must make it clear that the CDC loan was not used for land acquisition, which was undertaken before CDC agreed to provide finance for other aspects of the project. Before CDC agreed to participate, it was informed that NGPI had introduced new scales of compensation for any genuine claimants whose land was previously acquired and who for any reason did not benefit from these scales.

These are considerations which CDC has very much in mind in preparing and planning for the second project in the Loreto area, known as NDC/CDC. CDC has been asked by NDC to be its joint-venture partner in this.

Having regard to the anxieties which had become evident during the NGPI development, CDC decided that its approach at Loreto should be based on consultation with the population who would be asked to co-operate with the project. CDC wished to ensure that people understood the project and had the information on which to make up their minds. Accordingly, it commissioned a firm of Philippine agricultural consultants with experience not just of communicating with small farmers, but of carrying out a World bank evaluation of an adjacent project in Mindanao, to conduct a programme to explain the objectives of the project. That took place during the second half of July 1983. It has been followed by studies that I cannot describe in detail, but I have no doubt that the result is a soundly-based project.

The project is not a plantation but is conceived as an outgrower project supported by a nucleus estate, and the survey showed that the attitude to this was strongly positive.

A CDC appraisal mission went to the area last November. The mission's findings will be considered by CDC's board in due course. Its decision will be put to me for investment approval in the ordinary way.

I am advised on the project by CDC as well as the embassy in Manila. They have taken great trouble about the matter. I have read with great interest the report by my hon. Friend the Member for Lewisham, East (Mr. Moynihan) and the hon. Member for Battersea, South (Mr. Dubs). The hon. Member for Falkirk, West tried to dismiss them as having had too little time to study what was going on. Their report, which was by no means uncritical—no one could say that it was a simple whitewash of everything that happened—pointed out matters in which they believed that things had gone wrong, but they gave assurances that the new Loreto project was something with which it was right to go ahead. They said: We were impressed by the steps CDC has taken to consult the local population. More has been invested on pre-project communication than on any project in our experience. Those interested in this matter should read that report, and I believe that, if they do, and take careful account of the facts that I have presented in summary form, they will find that the thoroughly tendentious picture presented by the hon. Gentleman is far from being the whole truth.

The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-five minutes to Twelve o'clock.