§ Gregory BarkerTo ask the Secretary of State for International Development (1) whether his responsibilities in relation to CDC/Actis Capital have changed with regard to the reorganisation of public shareholder interests under the Shareholder Executive; [188850]
(2) what reserved rights he retains in CDC/Actis Capital with regard to the reorganisation of public shareholder interests under the Shareholder Executive. [188851]
§ Hilary BennMy responsibilities for CDC Group plc and Actis Capital LLP have not changed as a result of the involvement of the Shareholder Executive in DFID's shareholder responsibilities. I maintain responsibility for HMG's interests in both CDC and Actis.
1706WSThe Shareholder Executive now has delegated responsibility for advising me on HMG's interest in Actis. DFID officials retain direct responsibility for advising me on CDC. The Shareholder Executive provides advice to my officials in relation to the discharge of my shareholder responsibilities for CDC.
The reserved rights I retain in CDC Group plc and Actis Capital LLP have not changed as a result of the involvement of the Shareholder Executive in DFID's shareholder responsibilities.
For CDC, the reserved rights that I retain as the owner of 765,036,042 ordinary shares (the remaining one is held by HM Treasury Solicitors) and one special rights preference share are set out in detail in the Commonwealth Development Corporation Act 1999 and the Memorandum and Articles of Association of CDC.
As for Actis, the Members Agreement which I placed in the library of the House on July 14 this year sets out the rights I retain over Actis.
§ Gregory BarkerTo ask the Secretary of State for International Development what plans he has made to review CDC/Actis Capital investee(a) accountability standards and (b) compliance procedures. [188966]
§ Hilary BennSince 1999, the conduct of CDC's business has been governed by a set of responsible business principles which set out standards for corporate ethics, accountability, environmental and labour practices etc. Equivalent standards are required from CDC's investee companies. These were monitored by the Business Principles Committee of the CDC board.
As part of the reorganisation of CDC, these principles and requirements were reviewed and it was agreed that they should in future also apply to Actis. They have accordingly been written into the Members' Agreement establishing Actis, a copy of which has been placed in the Library. The Business Principles Committee of the Actis Supervisory Board will now oversee their application.
The business principles are also mandated in CDC's management contract with Actis and CDC will continue to monitor compliance through the CDC board Business Principles Committee.
§ Gregory BarkerTo ask the Secretary of State for International Development whether a formal environmental impact assessment was carried out regarding CDC's Higaturu Oil Palms investment. [188967]
§ Hilary BennEnvironmental impact assessments were not the norm when Higaturu was first established in the 1970s. Since then Higaturu has commissioned several environmental studies.
Most recently, in late 2002/early 2003, Higaturu achieved certification to IS014001 for environmental management: this requires that companies have mechanisms in place for identifying potential environmental impacts and their amelioration or avoidance. Such plans are updated twice a year, and include provisions for incorporating stakeholder feedback. The environmental management system is externally audited at least annually.
1707WS
§ Gregory BarkerTo ask the Secretary of State for International Development if he will list the environmental concerns relating to CDC/Actis Capital's Higaturu Oil Palms investment that arose(a) in the biannual Investment Valuation Review and (b) via the Business Principles Unit; and if he will list the action plans developed in response. [188969]
§ Hilary BennCDC's and Actis' investment reviews are confidential and commercially sensitive. CDC has in place appropriate procedures for monitoring that Actis complies with its Business Principles, including monitoring of the management of the environment by investee companies.
§ Gregory BarkerTo ask the Secretary of State for International Development what representations he has received regarding investee environmental regulation exemption requests in Papua New Guinea. [188970]
§ Hilary BennI have received no representations regarding investee environmental regulation exemption requests in Papua New Guinea.
For the record, CDC does not ask for or receive exemptions on environmental regulations on investments made on its behalf by any of its managers.
§ Gregory BarkerTo ask the Secretary of State for International Development if he will list the monitoring visits at Higaturu Oil Palms since 1999 that CDC/Actis Capital has(a) directly performed and (b) independently contracted. [188971]
§ Hilary BennMonitoring visits commissioned by the Pacific Rim Palm Oil Ltd. (PRPOL) Board have been effectively contracted by CDC as its owner. Since 1999, independent environmental studies have been contracted from at least four expert consultancy firms. There have been two CDC visits focused on environmental issues in 1999 and 2002 as well as a number of general monitoring visits by other CDC staff. There have been two visits by the PRPOL Board including its non-executive directors and by PRPOL's environmental manager.
§ Gregory BarkerTo ask the Secretary of State for International Development if he will list the criteria for deciding whether CDC/Actis Capital investments are considered of(a) high, (b) medium and (c) low environmental risk; and who performs environmental studies of (i) high, (ii) medium and (iii) low risks. [188972]
§ Hilary BennCDC's practice has been to rate investments as high, medium or low environmental risk in accordance with a matrix similar to that used by the International Finance Corporation.
High risk activities are those which, due to their type, scale or location have the potential for substantial adverse impact on the environment surrounding the facility and/or globally.
Medium risk activities are those which could cause adverse impacts but these are unlikely to be irreversible or persistent. Remedial measures can more easily be implemented, and the impacts are not as diverse or sensitive as in the high risk category.
Low risk activities are those which typically have minimal impact.
1708WSFor investments involving high risk to the environment, a formal environmental assessment by an external consultant is required. Where the environmental risk is rated medium, an environmental appraisal by an in-house specialist is required. In investments where the environmental risk is low, a routine environmental appraisal is carried out. Going forward, CDC will require Actis and other fund managers it uses to apply similar procedures and maintain similar standards.
§ Gregory BarkerTo ask the Secretary of State for International Development how many CDC/Actis Capital investment projects have been terminated on grounds of(a) environmental risk and (b) labour conditions. [188973]
§ Hilary BennSince 1999, there have been no occasions when environmental risks and/or labour conditions have forced an early exit from an investment.
§ Gregory BarkerTo ask the Secretary of State for International Development if he will list the institutional investors in CDC/Actis Capital by contribution(a) amount and (b) proportion. [189053]
§ Hilary BennThere are no institutional investors in either CDC or Actis.
§ Gregory BarkerTo ask the Secretary of State for International Development what CDC/Actis Capital's policy is towards initial public offerings as a method of attracting private capital, broken down by sector. [189054]
§ Hilary BennInitial public offerings (IPOs) are a well-established method of attracting private capital. CDC does not seek to influence Actis or other fund managers it may employ in determining the suitability of an IPO in particular cases, whether by sector or any other criterion.
§ Gregory BarkerTo ask the Secretary of State for International Development if he will list CDC investment programmes aside from Actis Capital.[189055]
§ Hilary BennIn addition to funds managed by Actis, CDC has funds under management with Aureos Capital, a fund specialising in small and medium-sized enterprises (SMEs) in developing countries. Aureos is owned 50:50 by Act is and NorFund.
§ Gregory BarkerTo ask the Secretary of State for International an Development if he will list by(a) country, (b) sector, (c) amount and (d) proportion CDC/Actis Capital investments in (i) SME firms and (ii) funds that invest in SME firms. [189056]
§ Hilary BennCDC does not invest directly in Small and Medium sized Enterprises (SMEs) but invests in them through Aureos Capital. Data on these investments are not classified by sector. Data on amount, country and the proportion of CDC's investment devoted to SMEs in the relevant country are as follows:
1709WS
CDC investments held through Aureos funds Country Amount (£00O) Proportion (Percentage)
Acacia fund Kenya 1,533 25 Aureos Capital fund n/a 1,368 50 Aureos Central America fund Costa Rica 2,187 28 Aureos East Africa fund East Africa 1,099 20 Aureos South Africa fund South Africa 307 28 Aureos West Africa fund West Africa 857 36 Ayojana fund Sri Lanka 902 50 Central America Venture fund Costa Rica 6,154 38 Fedha fund Tanzania 1,019 31 Ghana Venture Capital fund Ghana 839 34 Indian Ocean Regional fund Mauritius 2,802 39 Kula fund Papua New Guinea 1,707 32 Mauritius Venture Capital fund Mauritius 307 20 Mozambique Investment Company Mozambique 894 26 NDBVI fund Sri Lanka 925 50 Takura Investment fund Zimbabwe 11 31 Tanzania Venture Capital fund Tanzania 896 33 Zambia Venture Capital fund Zambia 1,592 20
§ Gregory BarkerTo ask the Secretary of State for International Development what representations he has received regarding CDC/Actis Capital investment in Iraq. [189057]
§ Hilary BennI have received no representations about either CDC or Actis in respect of Iraq. There are currently no CDC investments in that country.
§ Gregory BarkerTo ask the Secretary of State for International Development what resources CDC/Actis Capital(a) has directed and (b) will direct to small and medium enterprises in (i) Iraq and (ii) Afghanistan; and if he will make a statement. [189058]
§ Hilary BennCDC has directed no resources towards Small and Medium-sized Enterprises (SMEs) in either Iraq or Afghanistan. It will consider propositions to do so in future on their merits.
§ Gregory BarkerTo ask the Secretary of State for International Development what representations he has received from Rwandan officials regarding the transfer of its equity interest in the Commercial Bank of Rwanda to CDC/Actis Capital. [189060]
§ Hilary BennThe Rwandan Minister of Finance, Dr. Donald Kaberuka, made an oral request at the UK—Government of Rwanda Partnership Talks, 1-2 May 2003, that DFID finance a forensic audit of the
1710WS
£000 December 2002 December 2003 June 2004 (a) Funds solely managed by Actis Commonwealth Africa Investment Fund 13,873 13,873 13,873 South Asia Regional Fund 31,965 31,603 24,784 Nandi 18,566 10,050 3,695 Actis Fund 1 1,203,583 1,239,787 1,163,623 Actis Fund 2 — — 988 (b) Funds jointly managed by Actis with No fund Aureos SME Funds 27,002 24,029 25,400 (c) Fund investments managed by Actis on behalf of CDC Capital Alliance Private Equity 1,887 2,340 2,340 Gujarat Venture Capital 1,296 1,243 1,216 H&Q Asia Pacific 3,877 3,854 3,811 Nusantara Investment Fund 3,025 3,025 3,025 sale of Banque Commerciale du Rwanda (BCR). The sale had not been advertised at that time and CDC was not mentioned as a potential bidder.
Minister Kaberuka wrote to DFID in July 2004 after CDC were selected as the preferred bidder and requested that the forensic audit be carried out. DFID is currently carrying out a limited tender for the work and exploring options to ensure that the audit will be seen as properly independent.
The successful bid for an equity interest in BCR by Actis (having now taken over this function from CDC) was entirely independent of any contacts between DFID and Rwanda officials. It is not our policy to intervene or interfere in any way with the commercial judgment of Actis.
§ Gregory BarkerTo ask the Secretary of State for International Development if he will list CDC/Actis Capital holdings in funds(a) solely managed, (b) joint managed and (c) not managed by CDC/Actis Capital; and how much capital has been in each fund since 2002. [189062]
§ Hilary BennCDC invests all its funds through fund managers, whose performance it directs and monitors; to that extent, all CDC's investments are solely managed. The following data, which are at cost, relate exclusively to Actis:
1711WS
£000 December 2002 December 2003 June 2004 Praxis Active Equity Fund 3,316 3,431 3,489 South Africa Franchise Equity Fund 421 460 460 Total invested portfolio at cost 1,308,810 1,339,630 1,246,702
§ Gregory BarkerTo ask the Secretary of State for International Development what the status is of CDC/Actis Capital's Aureos investment; and what its returns have been since 2001. [189063]
§ Hilary BennAureos is a fund jointly established by CDC and Norfund (the Norwegian Government's investment fund). CDC's investments under management with Aureos Capital amount to £25 million. As Aureos has attracted some 50 other investors into its funds, it would be a breach of their commercial confidentiality to disclose return rates on these investments.
§ Gregory BarkerTo ask the Secretary of State for International Development what the status of CDC/Actis Capital's partnership with CGU in China is; and if he will list its(a) holdings, (b) projects and (c) quarterly returns since 1997. [189064]
§ Hilary BennCDC operates an investment partnership in China with Aviva, as CGU is now known. The holdings, projects and returns of that partnership are a matter of commercial confidentiality.
§ Gregory BarkerTo ask the Secretary of State for International Development what debt is owed to CDC/Actis Capital. [189065]
§ Hilary BennTotal debt owed to CDC at cost as at 30 June 2004 was £411 million. The breakdown by borrower and amount of this debt is commercially sensitive information.