The International Development Act 2002 ("2002 Act") came into effect on 17 June 2002, replacing the Overseas Development and Cooperation Act 1980 ("1980 Act").
Ministers can only spend public money for the purposes, and in the manner, authorised by Parliament. Where types of expenditure are made on a recurring basis it is customary for authority for these to be given in specific legislation.
The 2002 Act is the legal authority for most DFID expenditure. The two major exceptions are all UK contributions to European Community assistance (other than contributions to the European Development Fund) and overseas pensions - which are both covered by separate Acts.
The UK government committed itself to considering a new Act in the 1997 White Paper Eliminating World Poverty. The idea received support from the development community during Development Policy Forums in 1998 and 1999.
The Act sets out the purposes for which development aid can be given and increases the number of ways in which it can be provided.
The 2002 Act gives the authority to spend money through a number of different "powers". The most significant is the:
The Act also enables the:
Supplementary powers are provided to assist in achieving the purposes of the Act. These include a power to support organisations or funds that contribute to international development.
The 2002 Act establishes poverty reduction as the over-arching purpose of British development assistance, either by furthering sustainable development or promoting the welfare of people (Section 1 of the 2002 Act):
"The Secretary of State may provide any person or body with development assistance if he is satisfied that the provision of the assistance is likely to contribute to a reduction in poverty."
In this Act "development assistance" means assistance provided for the purpose of "furthering sustainable development..., or improving the welfare of the population..."(Section 1 (1) - (2)).
In other words, two conditions need to be met: a) that assistance is provided for the purpose of furthering sustainable development or improving welfare; and b) that DFID is satisfied that the assistance will be likely to contribute to the reduction of poverty.
The term "sustainable development" is clarified to prevent interpretations that have just an environmental or economic meaning:
"... sustainable development includes any development that is, in the opinion of the Secretary of State, prudent having regard to the likelihood of its generating lasting benefits for the population of the country...in relation to which it is provided." (Section 1(3))
The 2002 Act is drafted in such a way that a policy such as "tied aid" (and the Aid and Trade Provision), in which assistance is given for the purpose of promoting UK trade or for other commercial or political reasons, would now be challengeable in the courts.
Development assistance to the UK Overseas Territories must seek to further sustainable development or promote the welfare of its people but is not subject to the over-arching requirement of contributing to the reduction of poverty (Section 2 of the 2002 Act). This is in recognition of the continuing special relationship between the UK and Overseas Territories.
A specific power has been given to enable the Secretary of State to provide assistance in time of disaster (Section 3 of the 2002 Act). The power is limited to assistance for the purpose of alleviating the effects of disasters, man-made or natural, or other emergencies, on the people of the country or territory concerned. This power is not subject to the requirement that it be given for the purpose of furthering sustainable development or promoting welfare, nor that it contribute to the reduction of poverty. Longer term assistance would have to be justified under the core power.
As in the 1980 Act, a specific power is given to make contributions to multilateral development banks such as the World Bank (Section 11 of the 2002 Act).
The 2002 Act increases the number of ways in which development assistance can be provided (subject to the assistance being provided for the purpose of furthering sustainable development or promoting welfare and likely to contribute to the reduction of poverty):
The Act means that every development assistance project or programme should be approved explicitly on the basis that it is provided for the purpose of either furthering sustainable development or promoting the welfare of people and that it is likely to contribute to the reduction of poverty. The only exceptions are assistance to UK Overseas Territories, humanitarian assistance, and contributions to multilateral development banks.
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