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Joint Standing Committee on the National Capital and External Territories - 30/04/2012 - Department of Regional Development, Regional Australia and Local Government annual report 2010-11

CASH, Ms Linda, Marketing Manager, Christmas Island Tourism Association

LACY, Mr Brian James, Administrator, Indian Ocean Territories

PRESTON, Ms Lisa, Chairperson, Christmas Island Tourism Association

[16:30]

CHAIR: Welcome. I note that we have with us Brian Lacy, who is the administrator for both Cocos and Christmas islands. I would like to place on the record that it is thanks to Mr Lacy that we are here. Some months ago in my office I mentioned to Mr Lacy that we might come to visit Cocos and Christmas islands in April or May this year but he said, 'No, everyone will be at Lord Howe'—well, not everyone, naturally, but a lot of people it would be worth us speaking to. So here we are, but we will come and see you on Christmas and Cocos later on. I invite you now to make an few opening remarks before we go to questions.

Mr Lacy : Thank you, Chair, and all members of the committee for making the opportunity available for us today, and I do apologise for being late. I would also like to acknowledge at the outset and commend the government for the contribution that it has made to the infrastructure on Christmas Island over the past two years. It has made available over $200 million worth of funding for infrastructure on Christmas Island and Cocos (Keeling) Islands. We do appreciate that.

There have been a number of issues raised with me by people on Christmas Island and Cocos (Keeling) but from my perspective there are probably three priorities as far as issues are concerned on Christmas Island and Cocos (Keeling) Islands. The first one is the land release policy or Commonwealth property disposal policy that at the present time is impeding private investment in land development on both Christmas Island and Cocos (Keeling) Islands. There have been some submissions made about adapting or modifying that policy so that it fits in with the land management legislation from Western Australia, because we are actually governed by that legislation anyway. The policy is actually written for the Australian Capital Territory's land management scheme or legislation—I cannot remember the name of it offhand, I am sorry—so it does not really have application to the Indian Ocean territories. There are ways, I believe, in which a more facilitative scheme could be adopted that still maintains probity in the transfer of land or ensuring there is probity in the transfer of land. That is one of the major priorities.

We have had a number of potential investors who have put forward cases for investment on Cocos island and on Christmas Island. On Cocos island there has been interest expressed in the quarantine station, which was discussed earlier, and on Christmas Island there have been a number of expressions of interest in different parts of the island for the development of market gardens. As you are probably aware, the islands are not self-sufficient in fresh fruit and vegetables; it is all transported in, normally by plane. So those sorts of things which are very much needed on Christmas Island are being impeded by the land disposal policy at the present time.

The second priority, as I see it, is transport and communications, both the services and the infrastructure itself. There was some mention made earlier by Mr Peter Clarke in his evidence about the flights to Cocos island being disrupted by weather on Christmas Island and by the fuel shortages. The weather, as I understand it, could be accounted for if they actually adopted a better navigational aid system on Christmas Island, which would allow the flights to come in at a lower altitude to land.

CHAIR: What kind of investment would that require?

Mr Lacy : I have been told varying amounts, but $2 million, I believe, would be the cost of the navigational aid.

Senator PARRY: Would this be satellite navigation?

Mr Lacy : It is a navigational system that is used in New Zealand, I believe, in high mountain areas. It is a navigational system that gives off a signal from the ground up.

Senator PARRY: Is it unmanned?

Mr Lacy : Yes. The fuel issue, though, is caused mainly by the swell season. We did not have a vessel in from November through to March and therefore aviation fuel could not be offloaded at Christmas Island. That meant that the flights had to go to Port Hedland to refuel, then to Christmas Island and then to Cocos Island. Some mention was made earlier about the services always going Christmas Island, Cocos Island back to Christmas Island to Perth. The reason for that is that is a Civil Aviation Safety Authority regulation which requires Embraer E-190 aircraft to actually not travel that distance from Perth to Cocos Island over water without having an alternate. The problem an alternate is that if you cannot land at Christmas Island your alternate is Jakarta, but if you are going direct to Cocos and you cannot land at Cocos then you have not got enough fuel in the Embraer 190 to go to an alternate. You could use Christmas Island as an alternate but then if Christmas Island is weathered in you were not be able to land there and you would not have enough fuel to go anywhere else.

Senator PARRY: Is there fuel storage capacity on Christmas Island?

Mr Lacy : No. There is for motor vehicles—diesel and that sort of thing—but not for aviation fuel. The fuel is brought in in ISO containers—big containers that come on the ship—and they are offloaded about 20 at a time. But if you do not get a ship for three months that diminishes very quickly.

Senator PARRY: And the ship issue is weather related? You have had a port issue, of course.

Mr Lacy : We have, but that did not stop the ship unloading. It is weather related, that is right. That is one of the other infrastructure issues.

Senator PARRY: You cannot build a greater capacity on Christmas Island so you can have the refuelling for Cocos Island?

Mr Lacy : Not really. Not on the fuelling. Actually some of that investment I talked about is for building better fuel capacity on the island.

Senator PARRY: I do not know anything about aviation fuel but I would assume it would have a use-by date like other fuels?

Mr Lacy : Yes, it has. That is also an infrastructure or transport problem. There is only one shipping service. That is a monopoly, of course, and there has already been some mention made about the cost of shipping freight to the islands. But there is another docking facility built on Christmas Island, but the ship cannot unload there because it does not have any mooring buoys. If the mooring buoys could be put around at Nui Nui then the ship would be able to dock there in bad weather conditions as well. When there is a swell around on the Flying Fish Cove side of the island it is normally fairly calm around the other side of the island. If the Nui Nui buoys were put in that would overcome the problem of that period from about November through to April. That happens just about every year—that period of three or four months without a ship being able to land—which means we run down in food supplies in the supermarkets and stores as well.

Senator PARRY: Have you got a costing for those buoys? I cannot see those being cheap.

Mr Lacy : I have been told $5 million. There is a proposal at the moment—and I think it has been funded—to extend the jetty. I believe that is a greater cost more than the Nui Nui buoys and that jetty extension will not overcome the problem, because it is still on the northern side of the island and when there is a swell the ship will not be able to stand up against the jetty anyway—it does not matter how far they take it out on that side of the island.

Going back to the airlines, we used to have a northern flight to Kuala Lumpur. That has now ceased principally as a result of the freighter the government provides now to bring in fresh fruit and vegetables. One of the things that the Kuala Lumpur flight used to bring down was fresh fruit and vegetables from the north. It also had the postal contract, which it lost to the other operator. It has now ceased. There are negotiations going on to see if another northern flight can be started. I think that is very important, especially in the future if we want to get our tourism industry going again. I do not know whether the government can assist in providing northern flights.

CHAIR: Just to clarify: a win, on the one hand, in sorting your freight out really created a loss on the other hand?

Mr Lacy : Yes. As I said, it is important to tourism as well, from Europe.

CHAIR: I suppose we can have an exchange with Ms Preston about this issue. Were those your three issues?

Mr Lacy : No. There have been some urban design master plans done, and there is a draft ODP for the quarantine station. The urban design master plans that have been done for Coco Island and Christmas Island will provide greater housing facilities and better overall accommodation for tourists. But it is going to require private investment as well as government investment. I think it would be an incentive for the private investors if the government spent some money on doing that part of the urban design master plan that they would be responsible for, like street lighting and streetscaping and things like that. A lot of it would be done through the shire, but the funding would have to come from the Commonwealth because the shire does not have its own rate base to be able to do that sort of thing.

CHAIR: You said that they were the key issues as you saw them. I would be keen to ask about other issues that the community is raising.

Mr Lacy : I could send a list of those, if the senator does not mind.

CHAIR: Is that because the list is too long or because you do not want to air them on the public record?

Mr Lacy : A bit of both, actually—some of them are too inane to read out!

CHAIR: I am sure we will look forward to hearing directly from the residents of Christmas and Cocos (Keeling) Islands on those issues.

Ms BURKE: On the issue of housing and accommodation, which has obviously been exacerbated by the detention centre—let's get it out before we all go there—does the master plan include more housing and accommodation for tourism?

Mr Lacy : Mainly for tourism.

Ms BURKE: Housing is an issue anyway.

Mr Lacy : Part of the contribution that the government has made in recent funding is the building of 30 new houses for staff accommodation, which will most likely relieve some of the pressure on rents and house prices.

Ms BURKE: So for staff at the centre and also translators and other people who are coming over intermittently as well—the legal profession—

Mr Lacy : Yes, administration, nurses.

Ms BURKE: That is as opposed to island needs, with visiting specialists and all those sorts of things?

Mr Lacy : That is right.

Ms BURKE: So both those issues?

Mr Lacy : Yes. And the tourism people will tell you about the devastating effect on the accommodation for tourists.

Mr SECKER: Is the old detention centre still being used?

Mr Lacy : It is, spasmodically. At the moment it is empty but that is because the asylum seekers had been reduced to 128 on the island, just before I came over here. I believe that about 500 people have come in since. But that still would not require the use of the old detention centre, except perhaps for unaccompanied young males.

Ms BURKE: What about the wonderful casino? I love the casino!

Mr Lacy : It has been refurbished as a resort. A lot of work probably still needs to be done on it.

Ms BURKE: But people can use it and they are staying in it?

Mr Lacy : Yes.

Ms BURKE: It just seems such a waste to have it sitting there deteriorating into the ground when accommodation was at such a premium.

Mr Lacy : I think 128 rooms are being used by Serco and DIAC, and others are being made available for tourism. I think about 200 rooms are available there now.

Ms BURKE: So that has taken a bit of pressure off?

Mr Lacy : Yes. They would like to get the casino licence, though!

CHAIR: There was a recommendation, I think, for search and rescue boats and I was interested in what the community's response to that was.

Mr Lacy : The government's response is very welcome. The new boats are coming, I think in the next six months. At the moment they have boats on loan which are similar to the boats that they are actually getting. So the government's response on that is very welcome.

CHAIR: You have had quite a lot parliamentary inquiry, given the Christmas Island tragedy and given the detention centre, and I am just interested to know if you have fatigue from these kinds of exchanges yet. Do you have some advice for us as a committee? We really want to hear from you, but we do not want to be a burden to the local community by overdoing it.

Mr Lacy : There was a fair degree of fatigue, particularly after the boat accident, but I do think that the Christmas Island community is very resilient. It is quite surprising the way they have bounced back. There was some need for counselling for some of the people, and that was provided. There are a couple of people who are still affected by that particular incident on 15 December and then the riots in the following March. But, overall, I think the community has been very resilient in the way it has come back from all that.

Senator PARRY: Can I just push the point a bit further? We are very conscious as a committee that we do not want to bother you by being an additional burden, as the chair said. So would you welcome a visit from us and would you welcome a further inquiry on the island?

Mr Lacy : I certainly would. I think it would be great if the people in the community on Christmas Island could have an opportunity to speak. I know the last report made about 26 recommendations which were all very much what the community saw as being needed in Christmas Island and Cocos (Keeling) Islands.

Ms BURKE: Would it be good for the community to be consulted about the community, as opposed to all the external factors that the mainland has more or less forced upon them, so that we are actually talking about issues for the island community—tourism, economic development, et cetera?

Mr Lacy : It is a very pertinent point because a lot of the complaints from the community are that they have been consulted to death by different people, and different reports have been written, but no recommendations are actually implemented, whereas, when the committee comes over and listens to what they say, they know that it is the government actually listening.

CHAIR: We will have to have a look at the checklist of the previous set of recommendations that this committee has put forward. How useful have those recommendations been for you for leveraging off in the directions that you need to go?

Mr Lacy : They have been extremely useful. We used those as a basis for writing our economic development strategy for the Indian Ocean territories, and that was after consultation with the community. They were very helpful for us in putting up our 2010-15 economic development strategy.

CHAIR: Thank you. Ms Preston, you might like to add some remarks to the public record.

Ms Preston : I would just flesh out a little bit what Brian was saying. In terms of the land disposal, an expression of interest was put out on what we call the old chicken farm. We did have an investor interested. He is still very interested in the plot of land. We are getting mixed messages about what is stalling the project. We have heard that the shire have stalled it, but there are other processes that can be kicked into place.

To say just a little bit about why, in terms of tourism, we see this project as really important: it is providing a higher standard of accommodation on the island than we currently have. This fellow has links already through big diving markets, through Europe and the rest of the world. So he actually has a ready-built market; he just needs the rooms to be put in place. He is going straight to the target market that we are trying to entice to the island. It is the sort of low-key development that Lord Howe Island has totally built its reputation on, and those accommodation styles are entirely appropriate and sustainable for Christmas Island. So to see this project stalling and the fellow not getting answers or not being helped along to get this happening is certainly very frustrating from the tourism side of it.

I would just also clarify: we have reached a really pivotal point on the island. Brian mentioned that the immigration numbers have really dropped. The staffing levels have obviously dropped. Certainly, as a local, you have really felt the island just take a breath and go, 'Phew! We've got through that.' The actual tourism accommodation on the island is quite open at the moment. It is the most it has probably been in nearly three years, I would say. They are not bleating yet, so to speak, because they have had a couple of years of really good runs. But we know that is going to start happening soon, and obviously we want to see tourism.

The Australian Geographic project—again, thank you for the funding for that—was primarily to try and reinstate our image. The timing of that could not have been better because we wanted to move away, and it is almost as though the media has reached a saturation point with reporting on refugee boats. I have noticed that some have been coming in and not even making mainstream news any more. Whether that is a good or a bad thing I do not know, but certainly—

Senator PARRY: Could you give us the name of the vessels? We will rectify that!

Ms Preston : Just as a local person: it is out on your doorstep there and yet it is not on the news if there are other topics that they can talk about other than another arrival.

I am not too sure if you are aware that this Australian Geographic program will be played on Channel 9 on Saturday afternoon at four o'clock. It is a slightly cut down version of the release of the DVD that will go out on the magazine—this month?

Ms Cash : This month. In fact we would really like to show you the full documentary while you are here, if you have the opportunity.

Ms Preston : Yes. It is just outstanding. It is going straight to our target market. Again, it is just putting it back out there that Christmas Island is about red crabs and birds and nature, and not these other things that have been happening. It is trying to rebuild that interest in getting people to travel to Christmas Island.

Accommodation is wide open, but certainly something that the eco-resort is trying to develop I think would be a huge step forward for Christmas Island—if we could get a project like that off the ground.

Ms Cash : Can I just say that it has been three years? It has been three years since this project was first proposed, so that just gives you some background as to how long this has been outstanding.

Ms Preston : Timing wise, I think it is actually the best time. We are post boat crashes and post riots, and at this point we can cater to the tourism interest that would be generated out of the exposure that we will get through this DVD.

CHAIR: Great. What is your understanding of the roadblocks to this particular development?

Ms Preston : I believe that the shire is saying no, and that that is to do with the feng shui that is related to the Chinese cemetery across the road. I have also heard conflicting stories from the community. I have Chinese people who I know that are very feng shui oriented. The way they have explained it is that there is an earth god totem alongside the grave head. In a lot of those old graves that are immediately across the road those have deteriorated over time, and because the cemetery is now heritage you cannot replace them. Because they are missing, it more or less nulls and voids the feng shui because you are supposed to pray to the earth god before you do to the gravestone. I have had it explained that if you were trying to build directly onto the graves then yes, there would be a problem. The fact that you are not means that it really should not influence or dictate what development can happen around them.

I believe that the Islamic community are okay as long as there is a stand of trees left between the development and their cemetery, which is along the same stretch of terrace on the island. They were quite okay with it being there, because there is no nightclub or anything disrespectful proposed for that development.

CHAIR: It sounds like there would be some interesting issues for the committee to follow up.

Mr Lacy : I might be able to assist. The application has not actually gone to the council yet. The expressions of interest were called for by the Commonwealth Attorney-General's Department. The project that has won the tender has not put in an application to the council because the council was actually drawing up its town-planning scheme, and that town-planning scheme has now been down to the minister. It has gone back to the department in Western Australia to advertise.

The area that is identified as the area in which they want to build the dive resort is not zoned for that particular type of activity. But now that the matter is going out to the public for comment the proponent will be able to apply to have the area rezoned.

The council, even though no application has been in, has passed a resolution that they will not agree to it. That is based, as Lisa has said, on the feng shui opposition to it. But the majority of the community support it, and there was wide consultation undertaken by the proponent to gauge the community support for it in the first instance. But there is a pocket of people who, for feng shui reasons, do not think that it is the appropriate place for it to be.

CHAIR: Are there any other issues that you want to put before us?

Ms Preston : Yes, also referring to Brian's mention of the urban design master plan and the fuel storage facility. I am not too sure if you know but if you come to Christmas Island you see, along our main stretch of foreshore, that there are two nice big fuel tanks sitting there obstructing the view and development along that stretch. I had heard, as a community member, that the fuel restructuring on the island would remove those two tanks to another location where they would not be so obvious to the town, which would then probably lend to that area being redeveloped properly, so if there is funding that can—

Mr Lacy : That is part of the government funding.

Ms Preston : Yes. That would really kick it off, actually making us look a bit less like a mining-industrial town and we would be moving towards tourism.

Ms BURKE: And the mine is still operating?

Ms Preston : Yes.

Ms BURKE: Let's not undermine the mine. I think that is one of the amazing things about the island—isn't it?—that it is not just about a mine; it is this amalgam of everything but the mine is still operating and providing jobs.

Ms Preston : It is not disrespecting that, but that stretch—effectively from the supermarket through to Bosun tavern—is now being determined as a tourism precinct, so that is what we would like to see. It is not about getting rid of our heritage or 'let's just make ourselves look like something different to what we are'; it is about getting a different blend and feel through that area, noting that is where people are going to walk through to the beach and so when people get off a cruise ship they have actually got cover, seating and toilets and things all through that area that make it a little bit more presentable. I run my own private tour company on the island. I pick guests up from the airport and run them down past what looks like South-East Asian slums through the back of Poon Saan and then down to their accommodation, which they love, on the foreshore. The next day I get, 'How come everything's so neglected? Why this air of dereliction about the island?' So they come to a place like this and go, 'How are they making it happen?' It is so frustrating when we are living in these conditions when it is otherwise actually very achievable. On the second day, when you have got them out in the jungle, they are over the whole township thing as they are sold on the crabs and the birds. So we are still winning them over but it is about that first impression that we are giving people when they arrive.

CHAIR: Thank you for putting that on the record. It was very worth while. We look forward to following up those issues when we visit. Thank you.

Mr SECKER: Just before you go, there was a proposal some years ago to exchange some areas as to the phosphate mine. Have you had any success there or is it still frustrating you?

Mr Lacy : The applications for new leases were refused. But I understand that there are further applications being considered at the present time. At the moment the mining leases run out in 2019 and the possibility is that they will start winding down within five years because of the maintenance cost and the upgrading of the facility and so forth.

Mr SECKER: So you would want a resolution of that possibility fairly soon?

Mr Lacy : Pretty quickly, I think. We need to focus on it. As the committee said last time, it is about diversifying our industries or our economy on Christmas Island and the Cocos-Keeling Islands and that is what we are focusing on at the moment. But I think if we lost the mine it would make a very big impact on the economy of Christmas Island.

Mr SECKER: It is the base of your economy.

Mr Lacy : Yes. I am saying something about that tomorrow.

Ms Preston : I am sorry but just quickly before we go on the Virgin contract, I cannot stress enough how really important that is. We went through a previous prior process whereby it took a while for the government to go to tender. I see you over there shaking your head, Anna. You understood what the issues were.

Ms BURKE: Last time we were on the island it was the thing of the day. It was exactly the same process and you did not know and you could not sell tours and you could not fly, so it was just ridiculous.

Ms Preston : You could not package them. Our European agents are starting to send messages through about this: 'Well, Virgin are telling us they don't even know if they've got the contract anymore.' It kind of makes us look a little bit unprofessional. We cannot give these answers to people. It starts jeopardising the marketing that we have been building over the last—

CHAIR: When do you need to know by? Yesterday?

Ms Preston : By 31 May at the latest. That is at the absolute latest.

Ms BURKE: If a European visitor is going to come to Christmas Island that is a year or two years in the planning, isn't it? Do you know what I mean? You do not make that decision overnight.

Ms Preston : The average European tourist can book up to 18 months in advance. So that is why they need that information.

Ms BURKE: Plus if they want to actually come at your peak period and see the crabs and the birds they are all coming at the one time.

Ms Preston : Yes.

CHAIR: Thank you. Hopefully we might do some follow-up on that before we visit.

Ms Preston : Okay; fantastic. Thank you.