CHAIR —Welcome. I now invite you to speak to your submission, and then we will follow with some questions. I have to step out for a few minutes, so Senator Macdonald will take the chair. I hope to be back very soon. Please proceed.

Mr Rattenbury —Thank you for the opportunity to speak with you today. You have obviously seen our submission. I want to start by painting a bit of a snapshot of Greenpeace's operations in this region. We have staff in Papua New Guinea, in Suva and in the Solomon Islands. We have had quite a history of experience working in the Pacific region, from campaigning against French nuclear testing—which I suspect was our most high-profile work in the region—right through to trying to deal with chemical stockpiles left over from the wars and from companies operating there. Most recently, of primary focus for us has been our work on forests in the Melanesian region.

As you will have seen from our submission, the essence of our focus is that Australia is a very significant player in this region. I think that has come out clearly, from my observation of the committee hearings so far. However, we are not convinced that Australia is using that influence and power to the best outcomes for particularly the Pacific region but also for Australia's place in that region. We believe that many of the nations of the Pacific are highly vulnerable. They are vulnerable because they are microeconomies in a global and fast-moving world. They are vulnerable simply as developing countries and they are vulnerable to environmental threats and changes, particularly the low-lying atolls. We believe that Australia can play a strong role in alleviating this vulnerability. The thing we would like the committee to take on board is that Australia needs to work to ensure that the development of these countries is done in a truly sustainable way, and that is economic sustainability, social sustainability and environmental sustainability. We believe that, at the moment, many of Australia's policy positions and the type of aid it delivers into this region are not delivering those outcomes.

In our submission we cite a number of case studies. We have identified the issue of nuclear shipments through the region. We spoke particularly—and I would like to perhaps dwell on this for a moment—about the application of incineration technology in the Pacific region. It seems like a very finite example, but I think it is quite illustrative of some of the ways that Australian policy operates in the region. In 1997, AusAID recognised the problem of stockpiles of old chemicals that are lying around in many of the Pacific island countries. A good project was started where an audit was undertaken, the stockpiles were identified and an assessment was undertaken of what was there. So the first step of the problem was resolved in the sense that we actually knew the true and full picture of what was going on.

Then came the time to actually deal with those chemical stockpiles. AusAID recommended that those stockpiles be incinerated. We were quite taken aback by this for two reasons. Firstly, that sort of technology is simply no longer used in Australia. It is considered environmentally unacceptable because of the chemical hazards that incineration presents. So we were quite startled to see that AusAID would be doing this. The second problem is that it is in breach of the Stockholm Convention, to which Australia has recently signed although not ratified. Here we saw a practice whereby Australia was essentially foisting off second-hand dirty technology into the region, when at home, if you take the example of Homebush Bay for the Sydney Olympics, that type of technology was completely rejected as environmentally unacceptable and also unacceptable in terms of human health. That is one small example of where we think Australia's polices are not contributing terribly well to the sustainability of the region, and it presents real question marks about Australia's motives for what it does in the region.

In our submission we also made a number of reasonably specific recommendations. I know that the committee has been seeking in its deliberations some concrete ideas, and we would be happy to come back and discuss those in more detail. I would now like to pass to my colleague to make a few further introductory comments.

Mr Campbell —I would like to talk about two issues this morning. Firstly, I will briefly refer to the nuclear question and then I would like to talk more broadly about the forests issue in Papua New Guinea. On the nuclear issue, which is a very specific example of Australian policy and how Australian policy is viewed in the Pacific: Australia is a nuclear shipping state, in the sense that we export uranium to Japan and other countries. We provide about 25 per cent of Japan's uranium needs. We also ship nuclear waste from the reactor at Lucas Heights, and we are expecting returns of that waste from France at some stage. All of these shipments pass through the Pacific region.

For years, Pacific island countries who have had a long history of dealing with the impacts of radiation and radiological threat have been protesting against these shipments passing through the region, particularly through the mechanism of the Pacific Island Forum. Australia has continued to move that material through this region. Last year the Pacific Island Forum passed explicit language in their communique opposing nuclear shipments from transiting the Pacific. For the first time in 33 years the communique language explicitly mentioned one member of the forum and explicitly excluded one member of the forum from that provision in the communique, and that was of course Australia, which did not accede to that part of the communique.

This is a clear example of where Australia is out of step with the Pacific island nations. Another example is the upcoming compensation and liability discussions that will be occurring, I believe, this weekend in Nadi in Fiji. Australia, as the loan member of the Pacific Island Forum who supports nuclear shipments through this region, has always tried to undermine the Pacific's position on this issue and to undermine Pacific opposition to the shipments. This became a huge issue at the Pacific Island Forum last year. I think from the perspective of the Pacific many of the countries in this region see Australia as being out of step on this issue and as being somewhat arrogant and neo-colonialist in their view in relation to the nuclear question.

In relation to forests, Greenpeace Australia Pacific has been working in Melanesia for 10 years to save the last remaining rainforests in this region. We are home to the third largest rainforest region in the world, after the Amazon and the Congo. Australia's relationship with Papua New Guinea at this stage does not actually do enough to deal with the corruption that is going on in the forest sector, particularly in Papua New Guinea, or the promotion of ecologically sustainable development. I would draw your attention to some of the recommendations that we have made in our executive summary on this question. We are quite specific about some of the outcomes that we recommend the committee try to implement.

The recommendations include that, in giving aid to PNG, Australia must seek to counter corrupt government practices, particularly those in the forest sector; Australia must promote governance reform and conservation of resources; and, particularly in PNG, emphasis must be placed on building and maintaining institutions of trust and transparency—and we particularly note the construction of an independent commission against corruption, additional capacity in the Ombudsman Commission dedicated to investigating resource exploitation cases and a strengthened Solicitor-General's Office to deal effectively with corruption and non-compliance in forests and land matters. In addition, specifically in relation to forests, we believe that Australia should place emphasis on projects like eco-forestry when prioritising development support, because these support communities.

ACTING CHAIR (Senator Sandy Macdonald) —Has the Australian government engaged in cultivating any eco-forestry projects in the Pacific?

Mr Campbell —Not that I am aware of.

Senator MARSHALL —In terms of those objectives, how do you actually make that happen if the government concerned is not committed to that reform process and strengthening the institutions and removing corruption?

Mr Campbell —On the face of it, the government has said that it is anti corruption and interested in—

Senator MARSHALL —I think all governments say that.

Mr Campbell —Of course they do. I think it is a matter of engaging with them very closely and working through the issues to come to arrangements whereby those sorts of institutions can be built. It may be that you would think about putting conditionalities on loans. I am not sure what your position is in that regard. I think ongoing debate and negotiation with them is hugely important. I guess it takes political will on both sides to implement structures of this nature. I believe Sir Michael Somare has said recently that he would support the building of an ICAC type body in PNG, and I think that is a good step and it should be supported. It is one place where the Australian government could engage. I know that there are issues around the ombudsman's department, for instance, not having enough funding to keep their doors open at times. Those are areas where aid money could be put to enable those sorts of institutions to keep their doors open and to keep them functioning. Maybe it would be better to put more aid into those institutions rather than into some of the projects on the ground. I do not know; I am simply suggesting that that is a discussion for the Australian government and the PNG government, but it is one that has to be entered into.

Today I want to brief you on one clear example where corruption has been a huge issue and has had a major impact on the forests in Papua New Guinea. The project that I am referring to is one that we have been campaigning about for the last couple of years in Papua New Guinea. It is a project called the Kiunga Aimbak Road, which is in the western province of PNG. In 1995 a timber permit was issued for the construction of a road. This timber permit was not legally valid according to the independent review team of the World Bank. The landowner company that signed the timber authority was a company called Paiso, which is an invalid landowner company. They were in fact half owned by the logging company themselves, Concord Pacific. The landowners, the traditional resource owners, never gave prior informed consent for this project to continue. In the time that it has proceeded, the official figures show—and these are not necessarily the real figures—that around $US60 million of timber has been exported from that particular project.

The key thing to remember is that the authority that was given, invalidly or illegally, was to construct a road. That landowner company of two people straightaway gave a contract to a logging company, Concord Pacific, to clear the road. It is basically a logging concession under the guise of road construction. In fact, part of the road where they have started the project has fallen into disrepair and they are logging at the other end of the road. It is 270 kilometres worth of road and they have just extracted all of that resource and built roads off into the bush as well. There was no valid authority, permit or licence given for this road. There were also development promises made to the people, which remain unfulfilled.

An injunction brought by the National Forest Board to stop the road was stalled in the courts between 1999 and 2002 under a whole range of mysterious circumstances. Various politicians in PNG have made different statements at different times about this road, and I will quote some of them. The former Prime Minister of Papua New Guinea said that the project `failed to comply with legal requirements' and that it should never have been granted. The current Chief Secretary has said, `It entails one unscrupulous company apparently illegally securing extensive forest resources'. The secretary of the department of planning has said, `Concord Pacific are an unscrupulous company getting away with it and undermining the state, its agents and its citizens.' This project has gone on now for seven years and it has not been stopped. Yet all of these high-level people in the government have said that there are huge issues and huge questions. The World Bank has questioned it. The government has questioned it. Other bodies have questioned this project, and it still has not been knocked on the head.

Senator MARSHALL —Doesn't that reinforce what I asked you before? If the government is unwilling to reform in terms of transparency, process and corruption, what can we do about it? It is really just an example of the corruption that goes right through the system, isn't it?

Mr Campbell —I do believe that in the Papua New Guinea government and in the parliament there are people who agree with you and me that this is a huge issue and that it needs to be addressed.

Senator SANDY MACDONALD —They are probably the few who are not being paid out of the $60 million.

Mr Campbell —Potentially, yes. In late 2002, a crooked deal was hatched between the director of the forest board, David Nelson, and the bogus landowner company, Paiso—the effect of which was an out of court settlement to overturn the injunction that had been stalled in the courts for three years. So, in essence, a settlement had been made between the company and the forest board without the authority of the board of the forest board. That meant that the project could continue—in fact, it also contained an agreement to pay a large sum of money to the company in damages. The Chief Secretary of the parliament, in a letter regarding the deed of settlement—that is, the out of court settlement—states that the settlement recognised `the Kiunga-Aiambak project as having been deemed legal' and recognised `a phase 2 of the project'—which is about a 640-kilometre extension. It also permits the company to `harvest additional areas' and it allows four kina per cubic metre of `royalties to be paid to the supposed landowner company', and there is a payment to Concord Pacific of up to K150,000 for its court expenses in battling the injunction against the forest authority. We have had more statements, and we have had letters from the Chief Secretary and from the Forest Industries Association. I have got those letters here. I can table them so that they are entered into the evidence of the committee. They show that there was political will in the government to do something about this deed of settlement. At least publicly they were saying that they wanted to do something about it, but to date they have not done anything about it.

To sum up, we are saying that, recently, the Prime Minister told Australian investors and journalists that his government had rejected this particular project. The Chief Secretary has explicitly rejected the deed of settlement, and yet its signing last December will allow the illegal logging to continue in this area, despite landowner opposition. Corruption of this nature undermines the stability of the whole country and, in the case of forestry, allows the sell-off of the country's natural resources to benefit foreign logging companies and a handful of officials at the expense of the many Papua New Guineans who depend on them for their livelihood. I reiterate that we recommend that the Australian government place emphasis on building and maintaining institutions of trust and transparency in PNG, including an ICAC, capacity for the Ombudsman Commission to be dedicated to investigating forest cases and a strengthened Solicitor-General's office to deal effectively with corruption and noncompliance on forest and land matters. Australia should also prioritise projects like eco-forestry when allocating development support.

Senator SANDY MACDONALD —I notice that you have staff in PNG. How successful have they been in engendering public awareness of this in the country?

Mr Campbell —In April last year Greenpeace took direct action in the Western Province with a large load of logs that were coming from the Kiunga Aimbak project down the Fly River. We blocked the loading of those logs onto a transport ship bound for Asia and it became front page news in Papua New Guinea, and the issue of the Kiunga Aimbak project became the key issue at the time. In PNG they also recognise the importance of the Kiunga Aimbak project. I can quote from the letter from the Chief Secretary, where he said that this project has been an `internationally high-profile case which has long undermined the credibility of the organs of state in Papua New Guinea'. So our work there has thrown a huge spotlight on what is going on both domestically and internationally.

Mr Rattenbury —I might add to that as a broader observation that I think there is a frustration amongst the Papua New Guinea population. Certainly in my experience being up there and in speaking with people I have come across this frustration with the corruption and with the failure of elected officials to tackle it. We saw at the election last year, despite the problems with the conduct of the election, that there was a significant turnover of politicians during that electoral cycle and a large number of fresh faces were brought into the parliament. I think there was a real sense amongst the voters of hoping to see some fresh faces. Unfortunately that does not appear to have brought about significant changes in the sense that those who are still in charge have not changed.

Senator SANDY MACDONALD —Like all politics, the players change but the stage remains the same. I suspect that is the case whether you have good governments or bad governments. You make the point in your submission that Australia is a significant player and you say that we are not using our power appropriately enough. You do make some concrete suggestions, but the difficulty we face—this point was made this morning by the chairman—is that we are dealing with sovereign states and the exercise of power even over states for which our aid dollar is supreme for the management of their economies is exceptionally difficult. If there were easy answers, we would have found them already. Do you have any concrete suggestions, particularly with projects or the management of projects in Papua New Guinea which could be done in different ways?

Mr Rattenbury —I could make some general observations about the Pacific and then we might home in on Papua New Guinea. One of the concerns we have is the inconsistency that manifests itself in the way Australia operates in the region. I point to an example by way of solution, I suppose. When Australia came to an arrangement with Nauru last year about the detention centres, ignoring the politics of that issue, part of the compensation package, if you like, was the provision of $5 million of diesel fuel. I mentioned before that these economies are vulnerable as micro-economies in a global world. We would suggest that, rather than simply providing more diesel to run the generators that were sent from Australia and more fuel to come from Australia, Australia should be investing in, and helping these governments set up, alternative sources of energy so that they are not reliant on diesel imports the entire time. That might be small-scale wind farming, biofuel type facilities on the small islands—there is a host of ideas there. Those sorts of policies would help break the cycle of dependency. I think there is also an irony around Australia providing fossil fuels as a means of aid to countries that are at the frontline of sea level rise and global climate change. I would paint that as a specific solution-based example relating to the question you asked.

CHAIR —I think you said `specific solution', not `Pacific solution'!

Mr Rattenbury —Yes, let the record show that clearly.

Mr Campbell —In terms of practical suggestions from the ground projects, I was speaking with one of my colleagues in PNG this morning. She was saying that the perception in PNG is that the money goes in and is paid to Australian consultants to implement projects on the ground which are largely run by Australian companies. There is a feeling that the money does not trickle down or get to rural people, and it does not give them opportunities and options. Forests are one of the key issues because, as was pointed out this morning, the situation in PNG is that the people own 98 per cent of the land and it is held in customary tenure. It is enshrined in the Forestry Act that any timber authority which is issued must have the prior informed consent of the landowners. The fact is that that does not happen. The land is stolen from the people. There is no informed consent, they are not given information, and they are not empowered to make their own decisions—rights which are protected in the Constitution and the Forestry Act.

Australian project money that is going in might be dealing with issues such as eco-forestry or sustainable timber projects. You could have a situation where the money is put in to work very closely with the communities rather than to provide infrastructure that might support the inflow of multinational money from Malaysian logging companies. There is a way of reframing this stuff so it looks at and speaks to the rights of the people—the common and rural people who are being exploited, who are being undermined, who have no say and who have no voice. That kind of capacity building could bring a level of legitimacy to the Australian aid packages. At the same time, it could bring solutions to the issues of governance and corruption, and it could protect the forests and the communities. That would be a great thing.

Senator MARSHALL —What are your views on the level of logging that is going on? I think the submissions yesterday said—and I want to be careful not to misquote or misrepresent them—that there is effectively 16 years worth of logging left on PNG at the current rate but, in effect, given the costs of the logging, the quality of the timber and what it is mainly used for now, the market is acting as a disincentive to logging. While this was not their conclusion, it is a conclusion people may come to—that the market itself is going to slow the logging and the depletion of that resource, which, if we accept that, will probably be the first time that the market will save the environment rather than destroy it. What is your view on that?

Mr Campbell —I think that the exports of timber from PNG in the last couple of years have dropped and less volume has been leaving the country, but there is a range of reasons for that. One reason has been the fact that there has been a moratorium on the allocation of new concessions in the country for a year or two.

Senator MARSHALL —Unless they are roads.

Mr Campbell —Exactly. But the allocation of new concessions has not occurred, and the areas that they are in are the depleted ones, so there is not the same amount of resource coming out of those concessions. I think there have also been some issues in terms of competition about the log prices and so forth internationally. There has also been some effective campaigning work in PNG to stop new concessions from being opened up. But our real fear is that we are at a point in history where that could all turn around, because East and West New Britain are gone in terms of the resources there. About 35 per cent of the resource in Western Province is gone. Only a discrete amount there is actually left. The logging companies are very actively trying to have those concessions allocated and to get into the new resource areas. They have a big investment on the ground there. They want to see those areas opened up so they can start servicing the markets that they have. If they thought that the market was dropping out, I do not think they would be so aggressive in the attempts that they are making at the moment to get to the new concession areas. There are a couple of things that are holding the thing in the balance at the moment, but it could just as easily go the other way.

Senator MARSHALL —Given that you have said that it is one of the last remaining significant rainforests in the world, what is the general environmental impact of using that resource? If it potentially has 16 years left, what will be the consequences of losing that?

Mr Campbell —I believe that six per cent of the world's biodiversity is in that forest. We have to remember that not only the forests and biodiversity will go, but the communities, the culture and so many other things will be lost if the encroachment continues. There are also huge human rights issues in the region which are not being addressed. In terms of impact, there are many issues and they are extremely urgent.

Senator MARSHALL —I think the submissions yesterday indicated that, at the current level of logging, there is six years of logging left on the Solomon Islands. Would that be accurate?

Mr Campbell —I am not across the Solomons in such detail, but I would not be surprised if that were the case, because it is not a big country and the loggers have been active there for a long time.

Senator MARSHALL —What do you know about the storing of nuclear waste from Taiwan in the Solomons?

Mr Campbell —I believe there were discussions between the Solomon Islands government and the Taiwanese government. I have not heard anything in recent times about an agreement being closed and that being about to occur, but I know that they were talking.

Mr Rattenbury —It does, to an extent, highlight the vulnerability of some of these small states, in the sense that they do have limited income opportunities so, when something such as that comes along, they tend to jump at it quite quickly. There was a known incident last year with, I think, not just nuclear waste but other hazardous waste being imported into the Solomon Islands from Taiwan in contravention of various treaties such as the Basel convention on the transhipment of hazardous waste. That comes back to that point of vulnerability that we made in our submission.

CHAIR —Yesterday, in taking evidence on fishing and fish resource management in the Pacific broadly, a couple of points were made that I invite you to comment on. One was that it is necessary to have a stronger and more effectively observed international fishing code for the Pacific which puts to the forefront the interests of the Pacific island countries rather than the interests of international fishing operations. With respect to inshore fishing, the observation was made that, like a lot of developing countries, it is not so much the law of a country that is the problem but the implementation and policing of those laws and, the further you get from the main centres of population, the harder that is. The proposition was put to us that the policy here should be boldly placed and, rather than try and police those inshore fishing codes centrally, that responsibility should be devolved directly to the local communities, and they should be empowered to set and regulate their catch on the basis that they are more likely to be sensitive to the restoration of the supply than someone who is not in the immediate vicinity. Do you have any comment on those propositions?

Mr Rattenbury —Certainly. We made specific reference to the international codes—the first point that you mentioned—in our submission. Let me backtrack slightly. The support of fisheries management in the region has been one thing that Australia has worked at quite successfully with the region, and I think Australia's support for the Forum Fisheries Agency has generally been considered a very positive thing. It has been quite effective in setting up a centralised vessel monitoring system, which has been quite effective in dealing with the monitoring and policing of the activities of distant water fishing nations operating in the Pacific. That is a positive observation of where Australia has, in our view, played its role in the Pacific very well. Over the last few years, there have been some quite protracted negotiations on what is colloquially called the MHLC convention. Its full name is the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean. You can understand why it has a short name.

CHAIR —It is basically tuna, isn't it?

Mr Rattenbury —Essentially it is the tuna agreement. That was going along quite well and the Pacific states are very keen on it. Unfortunately Japan, as a key distant water fishing nation, has thrown down the gauntlet in the final throes of bringing this convention to agreement and refused to agree to a number of the conditions. We have specifically urged the Australian government to show great solidarity with the Pacific in squeezing the Japanese to come on board because, in our view and in the view of the Pacific governments, this has created a fairer allocation system for receiving returns for the removal of those fish stocks.

CHAIR —Before you go to the second part of my question, this morning it was asserted in evidence to us that untied aid that was not required to be accounted for from Taiwan and Japan to the Solomon Islands may have been instrumental—I think the assertion was that it was instrumental—in causing the Solomon Islands, as part of the International Whaling Convention, to abstain from the vote that would have been adverse to Japan had it been cast. In essence this assertion is made against the broader background of evidence we have heard that, while the nations of the Pacific might all be vulnerable microeconomies, they all have the same vote as the United States in the UN—one vote each. As a consequence some of the Pacific and North Asian powers—and not exclusively them; the allegation is made about the EU as well—see that they can harvest UN votes. To put it another way, it is asserted that a tradable good for Pacific island countries is to put their UN vote in hock to the superpowers in order to attract aid and economic support, and that that has crowded out Australian influence. That is the broad canvas. The particular allegation made here is that this occurred with respect to the Whaling Commission. I know that Greenpeace follows issues of whaling closely. Do you have any evidence that the assertion is right or wrong and, if so, what is it?

Mr Rattenbury —I would have to take part of that on notice. We have conducted considerable research, specifically on the question of the International Whaling Commission, on what we have described as Japanese vote buying. Certainly we saw some evidence here in Australia when the head of the Japanese fisheries agency was on an Australian current affairs program—it might have been Four Corners, and this is where I would like to get the specifics from to provide to you later—being quite open about the way Japan used its foreign aid assistance to, as you say, perhaps harvest those votes of support in some of those international fora. We have done considerable research on that and we would be happy to provide that to you.

CHAIR —My main interest in asking the question is that this assertion was made from a reputable quarter but it was unsupported by fact. If there is anything on this in the nature of hard evidence that you can provide, we would be interested in hearing it.

Mr Rattenbury —I will have to go back and check with our local experts. We have certainly seen circumstances in the Caribbean where government ministers have resigned from their portfolios in response to those sorts of pressures when their government has done those things. On the Solomons I will have to check. I draw your attention, however, to the report we attached to our submission as an annex called Turning the tide in which we have explored some of these issues. While you were out of the room we spoke about the issue of nuclear shipments through the region. There was a Japanese fund of $10 million put on the table at one point about which, again, the assertion was that it was to buy the silence of the Pacific island nations who were objecting to the shipments of nuclear material through the region to Japan. So there are examples around.

CHAIR —And your comments on the question of inshore fisheries and the policing of regulations?

Mr Rattenbury —It is not an area in which we have done a great deal of work, so I would prefer not to make a comment.

CHAIR —One of the other things that has been put to us—and this is something that we have to turn our mind to; it is a bit of a vexed question but I would like any observations you might have about it—is that there are obviously two economies residing alongside each other in the developing countries of the Pacific and in Papua New Guinea: the formal orthodox economy, which is what have come to mean by `economy', and the subsistence economy. This argument goes on that, if there is a downturn in the orthodox economy, that does not mean to say that the country is impoverished because a lot of the citizens of these countries are used to living in a subsistence economy and can live, as one description put it, in an `affluent subsistence economy'. But it is obvious from the evidence that, while that may be an option, it may not be the preferred choice, and even those who may prefer the subsistence economy existence do aspire to modern health and education access.

The contradiction here is that if you have no taxable base, as you do not have in a subsistence economy, there is no way for a government to raise the amount of revenue necessary to provide modern health and education and therefore you are caught in this situation where inevitably—so the argument goes—these countries will turn more and more to the types of economic growth policies that we in Australia are familiar with, leading to a cultural change from subsistence to a more orthodox economic structure, and that our aid program should anticipate and reinforce that move in a way sensitive to local needs. That is to say, we should not push it but we should reinforce the impetus as it arises at a local level and help these countries transfer to a more economically orthodox structure. I am sorry that I have laboured this point; I have tried to make it simple but I have made it complicated. Do you have a view about the strategy behind our aid program being directed at those goals? If you do not, that is fine.

Mr Rattenbury —You have highlighted the fact that one of the really difficult questions is that transition. That is where one of our real concerns lies in something like the forestry issue: the forests are much more than just a habitat for endangered species; they are also a major resource for the people who live in Papua New Guinea. That is where food, water, housing, fuel—all these important things—come from. Certainly a large scale liquidation of the forests delivers little economic benefit to the local or traditional landowners and, through the problem of illegal logging—through understatement of volumes or of income received—the government in a formal sense does not get the tax revenue that is warranted from the exploitation of those resources.

CHAIR —What is behind my question is that a classic growth scenario for a developing country is to improve its return and competency in exploiting natural resources—in that I include mining—managing and exploiting its fishing industry, opening up its borders to tourism and using its comparative advantage on cheap labour to capture an international market. That is a classic approach. Some of that approach conflicts with the objectives of Greenpeace. How do you manage to address both these questions?

Mr Rattenbury —That is where we have homed in on something like ecoforestry as perhaps meeting both those goals. It is a system which enables the forests to be harvested, but in a way that does not produce clear scale industrial exploitation. Because the timber is usually exported at a premium, due to the willingness of consumers in Western markets generally to pay a premium knowing that their timber has come from a sustainable source, you are getting a cash income but you are also maintaining the capacity to have a traditional lifestyle. So you are working through that transition phase in enabling the exploitation of the natural resources but you are also moving towards a cash economy.

Mr Campbell —Greenpeace globally supports the Forest Stewardship Council certification system. That is a certification scheme that recognises, for instance, Indigenous rights and has a whole range of criteria by which a particular forestry area can be certified, which would include revenue streams being paid appropriately at fair prices et cetera and the sustainable logging of the areas, but in a way which does not impact on the communities and forests like destructive industrial logging does. PNG is on the verge of having an FSC system in place and, in the next year or two, will be moving towards having concessions or companies being able to step up and have their operations certified under the FSC. Given that, one of the clear steps the Australian government could take is, for instance, to say, `We'll have a procurement policy in relation to tropical timbers. We will only allow FSC timber to be used in or imported into Australia.' That could be a major economic boon for PNG, but it would have to be tightly controlled under the FSC system worldwide.

Mr Rattenbury —Fisheries are an area where Australia can play a role without impinging on the sovereignty of these nations. For the last five to six years in Papua New Guinea, the European Union has funded a company called SGS, which is essentially a Swiss auditing company which has attempted to track the number of logs being exported out of PNG and make sure that the right royalties are paid. I mentioned that Australia has assisted the Forum Fisheries Agency with monitoring so that distant water fishing nations take and are paid for the right amount of fish. These are the sorts of ways Australia can perhaps play a concrete and active role in assisting that transition from a subsistence to what you describe as a formal or conventional economy.

CHAIR —Thank you.

[2.24 p.m.]