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Tuesday, 5 February 2013
Page: 99

Mr RUDDOCK (Berowra) (20:54): I came to the debate on the International Fund for Agricultural Development Amendment Bill largely without any agenda and with little knowledge of the subject matter, and I am persuaded by a different view from that taken by the member for Wakefield. I first emphasise, as the Deputy Leader of the Opposition and member for Curtin did in her remarks, that we support the need for enhanced international responses to food security issues in developing countries. This is not an area in which we are opposed to proper and responsible expenditure. We think our skills and knowledge in agriculture are uniquely relevant to solving many problems with food security in the developing world, but we believe the money must be spent well.

While it is important to note—and the member for Wakefield made mention of this—that IFAD in its funding arrangements of the past did not place much emphasis on funding developments in this part of the world, Australia has nevertheless taken an interest in addressing food security questions in other parts of the developing world such as Africa and that sometimes we have been particularly well-placed to do so. As a member of the Foreign Affairs, Defence and Trade Committee I went to Africa and we visited some projects in Ghana involving Australian aid, and what impressed me was that we were able to see works of the CSIRO, who had developed specific programs for dryland farming. These were regions where dryland farming was unique and it was a matter that had to be addressed, and Australia was in a particularly advantageous position—having similar difficult areas in which to farm—to share that knowledge and expertise.

As far as the opposition is concerned this is not a matter of ignoring food security in developing countries. Our view is that money must be spent well and it must be spent to achieve the best possible outcome in areas in which we choose to target our aid. Sometimes there are differences about targeting. I am one of those who thinks that Australia ought to be targeting more in our region, and I think Europe ought to be targeting more in Africa. North America ought to be targeting more in South and Central America. I think we have particular responsibilities in the Pacific and South-East Asia. We are unique in being able to pursue programs in this part of the world, and we have seen a shift in that emphasis under this government.

One of the points I note is that this is a government decision. The member for Wakefield in his observations put it on AusAID and suggested that this was their initiative. I am not sitting in the government, so I do not know the processes, and I am not sure the member for Wakefield knows the processes. However, I suspect that professional public servants, doing their job and having been asked by the government to support a decision that it wanted, would find reasons for taking the decision. That is what I suspect—professional public servants advancing arguments on behalf of the government of the day. I believe that the government of the day is in a position to rethink this issue. There is $120 million being proposed as an aid expenditure priority at a time when other money is being allocated to building detention centres as part of Australia's aid program. There are issues of priority that this government is addressing, and money taken from aid programs—the government will not tell us precisely where from—is now being spent on immigration detention issues offshore. It is a very important point to note.

I will go through some of the reasons that the decision to withdraw from IFAD was taken in 2004. It was a proper decision because we saw limited relevance in the priorities that IFAD had established, and South-East Asia and the Pacific were not part of its agenda.

We saw a lack of comparative advantage in focus, and we saw shortcomings in management. It seems to me that, if we are to rejoin the fund and spend a significant amount of money, those concerns should have been fully addressed. I do not believe proof has been produced that these problems have been solved.

AusAID officials appeared before the committee, as mentioned by the member for Wakefield, on 25 October, and I asked them this question in relation to IFAD's management:

Do you believe all of those concerns have been addressed?

The AusAID representative said:

I believe that the concerns have been well documented and that we are satisfied that our concerns have been heard by IFAD and substantially acted upon.

I emphasise that: 'substantially acted upon'—not wholly acted upon, just substantially acted upon. They continued:

As per our previous comments, they are not all the way there yet but they are making progress …

My view is that I will look at it when they have progressed it to finality. I asked if they could quantify the progress that has been made, and AusAID said no.

The April 2011 review of Australia's engagement with IFAD identified ongoing challenges for the organisation in terms of human resources and financial management. The report said:

… IFAD is benchmarked worse than peers for some aspects of financial management and administration.

This is AusAID's own review. It also states that, according to the Multilateral Development Banks' Common Performance Assessment System report of 2008:

… IFAD had the lowest disbursement ratio and one of the less satisfactory variances between planned and actual project duration.

The United Kingdom, in its 2011 Multilateral aid review, stated that IFAD's organisational strengths were 'satisfactory', noting high administration costs and the need to improve project efficiency.

As mentioned by the member for Curtin, allegations of fraud and corruption received by IFAD's Office of Audit and Oversight are up from five in 2004, when these matters were being looked at closely, to 41: 25 against external staff, 13 against IFAD staff and three against both external and IFAD staff. Staff misconduct cases involved harassment, breaches of confidentiality, recruitment irregularities and conflicts of interest, with external activities and other fraud on the part of companies and project staff. At the same time, the Office of Audit and Oversight reduced staff numbers.

What I found particularly fascinating was an article by John Phillips entitled 'IFAD chief in expenses furore'. It made the following points:

Felix Kanayo Nwanze, the President of the International Fund for Agricultural Development (IFAD) has instituted spending cuts at the U.N. agency worth an estimated dlrs 2.5 million but has resisted diplomatic efforts to curb his extraordinary personal expenses including rental of a luxurious villa complex on the exclusive Appia Antica, senior officials say.

As Mr Nwanze prepares to present IFAD's 2011 Rural Poverty Report at Chatham House in London in December, senior U.N. officials have expressed concern over the cost of his sprawling Roman mansion set in two hectares of manicured lawns and parkland featuring a swimming pool, gymnasium, soccer pitch and basketball court and garage housing the president's two black BMWs, a jeep and a limousine, with diplomatic license plates.

I could go on; it is worth reading. This is the way in which those who are advantaged in this organisation have looked after themselves. But AusAID, when I asked, 'Have there been any allegations of corruption within the fund,' replied:

Not that we are aware of.

'Not that we are aware of.'

IFAD's 2011 annual report on investigation and anticorruption activitiesstated:

The increased volume of allegations … with the reduced staffing … led to a very high investigation caseload of 59 active cases in 2011 (compared to 49 active cases in 2010 and 33 active cases in 2009).

So the allegations are increasing, but the number of staff looking at these matters is down. The UK's Multilateral aid reviewreport concluded that the likelihood of positive change within IFAD was 'uncertain', saying:

IFAD has a relatively new top management team and although commitment is clear, it is too early to judge impact.

So I think there are very substantial reasons that we ought not to be in front of the pack. The member for Curtin made the point that, when you see that the United States and the United Kingdom are contributing less than we are being asked to contribute and that New Zealand is not involved in these matters all, you have to ask yourself: why is there a hurry to get on board again? The committee concluded that the move to rejoin IFAD was not because of any other interests; it was not related to our bid for a seat on the UN Security Council. The committee came to that view. The AusAID officials denied it was linked—and I think that is probably right; they do the right thing by the government of the day.

What I think is particularly germane to these discussions today and ought to influence people in relation to this matter were the comments by the member for Wakefield, because he said in his observations—notwithstanding the comments made in the dissenting report and by me and by the member for Curtin today—that we should be rejoining this organisation now in order to increase our 'influence and profile'. He did not explain what 'influence and profile' meant, but I think it is not unreasonable to read into those remarks that this is about the Australian government, which wants to have a much larger role internationally, increasing its influence and profile.

Quite frankly, I do not believe Australian taxpayers' funds should be treated in such a cavalier way. When our budgets are under as much pressure as we are being told they are under, to find the funds to re-join an organisation where all the issues have not been fully dealt with—and we have been told that by officials—just to increase our influence and profile I think is a very questionable decision. I would suggest, even at this late stage as the government is planning for a budget, that if they want to put this off for a while it would not be out of character with some of the other decisions they are going to have to take. It would not be unreasonable, and I do not think the Australian public would see it as being unreasonable.