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Thursday, 16 August 2012
Page: 8904


Mr TEHAN (Wannon) (12:13): As I have written publicly in two opinion pieces, one in the Herald Suntitled 'Greens can't see the wood from the trees' and the other in the Australian, 'Policy tainted by Greens agenda', I believe this is bad legislation, supported by bad policy, and should be opposed. There are five main reasons I think this bill should be opposed, but there are many more I could go into detail on. The first is that it sets a dangerous precedent. The second is that it will increase costs for Australian business and achieve nothing.

The third is that it is already damaging our trade relations, in particular our trade relations with our near neighbours. Fourth, it is the Gillard government's way of further embedding Bob Brown's legacy in Canberra. We have seen the damage that has done to Tasmania. Well, this is Bob Brown coming to Canberra and coming to our trade policy. And the last reason is that there is a better way to deal with this issue. There is an alternative which would not cause the damage to our trading relationships that this bill will, which would not cause our businesses to have extra costs and which would not embed Bob Brown's legacy here in Canberra. And that is the approach we should take.

As we would with any crime, all of us in this place would like to see illegal logging stopped. But this is the wrong way to go about it. This legislation embeds the principle that the Australian government will restrict imports if other countries do not apply our environmental standards. It is unilateral in nature. I warn all members of this House that once we head down this path other countries will be emboldened to use such laws against Australia. And who stands to lose the most if that occurs? It is our agricultural exporters.

I call on the member for Lyne and the member for New England and say to them that this is an issue that you should look extremely closely at and on which you should stand up for your electorates. In the longer term this bill, while it may make us feel a little bit better, will harm especially our rural industries. I hope they are looking at this closely—looking at all the arguments for and against, looking at all the evidence that has been presented to the committees that have looked into this bill—and are thinking about whether they should support it or not. If they did that, I would find it very hard indeed to see how they could support this piece of legislation. I would point them in particular to the last hearing held into this bill, which was of the trade subcommittee. Three compelling arguments were presented to that subcommittee as to why this bill should be opposed.

As soon as it enters into law, the Illegal Logging Prohibition Bill will cause uncertainty in Australia's timber trade, because importers will not know what the precise impact of the legislation will be until the regulations are enacted. It will basically chill timber trade between Australia and its regional partners, and that will cause those countries to look at their trading relationship with Australia. We heard evidence that the Gillard government's consultation process throughout its development and implementation of this bill has been flawed. One of the key criteria for implementing this legislation was to do the consultation properly. If the consultation had been done properly, we would not be here today; this legislation would not be before the House. But the government itself admitted that it has been making up its consultative approach as it goes along. It said:

As the more detailed process of developing the regulations is now underway, more in-depth consultation with stakeholders is being and will be undertaken to assist their development and to ensure they operate as intended.

So the evidence to the trade subcommittee from the government itself is that its consultation has been nothing short of a debacle and that it is still trying to work out how it is going to go about it, who it is going to include and what the basis for doing that consultation will be.

The second thing that became very clear from the trade subcommittee was that the content of the bill and the way it has been handled has already caused harm to our trading relationships and, if passed, the bill will lead to more harm occurring. The Indonesian government, already irritated by the way Australia placed a temporary ban on live cattle exports, made clear in its submission:

The implementation of the Bill is also likely to undermine the development of trade between Indonesia and Australia based on our respective mutual interests.

In this respect, reference is made to the recent efforts of the government of Indonesia to accommodate and resolve the problem faced by Australia during the self-imposed ban on beef exports to Indonesia. As someone who was previously a diplomat, I know that you need to read this language and see what the Indonesians are saying. They are saying to us: 'Australia, we are your largest beef export market. We are your largest wheat export market. And what you are doing by introducing this piece of legislation is jeopardising that.' That is what the Indonesians are saying, and we should respect them for saying it—for having the courage to tell us what this bill is all about—and we should heed that warning. We have already done irreparable damage to our trading relationship with Indonesia with the live cattle fiasco and we are trying to repair that damage.

Yet, here we are, only months down the track from that decision, and we are going to do something which is going to irritate—this is putting it mildly—the Indonesians again. Have we not listened and learned from what the live cattle debacle did to the domestic industry in Australia? Do we want to do worse again to our beef and wheat exporters and our other agricultural industries? We need to learn, and we are not learning by this piece of legislation.

The third issue about this piece of legislation—once gain, there was evidence presented on this—is that it is unsound in international law. Given that there were divided legal opinions on the bill surviving legal challenge in the WTO, why would we be looking to go down this path? As a country with credentials as an upholder of the rules and regulations of the World Trade Organisation, why would we jeopardise that reputation by heading down this path when there is divided legal opinion on this?

In its submission to the trade subcommittee the government of Canada noted this and made it very clear to Australia that we should think again about heading down this path. The government of Canada said:

While Canada has concerns related to some of the potential trade implications of the Bill, Canada is pleased that the Government of Australia is committed to ensuring that the Bill and associated regulations are consistent with international trade obligations, that they treat importers and domestic processors of timber equally, and that they are not trade distortive.

So, once again in diplomatic language, the Canadian government is telling us: 'You have serious WTO commitments which you need to honour. And you need to look at this closely with regards to those commitments.' 'And if there is divided legal opinion on whether you are doing the right thing,' the Canadian government is very politely telling us, 'you should think again.'

This is something which Papua New Guinea made clear in that same subcommittee hearing. The Papua New Guinea Forest Industries Association pointed out that the government of Indonesia has already foreshadowed the possibility that the bill will not meet WTO requirements and will remain challengeable under the WTO.

Expert legal opinion by Professor Andrew Mitchell of Melbourne University indicated that the agreement would pose problems with WTO compliance as well as compliance with the ASEAN-Australia-New Zealand Free Trade Agreement.

The evidence is there as to why we should pull back from this bill. When it comes to our domestic industry we have to remember that this bill makes it a criminal offence to import illegal timber. I draw the House's attention to the recent hearings in the US Congress on the Lacey Act, which, in 2008, included illegal logging under its remit, and to what that Lacey Act has done to small businesses in the US who have unwittingly imported illegal products into that country.

In particular there was testimony from a small US businessman who ended up in jail as a result of, through no fault of his own, importing illegal product into the US. The testimony is compelling. His business was destroyed. His marriage was destroyed. He is now on a campaign to point out the absolute dangers of unilateral pieces of legislation like the Lacey Act—and like this Illegal Logging Prohibition Bill—and the impacts that they can unwittingly have, especially on small business people in countries like the US and Australia.

I would hope that the trade minister would see the damage that this piece of legislation is going to do to our trading relations, especially in Asia. I would hope that he would see the principle that has been embedded in our trade policy because of this bill. I would appeal to him to remember his time with the Hawke and Keating governments and his boasting of what that period of Labor government did to improving our trade principles and our trade record, and say to him, 'Pull this legislation before it's too late.'

I also appeal to the member for Lyne and the member for New England to look very closely at this bill and think about their electorates and oppose it. It is bad policy. It is bad legislation. There is a much better way. We can liaise and cooperate with the countries where illegal logging is taking place. We can provide them with assistance. We can put the certification processes in place to help them. We can encourage them. And we can do that in a way which will fix illegal logging and will remain true to our trade principles.