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Monday, 4 June 1984
Page: 2426


Senator ARCHER(4.02) —At the hearing of Estimates Committee E on 3 May I raised the question of the operation and sale, or non-sale as the case turned out to be, of the business enterprise known as P.T. Indomilk, in which the Australian dairy industry, through the Australian Dairy Corporation, had a 50 per cent interest. Subsequently I asked five questions. They did not go into the Hansard at the time; they were transmitted to the Department. I seek leave to incorporate the questions and the answers into Hansard.

Leave granted.

The questions and answers read as follows-

Australian Senate Canberra, A.C.T.

4 May 1984

To: Mr M. G. D. Williams,

Acting First Assistant Secretary,

Management and Foreign Services Division

From: Senator K. W. Sibraa,

Chairman,

Senate Estimates Committee E.

RE: FOREIGN AFFAIRS ESTIMATES

To follow up questions of Senator Archer relative to P. T. Indomilk and the operation of the company in Indonesia, may the Committee be advised as follows:

1. Was the Ambassador given specific directions from the Federal Government as to the retention or disposal of the Australian interest;

2. Did that include a preference as to who may have been the more or less acceptable purchaser?

3. Did the Ambassador (or any other officer of Foreign Affairs) have any discussion directly with the Indonesian Government or other Indonesian interests ?

4. Over what period have negotiations been in progress?

5. Have the discussions been regarded as satisfactory by Foreign Affairs?

Department of Foreign Affairs Canberra, A.C.T. 2600

23 May 1984

Senator K. W. Sibraa,

Chairman,

Senate Estimates Committee E,

Parliament House,

Canberra, A.C.T. 2600

Dear Senator Sibraa,

I refer to your letter of 4 May 1984 following up on questions put by Senator Archer relevant to P. T. Indomilk and its operations in Indonesia.

As you may be aware, the Senate Standing Committee on Finance and Government Operations has recently conducted hearings into the proposed sale of the Australian interest in P. T. Indomilk. In the context of that Inquiry Mr Hayden wrote to Senator John Coates, Chairman of the Standing Committee. Mr Hayden requested the Committee to consider certain information and documents at 'in camera' sessions because of the sensitivity of that information and these documents. I am constrained in the answer I may give to the five questions you have put on behalf of Senator Archer by the course of action adopted by Mr Hayden and the fact that the Standing Committee acceded to his request.

Nevertheless, I can provide the following information:

Question 1. No, the Australian Embassy in Jakarta has never been given specific direction by the Federal Government as to the retention or disposal of the Australian interest in P. T. Indomilk;

Question 2. No. See my answer to question 1;

Question 3. The Australian Embassy in the normal course of its business in Jakarta has had contact with the Indonesia authorities on the matter. The primary purpose of these discussions was to ascertain any Indonesian Government requirements which might affect the disposal of P. T. Indomilk;

Question 4. Discussion between the Australian and Indonesian Governments connected with the sale of P. T. Indomilk has taken place in the course of normal diplomatic exchanges. These contacts followed advice from the Australian Dairy Corporation to Foreign Affairs Officers of the unsolicited offer of September 1981 by the Indonesian company, P. T. Kebun Bunga to buy the Australian interest in P. T. Indomilk. Negotiations with Indonesian interests relating to the proposed sale have been the responsibility of the Australian Dairy Corporation.

Question 5. So far as the Department of Foreign Affairs is concerned all discussions it has had with Indonesian authorities have been amicable. The present Australian government, soon after coming to office, ordered a review of events relating to the proposed sale and as a result Mr Hayden during a visit to Indonesia in early 1984 requested the Indonesian Government to make public its policy on a sale. The Indonesian Government, to our knowledge, has not yet done so.

Yours sincerely,

M. G. D. WILLIAMS

A/g First Assistant Secretary Management and Foreign Services Division


Senator ARCHER —The questions I asked were produced with a view to determining whether the Department of Foreign Affairs had been involved in any way in negotiations with the Indonesian Government or Indonesian interests which may have affected in any way the outcome of negotiations between the Australian Dairy Corporation and a purchaser at the time. Having asked fairly specific questions and put them in writing I received equally specific answers which I doubt answer the questions which I raised in total, although they may well cover the word by word questions that I asked. Regrettably, it will be necessary for me to go through these questions again. I asked:

Was the Ambassador given specific directions from the Federal Government as to the retention or disposal of the Australian interest;

The answer I received was:

No, the Australian Embassy in Jakarta has never been given specific directions . . .

The answer used my exact words. What I really wanted to know was whether there had been any discussions whereby there was some involvement between the Australian Government and the Indonesian Government or other representatives which may have had at some time some effect on the negotiations that were in force. There is a lot of difference between answering what I asked as specific directions and saying: 'Did anything transpire which may have affected the ultimate result?' That is really what it is all about. I also asked whether the ambassador had had any discussions directly with the Indonesian Government. The reply I received was:

The Australian Embassy in the normal course of its business in Jakarta has had contact with the Indonesian authorities on the matter.

That does not tell me whether they were, in fact, in the position of discussing some messages that had come from Australia with the Indonesians or whether they were transmitting messages from the Indonesians to the Australian Government through the Department of Foreign Affairs, the Australian Dairy Corporation or the Department of Primary Industry. The answers that I received by way of letter were carefully worded. One answer stated:

So far as the Department of Foreign Affairs is concerned all discussions it has had with Indonesian authorities have been amicable.

The Department said that it had received no specific instructions. I regret that we have reached the stage where that information does not fit in with other information that is now floating about. The first question I asked on 3 May was answered by Mr Henderson in the following terms:

. . . I know the Ambassador in Jakarta was very much involved in discussion within the Embassy on the handling of that issue.

From the answers that I received it would appear that the position was very oblique in every way. During the consideration of the Department of Primary Industry by the Committee of the Whole a few days ago I read to the Minister for Recources and Energy, Senator Walsh, a statement that was made by the Minister for Primary Industry, Mr Kerin, on 18 October 1982 in which he said:

Mr Nixon's actions in advising the ADC not to proceed with the sale of the half -share in P.T. Indomilk to P.T.K.B. was ill advised. It was not up to Mr Nixon to intervene in a commercial transation.

We have Mr Henderson saying that yes, there was considerable intervention; we have a report that Mr Kerin gave some time ago saying yes, it was unwise and ill advised of the then Minister for Primary Industry, Mr Nixon, to be involved, and then we have Senator Walsh who, as he explained at great length, was considerably involved in the issue in 1982, saying:

I believe it was acknowledged by Mr Nixon that he had in fact intervened in the sense that he had asked or directed the Australian Dairy Corporation not to proceed with the sale.

Further, he went on to say:

Mr Nixon was criticised at the time by Mr Kerin-quite properly in my view-for having intervened in that way.

There we have the first of the information coming from Mr Henderson; the second from Mr Kerin, the present Minister for Primary Industry; and, thirdly, Senator Walsh who was actively engaged in this enterprise at the time in 1982 and who still represents the Minister for Primary Industry in this chamber. Yet the report that I received from the Department of Foreign Affairs indicates that the Department really had nothing to do with the matter at all. At this stage I would like to be told whether the Department had anything to do with it or whether it had nothing to do with it. I wish to know whether the Department's actions might have affected the negotiations that were currently going on or whether it could be taken that such negotiations may have influenced things in any way whatsoever.