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Thursday, 20 November 1986
Page: 2611


Senator SIBRAA —On behalf of the Joint Committee on Foreign Affairs and Defence, I present the report `Australia and the Philippines', together with the transcript of evidence and extracts from the minutes of proceedings.

Ordered that the report be printed.


Senator SIBRAA —by leave-I move:

That the Senate take note of the report.

The report `Australia and the Philippines' of the Joint Committee on Foreign Affairs and Defence represents a timely and valuable contribution to the Australia-Philippines bilateral relationship by the Australian Parliament. The decision to conduct such an inquiry was based on several considerations, including the Philippines's location in a region of primary strategic, political and economic interest to Australia, its membership of the Association of South East Asian Nations and its alliance with the United States of America. A further consideration was the growing public concern in Australia about Australia's policies towards the Philippines in general; and the Marcos regime in particular.

Soon after the Committee commenced its program of public hearings in February 1986, the political landscape in the Philippines changed dramatically. After being declared winner of the presidential election held on 7 February, Marcos's position was rapidly eroded by widespread reports of vote buying, multiple voting, mass disenfranchisement and other forms of fraud. The election was condemned both in the Philippines and by the international community. I would note here that Senator Hill, Deputy Chairman of the Sub-Committee, participated in an international observer group at those elections and the Committee welcomed his contribution when he returned.

In an extraordinary sequence of events, Defence Minister Enrile and General Ramos announced that they had broken with Marcos and could no longer accept his authority as President. Their defection quickly attracted the support of the armed forces. Simultaneously, the church and opposition groups acted swiftly to mobilise `people's power' in the streets of Manila to support the cause of the rebels.

Within a few days, Marcos left for exile in the United States once it was clear that he had lost control of the armed forces and that the United States Administration would no longer support his presidency. Again, the Committee was fortunate that Senator Lugar, Chairman of the United States of America Senate Foreign Relations Committee, who played a key role in these events, was able to brief the Joint Foreign Affairs and Defence Committee. On the same day as Marcos left, Corazon Aquino was sworn in as President and established a new government. I now turn to the major findings of the report.

The Aquino Government-Challenges and Prospects

The problems facing the Aquino Government are daunting in their number, scale and complexity. After 20 years in office, Marcos left the Philippines a legacy of decayed and corrupt political institutions, an economy in crisis, an active communist insurgency and a society marked by sharp inequalities and widespread poverty. Despite these problems, the Aquino Government has moved quickly to begin the task of rebuilding the political system and restoring individual freedom and respect for human rights.

There have been some major political developments since the Committee concluded its inquiry in September of this year. Regrettably, political instability has persisted. Serious differences between Defence Minister Enrile and other members of the Cabinet, which were explored in detail in the report, have intensified in the last two months. The handling of the communist insurgency remains the major bone of contention between Enrile and some other Ministers. The draft constitution, to be presented to the people in a plebiscite in early February, is also emerging as a source of instability and friction within Aquino's Government. The murder in recent days of a prominent left wing political and trade union leader, Rolando Olalia, and the kidnapping of a senior Japanese executive provide further evidence of the difficulties which now exist.

Despite the current instability, it should not be concluded that Aquino's Government is about to fall. What is more likely to happen is a continuation of the present circumstances, in which personal ambitions and policy differences are being fought out within the Aquino Government. Despite persistent rumours, a military takeover does not appear likely in the short term. As noted in the Committee's report, Aquino enjoys the support of the Reagan Administration and the US Congress. Anyone contemplating the illegal seizure of power would have to take account of strong United States disapproval and probable withdrawal of US economic and military aid. We should also bear in mind that there is a very broad constituency supporting the Government's emphasis on national reconciliation and moderate reform. If Aquino can hold together the broad middle ground, there is a fair prospect that her Government will lay the foundations for political stability and economic recovery.

The Economy

President Aquino's Government is facing severe economic problems after three years of contraction in the economy as a result of mismanagement by the Marcos Government and the drop in world commodity prices. The most pressing needs are to reschedule foreign debt, to improve economic policy formulation, to revive business and investor confidence, and to alleviate poverty throughout the country.

The Committee's report concluded that, even with sound economic management, economic recovery would be slow and difficult. Recent developments confirm this unfortunate outlook, with the economy contracting by about 2.2 per cent in the first half of 1986. The persistence of political instability is a major reason for the reluctance of domestic and foreign business to invest.

The Communist Insurgency

One of the most serious challenges to the Aquino Government is the communist insurgency. The Committee's report concluded that the communist insurgency, which remains at a high level, would continue to burden the Aquino Government at a time when its energies and resources are already stretched to meet political and economic problems. Regrettably, recent developments appear to bear out that pessimistic assessment. The Committee's report concluded that a lasting nationwide ceasefire was not likely. Though negotiations between representatives of the Government and the insurgency have continued, the chances for success look remote. The recent murder of Rolando Olalia will set back even further the prospects of a lasting ceasefire.

Australian Policy

The Committee's report strongly endorses the Australian Government's decision to extend political support and to increase development assistance to the Aquino Government. The emergence this year by peaceful means of a new Philippines Government, committed to democracy and reform, was a better outcome than was widely expected in the closing stages of the Marcos regime. The Aquino Government deserved support and assistance in February this year. It continues to deserve that support and assistance now.

Defence Co-operation Program

Australia's defence relations with the Philippines have been the subject of controversy within the Australian community, mainly because such relations have been perceived as providing support and assistance to the Marcos regime, and because of concern that they associated Australia with human rights abuses. The nature and extent of the defence co-operation program is not always clearly understood. No weapons or armaments are provided under the DCP, and funding for the program has remained at the very modest level of about $1.5m since 1979-80. The major element of the DCP in recent years has been the training in Australia of personnel from the armed forces of the Philippines. The Committee does not consider that training of armed forces of the Philippines personnel in Australia contributes to human rights abuses in the Philippines or that it represented endorsement of the policies and practices of the Marcos Government.

The conduct of armed forces of the Philippines personnel is a matter for the Philippines to resolve. If Australian training imparts useful skills and knowledge and encourages a professional and disciplined approach, it will have served a worthy purpose. I point out that Amnesty International told the Committee that it was unaware of any individual of the armed forces of the Philippines who trained in Australia and later became implicated in human rights abuses. The Committee believes that training in Australia of armed forces of the Philippines personnel may serve to instil in the recipients values that tend to discourage human rights abuses. The Committee believes that the time to make the armed forces of the Philippines more proficient and professional is now, and Australia's DCP can make a modest but useful contribution to this process.

The Committee recommends that the Australian Government consult with the Government of the Philippines on the most appropriate form and orientation of the defence co-operation program; and give careful consideration to any proposals from the Philippines Government for reorientation of the DCP, including any relating to human rights issues, such as the provision of special training courses.

Development Assistance

Although there was no disputing that the Philippines was a deserving recipient of aid, the forms and effectiveness of its delivery by Australia were questioned in many submissions received by the Committee. The Samar and Zamboanga projects have been criticised for an excessive emphasis on infrastructure on the basis that roads and bridges are of limited value to the poorest groups in the community and may also benefit the military. The Committee considers that this criticism misses the point that sustained economic growth, without which lasting poverty alleviation is unlikely to occur, requires the removal of major obstacles to development, one of which is poor infrastructure.

The Committee has concluded that, on balance, large scale integrated development projects, such as those at Zamboanga del Sur and northern Samar are suitable vehicles for aid delivery and that these projects in the Philippines have increasingly met their objectives. In its current form, the Samar project represents a well balanced combination of infrastructure and agriculture components with an appropriate emphasis on fostering community organisations and local decision making. The Committee is keen to see the benefits of this project sustained and improved.

The Committee understands the Australian Government's decision to withdraw Australian personnel from Samar in 1985 on security grounds. It would be a pity, however, if project implementation were to lose momentum now. For this reason the Committee recommends that the Australian Government, in consultation with the Philippines Government, should arrange the return of Australian personnel to northern Samar as soon as security conditions allow.

Earlier this year, shortly after the Australian Government announced an increase in development assistance to the Philippines, the Australian Development Assistance Bureau outlined a series of proposals on how best to structure and implement an expanded aid program. The Committee agrees in general with ADAB's proposals and considers that they offer an imaginative and constructive approach to the problems confronting the Philippines. The Committee commends the proposed sectoral inputs program as an appropriate response to the Philippines' pressing budgetary and balance of payments difficulties. This proposal will require careful design to ensure that Australian exports to the Philippines will not be adversely affected.

The Committee commends also the proposals for an Australian community assistance program which focuses on the pressing need to create jobs and generate income in rural areas, and which recognises the important and effective role which Philippines non-government organisations and the Catholic Church can play in pursuing these objectives. This scheme should go some way towards addressing the criticism, raised by Australian NGOs, that Australian aid to the Philippines is inadequately focused on community needs and is excessively implemented through bilateral rather than community channels.

Economic Relations

Although Australia and the Philippines are not major trading partners, economic relations are an important aspect of the bilateral relationship. Domestic economic circumstances in both countries, and the state of the international economic environment, do not favour a rapid or substantial increase in bilateral trade or investment. The Committee believes, nonetheless, that several opportunities exist for an increase in Australian trade with the Philippines, particularly in the sale of agricultural and mining equipment and technology.

The Committee heard claims from a number of witnesses concerning the alleged abuses of Filipino workers by Australian companies operating in the Philippines. The Aquino Government has announced its intention to overhaul drastically industrial practices and improve labour conditions in the Philippines, which currently leave much to be desired. Evidence submitted to the Committee would not appear to support claims of repeated abuses by Australian companies of Filipino workers. The Committee does not consider that the establishment of a code of conduct for Australian companies in the Philippines would be a useful or effective measure. Australian companies operating in the Philippines are subject to the laws of that land and it is ultimately the responsibility of the Philippines Government to enforce those laws.

Social Concerns

In the course of the inquiry the Committee also encountered a level of concern within the community about issues affecting Filipino women. These included the problems faced by Filipino brides in Australia, the organisation of so-called `sex tours' to the Philippines, and prostitution. Whilst these matters go beyond the scope of this inquiry, the Committee believes that they require further investigation, particularly by the Minister for Immigration and Ethnic Affairs (Mr Hurford).

Conclusion

Before concluding my remarks I would like to express my appreciation to all who assisted with this inquiry. I thank all members of the Sub-Committee, chaired by Mr Gordon Bilney, who attended the series of meetings and public hearings, and all organisations and individuals who placed submissions before the inquiry and assisted the Sub-Committee with its work. I also thank Hansard for its assistance during the formal proceedings of the Committee. I would also like to thank Mr Peter Stephens, secretary to the Sub-Committee, Mr Marcel Dimo, Foreign Affairs Adviser, Ms Kelly Edwards, who was responsible for typing of the reports, and Ms Margaret Ray and Mr Jack Cassels for their valuable assistance with this inquiry.