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Parliamentary Joint Committee on Foreign Affairs, Defence and Trade
International Fund for Agricultural Development Amendment Bill 2012

BRYANT, Ms Rebecca, Assistant Director General, Food Security, Infrastructure, Mining and Trade Branch, AusAID

WOJCIECHOWSKI, Mr Paul, Assistant Director General, Multilateral Policy and Partnerships Branch, AusAID

Subcommittee met at 10:00

CHAIR ( Mr Champion ): I declare open this public hearing of the Foreign Affairs Subcommittee for the review of the International Fund for Agricultural Development Amendment Bill 2012. This bill allows Australia to rejoin the International Fund for Agricultural Development. Today the witnesses from AusAID will appear to discuss the submission from the Foreign Affairs and Trade portfolio agencies and the reasons underlying the bill. Before commencing the hearing, I refer any members of the media who may be observing to the need to report fairly and accurately the proceedings of the committee as required by the Senate order concerning broadcasts of the Senate and committee proceedings.

On behalf of the committee, I would like to welcome Ms Rebecca Bryant and Mr Wojciechowski from AusAID. Before proceeding to questions, do you wish to make a short opening statement to the committee?

Mr Wojciechowski : We do, Mr Chair. Thank you very much for the opportunity to address the committee. As AusAID has outlined to the Joint Standing Committee on Treaties on 13 August this year, Australia has been at the forefront of global efforts to improve food security. By 'food security' we mean the physical and economic access to sufficient, safe and nutritious food. Food security is integral to our efforts to support sustainable economic development—one of our eight programs and five strategic goals—as well as responding to humanitarian needs.

Australia's approach to food security is focused on three pillars: lifting agricultural productivity through agricultural research and development, improving rural livelihoods by strengthening markets and market access and building community resilience by supporting the establishment and improvement of social protection programs. These three pillars aim to increase the food available in markets and poor households and increase the incomes and employment opportunities of poor women and men.

Through our aid program, Australia is addressing the food security challenges by responding to the emergency food assistance needs of the people in the Horn of Africa by increasing funding for rural development with international collaboration from multilateral organisations and pursuing trade policy reforms to open up markets and allow more free and fair access to food.

The United Nations International Fund for Agricultural Development, IFAD, the membership of which we are discussing here today, is dedicated to eradicating rural poverty in developing countries. AusAID is recommending Australia rejoin IFAD through this committee's endorsement of the IFAD Amendment Bill 2012. Since Australia announced its withdrawal from IFAD in 2004, the fund has become a much more cost-effective and efficient organisation.

Australia's decision to withdraw in 2004 was not taken lightly. At the time of the withdrawal, the government had serious concerns about IFAD's performance. It assessed that IFAD was not delivering cost-effective and tangible returns on Australia's aid investment, that only a small percentage of IFAD programs were being delivered to Australia's priority countries in South-East Asia and the Pacific—about seven per cent, in fact. IFAD did not have a clear mandate or role. It delivered most of its assistance through other multilateral agencies and did not have a clear strategic focus on rural development activities. These key weaknesses, which had led to Australia's withdrawal, have been remedied, and this has been shown in several assessments of the fund both from Australia and from overseas.

Mr Kanayo Nwanze, the current president of IFAD who was elected for a four-year term in 2009, has been actively leading IFAD's change process, pushing for the implementation of significant reforms, including to the fund's operational management.

Improvements include the implementation of an organisational results framework, results based budgeting systems, strategic workforce planning and release of IFAD's strategic framework in 2011. IFAD has also improved its fiduciary processes and structure for implementation of external audits in line with international financial institutions best practice and the establishment of a designated ethics office and the position of a chief financial officer.

IFAD is becoming much better aligned with Australia's geographical and sectoral aid priorities. South Asia and East Asia and Pacific now make up 31 per cent of IFAD's allocations, up from seven per cent in 2004. In recent years IFAD has been increasing its focus on results. Over the last two replenishment periods project completion reports from IFAD have shown improvements in all of IFAD's performance indicators. Particularly, marked improvements have been seen in innovation and scaling up, gender, sustainability and rural poverty impact.

IFAD has dramatically increased the efficiency of its projects based on the size of the administrative budget compared with the total size of grants and loans in administration. In 2007 administrative costs equalled close to 20 per cent of loans and grants. This has dropped to around 12½ per cent in 2012—comparatively good for a multilateral organisation. The fund has increased the average size of its projects as well as the size of its in-country presence and the number of projects it supervises directly. In fact, at the end of 2011 IFAD had more than doubled the number of projects it supervised directly compared with 2008.

IFAD is clearly targeting its programs to address rural poverty, aligning its actions with its mandate, which is to reduce rural poverty and hunger through working with smallholder farmers, who are disproportionally represented among the poor, vulnerable and food insecure. IFAD's approach aligns well with the Australian government's aid policy, which places a specific priority on food security as a vehicle for sustainable economic growth and poverty reduction. These changes and improvements mean that IFAD is now considered by donors and developing countries to be an increasingly effective, results focused and value-for-money partner. This assessment is supported by AusAID's 2011 review of IFAD and more recent Australian multilateral assessment, as well as separate evaluations by the UK's Department of International Development and the Multilateral Organisation Performance Assessment Network—a network of donor countries with a common interest in assessing the organisational effectiveness of the major multilateral organisations they fund.

The view that IFAD has improved its performance and relevance has been supported by submissions to both a national interest analysis consultation process the government undertook in February and March this year and the inquiry into the IFAD Amendment Bill by this committee. AusAID received 15 responses to the request for submissions from NGOs, universities, consultants and private citizens, all were supportive of a proposal to rejoin IFAD. I note that all five submissions provided to this committee's inquiry into the bill were also positive. Based on the arguments I have just outlined, AusAID recommends that the committee endorse the IFAD Amendment Bill 2012 in the interest of improving food security and agriculture in developing countries.

CHAIR: We were a founding member of IFAD, weren't we?

Ms Bryant : That is correct.

CHAIR: When we withdrew, were we the only country to withdraw?

Ms Bryant : That is correct, yes.

CHAIR: Did other countries suspend their membership at all?

Ms Bryant : New Zealand is one country that has the status of being a member of IFAD without being a financial contributor to IFAD, and there are a number of other countries in that category. But we were the only country to fully withdraw. There are a number of other countries that are not members of IFAD, of course, but they are relatively few.

CHAIR: Would we be the only one in the OECD?

Ms Bryant : Yes.

CHAIR: And one of two or three in the G20?

Ms Bryant : I think that is correct. Russia is not a member of IFAD. So yes, I think it is about one of two or three amongst the G20 countries.

CHAIR: But most of the other nations we would think to compare ourselves with—the United States, the United Kingdom, Europe and places like that—are all members?

Ms Bryant : Yes.

CHAIR: Are they paid-up members?

Ms Bryant : Whether they are fully paid up, I could not comment.

CHAIR: When IFAD realigned to our region—I think we went from seven per cent to about 30 per cent—did that include countries like Indonesia and Timor and places like that?

Ms Bryant : That is correct, yes, and South-East Asia.

CHAIR: And presumably, this is in line with our Millennium Development Goals and Australian priorities and would complement Australian expertise?

Ms Bryant : That is correct. Amongst our significant partners in the rural development portfolio our judgement is that IFAD's priorities and mandate align most effectively with MDG1, which is to reduce hunger by 50 per cent. So yes, we consider it to be very much in line with our priorities now. Previously, it did not actually have a clear mandate so it was difficult for us to make that claim.

Mr RUDDOCK: And on that same question—and you might like to give this in detail in writing—I would be interested in where else it is conducting programs in what you consider to be our region.

Ms Bryant : Sure. We are happy to put that on notice and provide that information.

CHAIR: Perhaps also, where we might be running complementary programs. I know that in Timor AusAID funds Seeds for Life and other things like that and it would seem to me that, if the rural area does not run a surplus, then economic development does not commence in countries or it is very difficult, it is hampered. You might want to give some details about how the two might complement each other practically on the ground.

Ms Bryant : We would be happy to. It is the case that IFAD does more than its project list demonstrates. For example, last week I met with the head of the Secretariat of the Pacific Community who indicated that although IFAD does not have a lot of projects on the ground, it is providing advice to Pacific institutions to assist them to undertake their own agricultural development activities, more than any other multilateral organisation actually from their perspective, so yes, we are very happy to provide that information. But it is also our view that IFAD is an effective colleague to other institutions and is sharing its knowledge effectively.

CHAIR: My other question was in terms of Afghanistan and Pakistan. There was some mention in the submissions about them and obviously they are areas of concern, and economic development is seen as a mechanism to help provide security in that part of the world. Is IFAD engaged there in those two countries? Would that be an effective partner for Australia to provide aid?

Ms Bryant : I think the short answer to a question is yes, they are engaged, but I am not 100 per cent sure of the details so we will take that on notice and provide you with that in writing.

CHAIR: That would be helpful. In respect of the administration costs, you gave a figure going from 20 per cent to 12½. Is that because the projects have got bigger and so by necessity they have driven down admin costs there, or have they driven down admin costs across the board?

Mr Wojciechowski : I think it is a combination of factors, Senator. Obviously, with larger projects you have economies of scale and that is certainly something that we are encouraging to avoid what we call 'fragmentation of aid', too many small inefficient projects. So that is one factor.

But I think it is also the reforms that they have undertaken in the area such as management—how they deploy people, how they focus on results—and other management reforms including procurement reforms and other things that have come with it. So it is an accumulation of the reform efforts including in respect of making projects larger.

CHAIR: How does that figure compare with other multilateral institutions?

Mr Wojciechowski : It is comparable. I do not have figures to hand for the World Bank or the Asian Development Bank, but we understand it is pretty much in that band of what is acceptable. Obviously we have to recognise that different institutions work in different environments so at times it is comparing apples with oranges in terms of what is a project in the mountainous region of Pakistan and how that compares with something in Sub-Saharan Africa where costs are different. Certainly, they are now considered to be very much in the mainstream of good practice among multilateral organisations as far as costs are concerned.

Mr RUDDOCK: On that same issue, would their total income have risen so that administrative costs would have fallen as a percentage?

When you talk about percentage, it is sometimes misleading if your total budget has gone up; you still have the same administration so, as a percentage, it falls.

Mr Wojciechowski : We would see that as a positive factor. They are administering a much larger portfolio with the same amount of resources. But, yes, they have, as an organisation, risen.

Mr RUDDOCK: No. I would consider it of far more influence if it could be demonstrated that they had achieved efficiencies in their administration, given that there are significant question marks over whether it is a prudent and careful budgeter in the way in which it appropriates its money. I am going to raise some issues relating to that. I would like to hear whether it can be demonstrated, from the figures you have given me, not that it is just a percentage change, which could be related on any number of factors, but that they have made substantial changes to their administration.

Ms Bryant : Can I refer you to pages 30 and 31 of the Review of Australia's engagement with IFAD, which is a public document. It deals with that in some detail and it has a chart that precisely answers your question about the ratio between the total amount—

Mr RUDDOCK: Pages 30 and 31—in your submission?

Ms Bryant : It was an attachment to the submission. It is titled Review of Australia's engagement with IFAD. We can provide this information again to you in a response to a question on notice, if you like. But it is not a simple calculation of the proportion of one to the other. They undertake an efficiency ratio calculation and they have set themselves targets and they are some way towards achieving their target but not all the way there yet.

CHAIR: While Mr Ruddock analyses that, we will go the deputy chair.

Dr STONE: I would be keen to get more detail on those comparisons of the administration costs that are now 12½ per cent with, say, an AusAID funded project. If a member of IFAD is not a financial contributor, and I think you mentioned New Zealand is in that category, do those other countries still have the right to have their nationals compete for tenders?

Mr Wojciechowski : Yes, they do. The right to compete for project tenders is linked to the membership. As long as the country is a member, it can contest those contracts.

Dr STONE: Of the five submissions that you mentioned were all very positive about rejoining IFAD, I think all of those would have had a vested interest perhaps in being able to compete again for project management or implementation. Would that be the case?

Mr Wojciechowski : I accept your comment with respect to that, yes.

Dr STONE: If we again join IFAD, what level of control over the choice of projects would we have as a financial member compared with a non-financial member? I understand from earlier information that we may become a member of the board. Has that been some sort of upfront negotiation?

Mr Wojciechowski : That is exactly right. Given that we would be a significant member and donor to IFAD, we would have good chances of contesting a position on the executive council of IFAD, which essentially is the equivalent of a board of directors of a private institution or a bank, for example. That is a body that is vested with the power to make policy for IFAD, including approval of major projects—that is, direction in policy, the areas that they focus on and specific projects. So, subject to us being able to secure a seat on the executive council of IFAD, we would be in a position to exert a high degree of influence on its lending decisions.

Dr STONE: Were we on the executive council before?

Ms Bryant : Yes, we were but as an alternate with the United States. We were not an executive member in every year but every alternate year, I think.

Dr STONE: Then we were not able to do much in the way of directing projects at that time by the sound of it if we were so unhappy with the regions being funded and the type of grants.

Ms Bryant : We did make quite a lot of approaches to IFAD, but their lack of responsiveness to the approaches we made was one significant factor in our decisions to withdraw. So the submission to the committee outlines the various steps that we went through between 2003 and 2007 to indicate our dissatisfaction with IFAD's performance and with their lack of focus on our region; however, those complaints were not necessarily taken into account and that was one significant factor in our ultimate decision to withdraw.

Dr STONE: What about badging? Say, if we rejoined—I understand we have already indicated a significant contribution—what sort of badging of our country's contribution occurs where there is an IFAD project on the ground? It is just an IFAD general badging or is the country actually identified?

Mr Wojciechowski : Branding and visibility of Australian contributions is something that we take very seriously, so in all agreements with international organisations we specifically have clauses which refer to their attribution of visibility that this particular project had Australian involvement. That is particularly so in projects that are cofunded by a multilateral organisation and Australia. In the case of Australia providing funds to part of a core replenishment of an organisation, the usual practice is not to have visible branding on projects, given that there are so many members and it would be very hard to spell out the names of all the members of that particular organisation—for example, the UN Development Programme with all its members or even World Bank with its 100-odd members.

In the case of IFAD, once we pledge a significant amount, we have influence on the projects. What we tend to do with partners like that is to use our communication strategies to ensure that people are aware of the contribution we make. Again, we have not had much experience of IFAD in recent years but, if I can draw a parallel, for example, the Asian Development Bank of the World Bank. Members of the committee will be aware that we have regular publications and we have regular events where we publicise the work we do with the World Bank. We can give examples of those publications to the committee so you can see what Australia might be looking forward to in terms of how we publicise our work with IFAD.

We also are very much focused on the results that are produced by those organisations. In the case of IFAD, we would be looking at how many farmers they assist and what the results are and then we would be really focused on the percentage of that result that is achieved with Australia's funds and would like to very much highlight that in our communication. I hope that answers your question.

Dr STONE: In my travelling about and looking at our projects overseas, one of our big problems—and I know it is improving—is badging. My final question is: you are both from AusAID—if you had an amount of money, say, $5 million, presumably you would be far better off spending that $5 million via AusAID's own identification of a project, a place, calling the tenders, choosing the NGO or the partners who are going to implement that project rather than direct it through another agency where we have just been talking about issues of badging but also not having complete control over where that project goes and so on? In making the assumption that AusAID is an effective organisation—and I think it is—wouldn't it always be better for any funds we have got to go directly from our own government's agency than via another? What are the advantages of going via that other versus just AusAID selecting the project, selecting the players, badging it effectively, monitoring it effectively and, I presume, having far less than 12½ per cent administration costs?

Ms Bryant : The aid effectiveness review addressed exactly this question in some detail. What it did was divide AusAID's geographical focus into a range of tiers—for want of a better term—and, with respect to those countries that are most important to us and the closest to us geographically, your statement is probably correct.

We have therefore resourced our posts adequately to ensure that we can undertake that kind of bilateral assistance in the most effective way possible. But, the further we get away from Australia and the fewer people we have on the ground, it is not necessarily effective for us to deliver the assistance bilaterally in all circumstances. What the review indicated is that, as we get into the regions that are furthest away from us, we are better off working with our most trusted partners, particularly the multilateral organisations such as the financial institutions and the UN agencies.

In the case of Africa, for example, I would argue that we would be much better placed working through an organisation like IFAD, which has offices on the ground and relationships with local governments that we may not have. That would be a much more effective use of that $5 million that you referred to. There is another example where IFAD can do a lot more than we can, and that is in respect of middle powers. In China, for example, IFAD is very effective in working with the Chinese government to change its behaviours with respect to its delivery of its own development assistance and in the delivery of assistance to its own rural communities. That is something that bilateral government assistance at some stages cannot necessarily do most effectively.

So there are two examples, two circumstances, where an organisation like IFAD is more effective than us—in tricky situations where their relationship with the government is not bound up in bilateral politics and in other situations where we do not have sufficient numbers of people on the ground to do it effectively.

Dr STONE: Thanks for that.

Mr RUDDOCK: It depends on whether you adopt the recommendations of the Simons review, back in the time of the Howard government, as to whether we ought to have a significant presence in Africa in any event—that our aid ought to be more focused on our area, that Europe ought to accept responsibility for Africa because it was closer and, similarly, the Americas for South America. You would not have to worry about going through some multilateral agency because of your concerns about relative efficiency. Small amounts of money spread across multiple countries, in my view, is far less effective than a large amount of money from one source.

Ms Bryant : I might also say that IFAD does things that we cannot possibly expect to do. The provision of concessional loans is something that only international financial institutions can do effectively. We do not provide loans and we cannot do that. I cannot comment on the Simons review. I can only comment on the most recent review of aid effectiveness and the resulting strategy for the Australian aid program, which is what we currently work to.

Ms PARKE: I have a question following on from the deputy chair's question about middle-income countries. I note that the Review of Australia's engagement with IFADreport says on page 7:

IFAD also works to address large poverty concentrations in rural areas of emerging and middle income countries, all of which are members of the G20. IFAD has a funding strategy to focus on large rural poverty concentrations in otherwise middle income countries such as Brazil, China, India and Indonesia.

I also note that more than half of the world's poor—that is more than 750 million people—live within those G20 nations. Given Australia's membership of the G20 and our impending presidency of the G20 and membership of the troika in the next few years, we have an opportunity to really make a difference when it comes to promoting food security within the G20, and IFAD is the ideal organisation to be part of that effort. So it seems to me there are some synergies between what is coming up in the G20 and IFAD. Can you comment on that?

Mr Wojciechowski : I think that is absolutely right. Australia has been very closely involved in the development work in the G20, in addition to all the work we are doing in the financial and other tracks. Certainly, in the Development Working Group, which is a sub-body of the G20 that AusAID is responsible for, one of our key priorities has been food security and, in that, IFAD is well placed to contribute. It has been an active participant.

Again, IFAD is not a huge organisation, but it is a very highly specialised one. So you are absolutely right. As we look forward to 2014 and hosting, I imagine that there would be a very strong case for the government to again consider putting priority on food security in the work of the development working group of the G20. IFAD will be part of that.

More broadly, I think you have identified another aspect to this issue, and that is that working with these institutions is very important for the development of our own policies, best practice, techniques and technologies. The biggest value of a lot of the multilaterals is in being knowledge institutions. The best example of that is the World Bank. Yes, they have a huge portfolio of loans, but that is really only one aspect of what they do. It is often said that, particularly, the middle-income countries are very interested to get some lending from the World Bank not for the money, because the volume of lending is actually quite small relative to their needs, but for the policy expertise they can tap into. It is really looking at multilaterals as knowledge institutions.

In their own way—and I do not want to overstate it because IFAD are small—they are experts at certain agricultural things. So from the programs that they have successfully run, for example, in Africa through our membership and the involvement of IFAD we can learn and then see if we can do similar things in our own region. I would like to add that to the discussion.

Ms PARKE: You mentioned earlier—and the chair raised this—that Australia is the only member of the OECD that is not a member of IFAD. But Australia is one of only a few OECD countries with world-class technical expertise in tropical agriculture and dryland farming. Again, it looks as though this is an ideal opportunity for Australia to influence strongly what happens in other parts of the world where they really need help through sharing our knowledge and expertise and to get a better profile as well.

Ms Bryant : I would just say in response to that that it is not like those experts have been idle in the time that we have not been a member of IFAD. There are multiple other international forums through which they have been able to contribute their expertise to the development sector, and they have done that very effectively.

Ms PARKE: There is also a submission from Peter Graves in relation to the United Nations Convention to Combat Desertification. He submits that being a member of IFAD would contribute to our obligations under that convention. Do you have anything to say about that?

Ms Bryant : Not particularly, except to say that it is true that IFAD, unlike many of the other rural and agricultural development organisations, does have a specific focus on smallholder farmers and on environmental protection. In that respect, I suspect it contributes to that convention. But I am not aware of any large-scale activities that IFAD undertakes that contribute directly to—

Mr RUDDOCK: The UN has an organisation specifically to deal with desertification.

Ms Bryant : I did not write this submission. I am not responsible for it.

Mr RUDDOCK: It does. It has a specific organisation.

Ms Bryant : I suspect other UN organisations contribute to that convention though.

Ms PARKE: Just in relation to the executive board that the deputy chair was talking about, I understood that the governing council was going to meet in February this year, at which time the composition of the board would be determined for the following three years. Does that mean we are too late for that this time around?

Mr Wojciechowski : That is correct, yes. We need to have all our legislation passed and we need to formally become members before we can get on the board.

Mr RUDDOCK: Did you talk to other international development bodies about their views on this organisation?

Mr Wojciechowski : Yes, we have, recognising that some of them are working in an area that is highly contestable. So obviously you do not—

Mr RUDDOCK: Did you talk to the government of the United Kingdom's Department for International Development?

Ms Bryant : Yes.

Mr Wojciechowski : Yes.

Mr RUDDOCK: It has said in relation to this body that 'administration costs are currently too high and project efficiency needs to improve'. Have you talked about how they came to that view and why you have come to a different view?

Mr Wojciechowski : I do not think that our view is entirely different. It is a really a question of progressive reforms that need to be implemented. We believe that tremendous inroads have been made in terms of efficiency. The direction of travel is correct. We would like to be involved in influencing reforms moving forward and the best way of doing that is to be on the inside of this organisation. But, yes, we have spoken to other donors about it and compared assessments, including with the UK. But let me make this absolutely clear: we are not saying that we are completely satisfied with IFAD's performance. This is a question of making sure that they continue to reform and continue to deliver in the best possible way. I want to stress the point that you need to be on the inside to influence those decisions.

Mr RUDDOCK: That brings me back to some of the words that you offered in your evidence. You referred to improvements but did not quantify them. It troubles me that, in relation to an organisation that we defunded because of significant issues in relation to their performance, we are still using fairly ambiguous language in our judgements. I can understand why, if there are concerns about the organisation, you would use ambiguous language. Another report that I looked at—which I assume that you contributed to, because it says 'Australian government: AusAID'—was a multilateral assessment. This is how it talked about results: 'In the 2010 IFAD report, 90 per cent of reports were rated moderately satisfactory or better.' How do you deal with language like that? 'Moderately satisfactory' for a figure of 90 per cent could mean that 80 per cent were moderately satisfactory and 10 per cent were better. That is what it could mean. It may mean that 90 per cent were moderately satisfactory; it could mean something else. And we say that that is a strong result that we should give credibility to. I am very troubled when I look at the evidence and the language that has been used and the reasons that we got out in the beginning that there may be other reasons for the decisions that we are taking about joining now. I will explore those, if I may.

Ms Bryant : Could I respond to your question?

Mr RUDDOCK: By all means. It was a statement, but I am more than happy for you to respond.

Ms Bryant : There was a question at the beginning. You refer to two specific reviews of IFAD. One was the review that we undertook in 2011 using an independent review team. You have a copy of that report. It goes into some detail about exactly the points that you raise. It is not unequivocal in its support for IFAD. It talks about the specific areas where it expects IFAD to undertake further improvement, specifically around the percentage of administrative cost to project cost, the size of individual projects, its geographic focus and a range of other areas. It goes into some measure of detail about its specific concerns about IFAD. But it makes a judgement that on balance there is a strong business case for Australia to re-engage.

The other report that you referred to is the multilateral assessment that we undertook in 2010. Again, that assessment looks across AusAID's portfolio of multilateral engagements. Its methodology was quite robust. It took a significant amount of time and a significant amount of effort to undertake. Field visits were undertaken, interview were held and comparisons were made between Australia's assessments and the assessments of our likeminded partners. We undertook to assess the opinion of the partner countries that we work with as to the quality and effectiveness of these organisations. I take your point that there are statements made that you might not find substantiation for, but there is a robust methodology behind that assessment. We have used as a basis for a range of multimillion dollar investments in these organisations.

Mr RUDDOCK: Sometimes these arguments get lost in verbosity. Maybe, if you would like to highlight the particular parts of the review in 2011 that I should look at, that might help me. I am happy for you to do that in writing.

Ms Bryant : Okay.

Ms PARKE: It is here.

Mr RUDDOCK: I know it is there.

Ms PARKE: Why not read it?

Mr RUDDOCK: I said it was lost in verbosity.

Ms PARKE: Please! I should have thought it was pretty clear.

CHAIR: That is not a crime in this building! Continue.

Mr RUDDOCK: I will go to a number of points that I do want to go to. I hope that an hour and a half will be enough. When did the government first contemplate rejoining the fund? Were these reports because the government had decided to do it, or did it decided to do it because these reports inevitably emerged and it happened.

Ms Bryant : In 2007-08, as you are probably aware, there was a global food crisis that unhappily coincided with an energy crisis—a fuel crisis—as well as the global financial crisis. And that caused what we call the 'triple whammy' on developing countries and caused us to reassess quite significantly our rural development and agriculture portfolio. As a consequence of that occurrence in 2007-08 we have significantly increased our expenditure on food security activities, broadly speaking.

It was in that context that we started to look at the comparative advantage of the range of institutions that we work with in the food security space. So we were heavily engaged in the UN's global food price crisis response fund. Through the Australian Centre for International Agricultural Research, we are an investor in the Consultative Group on International Agricultural Research and we increased our contributions to those organisations. We are a substantial member of the World Food Programme, as I am sure you are aware. We are a core funder of the UN Food and Agriculture Organization. So we have a strong portfolio of multilateral investment in food security. But it came to our attention at around about that time that IFAD was a significant gap in our portfolio. It does what those organisations cannot do. It has a specific mandate to focus on small-holder farmers and on rural poverty, which is different to the other organisations that I have mentioned.

So the specific answer to your question is that at around about 2008 we seriously started contemplating why we withdrew and what that meant for us in terms of our investments in food security.

Mr RUDDOCK: So when did the government first consider this issue of rejoining?

Ms Bryant : We put a proposal, I think, at the end of 2010, to senior management of AusAID proposing that we review our engagement with IFAD, or our decision to withdraw. And then it progressed from there to a review undertaken in 2011.

Mr RUDDOCK: Have there been any other pressures to rejoin the fund, for instance—

Ms Bryant : No.

Mr RUDDOCK: So there were no representations from any other governments that we should do so?

Ms Bryant : Not to my knowledge. There were significant representations made by IFAD itself, of course. So if you are talking about pressures on us, yes, they were very interested in us rejoining.

Mr RUDDOCK: I am sure they were; it is a bucket of money.

Ms Bryant : Right. But as to other pressures on us—other advocacy towards the Australian government—no.

Mr RUDDOCK: So there were no representations.

CHAIR: On IFAD's representations, you talked about the run-up to our withdrawal: they were not very responsive to Australia's interests. Obviously, they have changed their path, because they did not have many projects in our area. Is that because they have learnt their lesson, in effect, do you think and they have changed their behaviour or the path that they are on?

Ms Bryant : It is an entirely new management group. So we are dealing with a completely different set of people at every level of IFAD now from those we were dealing with in 2003-04 and leading up to 2007.

The new president took his place in 2009, and he has proved to be a good interlocutor and someone who has engaged actively with Australia. Management changes are one thing, but you might also be aware that the UN Food and Agriculture Organization is also undertaking a significant reform agenda because of an independent external evaluation undertaken at around the same time as IFAD's independent external evaluation. So it was something that the UN undertook—I would say, because of pressures from its members, but I could not comment on that definitively.

Mr RUDDOCK: Could I just ask you a question about the implications for AusAID's funding and Australia's development aid. Is this a decision that you would make that would prompt you to defund other programs to accord this priority, or is it a decision that you could contemplate merely because there is an assumption that the aid budget will increase to 0.5 per cent?

Mr Wojciechowski : I think it could be either, and the decision would be one for the government to make. The priorities are assigned in a budget process where we design the aid budget. There are some parameters that are discussed which are really the subject of the government's decision as to what percentage of our development assistance is channelled through multilateral partners and what is channelled through bilateral partners.

Mr RUDDOCK: I realise they are government decisions, but you get to this point: there is a commitment to increase; you have to find ways of spending it; this is one way. If, for budgetary reasons, you are not able to make a surplus and you decide to cut back on overseas aid—

Ms Bryant : We are not cutting back on overseas aid.

Mr RUDDOCK: At the moment.

Mr Wojciechowski : I understand what you are asking. I would just like to acknowledge that you are asking me to answer a hypothetical question of—

Mr RUDDOCK: I come to the question. I can understand you increasing it because you want to spend your 0.5 per cent, and it is another way in which you can get a bucket of money into something. We are finding all sorts of ways of doing it. We are spending money on building detention centres, I gather, out of the aid budget. So all of that is because it is getting the increase. But, if you take that away, is it your judgement that you would defund other programs to accord this priority? That is really the question I am asking.

Mr Wojciechowski : Again, this is a question we would put to government. It is a question that we would discuss, as to specifically which programs. But my answer would be yes. If you think about it, if we did not have AusAID, Australia could still have an Australian aid program by giving 100 per cent of its contributions to international organisations. Some countries have a very high percentage of their aid funding that is simply channelled through the UN or the World Bank. We choose to have a national agency that administers programs in our region focused specifically on what we want to see as priorities.

You asked a question previously about the pressures. One of the pressures was that in fact the budget has been rising. It was, as you know, a decision first made by Prime Minister Howard to increase the aid budget. Since that time, we have doubled our aid program and are about to double it again. So, as Australia re-emerges as a major international donor, we simply cannot not be members of IFAD, which is a significant part of the international architecture devoted to resolving the food security challenge. So it is a question of the need to choose all of our partners and we really need to be members of organisations that work in this area in order to influence them and push them to achieve the best results they can, and see how they can enrich our own program and our own results.

Ms Bryant : I would also refer you to page 8 of the review of Australia's engagement with IFAD where it talks about the range of investments that, in 2007, at the time this report was written, we were making. Things are moving, and they are constantly changing. The Global Food Crisis Response Program, for example, is a World Bank trust fund to which we contributed at the time of the 2007-08 food crisis, and we will no longer be making contributions to that. The Global Agriculture and Food Security Program was a G20-initiated activity. Australia has already paid $70 million of a $100 million commitment to that program, and we will have satisfied our commitments within the next few years. That means that, in effect, we are already shifting our resources around to suit the circumstances of the day, as you would fully expect us to do.

Mr RUDDOCK: I listened very carefully to what you said and I do not think I have any clear indication about the priorities or the impact. The decision to rejoin would be influenced if, for instance, the government decided to push back on the timetable for increasing the aid budget.

CHAIR: They cannot answer hypotheticals, can they? You are asking them how long is a piece of string.

Mr RUDDOCK: No, it gets to this question of where your priorities should be and how you assess this organisation, given some of the ambiguity in the language that I pointed to earlier in terms of whether it is the best use of our aid funds. I ask you whether any assessment has been undertaken to determine whether this is the best use of our aid funds, particularly whether you have undertaken a cost-benefit analysis of this expenditure in comparison to other forms of expenditure.

Ms Bryant : I think that the review report that you have in front of you is one measure of a cost-benefit analysis, and subsequent thinking that we have done in a budgetary context would supplement that. What this has said is that, in relation to AusAID's rural development portfolio of activities, this is a good investment of money. I think your question is: if we had less money to spend, would we still spend this money? The answer is yes, because the assessment is that this organisation—

Mr RUDDOCK: Your assessment is that there are other programs that you would suspend first, before you would suspend this one.

Ms Bryant : Suspension is one option, but reducing the amount of expenditure on each item of the portfolio is another way to handle it. I am not prejudging how we would manage it if that was the scenario that was put to us. The judgement that we have made is that IFAD can do things that no other organisation can do, that it makes a valuable contribution to our rural development portfolio and we should invest in it. The volume of that investment is not a question for us. It is a question for government.

Mr RUDDOCK: Let me just move on to the organisation itself. Why did New Zealand withdraw from participating in the sixth replenishment round in 2003?

Mr Wojciechowski : We understand this was purely due to budget pressures they were experiencing at the time.

Mr RUDDOCK: Have there been any allegations of corruption within the fund?

Mr Wojciechowski : Not that we are aware of. We understand that there are reporting mechanisms for corruption, but we are not aware of any making it to the executive council discussions. I think the report that we have commissioned, the 2011 report, looked at that issue and also did not identify any allegations of corruption. I am using the word 'allegations' here; there were certainly no cases.

Mr RUDDOCK: The 2011 report of IFAD was commissioned by you, was it?

Ms Bryant : That is correct.

Mr Wojciechowski : That is right, yes.

Mr RUDDOCK: Is this the one that said in the executive summary:

4.   The increased volume of allegations in 2010/11 in combination with the reduced staffing … in the same period 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).

Ms Bryant : I am looking at page 13 of the Review of Australia's engagement with IFAD, and it states:

The Review Team is not aware of any evidence to suggest that IFAD has a systemic weakness with respect to corruption. To the contrary, independent assessments such as those by MOPAN rate IFAD well with respect to anti-corruption.

It is the case that we are dealing with a high-risk environment for corruption.

Mr RUDDOCK: Have you read IFAD's report into its investigations and anticorruption activities?

Ms Bryant : I have not myself, I am sorry.

Mr RUDDOCK: It indicated that there is a significant increase in the number of investigations that are occurring.

Ms Bryant : But does that increase correlate to its increase in expenditure?

Mr RUDDOCK: It may correlate to an increased attention to what had been an endemic problem.

CHAIR: That might be a positive thing.

Mr RUDDOCK: It may be that it is positive to know that the number of active cases in three years have increased from 33 to 59.

Ms PARKE: That may also relate to the fact that it has established an ethics office which would be engaged in looking at cases.

Mr RUDDOCK: We may need to do a little more work on that issue, but there are some other matters. You must have a lot of offices. I am not sure this is the same thing: there is the investigation into anticorruption activities. I am told there is an office of auditing and oversight and it has received 41 allegations of fraud and corruption, again significantly higher. So there appear to be two reports that deal with those issues, but they may be the same ones.

Mr Charles Tapp gave evidence in relation to these matters on behalf of your agency back in 2004. He was then your deputy director-general. He said at that time that AusAID had concerns regarding IFAD's performance in relation to Australia's aid program and its priorities for a substantial period of time. You would be familiar with the concerns that he expressed on behalf of the organisation at that time?

Ms Bryant : Yes.

Mr RUDDOCK: Do you believe all of those concerns have now been addressed?

Ms Bryant : 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. As per our previous comments, they are not all the way there yet but they are making progress against a number of our concerns to the point where we are satisfied that they are on the right path.

Mr RUDDOCK: But you cannot quantify that.

Ms Bryant : No. I am not sure how you would like me to quantify it. In terms of a list and a tick box, no, I cannot do that.

Ms PARKE: There have been a number of reviews done by different organisations into IFAD's management. Some of them are set out in here. DFID and other organisations go through various criteria and show that there has been a great improvement. Those concerns that Australia raised have been acted upon, it seems.

Ms Bryant : It is also the case that we have changed since 2003-04. At that time we were concerned only with the Asia-Pacific region, but we now have an aid program that is substantially larger than it was before and operational in areas that we were not operational in in 2003-04. So IFAD offers different things to us now than it did in 2003-04. With all respect to Mr Tapp, his list might not be the list that we refer to now to assess IFAD's performance.

CHAIR: You were talking before about working in at-risk environments. Allegations of corruption will from time to time be made about any institution in those environments, won't they? It is a question of how you respond to those.

Ms Bryant : That is correct. We cannot not engage in those difficult environments; they are some of the most important environments to engage in. If an organisation like IFAD can work effectively in those environments, that is a good thing and we have to accept that some measure of risk goes with that.

CHAIR: And with all aid programs and with all multilateral institutions, presumably.

Ms Bryant : That is correct.

Mr RUDDOCK: We will leave questions of judgement, of course, but I gather that the United Kingdom's Multilateral Aid Review of 2011 rated the organisational strengths of IFAD as being only satisfactory. Do you know what concerns the UK agency had that led them to that view?

Ms Bryant : I would say that overall they actually rated IFAD 'good'. On a four-point scale they gave it a 2, I guess, 1 being the best and 4 being the worst. So they measured it across a range of factors. Organisational strengths are one. Effectiveness in delivering aid would be another. There are a range of factors against which we assess these organisations. We took a similar approach in the multilateral assessment. So, if they do not rate IFAD terribly highly on their organisational strengths, that could be offset in a range of other areas where IFAD are more effective than some other organisations.

Mr RUDDOCK: I hear what you have said, and you have dealt with organisational strengths by saying that maybe there are some other matters in which they did a little better, but I gather that the UK agency said that the likelihood of positive change within the fund—and presumably this is in relation to organisational strengths—was uncertain as it was too soon to judge the impact of their new management on the fund's operations.

Ms Bryant : That is fair enough. I do not think Rome was built in a day. I think we do have to give the new president and his new management team some time to bed down reforms. From our perspective, all the indicators are positive. The areas where he has indicated he is taking action are areas that we believe are important, but of course he cannot entirely turn everything on its head in the space of three years, which is where we are at now.

Mr RUDDOCK: Are there any circumstances in which you would wait to make your judgement before rejoining?

Ms Bryant : I think that through our behaviour we have demonstrated that we are definitely not passive in these issues. This was an example of very strong action taken by Australia in a circumstance where we were unhappy with the performance of an organisation and felt we had no choice other than to walk away. So we would do that again, I would suggest.

Mr RUDDOCK: Yes, but the result of the changes is described as uncertain. We are dealing with it eight years after we left the organisation. It is still uncertain, and we are saying, 'We should give them the benefit of the doubt and rejoin now.'

Ms Bryant : But they are doing good things on the ground. This is the thing. They are supporting. They are helping reduce poverty for a substantial number of people—people that we care about in countries that are areas of interest for us. Those results are results that we believe are worth investing in.

Mr RUDDOCK: Do you read the Economist?

Ms Bryant : Sometimes, when I have time.

Mr RUDDOCK: There was a very interesting article on 27 January last year about the organisation and its responsibility to look after the rural poor. It describes the emoluments of the president. It describes his salary as being on a par with that of the boss of the much bigger Food and Agriculture Organization, plus the $50,000 representation allowance and his entire housing costs, which were described as being over half a million Australian dollars, as he lives in a villa on the Appian Way 'set in two hectares of manicured lawns and parkland'.

Ms Bryant : Yes, we are aware of those allegations, and we think it was an error of judgement by the incoming president. He has since corrected his behaviour and moved into a less extravagant residence, and he is behaving more appropriately.

Mr RUDDOCK: Could you quantify that.

Ms Bryant : I cannot immediately, but we can provide some information on notice.

Ms PARKE: I think it was established that there was no corruption. It was simply bad judgement on his part.

Mr RUDDOCK: Bad judgement, yes.

CHAIR: He would not be the first office holder to—

Mr RUDDOCK: If you look at Fairfax, some people think you should hold people responsible.

Ms PARKE: Can I ask something.

Mr RUDDOCK: Of course. I have a fair way to go.

Ms PARKE: If I look at the reasons for Australia's withdrawal from IFAD in 2004, we have that it was not delivering cost-effective and tangible returns, only a small percentage of IFAD programs were located within Australia's priority countries of South-East Asia and the Pacific and IFAD did not have a clear mandate or a role. If we look at what has changed since then, we have reforms that improve cost effectiveness and demonstrate a comprehensive focus on results—and that is improving all the time; it is acknowledged that they are not 100 per cent there yet, but they are on track to doing those reforms. They have a clear and well delivered mandate and role, which is to reduce rural poverty and hunger through working with smallholder farmers. They have a program that is closely aligned with Australia's aid program objectives and geographic and thematic foci. They target the Millennium Development Goals, particularly reduction of hunger, promoting gender equality and sustainability in relation to climate change. They have the issue of food security which is a high priority for Australia. They look at dryland agriculture, where we have expertise. They have picked up their programs in the Asia-Pacific.

I note also that IFAD is an implementing agency for the Global Environment Facility and its grants program, and that the South Pacific countries have been unable to attract significant GEF grants. If Australia was a member of IFAD, we could use that as leverage to have the Global Environment Facility target those areas in the Pacific that we are concerned about. We do not have any influence over what IFAD does with that if we are not involved. Finally, I just note that we cannot have any impact on IFAD's reform process if we are not part of it as well. So I just do not—

Mr RUDDOCK: I think you are writing the report.

Ms PARKE: Mr Ruddock, I am struggling to see where you think there is a problem. What could IFAD do more than it is doing now? It is on the path to reform and doing very well. It has a clear mandate. It has a program that aligns with our own strategic priorities. What is left to be satisfied?

Mr RUDDOCK: Quite a lot yet. I will put you in opposition one day and we will see how you deal with these issues. I was particularly interested in your comments earlier about the Pacific and where you identified where they were giving advice. I assume from that that they are still only funding in the Asia part of our region and not Pacific specific programs.

Mr Wojciechowski : That is correct. They are in fact developing a strategy for engagement with the Pacific. We have had technical discussions with them.

Mr RUDDOCK: The only way in which they would be likely to get involved in the Pacific would be if we were contributing a bucket of money and—

CHAIR: You might let him answer the question.

Mr RUDDOCK: they then thought, 'We should give some of this to the Pacific.'

Mr Wojciechowski : Not necessarily. I think they are responding to this consistent pressure from us, from New Zealand and from others to not ignore the Pacific. They are doing this, obviously mindful of the debate we are having internally in the government about joining IFAD. I would acknowledge that, but certainly this is not linked purely to Australia coming with additional funds which would be allocated to the Pacific. In fact, our funds would not necessarily be earmarked. We would pair up with IFAD on projects in the Pacific, but IFAD would also be implementing its own development strategy. We certainly would hope that it would draw on its knowledge and experience in other regions, including small states to—

Mr RUDDOCK: But at the moment it has no development strategy for the Pacific?

Mr Wojciechowski : It is in the process of developing one.

Dr STONE: Could Australia earmark its contribution?

Mr Wojciechowski : Can we earmark our contribution?

Dr STONE: If we were to rejoin and contribute, could we earmark our contribution for, say, the Pacific or PNG, or somewhere else in our region?

Mr Wojciechowski : No, we could not. Can I just supplement, if not correct, my previous answer as my colleagues have just pointed out that there are already two active projects in the Pacific: one in PNG and one in the Solomon Islands. I understand they are small projects.

Mr RUDDOCK: I am going to the Solomon Islands next week. Can you give me some details so I can have a look?

Mr Wojciechowski : We would be delighted to do that. Can I just come back to that question about the co-funding because I think that goes to the heart of what I think you are interested in and that is how Australia will exert influence on IFAD? I think the question before us now is whether we should join this organisation. Obviously we need to join in order to have the benefits of membership and influence other members. However, there is the separate question of how much money we contribute to each replenishment of the IFAD fund. We have the flexibility of dispersing whatever the government allocates as the amount to disperse but also to calibrate that amount to exert pressure and, if the scenario is as Mr Ruddock puts forward and the reforms perhaps are not as robust and not moving as fast possible, we have the option of not dispersing that money.

We can be a member and make a smaller contribution to IFAD's co-funding if we feel that it is not an organisation that best helps us to deliver on our commitments in the food security area. We can give that money to another replenishment—to the World Bank or other multilateral organisations or disperse it bilaterally. So I think it is important to consider the fact that we will have a voice on the executive council but also every three years we will have an opportunity to negotiate with IFAD what their priorities are and what we want as part of a group of donors negotiating replenishments. We will have an ability to influence their priorities and push for certain changes.

Mr RUDDOCK: I thank you for your enthusiasm for the task.

CHAIR: In effect it would increase our options as opposed to the one we have at the moment which is being outside the tent.

Mr Wojciechowski : That is exactly right—having no influence at all.

Mr RUDDOCK: Your answers have not deterred me leading up to this question. Mr Tapp in 2004 was quite critical about working through IFAD in this Pacific region. I wonder how you respond to his specific criticism that working through IFAD would only add another layer of bureaucracy and additional transaction costs.

Ms Bryant : I think the issue that was identified in the early days of IFAD's engagement in the Pacific was a lack of familiarity with the region. So it was the case that Europeans or North Americans or even Africans were coming to the Pacific region having never visited there before and assuming it was like everywhere else and it is really not. That in itself led to poor outcomes of their first engagement in the Pacific. Since then they have increased the number of staff that they employ locally in the region, they have posted, and indicated they intend to post, people with more experience in the region.

We understand they are going to open a sizeable office in Indonesia and it will be headed by an Australian who is currently an employee of IFAD. We know that in the Solomon Islands they have an office collocated with UN FAO and they employ Solomons Islands staff and have staff from Rome visiting on occasion to undertake various activities. So I think what Mr Tapp was referring to in 2004 was a perception by Australia and potentially by our partners that IFAD did not adequately understand us and understand the particular needs of the Pacific region.

Mr RUDDOCK: I do not think that is at all the case. I think if he used the words that it would only add another layer of bureaucracy and additional transaction costs, that is not suggesting that they did not understand and so on. It does not suggest that any of the matters that you have said that they have followed up on make it more appropriate address the issue of costs that arise from transactions and layers of bureaucracy.

Ms Bryant : Could you expand on what else Mr Tapp said, because I am not sure I understand the context of his comments.

Mr RUDDOCK: I will get them out for you.

Ms Bryant : My assumption would be that he is referring to efficient operations, which often relates directly to the quality of the staff and the regional and contextual knowledge also.

Mr RUDDOCK: That is not how I read the quote.

CHAIR: Perhaps you could put a question on notice with the full context of Mr Tapp's comments.

Mr RUDDOCK: I will get the quote for you. What was the financial contribution from Canada, New Zealand, the United Kingdom, Germany and the United States in the latest replenishment?

Mr Wojciechowski : In the 2011 replenishment—and this is in US dollars—Canada pledged $76.8 million, New Zealand opted not to pledge, the United Kingdom pledged $82.9 million and Germany pledged $70 billion. We can make a copy of this available to you if it is not already in the material provided.

Mr RUDDOCK: So the United States must be the big one, is it?

Mr Wojciechowski : The United States contribution was $90 million.

Mr RUDDOCK: And what do you think we might get to?

Mr Wojciechowski : This would be a decision for the government made around the time when our mandate for those negotiations was being approved. However, the envelope indicated to us in the budget in May was A$120 million for future IFAD replenishments.

Mr RUDDOCK: So we go into this organisation giving more than any of those that we have just talked about.

Mr Wojciechowski : We are talking about future replenishments so it would depend on the scale of it and underpinning analysis.

Mr RUDDOCK: I hear you. The Australian dollar is pretty close to the US dollar—and you said there was one at $90 million, one at $80 million and two at $70 million.

Mr Wojciechowski : That's right. That is three years later. This is an indicative allocation by the government and we are under no pressure to disburse all of this. We have to make a strong case for how much we would like to disburse and what we get for that money when we disburse it.

Mr RUDDOCK: And that is in relation to an organisation we still only rate as satisfactory and in which we are expecting further changes to be made. In any event, can you, in relation to your view, expand on what you assert were the challenges that remain in human resources and financial management?

Ms Bryant : Can we do that on notice?

Mr RUDDOCK: Yes, by all means. I think it would be particularly beneficial. In relation to this document that I looked at earlier, 'Australian Multilateral Assessment, March 2012', which you have contributed to, I am interested in your ranking of satisfactory being two out of four. Would that be the same ranking that would have applied to the areas that this report identified?

Ms Bryant : The ranking that I was referring to is the UK's multilateral ranking. They rank it in a scale of very good, good and something else—

Mr RUDDOCK: I am trying to get an idea of what your ranking is in this document that you have contributed to the Australian multilateral assessment of March 2012.

Ms Bryant : You have the assessment in front of you.

Mr RUDDOCK: I see it. It says strong, satisfactory, and I am wondering whether that would be two out of four, three out of four for strong. This is how I would assess it?

Ms Bryant : On my personal rating scale?

Mr RUDDOCK: Well, you have contributed to this. What does it mean?

Ms Bryant : An independent team has undertaken that assessment against a set of criteria that are outlined in the methodology in the report itself. I cannot second-guess what they have assessed it as. They have taken a range of different areas and they have assessed those against a set of criteria.

Mr RUDDOCK: Would they have used only the three titles that I see or could there have been excellent, or outstanding, or strong, satisfactory, abysmal? They are pretty nebulous terms unless you understand where they fit.

Mr Wojciechowski : We will look back into the methodology of this exercise, which was an independent exercise, and we will provide a response to that, including definition of terms.

CHAIR: I think Mr Ruddock wants to be satisfied as to the scale.

Ms Bryant : What I can tell you is that the multilateral assessment that you have in front of you used a four-point rating scale similar to the UK's: very strong, strong, satisfactory or poor.

Mr RUDDOCK: Okay. So they had nothing that was very strong, they had a number that were strong.

Ms Bryant : They had six that were strong and one that was satisfactory.

Mr RUDDOCK: No, not what I am seeing. I have got to come to weak yet. I am looking at pages 1-15.

Ms Bryant : Of the multilateral assessment?


Ms Bryant : I have not got that in front of me. The information that I have indicates that it ranked IFAD strong in six categories and satisfactory in one category.

Mr RUDDOCK: There is a very strong and there was no very strong ranking. It is strong on 2 for two items, strong on 3, strong on three more on 4, strong on one more on 5. I thought, gee, this is a great organisation until I realise there was very strong. Satisfactory, strong and satisfactory on 6, satisfactory and satisfactory on 7, satisfactory on 8 and another strong on 8, another strong and strong on 9—

CHAIR: I am struggling to see the further point other than the one you have made.

Mr RUDDOCK: I am coming to the one that troubles me, and that is weak. That is on page 13 dealing with placing a value on alignment with partner countries' priorities and systems.

Mr Wojciechowski : That is exactly right. It is something we often refer to as partnership behaviour, that these organisations work with partners, including the major donors. But this is exactly the kind of thing you can only address by working with them and being a member.

Obviously in the past—and this was really the crux of the concerns we had back in 2004—they did not care sufficiently enough about Australia's priorities, our continuous calls to increase the engagement of the Pacific. So it is all that kind of behaviour that we refer to as 'partnership behaviour'. I am sure you would agree that the only way to influence this is to be on the inside and do it. So I do not think this will increase, with respect to Australia, with us standing on the sidelines here. We need to get in there and start talking to them, start engaging them and, frankly, use the stick and carrot—the carrot being funding and the stick being continuously exerting pressure on them to perform better.

Mr RUDDOCK: Notwithstanding these inadequacies, we need to go in and oppose a stick. I would have thought withdrawing was the biggest stick you could have opposed. I would have thought the fact that you were still out there, not joining would have been a bigger stick in my judgement. Are there any other factors that might have influenced this decision than your desire just to give them a bit of leeway and get in there and encourage them?

Ms Bryant : Absolutely there were different factors, and one is that one of the objectives of the aid program is to reduce food insecurity in our partner countries. Our judgement was that IFAD was an organisation that was addressing a need that we felt was important in a range of countries of critical interest to us. So it is an effectiveness question. Just to clarify, because I now have the multilateral assessment in front of me, the ratings that you refer to are in subcategories. Overall, IFAD was ranked 'satisfactory' in one category and 'strong' in six. So there were seven overall categories against which IFAD was judged. The one that you refer to, where we rank them 'weak' was a subcategory of one where they were overall assessed to be 'satisfactory'. So, under the category of 'partnership behaviour', they were assessed to be 'satisfactory'. There are positives and minuses within that category.

Mr RUDDOCK: I am really getting to something that will become very obvious as I question you on it. Are you speaking for the department of foreign affairs?

Ms Bryant : We are speaking for AusAID, which is an executive agency within the Department of Foreign Affairs and Trade.

Mr RUDDOCK: If we have questions that really go to the department rather than you, do we do it through you?

Ms Bryant : No. We cannot take those questions. We would have to refer them to the Department of Foreign Affairs and Trade.

Mr RUDDOCK: Are we planning to have representatives of the department of foreign affairs before us?

CHAIR: This is the department that deals with the bill.

Mr Wojciechowski : We are the responsible executive agency.

CHAIR: Why would we ask—

Mr RUDDOCK: Listen to the questions and you might ask—

CHAIR: You can ask questions and they will refer them to DFAT and you will get answers in writing.

Mr RUDDOCK: We may. Has the government's plan to rejoin the fund ever been mentioned in discussions about our campaign for the non-permanent seat on the UN Security Council?

Ms Bryant : Not to my knowledge.

Mr Wojciechowski : Not to my knowledge.

Mr RUDDOCK: But you could not answer on behalf of the department?

Ms Bryant : No.

Mr RUDDOCK: Has the government's plan to rejoin the fund been included in any material that was circulated in relation to the campaign or representations made to other governments?

Mr Wojciechowski : Again, Mr Ruddock, I would have to refer you DFAT on all questions relating to the campaign.

Mr RUDDOCK: Has the Australian ambassador and permanent representative to the United Nations been involved in any discussions about the fund?

Mr Wojciechowski : Not with us. I am not aware of it, no.

Mr RUDDOCK: Has he requested a briefing and/or received briefing notes about the fund and has any information been provide to him?

Mr Wojciechowski : I am not aware of it.

Ms Bryant : I am not aware either. It is worth noting that the activities of the government are reported on the cable system. So the review of IFAD and our acceptance or otherwise of the report—

Mr RUDDOCK: I think the access to the cable system is fairly restricted. I do not get to see it.

Ms Bryant : No. But your question went to Australia's representative to the United Nations. So my suggestion is that he may be aware of the campaign through reporting on the cable system; but other than that we have received no specific request to provide information.

Mr RUDDOCK: Do you know whether Minister Carr raised the matter on any of his overseas appointments?

Ms Bryant : I am not aware.

Mr RUDDOCK: Has Australia's Special Envoy for Africa raised the matter on any of his overseas visits and were any briefing notes provided to him on Australia's re-engagement?

Mr Wojciechowski : I am certainly not aware of it and nothing was provided directly by our areas. But we would really caution that these are questions to be asked of DFAT. Where they sourced the information including publicly available information is really up to the individuals running the campaign for the UN Security Council. For our part, we certainly see the campaign playing no role in and having no bearing on how we make decisions with regard to the allocation of funding in an aid program. This is based really on our own program, which is based on the Millennium Development Goals, which is based on Australia's commitment to reach 0.5 GNI target.

Mr RUDDOCK: When we give you the transcript, you can take those questions on notice and if there is a willingness to answer them that will be helpful. Otherwise, I would ask that the department be separately called.

Ms PARKE: We could simply send them the questions to answer in writing.

Mr RUDDOCK: It is a question of what is the appropriate procedure to follow: whether we do it directly to the department or whether we ask you to do it. Presumably, the department expected you as the lead agency to represent them.

CHAIR: The questions you are asking are about an entirely different matter, which is about the campaign concerning the Security Council.

Mr RUDDOCK: I was wondering whether there was any ulterior purpose in pursuing this matter at this time. I am sure there were other questions answered in relation to the organisation.

CHAIR: You have asked the relevant agency which deals with this bill about that question and they have provided you with an answer.

Mr RUDDOCK: I do not regard my questions as answered so we need to find a way forward.

CHAIR: That might be for another time.

Mr RUDDOCK: That may well be, but you might bring it to their attention.

Ms Bryant : Yes, and just to clarify, we are represented here today because we are the responsible agency.

Mr RUDDOCK: You are an agency within the Department of Foreign Affairs—

Ms Bryant : But there is no authority. We are not authorised to respond on behalf of the Department of Foreign Affairs and Trade relating to matters that are within their remit. We are authorised only to respond to questions relating to our responsibilities.

CHAIR: And this bill falls within your responsibilities.

Ms Bryant : That is right.

Mr Wojciechowski : And we are also very much focused on the terms of reference of this hearing, which were to focus on two specific questions about the effectiveness and the changes in IFAD since 2004, and, secondly, the funding implications.

Mr RUDDOCK: We hear all of that and we are still entitled to ask questions as to whether there may have been other motives

CHAIR: And you have asked them.

Mr RUDDOCK: I have, but I would expect an answer before we start report writing.

CHAIR: Thank you for your attendance here today. If there are any other matters upon which we might need additional information, the secretary will write to you. The secretary will send you a copy of the transcript of your evidence to which you can make any necessary corrections to the error of transcription.

Resolved (on motion by Ms Parke):

That this committee authorises publication of the transcript of the evidence given before it at public hearing this day.

Subcommittee adjourned at 11:34