Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Foreign Affairs, Defence and Trade Legislation Committee - 06/06/2013 - Estimates - FOREIGN AFFAIRS AND TRADE PORTFOLIO

FOREIGN AFFAIRS AND TRADE PORTFOLIO

In Attendance

Senator Bob Carr, Minister for Foreign Affairs

Department of Foreign Affairs and Trade

Budget Overview

Mr Peter Varghese, Departmental Secretary

Ms Gillian Bird, Deputy Secretary and Ambassador to ASEAN

Mr Rod Smith, First Assistant Secretary, Corporate Management Division

Ms Jan Adams, Deputy Secretary

Ms Ann Thorpe, Chief Finance Officer

Mr Jeff Roach, Assistant Secretary, Executive Planning and Evaluation Branch

Mr Simon Merrifield, Assistant Secretary, Parliamentary and Media Branch

Outcome 1: The advancement of Australia's international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign and trade policy priorities

Program 1.1 Foreign Affairs and Trade Operations

North Asia:

Mr Peter Rowe, First Assistant Secretary, North Asia Division

South-East Asia:

Mr Allaster Cox, First Assistant Secretary, South-East Asia Division

Americas:

Dr Brendon Hammer, First Assistant Secretary, Americas and Africa Division

Africa:

Dr Brendon Hammer, First Assistant Secretary, Americas and Africa Division

Europe:

Mr Jeremy Newman, First Assistant Secretary, Europe Division

South and West Asia, Middle East and Africa:

Ms Jennifer Rawson, First Assistant Secretary, South and West Asia and Middle East Division

Pacific:

Mr Lachlan Strahan, Acting First Assistant Secretary, Pacific Division

Ms Kate Logan, Assistant Secretary, Papua New Guinea and Fiji Branch, Pacific Division

International organisations, Legal and Environment

Ms Harinder Sidhu, First Assistant Secretary, International Organisations and Legal Division

Mr Richard Rowe, Senior Legal Adviser, International Organisations and Legal Division

Mr Craig Chittick, Ambassador for People Smuggling Issues, International Organisations and Legal Division

Mr Jon Merrill, Assistant Secretary, Head of UNSC Task Force

Dr Greg French, Assistant Secretary, International Legal Branch, International Organisations and Legal Division

Ms Amanda Gorely, Assistant Secretary, Domestic Legal Branch, International Organisations and Legal Division

Mr Noel Campbell, Assistant Secretary, International Organisations Branch, International Organisations and Legal Division

Mr Bassim Blazey, Assistant Secretary, Environment Branch, International Organisations and Legal Division

Ms Penny Williams, Global Ambassador for Women and Girls

Mr Ben Playle, Director, Sanctions and Transnational Crime Section

Security, Nuclear Disarmament and Non-Proliferation:

Dr Robert Floyd, Director-General, Australian Safeguards and Non Proliferation Office

Dr John Kalish, Assistant Secretary, Australian Safeguards and Non-Proliferation Office

Ms Caroline Millar, First Assistant Secretary, International Security Division

John Quinn, Assistant Secretary, Strategic Issues and Intelligence Branch, International Security Division

Ms Paula Watt, Director, Counter-Terrorism Policy Section, Counter-Terrorism Branch, International Security Division

Services to Other Agencies:

Mr Justin Brown, First Assistant Secretary, Consular, Public Diplomacy and Parliamentary Affairs Division

Mr Simon Merrifield, Assistant Secretary, Parliamentary and Media Branch

Mr Rod Smith, First Assistant Secretary, Corporate Management Division

Mr Tuan Dao, Chief Information Officer, Information Management and Technology Division

Ms Minoli Perera, Acting Executive Director, Overseas Property Office and Services

Mr Keith Harmsworth, Assistant Secretary Project Management Branch, Overseas Property Office and Services

Services to Diplomatic/Consular Representatives in Australia:

Ms Sally Mansfield, Assistant Secretary, Protocol Branch

Public information services and public diplomacy:

Mr Justin Brown, First Assistant Secretary, Consular, Public Diplomacy and Parliamentary Affairs Division

Mr Simon Merrifield, Assistant Secretary, Parliamentary and Media Branch

Program 1.2: Payments to International Organisations (Administered)

Ms Harinder Sidhu, First Assistant Secretary, International Organisations and Legal Division

Program 1.3: Public Information Services and Public Diplomacy (Administered)

Mr Justin Brown, First Assistant Secretary, Consular, Public Diplomacy and Parliamentary Affairs Division

Mr Simon Merrifield, Assistant Secretary, Parliamentary and Media Branch, Consular, Public Diplomacy and Parliamentary Affairs Division

Outcome 2: The protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas

Program 2.1: Consular Services

Mr Justin Brown, First Assistant Secretary, Consular, Public Diplomacy and Parliamentary Affairs Division

Program 2.2: Passport Services

Ms Penny Williams, Executive Director, Australian Passports Office

Mr Tuan Dao, Chief Information Officer, Information Management and Technology Division

Outcome 3: A secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth's overseas property estate

Program 3.1 Foreign Affairs and Trade Operations

Mr Rod Smith, First Assistant Secretary, Corporate Management Division

Mr Tuan Dao, Chief Information Officer, Information Management and Technology Division

Program 3.2: Overseas Property

Ms Minoli Perera, Acting Executive Director, Overseas Property Office and Services

Mr Keith Harmsworth, Assistant Secretary Project Management Branch, Overseas Property Office and Services

Department of Foreign Affairs and Trade trade programs

Bilateral, regional and multilateral trade negotiations

Trade development/policy coordination

Ms Jan Adams, Deputy Secretary

Mr Sam Gerovich, First Assistant Secretary, Trade and Economic Policy Division

Mr Daniel Sloper, First Assistant Secretary, G20

Ms Frances Lisson, Acting First Assistant Secretary, Free Trade Agreement Division

Mr Michael Mugliston, Special Negotiator, Free Trade Agreement Division

Mr Christopher de Cure, First Assistant Secretary, Office of Trade Negotiations

Mr Michael Dean, Director, Pacific Division

Export Finance and Insurance Corporation (EFIC)

Mr Stuart Neilson, Acting CEO, Export Finance and Insurance Corporation

Mr John Hopkins, General Counsel and Board Secretary, Export Finance and Insurance Corporation

Mr John Pacey, Chief Credit Officer, Export Finance and Insurance Corporation

Mr Jan Parsons, Director, Environmental and Technical Review, Export Finance and Insurance Corporation

Australian Trade Commission (Austrade)

Outcome 1: Advance Australia's trade and investment and education promotion interests through information, advice and services to businesses, industry and governments

Program 1:1: Trade and investment promotion

Program 1.2: Trade development schemes Export Market Development Grants (EMDG)

Program 1.3: Trade development schemes Asian Century Business Engagement Plan (EMDG)

Outcome 2: The protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas

Program 2.1: Consular and passport services

Mr Bruce Gosper, Chief Executive Officer

Mr Peter Yuile, Executive Director, Education and Corporate Operations

Mr Tim Breresford, Executive Director, Austrlian Operations

Mr Laurie Smith, Executive Director, International Operations

Ms Marcia Kimball, Chief Human Resources and Change Management Officer

Mr Ian Chesterfield, General Manager, Programs, Consular and Business Services

Mr John Angley, General Manager, International Education

Mr Rob O'Meara, Chief Financial Officer

Mr Michael Vickers, National Manager, Policy and Scheme Development

Australian Agency for International Development

Mr Peter Baxter, Director General

Outcome 1—To assist developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interest

Mr James Batley, Deputy Director General

Mr Ewen McDonald, Deputy Director General

Mr Gary Dunn, Chief Operating Officer

Mr Rob Tranter, First Assistant Director General, Pacific Division

Mr Roderick Brazier, First Assistant Director General, East Asia Division

Ms Margaret McKinnon, First Assistant Director General, Africa and Community Programs Division

Mr Scott Dawson, First Assistant Director General, South and West Asia Division

Mr Alan March, Acting First Assistant Director General, Humanitarian and Stabilisation Division

Ms Clare Walsh, First Assistant Director General, International Policy and Partnerships Division

Mr Blair Exell, First Assistant Director General, Policy and Sector Division

Mr Laurie Dunn, First Assistant Director General, Program Effectiveness and Performance Division

Ms Natasha Smith, Acting First Assistant Director General, Corporate Enabling Division

Mr Paul Wood, Chief Financial Officer

Ms Lisa Rauter, Assistant Director General, Africa Branch

Mr Mark Tattersall, Acting Assistant Director General, Afghanistan and Pakistan Branch

Ms Caitlin Wilson, Assistant Director General, Papua New Guinea and Solomon Islands Branch

Mr Dereck Rooken-Smith, Assistant Director General, Office of Development Effectiveness

Mr Alistair Sherwin, Assistant Director General, Risk Management and Fraud Control Branch

Mr Andrew Cumpston, Assistant Director General, Budget Branch

Outcome 2—Australia’s national interest advanced by implementing a partnership between Australian and Indonesia for reconstruction and development

Mr James Batley, Deputy Director General

Mr Roderick Brazier, First Assistant Director General, East Asia Division

Committee met at 09:01.

CHAIR ( Senator Stephens ): I declare open this meeting of the Senate Foreign Affairs, Defence and Trade Legislation Committee. I welcome back Senator Bob Carr, Minister for Foreign Affairs; Mr Peter Varghese, Secretary of the Department of Foreign Affairs and Trade; and officers of the Department of Foreign Affairs and Trade. Today the committee will examine the budget estimates for the foreign affairs and trade portfolio, beginning with the Department of Foreign Affairs and Trade until 4:30 pm, followed by the DFAT trade portfolio in conjunction with Austrade and EFIC from 4:30 pm to 6 pm, and AusAID will be held from 6 pm onwards this evening. As I announced yesterday, the Australian Centre for International Agricultural Research has been excused. The topics will be considered set out in the order in the agenda. A full opening statement was read into the record yesterday morning.

Minister, do you or an officer wish to make an opening statement?

Senator Bob Carr: No, thank you, Chair.

CHAIR: I have here the document that you provided late last night—the case chronology. It has been moved and seconded that the document be received into Hansard. Thank you.

We have exhausted our country trips, and we are now moving to international organisations, legal and environment. Senator Macdonald has some preliminary question about legal arrangements in Papua New Guinea.

Senator IAN MACDONALD: Thank you, Chair. I will not be long in relation to international law, although I have to say they also relate to PNG. I understand we finished with that last night and that there are no officers here. But I am sure the minister will be able to answer the questions that I want to ask. Minister, how many times has the Prime Minister been to PNG in this term? Do you know that off the top of your head?

Senator Bob Carr: Once.

Senator IAN MACDONALD: And you have been?

Senator Bob Carr: Twice.

Senator IAN MACDONALD: Minister, last time you were there, there were media reports about possible Australian police in PNG. Could you just tell us what exactly was the arrangement? This, of course, relates to international law in the section we are dealing with. Could you briefly say what, if anything, was publicly said about that?

Senator Bob Carr: PNG ministers are keen to have more Australian police stationed in Papua New Guinea. To the best of my knowledge, where this stands now is us focused on the questions of at what level and with what responsibilities. I will get further advice. The secretary has further advice.

Mr Varghese : Senator, during the Prime Minister’s visit it was agreed that we would enhance our police cooperation with Papua New Guinea. That involves placing some additional Australian police personnel, but not in online positions—in other words, with direct reports. The legal issues relate to immunity from prosecution were they to be engaged in policing activities which may make them susceptible to legal action. You may recall that when we previously proposed a very large police program in Papuan New Guinea under the previous government, that became the stumbling block. So that legal issue is still there but in the meantime we have put in place enhanced police cooperation, which doesn't get us into that territory.

Senator IAN MACDONALD: I understand that the lawyer who took the action last time is now the foreign minister. Are you aware of whether he is supportive of this general proposal?

Senator Bob Carr: He certainly raised it with me, yes.

Senator IAN MACDONALD: Did he tell you that he was the one who stopped it last time?

Senator Bob Carr: I don't think so. The reference you make stirs something in my memory, but I do not recall whether he and I discussed his previous role.

Senator IAN MACDONALD: It is not relevant. Is there a formal agreement? Is there a memorandum of understanding or anything that we can see in writing that the Prime Minister and the PNG prime minister agreed to in relation to this, Mr Varghese.

Mr Varghese : There would be a reference to it in the joint statement, which we could certainly make available to you.

Senator IAN MACDONALD: Could you do that? Did that arrangement between the prime ministers extend further into the public service, perhaps the military, or was confined to the police?

Mr Varghese : We have a wide range of Australian officials and other Australians paid for under the aid program who are working in different parts of the PNG bureaucracy—for instance, in the finance ministry. I cannot remember off the top of my head the total number, but there are probably around 50 of them, I would imagine, across the PNG system.

Senator IAN MACDONALD: Was there no discussion, either with the foreign minister of the prime minister, about increasing our level of engagement and perhaps taking PNG public servants down to Canberra?

Mr Varghese : The whole focus of the Prime Minister's visit was to put in place a modernised framework, if I could put it that way, for the bilateral relationship, which extended into a number of areas. But the focus of the discussions between the two prime ministers was more on infrastructure, law and order and putting in place arrangements that would take is through to the next chapter of the relationship, which is, I suppose, a chapter less dominated by the aid relationship and more reflective of the economic growth that is anticipated in PNG through their own resources boom.

Senator IAN MACDONALD: Again, in relation to international law, has there been any further agreement, to your knowledge, between either Australia or any of the Australian states and PNG in relation to cross-border power supplies, water supplies or hydroelectricity? Was there any discussion about that at all?

Mr Varghese : Not to my recollection.

Senator IAN MACDONALD: Is the department doing anything in relation to those things? There is an agreement—an MOU with Queensland on electricity. It is nothing more than an MOU, as I understand it.

Mr Varghese : Between Queensland and PNG?

Senator IAN MACDONALD: Yes.

Mr Varghese : I will have to take that on notice. The Premier of Queensland has recently been up to PNG, as I am sure you are aware. He and Prime Minister O'Neill did discuss a range of areas where Queensland might be more involved. But to my recollection that didn't include the sorts of areas that you were speaking about. It was more focused on policing and health, I think.

Senator IAN MACDONALD: Okay. But as far as your department is aware, Mr Varghese, you are not currently doing any activity in relation to cross-border economic—

Mr Varghese : Can I take that on notice. I will just check whether there is work going on that may not have reached my desk.

Senator IAN MACDONALD: If there is, subject to whatever confidentiality is around, could you let us know what it might be, where it is at and what is happening.

Mr Varghese : Sure.

Senator FAULKNER: I want to follow up on an issue I raised at the last estimates round, which is the issue of Australia's involvement in the Open Government Partnership. Since that estimates round, I am very pleased to see that Australia has launched its letter of intent. I have been informed at other estimates committees last week that the Prime Minister has determined that the Attorney-General should be the lead minister on this matter and the Attorney-General's Department the lead agency. So that is understood, and I have certainly appreciated the fact that witnesses at the table for the Department of Foreign Affairs and Trade were seen to be the most informed and forthcoming in the last estimates round, which is a positive thing. It is always good isn't it, Mr Varghese, to be able to say something positive at estimates? I learnt more about this from the Department of Foreign Affairs and Trade than from other departments.

But what I would like to know now—and whether you can help me, Mr Rowe, or any other official—is what you understand to be the situation in relation to the engagement of DFAT with the OGP, given, which I appreciate, that decisions are starting to be made now about ongoing processes and the involvement with the OGP. So if you could give us a brief status report on what you understand will be the Department of Foreign Affairs and Trade’s engagement with the OGP now, I would appreciate that.

Mr R Rowe : Certainly. Following the decision by the government to become a member of the OGP, we will now need, in a whole-of-government sense, to focus on the development of a national action plan. As you mention, the process, in an inter-agency context, will be led by the Attorney-General's Department. On DFAT’s side, we are ready to engage very actively in that process and we will contribute to the development of that national action plan. In DFAT, the responsible area will be the freedom of information and privacy law section in the legal part of the international organisations and legal division. I will have oversight of the involvement of that section and our work in relation to the national action plan. So we are ready to engage.

Senator FAULKNER: Is this likely to mean Australian attendance at any or a number of international meetings of forums that you are aware of?

Mr R Rowe : I am not aware of it at the moment. I think we need to determine, particularly with the Attorney-General's Department and other interested agencies, just what particular meetings are actually relevant and where we might usefully participate.

Senator FAULKNER: If there is Australian involvement, which I hope there will be, in relevant international forums, will that be supported by the Department of Foreign Affairs and Trade? We have established that the Attorney-General's Department is the lead agency here.

Mr R Rowe : Obviously, as I mentioned and as the minister mentioned at the last estimates, we are very supportive of the OGP. Consistent with that support, it would follow that if there are relevant meetings we would discuss with Attorney-General's and other agencies the best form of representation at those meetings to ensure the government's and Australia's involvement in the process is reflected in every aspect. But that discussion has not yet occurred. But it is something that will take place very shortly.

Senator FAULKNER: Are you expecting this will take some resources at the DFAT level?

Mr R Rowe : I indicated how we would be covering our involvement and support for the Open Government Partnership process. At the present time, I consider that we would be able to manage that adequately from the existing resources that we have at our disposal in the legal area of the ILD.

Senator FAULKNER: Do you have an update on how many countries are currently members of the OGP? I realise that one has recently indicated that it has withdrawn, and I might ask you about that too.

Mr R Rowe : The information that I have is that there are now 53 members of the OGP, with a further six countries indicating their intention to join.

Senator FAULKNER: And what category does Australia fall into—intention to join or actually a member?

Mr R Rowe : We have to be accepted at the meeting in October, I understand.

Senator FAULKNER: Yes. So we are in the six, effectively, are we?

Mr R Rowe : That is correct.

Senator FAULKNER: It is also true, isn't it, that one country, namely Russia, has withdrawn from the OGP?

Mr R Rowe : I do not have that information.

Senator FAULKNER: So you are not aware of it?

Mr R Rowe : I am not aware of it.

Senator FAULKNER: If you are not aware of that, I suspect that I cannot ask you about it. Would that be right?

Mr R Rowe : Correct. You can ask me, but I will take it on notice.

Senator FAULKNER: No. I was going to ask you about some background. Admittedly it is public knowledge, of course, that Russia has withdrawn, and I was going to ask you some questions about the implications of that. But if you are not aware of it, I will await a further occasion. I will just flag with you for the next estimates round that I might ask for some. I realise it is early days. Certainly we have established that from the Attorney-General's Department. I might flag that follow through about what this involvement means in terms of any departmental action or resources as far as DFAT is concerned.

Senator FAWCETT: Looking at international law, particularly the 1982 UN Convention on the Law of the Sea, do we have anyone who is regularly involved with the UN in terms of international law? As in, do we participate in forums and provide funding for research or development of those protocols?

Mr R Rowe : Yes. The UN Convention on the Law of the Sea, which of course has been in existence, as you say, since 1982, is the subject of regular meetings of the parties, which are held in New York every year. So there is a review of ongoing aspects relating to the law of the sea that is taken up at the meeting of the parties which is held, as I say, annually in New York. Then, of course, there are resolutions that are presented to the United Nations General Assembly each year relating to the Law of the Sea Convention and aspects of that convention—fisheries, oceans and research. And Australia, consistent with its very strong support for the Law of the Sea Convention, participates actively in those meetings. In addition, there is a meeting held in Jamaica for the International Seabed Authority, established under part XI of the Law of the Sea Convention. That meets annually and we participate there as well. Our participation is via officers from the department here in Canberra in these meetings together with officers from our mission to the United Nations in New York.

Senator FAWCETT: How many other members of ASEAN participate in that?

Mr R Rowe : I would have to take that on notice to give you a precise answer.

Senator FAWCETT: I am particularly interested in the dispute in the South China Sea, particularly the nine-dotted line constructed that both PRC and ROC referred to in terms of claims. I am aware that that sparked considerable regional concern and a number of countries have lodged protests with the UN over that claim. Has that been the subject of discussion as part of these regular UNCLOS meetings?

Mr R Rowe : No, it has not.

Senator FAWCETT: Is there a reason why that is not on the agenda for discussion, given that it is the cause of considerable contention and countries have lodged protests over it?

Mr R Rowe : As the minister said yesterday in answer to your question on the South China Sea issue, we, like so many other countries, consider that this is a matter to be resolved essentially by the parties to the dispute through peaceful means and through dialogue. There are processes underway at present within the ASEAN context to try to reach a settlement of the issues that arise from the South China Sea subject.

Senator FAWCETT: Surely considered dialogue at a UN body is a peaceful means and a productive way of having a parallel process of seeking to get some jurisprudence on an issue that has potential to cause great harm to many people?

Mr Rowe : There are different positions, as you are very much aware, in relation to claims in the South China Sea. While obviously there are formal processes under the law of the sea convention that can be initiated in relation to such disputed claims, the process at the moment and the approach that is preferred by the parties most directly involved in the region is to deal with this essentially through other means.

Senator FAWCETT: If we were going to go down that path, can you step me through the process? If the parties to UNCLOS decided to address the issue, does somebody need to bring that forward as an agenda item? Is that then voted on by the members for that to be accepted? How does that work?

Mr R Rowe : If the matter were to come up in a meeting of states parties to the law of the sea convention, yes. The subject would have to be put forward as part of an agenda item and then it would need to be considered by the parties as to whether they wish to address that matter as a formal agenda item.

Senator FAWCETT: Is that a simple majority vote or does it need a unanimous vote? Does anyone have a power of veto?

Mr R Rowe : I would have to check that. I think it would need to have the full support of all the parties to the convention to put it on the agenda. I would have to check the convention as to the actual meeting requirements.

Senator FAWCETT: Just to take that process a little further, let us assume that we got past that hurdle and it was on the agenda. Let us assume that a consensus was reached—improbable as that may be. Does that then have to go to the General Assembly for ratification, approval or adoption?

Mr R Rowe : You mean if some proposal emanated from the meeting of states parties?

Senator FAWCETT: Yes.

Mr R Rowe : No, the states parties could determine an outcome or a recommendation. It is conceivable—and this is all theoretical—but if there were a desire to endorse that and give it some formal status, of course it could theoretically be put forward, I suppose, as a General Assembly resolution. But I really wish to emphasise that there is no indication at the moment in a general sense to put this subject of the South China Sea issues into the formal agenda of the states parties meeting.

Senator FAWCETT: Are there any signs that China intends to enforce its claim? I know that at one time they made the threat that they saw it as a core issue similar to Tibet and Taiwan and that they would be prepared to use military means to protect their interests. Is there any indication that they have gone down that path?

Mr R Rowe : The only answer I can give to that question is to say that of course China maintains very resolutely its national position on the issue. Going beyond that, I have no direct knowledge of any intent to enforce, as you are suggesting.

Senator FAWCETT: Sure. Obviously the flow-on impact if that claim were recognised, in terms of freedom of navigational passage, has significant implications—probably not so much for commercial shipping but certainly for military shipping. Has there been any occurrence of attempts to impose restrictions on military shipping through that area?

Mr R Rowe : Not that I am aware of, no.

Senator FAWCETT: Thank you, Chair. I have other questions in this area.

CHAIR: Okay. We will come back to you. We will share the time around a bit.

Senator KROGER: Thank you. I don't know whether you can answer this because I know it is not strictly international law, but I am interested in confirming whether PNG has determined to introduce the death penalty? Are you able to advise me? I know that there were discussions that they were exploring introducing the death penalty. Have they done that?

Senator Bob Carr: I did discuss it with the Prime Minister. I think the Prime Minister raised it first, and I indicated that Australia is opposed to the death penalty in all circumstances and at all times. Since that visit, I have seen reports that the country has moved—and I will just get this confirmed—to broaden the number of offences that would trigger the consideration of the death penalty.

Senator KROGER: Clearly the question of particular interest is whether this will impact on Australian citizens, because there are a number there working, and the implications for Australians who are working in the country.

Senator Bob Carr: We will get the list of offences under the Crimes Act or its equivalent that the death penalty would, in theory at least, apply to.

Senator KROGER: That would be helpful. I am also interested in getting an update on the progress of the UN Security Council sanctions committees. I understand that we chair the sanctions committee.

Mr Varghese : We chair more than one sanctions committee.

Senator KROGER: Which sanctions committees do we chair?

Mr Varghese : We chair the ones on al-Qaeda and the Taliban, I think. She Can I just give you a bit more information on the PNG question, because it may be quicker than taking it on notice.

Senator KROGER: Yes, please.

Mr Varghese : On 28 May the PNG parliament passed a bill amending the criminal code to introduce increased penalties, including the death penalty, for certain violent crimes including wilful murder of a person on account of accusations of sorcery, aggravated rape and aggravated robbery. The bill also sets out the ways the death penalty shall be carried out, using one of the following five methods: hanging, lethal injection, medical death through deprivation of oxygen, firing squad or electrocution. It was passed on the voices with no audible dissent. The foreign minister has indicated that he has raised it. The Prime Minister also raised it during her recent visit.

Senator KROGER: Thank you. What is the process from here, then, in mandating that? If it is passed on the voices, what activates it legislatively in PNG?

Mr Varghese : It is a bill that has passed the parliament.

Senator KROGER: So it actually has passed.

Mr Varghese : Yes.

Senator KROGER: So it just has to be put into effect now.

Mr Varghese : That is correct.

Senator KROGER: Mr Merrill, could you give me an update on those three committees and what progress they are making?

Mr Merrill : Certainly. I might make some introductory remarks. I also have a colleague here who is the head of our sanctions and transnational crimes section who might be able to provide a bit more detail if you have any follow-up questions. As the secretary pointed out, we chair those three committees—Iran, al-Qaeda and the Taliban. We are also vice chair of three other committees. I would just make the point that we are also an active member of all 13 of the UN Security Council Sanctions Committees, including, critically, the DPRK committee.

In relation to the three committees that we are chairing, we have come to the task with an interest in ensuring that the committees are active in monitoring compliance of council resolutions and implementation by member states of their obligations under various resolutions. We are particularly focused on ensuring that the committees work closely with their respective monitoring groups and the panel of experts. Again, my colleague will be able to talk a little bit about the nature of those independent monitoring mechanisms. They are a little bit different for each of the committees.

As chair of the committee, we are basically responsible for facilitating discussion and consideration of proposals that are brought to the committee, recommendations of those panels, inquiries by member states and issues about noncompliance. Our job is to ensure that that is done in a timely and effective way. Perhaps one of the key roles that the chairs of the committees perform is to set out a program of work over the term. What we have done with each of those committees is essentially ensure that they meet regularly. For example, the Iran committee met only five times last year under its previous chairmanship. We have already had five meetings in the first five months of this year.

Another aspect of the work of the committees that we think is important is to better align their focus with some of the broader council objectives. Certainly in relation to the al-Qaeda committee, we are very interested in using the powers that flow from resolution 1267 to ensure that those sanctions can be applied to emerging threats in areas like the Sahel in northern Africa. In broadening the scope, we are bringing a degree of agility and innovation to the way the committee is looking at its own mandate and the way the sanctions are being applied.

On Iran, we are interested firstly in ensuring that we are engaging regional states whose support and cooperation are vital to making those sanctions on Iran work and ensuring the committee is considering actively the advice of the panel of experts—who are very knowledgeable on this area but have been perhaps underutilised at times. But we are dealing with a political reality there. Decisions of the committees are made by consensus and that involves the support of all the members for any active decision that the committees make with regard to listing or delisting action.

Senator KROGER: When you say ‘consensus’, do you mean a simple majority or 100 per cent?

Mr Merrill : I mean all 15 members. That presents its own challenges. Getting agreement to the program of work for the committee requires full consensus of members. So you can see some of the dynamics at work there.

Senator KROGER: To appreciate the difficulty of agreeing to a program of works—and I am happy to take this on notice—can you advise whether the composition of these sanctions committees different? Is the membership composition of these sanctions committees, the nations that are representative, all the same?

Mr Merrill : All sitting members of the council serve on all 13 sanctions committees. The composition does not change. Some of the rules of procedure, some of the mechanisms that are there to support the committee, do vary, and that is actually the case with two of the committees that we are chairing. Mr Playle can provide you with a bit more detail on that.

There are two points about the program of work. Firstly, it sets the agenda for the next two years and, in a sense, the level of ambition. It also creates scope for a greater or lesser degree of engagement with outside parties, and that is within the committees remit as well—to invite non-council members to have their say in relation to sanctions matters. But, again, it is about the degree of engagement of the ombudsman or the independent panel of experts mechanisms and those sorts of functions. That is really what we have set as one of our objectives. The other important objective that we have is really about greater transparency—that is, to any extent possible, having the decision making processes of the committees and certainly the outcomes of those decisions available to the wider UN membership and indeed beyond that.

Senator KROGER: I think you answered this in your explanation. So the chairmanship stands for the two-year period; it does not change again in 12 months’ time?

Mr Merrill : That is correct.

Senator KROGER: So it stands for the full period.

Mr Merrill : That is correct. Those roles are allocated essentially by the P5. The role of vice chair of the committees, which we also have, is a little bit more nominal. But as chair we are responsible for driving the agenda for the committee for the period that we are on it.

Senator KROGER: You were talking about more rigorous monitoring of processes. Can you take me through that a little bit, because the whole point here is that you are not presiding over a toothless tiger—that it is a robust process. How are we affecting that through our chairmanship on these committees?

Mr Merrill : Again, critically, if it were as simple as having states just submit documents confirming that they have to their satisfaction met all of their obligations under the various resolutions, it would be a much easier world, in a way. The reality is that you need to engage mechanisms like the panels of experts and the monitoring groups visiting states that are under UN sanctions and have those measures applied to them and visiting those neighbouring states and other states to actually examine and provide a greater degree of verification about whether these sanction obligations are being met. That is one critical function. Another critical function is regular reviews by the committee itself and in bringing parties who, for example, have complaints or concerns that resolutions are not being met. It is a responsibility of the committee to have them heard and to investigate and initiate action. That is using some of the wider functions of the secretariat as well. Thirdly, it is a lot about advocacy and outreach. With a lot of smaller states who may lack capacity, it is about focusing more on how they can improve their technical ability in many respects to meet their obligations under the resolutions. We are doing a fair bit of work on that as well.

Senator KROGER: In previous estimates it has been reported that a taskforce was set up here to support it. Given the nature of what you have just gone through, has this required further resourcing in addition to what has been provided to us in past evidence?

Mr Merrill : No. That was part of our planning. We came in with our eyes open. Certainly late last year we did not know exactly which committees we would be assigned but we knew, partly as a reflection of the composition of the e10, that we were going to get a big’un. We knew that we were going to get some of the committees with heavier workloads, and we planned appropriately.

Mr Varghese : The chair has available to it the resources of the UN Secretariat and the Security Council Secretariat, so a lot of that supportive work is also provided through the UN system, not just from our own resources.

Mr Merrill : Can I just make two other points? Again, the committees we are chairing are directly aligned with our interests and our stated campaign goals in terms of serving on the council. Iran is by far the hardest in a way, but so many of the sanction issues are cutting across the council's agenda. That is not just about proliferation activities. We are also talking about arm shipments and a general destabilising effect that we are seeing there. That for us is important. We will be seeing in the next week—and correct me if I am wrong—a pretty significant decision to list al-Nusra as an alias of al-Qaeda in Syria. Sorry, I stand corrected. That happened last week. Again, this is in our interest, certainly in terms of pursuing peace and security in the Syrian area. With the Taliban, we have a critical interest in Afghanistan as well. What we want to do on that committee is really look down the track at the way we can use that committee to facilitate some sort of move towards dialogue with them.

Senator KROGER: I would think that it is a logical conclusion that that work in regard to Afghanistan and the Taliban will exponentially increase as we withdraw from the region. The dynamics of what you are dealing with will be quite different as coalition forces withdraw. But that may be on the tail end of our chairmanship.

Mr Merrill : Yes.

Senator EGGLESTON: I noticed under international organisations you have people dealing with refugees and people smuggling.

Mr Varghese : Our ambassador for people smuggling issues is available.

Senator EGGLESTON: The vast majority of the refugees who are smuggled seemed to be coming from Indonesia. How cooperative have you found the Indonesian police and authorities in trying to track down the individuals behind the, obviously, criminal organisations that are running these people smuggling operations?

Mr Chittick : We have a very good relationship with the Indonesian government to counter people smuggling. There is a very significant flow of people being smuggled through Indonesia. The Indonesian law enforcement authorities undertake disruptions fairly regularly. I do not have a particular set of statistics on me, but annually it usually runs into the many thousands who are disrupted en route. So the Australian government works very closely with Indonesia on that. Those disruptions, for a range of operational security reasons, are not generally made public. But certainly there is a lot of hard work that is going on in Indonesia.

Senator EGGLESTON: By disruptions, you mean intercepts of people before they actually undertake a boat trip?

Mr Chittick : Yes. It would be the disruption of a smuggling activity, the taking into custody those who have been smuggled or who have been seeking to smuggle and prosecutions where those can be made.

Senator EGGLESTON: Are you able to tell us about the number of prosecutions?

Mr Chittick : I think that may be buried in an AFP brief that I have here, Senator. So if I could take that on notice.

Senator EGGLESTON: You can take that on notice. Do you have similar arrangements with other countries, such as Malaysia or Thailand?

Mr Chittick : We have very cooperative relationships with all of the countries that are transit or source countries in the so-called ‘people smuggling pipelines’. With Malaysia, we have a joint working group that now meets annually. The last meeting was in December, and that covers a broad range of law enforcement, information sharing and legal cooperation issues that involve a wide range of Australian government agencies. In Thailand, we have a slightly less formalised structured relationship, but nonetheless an excellent relationship between Australian law enforcement, immigration and border security agencies. The Thai law enforcement agencies have done a very good job in recent years in disrupting a number of people smuggling activities. As with most crime types, it is very difficult to eliminate those. But our partners in the region have done a good job in combating these people smuggling crimes in our own countries.

Senator EGGLESTON: Are there any other countries that you have such arrangements with, like Myanmar?

Mr Chittick : As I mentioned last night, we have a joint working group on people smuggling and transnational crime with Sri Lanka. Minister Carr opened the first of those meetings in December last year in Colombo. We have a formalised joint working group with Pakistan as well, and the last meeting of that was in September last year. We have a number of different approaches with our country strategies. Some involve formalised working groups and others are generally more informal arrangements with the relevant agencies in the country. So we seek to tailor our approach to the most effective way to engage with specific countries.

Senator EGGLESTON: I have heard that there were—and perhaps it might not be now—five times as many people coming in through airports as come by boats as irregular entrants, if you like. What countries are the people who come in by air largely coming from?

Mr Chittick : I do not have those statistics on me, Senator, and it is really a matter for DIAC, who manage those issues at the border. But roughly the number of people arriving by irregular means by air is a smaller number than those arriving by boat.

Senator EGGLESTON: It is now, but I think in the past it was a different ratio. So you do not have any information on that?

Mr Chittick : No, I do not. You should really direct that to DIAC.

Senator EGGLESTON: Do you have regular meetings with the Indonesian authorities?

Mr Chittick : We have both meetings involving Canberra-based officials with their Indonesian counterparts regularly, but it is a daily phenomenon for our embassy staff in Jakarta to have very regular meetings. They are in constant contact with our counterparts.

Senator EGGLESTON: Is it your impression that you are getting to the more senior people in the organisations behind the people smuggling activities or more junior people who are taking people out to the ports and so on. Are there bigger fish to catch in the organisations behind this?

Mr Chittick : These are very well organised and quite complicated organised crime outfits. They are becoming increasingly so. When my colleagues in law enforcement describe these organisations, they do sound quite similar to the mafia in the way that they run. The focus is on disrupting in whatever way is possible, and that includes disruptions of particular movements of people. It also includes a focus on the key organisers of people smugglers. There have been a number of recent successes in Indonesia where the Indonesian national police have arrested some very serious players in people smuggling. Most recently last month with a people smuggler by the name of ‘Bilu’, who figures prominently in many of the people smuggling activities in Indonesia.

Senator EGGLESTON: Are these people Indonesian nationals or are they from other countries?

Mr Chittick : Almost exclusively they are non-Indonesian.

Senator EGGLESTON: Do you wish to give us a general indication of where they might be from?

Mr Chittick : Traditionally, particular ethnic or national groups have smuggled their particular ethnic group. So the organisers and key people smugglers have tended to reflect the groups that have been smuggled. So there are very significant numbers of Pakistani, Afghani, Iranian and Iraqi nationals involved in Indonesia, and, elsewhere in the region, Sri Lankan organisers.

Senator EGGLESTON: Does that imply that the people who are being smuggled are sort of buying a ticket from beginning to end that involves transport from their home country to Indonesia and then on to Australia?

Mr Chittick : I think that used to be the case. What we have seen more recently is a change in the way that these organisations operate. That is as a result of the disruption activity undertaken by governments in the region. So we now see a much more cellular organisation which seeks to limit the risk of any particular part of the organisation from disruption activity. I think that that is a testament to the impact that regional governments have had on disrupting people-smuggling organisations. They are, nevertheless, very hardy operations and very profitable organisations. It is a hard business to be in.

Senator EGGLESTON: You said it is very profitable. What sort of fees are people paying to be brought to Australia by boat?

Mr Chittick : Because of the breaking up of the different types of services offered now, it is really fee-for-service, so it depends on the risk and the extent of the service. But typically, people are paying anywhere between $10,000 to $15,000 from their home country through to Australia. So very substantial amounts of money.

CHAIR: Senator Eggleston, Senator McEwen just has a follow-up question.

Senator EGGLESTON: That is fine.

Senator McEWEN: This is on the manner of working cooperatively with other countries in the region to address the issue of people smuggling. Following on from Senator Eggleston's questions there, Ambassador or Minister, can you advise me of how important it is to maintain good relationships with senior people in those other governments, and how helpful is it if senior members of the opposition in this country accuse senior diplomats—for example, from Indonesia—of not telling the truth?

Senator Bob Carr: I think the argument you raise is very valid. We need the cooperation of nations to our north if we are to defeat the people smugglers. That means having a cooperative relationship with Indonesia, with Malaysia and with Sri Lanka. There are millions of people displaced in the world and thus vulnerable to the allure of people smugglers who say, 'Pay me $10,000 and I will take you into Australian waters on my leaky, unseaworthy vessel.’ So the scourge of people smuggling is very real. It does not help our cause one little bit if you have a senior political figure in this country suggesting that an especially respected Indonesian diplomat—such as the Republic of Indonesia’s ambassador, who we are honoured to have in Canberra—says one thing in public and says another thing privately—that is, to accuse him of lying. That is a staggering thing for a shadow foreign minister to do and say and makes the prospect of fruitful cooperation all the harder. There is no doubt in my mind that an Abbott government would not be able to secure a cooperative relationship with Indonesia because of the appalling nature of these comments.

CHAIR: Minister, Senator Fawcett has a point of order.

Senator FAWCETT: As you reminded the minister and members of the committee yesterday, standing order 193 prevents imputation of improper motive or personal reflections on members, and I would ask you to draw the minister's attention to his requirement to comply with the standing orders.

CHAIR: Thank you, Senator Fawcett. There is no point of order. Minister Carr was answering Senator McEwen's questions.

Senator EGGLESTON: Mr Chittick, given what you have told us about your organisation's activities, notwithstanding the cooperation with the Indonesian police, where is it failing, because a number of boat people are obviously going out?

Mr Chittick : A very substantial number of displaced people, as the senator said, are leaving their countries. So the number of people seeking to come to Australia has increased. The efforts of our regional partners continue, and they remain committed to addressing this problem. But there are simply larger numbers of people who are leaving their countries to come to Australia.

Senator EGGLESTON: Wouldn't it be the case, though, that if there are these substantially increased numbers of people who, one would think, are fairly obviously refugees that it would be easier to identify them within the Indonesian community from which they are coming? What is the reason that they are not being identified before they board the boat?

Mr Chittick : Indonesia is a very large country with 17,000 islands and many tens of thousands of kilometres of coastline. There are 240 million people. Millions of tourists come through their major airports and a number of those who enter Indonesia do so under valid visas and remain legally in Indonesia until they depart illegally. It is a very complex law enforcement environment for Indonesia. They undertake what I can see, as a non law enforcement officer, to be high-quality efforts to disrupt these activities. But there are a very large number of people now leaving their home countries to travel to Indonesia with a view to coming to Australia.

If I could just answer a question I took on notice earlier which I think was about the number of arrests in Indonesia.

Senator EGGLESTON: Yes.

Mr Chittick : There is no official data on people-smuggling prosecutions in Indonesia. As of earlier this year, we understand that 18 people have been convicted of people-smuggling offences under the new people-smuggling law. There have been over 120 arrests and there are approximately 30 people-smuggling cases currently before Indonesian courts or under investigation.

Senator EGGLESTON: Thank you for that information.

CHAIR: Ambassador, can you explain what the obligations are under the international laws of the sea in terms of unseaworthy vessels?

Mr Chittick : I might hand that to our senior legal adviser.

Mr R Rowe : The International Convention for the Safety of Life at Sea obliges masters of vessels to assist those who are in danger and peril on the sea and to take care of them and to take them to a safe place so that they can be taken off the vessel. So there is an international convention and there are international arrangements under that convention providing an obligation to masters of vessels to save lives, basically.

CHAIR: What kinds of sanctions are there if a vessel does not respond to that, or does not take those responsibilities seriously?

Mr R Rowe : There are some formal sanctions under the convention, as such, but other aspects would come to bear—moral judgement and so forth. But there is a well-established international practice, over centuries, of going to those in peril on the sea and looking after them.

CHAIR: I am sorry to labour this a little, but where would those sanctions be applied from? Hypothetically, if a vessel got into trouble in international waters to our north and a tanker from another country heard the distress call but did not respond, what would happen?

Mr R Rowe : The Australian Maritime Safety Authority would be engaged in any rescue or any process like that. But in terms of a vessel not fulfilling her responsibility under the convention, the only way I can imagine that would be taken up would be, perhaps, bilaterally with the flag state of the vessel—in other words, the government of the state in which the vessel is registered.

CHAIR: Thank you for that. Senator Eggleston, have you finished that set of questions? Senator Fawcett has some more, so we can come back to you if you want to have a think about it.

Senator FAWCETT: When we have committed to agreements with UN agencies—for example, ICAO—can you talk me through what the expectation is about our conduct if we have agreed to be bound to expectations of a UN agency? Are there self-checking mechanisms within the Commonwealth if we fail to observe an obligation? Does the UN impose any kind of comment, sanction or response? What is the impact of our making a commitment and then not following through with it?

Ms Sidhu : I might need to clarify your question. Are you asking if we commit to obligations under an international treaty, or are you asking if we commit to obligations under a UN agency? There are a range of obligations and, essentially, a spectrum of obligations that we enter into as a country, with treaty obligations being obviously the highest form of that obligation, where we effectively agree to enforce the terms of those treaties in our domestic legal system. So that is one category of compliance. In those circumstances there is a very clear set of sanctions or rules about what might happen if we were to breach our obligations under that treaty. UN agencies may pass resolutions that bind UN agencies themselves or bind countries and commit them, perhaps in a normative sense rather than in a legal sense, and that is a different type of obligation.

Senator FAWCETT: The obligation that I am specifically referring to is with ICAO, the International Civil Aviation Organisation—a UN body. Under annex 13 there is an obligation that we have signed up to regarding the standards that we will apply about how we do aircraft accident investigation. In a recent inquiry it came to light that perhaps we have not lived up to those standards. So what are the consequences from the UN's perspective? Clearly, the Senate committee process is one of our internal checks and balances; but are there potential consequences from the international body?

Ms Sidhu : We may have to take that one on notice. Australia's obligations under ICAO are the responsibility of the Department of Infrastructure and Transport; they administer Australia's engagement and lead Australia's representation at ICAO. We are very happy to help you to the extent that we can, but that is the department.

Senator FAWCETT: I recognise that the department of infrastructure look after that particular. I am looking more broadly at the principle of whether it is purely a self-checking function—to make sure that we comply—or whether there is potentially any consequence, if that self-checking function has not been adequate and we deviate from something we have signed up to.

Ms Sidhu : We can supply that on notice.

Senator FAWCETT: We are here for the rest of the day. If you could get back to us with that today, that would be very useful.

Ms Sidhu : We will endeavour to do so.

Senator FAWCETT: I turn to the Bali Process; it has been raised a couple of times. Mr Chittick, you have talked about people smuggling from the illegal immigration perspective. Does the Bali Process also cover that aspect of people trafficking which is more about people who are co-opted, kidnapped or moved into the sex trade, forced labour or other areas? Does it also cover that side of people smuggling?

Mr Chittick : Yes. It covers human trafficking. One of the things that we are very mindful of is to not conflate people smuggling and trafficking in persons. Indeed, the full title of the Bali Process, which is more than a little unwieldy, is the Bali Process on People Smuggling, Trafficking in Persons and Related Transnational Crime. We call it the Bali Process. Human trafficking, or trafficking in persons, has been a part of the Bali Process since it was established in 2002. It is chaired by Australia and Indonesia, and it is a great success story of what Australia and Indonesia can do regionally. I think it is fair to say that the human trafficking agenda within the Bali Process was underdone. So in 2011 ministers decided to increase the effort on human trafficking within the Bali Process. Since then a range of work has gone on, primarily at working level, to share experience and to build understanding within our region about the evils of human trafficking and to focus on the key elements of the trafficking agenda. They include prevention, prosecution, protection—there is a fourth 'p' which I cannot remember right now. That work has been going on in the Bali Process. I have participated in a number of those workshops and can attest to their quality and the impact they are having on the consciousness of senior officials within our region on human trafficking. At the last Bali Process ministerial meeting, which Senator Carr co-chaired with his Indonesian counterpart, ministers agreed that, given that the workload within the Bali Process on human trafficking was now so substantial, they would create a dedicated working group on human trafficking. That is still very much at the early stages of development, and there is a good work program for us to take forward on that. One of the key elements, and one of the great outcomes from our perspective, was that that working group will allow us to integrate the very valuable experience of civil society—NGOs and the business sector—who have much to offer in countering human trafficking in our region. Another element of the work that was undertaken in the last Bali Process was an agreement to develop policy guides to help regional countries to better criminalise human trafficking. It is a work program that is quite dynamic in the Bali Process. It still has quite a long way to go to deliver on the objectives set for us by ministers in 2011, but I think we now have in place the infrastructure within the Bali Process to take that agenda forward.

Senator FAWCETT: Is there a publicly releasable document that shows what those objectives were in 2011, the resources applied by each country to enable the workforce to do it, and a statement of progress against those? Everything you have said sounds very good. The question that this committee and the taxpayer ask is, I guess: how much is it costing us, is it being delivered and is it effective?

Mr Chittick : I would refer you to the Bali Process website, at baliprocess.net. That has on it publicly available information, including the ministers, the communiques from the 2011 Bali Process meeting and the 2013 Bali process meeting that Senator Carr co-chaired and, if my recollection is correct, a statement of the activities that have taken place between the two meetings.

Senator FAWCETT: And also a statement of the resources that have been applied to it?

Mr Chittick : The Bali Process is not an institution, like the OECD or the UN. It is not quite a virtual institution either. The resources are devoted by and deployed by member countries rather than a formal secretariat.

Senator FAWCETT: I understand that, but I guess I am asking from Australia's perspective. If we have now agreed to establish a full-time working group, clearly somebody has to pay for the salaries—and I am assuming that, for the Australian participants, we do. So my question is: how many people are there on the working group, how much is it costing, and what are their specific objectives?

Mr Chittick : The terms of reference for the working group are still to be established. From the Australian government's perspective, we will service that out of our Bali Process funding in terms of the staff I have working on human trafficking and staff working across government on human trafficking, including at AGD and in AusAID.

Senator FAWCETT: Just a last question on that: you have said that the terms of reference have yet to be completed. Do you have a time frame for that?

Mr Chittick : We are engaging with our co-chair Indonesia on that. I do not have a time frame available at this point.

Senator HEFFERNAN: Given the process and all the words you have just spoken, does the process include defining and dealing with facilitation? In other words, the description of 'facilitation' is someone paying a government official to speed up what they are paid to do; whereas 'bribing' is paying a government official to do something they are not paid to do. In all of this, you know—we all know; we do not talk about it—there is serious corruption, by government officials et cetera. Are you ignoring that?

Senator STERLE: Not Australians.

Senator HEFFERNAN: No—I am not referring to Australia. But there is serious corruption up there. I have dealt with it with cattle and all sorts of things. You can get a signature on anything if you pay them enough money. Are you, in a practical way, coming to terms with that? You can have all the planning you like—if you don't deal with that, you are dead.

Mr Chittick : There are no broader governance issues dealt with such as the ones you have outlined, particularly through the Bali Process. We do have a very high quality and internationally regarded aid program called APTIP, which you might seek further advice on from AusAID. That seeks to build the capacity of a particular number of countries which are ASEAN members and very focused on the Australian aid program.

Senator HEFFERNAN: Is that a cousin of AusAID?

Mr Chittick : No; that is a program that is delivered by AusAID which—

Senator HEFFERNAN: Which has serious corruption—

Mr Chittick : It is not an anti-corruption program, but it does seek to build capacity in a number of Bali Process members and, therefore, reinforces the work that goes on within the Bali Process. I think the issues you are raising are much broader than specifically human trafficking or even people smuggling.

Senator HEFFERNAN: You do not think to audit or measure the amount of interference in these programs brought on by corruption?

Mr Chittick : That is an issue well beyond the remit of the Bali Process.

Senator HEFFERNAN: It should not be.

Senator Bob Carr: I will take this opportunity, if I can, to give an answer that I promised in response to Senator Fawcett about minorities in Pakistan. I am advised by our high commission in Islamabad that they are continuing to work with the government of Pakistan as well as the international and NGO community to advocate for the protection and promotion of human rights for the most vulnerable populations in that country. That includes Christians, Ahmadis, Hindus and the Shia community, in particular Hazaras, who have suffered multiple, targeted and brutal attacks by militant groups over the past year.

Australia continues to support the promotion of human rights at the grassroots level, and this is something that Senate Fawcett asked specifically about. For example, we are working with the Jenner Institute to establish a human rights curriculum for schools across the country, which includes a strong focus on minority rights. In 2011­12, we worked with local partners to promote interfaith harmony and human rights in southern Punjab. The high commission also works alongside religious groups of all faiths, including the Pakistan Ulema Council, various Christian dioceses and representatives from the Ahmadi and Hindu community to support their indigenous efforts to promote interfaith harmony, tolerance and dialogue.

I am encouraged that the newly elected Prime Minister Sharif raised the issue of minority rights as one of his priorities in his inaugural address to parliament on 5 June. On 10 May, during the election campaign, he committed to equal treatment of minorities and protection of their rights, once in power. Our high commission will continue to work with the incoming Sharif government and his appointed officials in the ministry of national harmony and the ministry of human rights to encourage them to uphold their commitments to human rights instruments. It will be a priority issue for the Australian government in our discussions with the new government of Pakistan.

CHAIR: Thank you very much. Senator Fawcett, do you have any further questions?

Senator FAWCETT: I do.

CHAIR: Yes, keep going.

Senator FAWCETT: Minister, can I ask one follow-up question on that. You will probably need to take this on notice but, with the human rights work in Pakistan, would you be able to confirm whether they are taking, as the basis of their definition of 'human rights', the definition from the United Nations or from the Organisation of Islamic Cooperation?

Senator Bob Carr: Who is the 'they' in the sentence?

Senator FAWCETT: The Pakistan government.

Senator Bob Carr: I will make further inquiries.

Senator FAWCETT: Thank you very much. Could I just come back to the topic of sanctions. We talked before about the United Nations sanctions and of various committees with the Security Council. Can you confirm that Australia also supports other sanctions that are not necessarily UN based? For example, if there are sanctions by the US on a country over military equipment, Australia will in some circumstances support those?

Mr Merrill : Yes, Australia does have arrangements for autonomous sanctions outside of the UN Security Council resolution framework. My international organisations and legal division colleague Mr Rowe might be able to provide you with a little more information on those measures.

Mr R Rowe : The Autonomous Sanctions Act was adopted in 2011. That act provides for the government to institute sanctions additional to those which Australia is obliged to implement in response to a United Nations Security Council resolution. That sanctions regime, which now has been in effect for two years, is given effect to through regulations. It enables the government to apply additional sanctions over and above those which are mandated by UN Security Council resolution.

Senator FAWCETT: On DFAT's website, you can find a consolidated list of UN sanctions, particularly their financial sanctions, against individuals or regimes and the people that flow from that. But if a business, for example, was looking to have a contract with a country that possibly is subject to a sanction, where would they go to find out whether Australia has, in fact, signed up to support a sanction and whether that would impact on their contract?

Mr R Rowe : That information about autonomous sanctions is available on the DFAT website. We have a very comprehensive site in relation to sanctions. But additionally, we have a portal in the sanctions and transnational crime section, in the International Organisations and Legal Division, where companies and individuals put requests and pose questions regarding sanctions matters. That facility is, I would say, fairly extensively known now, not only through the website but also through a very active program of outreach that my colleagues in the sanctions and transnational crime section engage in through going to states and talking to companies, talking to individuals and holding public information events.

In addition to that outreach, the main, I suppose, avenue for checking directly is through putting a question into the system through this portal, and we take that very seriously. We respond very quickly because of, obviously, the importance of companies and individuals knowing exactly what they can do under the autonomous sanctions and UN sanctions regimes.

Senator FAWCETT: I am glad to hear about the outreach. All I would say is that there are still obviously some gaps, given feedback that I am getting from companies that have looked at that sort of work. So I would encourage you to continue to expand that program, as appropriate.

Mr R Rowe : Yes. If I can comment on that, we would be interested to hear if there are any gaps, as you say, because it is a pretty active program that we engage upon and we are always very interested in—

Senator FAWCETT: Sure. I am happy to talk to you offline about the specific detail.

CHAIR: How are we going?

Senator FAWCETT: I still have lots more.

CHAIR: Okay, keep going then.

Senator FAWCETT: As a last question on sanctions, I notice that there is a provision for compensation if companies feel as though they have been wrongly impacted through sanctions. Has that ever been claimed by an Australian individual or company?

Mr R Rowe : I think there has been one case but I would have to take that on notice, to be absolutely precise.

Senator FAWCETT: Thank you. Can I come to our involvement with international organisations, particularly the IPCC. Can you tell me how much Australia has committed to the funding for the IPCC?

Ms Sidhu : Australia's participation in the IPCC is led, managed and funded from the climate change part of the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. So that would be a question better addressed to that department.

Senator FAWCETT: So they have primary responsibility for climate change issues?

Ms Sidhu : They do.

Senator FAWCETT: The Prime Minister went to Rio some time ago to a conference where she is quoted as saying it would not make 'an indelible mark on the world's history'. I think 52 Australians were there. How many from DFAT went on that trip?

Ms Sidhu : I would have to take that one on notice. I do believe that a number of DFAT staff attended that conference but I can return to you with the precise information shortly.

Senator FAWCETT: Would 23 sound about right?

Ms Sidhu : I would have to confirm that.

Senator FAWCETT: I would welcome that confirmation this morning, if you could. But on the assumption that it was 23, which is what has been reported in the media—and given that you have just said that you are not actually primarily responsible for climate change; it is another government agency—what was the justification for 23 people from DFAT going to Rio for a talkfest that the Prime Minister herself said is not actually going to leave 'an indelible mark on history'?

Mr Varghese : Can I suggest that we get the accurate number as opposed to a media number and then address your question?

Senator FAWCETT: I am happy to take the accurate number later. But whether it is one, five, 10 or 20, if DFAT does not have primary carriage for that responsibility, why would it be sending numbers of people to a climate change conference?

Mr Varghese : I think the issue is how big the number is. If one person went, I do not think it would surprise you. If it was a much larger number, I would like to find out what the number was before engaging in hypotheticals.

Senator FAWCETT: At the end of the day, we are in a constrained budgetary environment. I would assume that, as the secretary, you would know if you had a large number of people who had travelled around the world to a conference—

Mr Varghese : I was not secretary at the time, and there is a lot of travel in the department that I would not keep tabs on. All I am suggesting is that we diligently find out for you, as soon as we can, how many DFAT staff were at the conference and what their role was.

Senator FAWCETT: Okay. We are about to go to the morning tea break. I assume that, when we come back from the morning tea break, we will be able to continue this discussion.

Senator McEWEN: I want to ask questions of Ms Williams, our Ambassador for Women and Girls.

CHAIR: Ms Williams, just while you are getting organised, perhaps we can discuss a bit of housekeeping here. We were trying to get to morning tea and then go to security and nuclear disarmament and non-proliferation. If there are many more questions in this group, perhaps I can get an indication.

Senator FAWCETT: I probably have another five minutes or so on IOR-ARC.

CHAIR: So how about we aim to get to ASNO at about 11? Thank you.

Senator McEWEN: Hello again, Ms Williams. I want to follow up on the UN Commission on the Status of Women meeting in March this year. Perhaps you could tell us what the theme was and what role Australia played in CSW this year.

Ms Williams : The theme this year was the elimination of violence against women, which is obviously a very important theme for us. I think I briefed the committee at last estimates, and I would not say that we were pessimistic but we had a sense that it was going to be quite a challenging CSW. That was because the last year there had been no agreed outcomes and, the last time that there had been no agreed outcomes, it was on the theme of violence against women. So we were very pleased that we were able to participate in reaching agreed conclusions. I think, across the globe, they have been welcomed, given the importance of the elimination of violence against women.

Besides actively participating in the negotiations, we co-sponsored 12 side events and we organised two events ourselves on two particularly important themes. One was engaging men and boys on the elimination of violence against women, and we were able to showcase White Ribbon Australia's campaign in that event. That was very much welcomed, and the importance of engaging men and boys and male advocates was reflected in the final outcomes document. The other one that we had organised was on social media and the role of social media in eliminating violence against women and changing attitudes. The campaign 'the line', about respectful relationships, also attracted a lot of interest when we were able to showcase that in New York. I suppose as preparation for the outcomes, we had an extensive range of bilateral meetings. The Minister for the Status of Women had 14 bilateral meetings, in the few days that she was there, and I had a further eight bilateral meetings across a range of country representatives so that we could actively contribute to the negotiations.

I should just say one final thing. We were so pleased to see the active participation of Pacific delegations this year. It was really quite stark and it really built on the Pacific women shaping the Pacific development initiative that was launched last year. There were a number of side events, and I was pleased to be able to participate in those that highlighted the challenges that the Pacific faces but also some of the innovative things that we are doing together, particularly through using faith-based organisations. I was very pleased to speak on a panel, with Tim Costello from World Vision, about the sort of work that we are doing together in the Solomon Islands, using the churches.

Senator McEWEN: And the outcomes? I did have a quick look; it is a very lengthy statement, I have to say. But it was agreed by—

Ms Williams : It was agreed. From our perspective, in terms of the outcomes, I think there are some standouts for us that we were very pleased to be involved in. One is recognition that states should refrain from invoking any custom, tradition or religious consideration to avoid their obligations in relation to the elimination of violence against women. There was some push back, in trying to use cultural and traditional reasons. We are also pleased to work on language regarding Indigenous women and the impact on women with disability and also to insert language on female genital mutilation.

Senator McEWEN: Was a decision made about a theme for next year?

Ms Williams : The theme for next year is on the Millennium Development Goals.

Senator McEWEN: Who were our community representatives, if you like, at CSW this year?

Ms Williams : We had four community representatives. We had a representative from the YWCA. We had a woman with a disability, who was a very active participant in the panel. I also spoke on a panel on women and disabilities and what we are doing in our aid program. We had a woman of South Sudanese background from South Australia from a non-English speaking background. We also had an Indigenous representative. I think we have had NGO representatives on the delegation since 2000. They really do make an important contribution. About 6,000 people participate in CSW, so they themselves participate in a lot of panels. There are also those who are outside the delegation—a lot of NGO representatives from a really broad spectrum, from the YWCA to Australian Girl Guides, who seem to pop up everywhere, and a range of rural women's organisations.

Senator McEWEN: Excellent. The membership of CSW: there are 45 members at any one time; is that right?

Ms Williams : In terms of the bureau—all of us are participants; we are not a member of the bureau.

Senator McEWEN: How are those countries replaced? They have four­year terms. What is the process of—

Ms Williams : I am not sure of the mechanics and what the turnover is on the bureau for CSW. But it is worth making the point that we are at the moment on the executive board of UN Women.

Senator McEWEN: Thank you for that. You said the theme next year is the Millennium Development Goals, but that is fairly broad issue. Is it about achievement of the Millennium Development Goals? Is that what CSW is going to be looking at?

Ms Williams : I think they are working through how we are going to address that theme. Obviously, AusAID is going to play a really critical role as we move into post 2015 and the focus that we have on not just the specific gender MDGs but across the MDGs. It might be worth taking that up in terms of 'the thinking' within AusAID, who will be on later today.

Senator McEWEN: Thank you very much. I appreciate that.

CHAIR: We will now take our morning tea break.

Pr oceedings suspended from 10:33 to 10:54

CHAIR: I call the committee to order. Mr Varghese, as I said, we have just got a few more questions in the international section and then we are going to move to security nonproliferation. We will aim to get there by 11ish. Senator Fawcett.

Senator FAWCETT: Thank you. I was wondering if you have a response for me on the number of people who went to Rio.

Mr Varghese : I am still waiting on some additional information. It is also the case that the minister did answer a question on notice on this on 21 November 2012 which provides quite a bit of detail. I will get back to it in this session, I hope.

Senator FAWCETT: I can confirm from an answer to PM&C that the number was 23.

Mr Varghese : The 23 number is correct. I just wanted to also have a bit more detail about why the number was that number.

Senator FAWCETT: In broad terms, then, if DFAT is not responsible for an area and there are a number—whatever 52 minus 23 is—of Commonwealth staff who have gone to support the PM, is it, as a general principle, a good use of taxpayers' money to have that many DFAT staff travelling overseas for something that your department is not responsible for?

Mr Varghese : The reason I did want to wait was to get a better sense of why that number was as high as it is. It does appear a high number on first glance. I am happy to answer at this point, but I think it may be more informative if I was able to get a little bit more information.

Senator FAWCETT: I am happy to wait for that other information. But something hopefully you can tell me is this: within DFAT do you have a specific climate change section or department or group?

Mr Varghese : It will be covered by our Environment Branch, which is within International Organisations and Legal Division.

Senator FAWCETT: How many people within that have a focus on climate change?

Ms Sidhu : Senator, it is probably one or two. The Environment Branch is not the only part of the department that contributes to the climate change work. The role of the department, essentially, in the climate change work is to support the broader whole-of-government effort. The input that the department provides to climate change work includes advice on trade-related aspects that are relevant to climate change activities, as well as advice that we provide on international legal aspects of international climate change activity, particularly now that work is underway to develop and negotiate a new treaty in the UN Framework Convention on Climate Change. There are a number of inputs that the department does make into the climate change work. It is not strictly accurate to say that the department has no role.

Senator FAWCETT: I will await with great interest then, Secretary, your further information. As you indicated yourself, it does seem an unreasonably high number.

Mr Varghese : At first glance.

Senator FAWCETT: Could I go to IOR-ARC?

Mr Varghese : Go ahead, Senator; ask a question. I may be able to help you, but Jennifer Rawson is the division head.

Senator FAWCETT: We are obviously looking at the chair of that organisation for a period. I am just interested to know what specific strategic guidance that individual has been given from the department about Australia's intention for the outcomes we would like to achieve through this body over the time of our chairmanship, whether there are certain things that we want to bring to conclusion, whether there are certain initiatives we are keen to kick off and where we would like to be in terms of our relationship with the Indian Ocean rim nations in two to three years time.

Mr Varghese : Sure. We took over the chairmanship this year, following India. We anticipate that Indonesia will be the chairman to replace us after our two-year period. The troika that has been working on IOR-ARC issues, India, Australia, Indonesia, is actually quite an important subgrouping. When you think about IOR-ARC, you have got to conceptualise it as a long-term project. Ultimately, what we want to see is a greater degree of economic trade and investment integration in the Indian Ocean which can reinforce what is an emerging strategic coherence in the Indian Ocean, which is, essentially, a strategic coherence built around maritime security issues.

When people think about regionalism in the Indian Ocean they understandably tend to try and match what has been achieved on the other side in the Pacific Ocean. In the long term what we would be looking to achieve across the Indian Ocean would not be dissimilar to decades and decades of work that has been put into Asia-Pacific integration. A key feature of that was private sector trade and investment integration underpinning the regional identity. That is what we have not seen in the Indian Ocean and, in my view, regionalism in the Indian Ocean will not reach a critical mass until we do have that level of economic integration.

We will be using our period in the chair to try and push the organisation further down that long-term path. We will start with issues which have a high comfort level—this will include a number of maritime cooperation issues, fisheries, climate science and so on—and, in the process, try and build up a greater sense of common participation, and build up some sense of confidence that the organisation has a fundamental coherence that brings countries of the Indian Ocean rim together.

We want to try and improve the secretariat for the organisation. We have started that process with India over the last two years. That involves giving the secretariat some greater capability to propose and manage projects. Obviously, in the longer term we want to embed in the organisation the acceptance of some fundamental principles of regional security cooperation including, very importantly, respect for international maritime law, respect for freedom of the high seas, respect for the whole body of international law as it relates to high seas freedoms. The key part of this from a strategic point of view is that this is a crucial waterway for global trade in terms of the proportion of oil and other exports that are carried on ships that go through the Indian Ocean. We will fine-tune that strategy between now and November, when we will be chairing our first ministerial-level meeting; that is a meeting at foreign minister level. That is the broad perspective that we bring to our period as chair.

In the process it has also proved a very useful means of strengthening the dialogue we have with India, when India was in the chair and we were vice-chair. Similarly, I think it will add another layer of cooperation regarding our relationship with Indonesia, as it takes up the duties of vice-chair and chair down the track.

Senator FAWCETT: The two main areas of concern I am looking at are those sea lines of communication because of that trade task, and our economy and energy task are very heavily dependent. There is also the food task for the region with the fisheries. You have mentioned our interest in those. Is that a topic of coordination and agreement between that troika of us, Indonesia and India? Do they also see those as a priority or has that not been established with them yet?

Mr Varghese : I think we are pretty like-minded in the broad across those issues—certainly, in terms of strengthening what we are doing in fisheries, climate science and those sorts of maritime related activities. On the bigger question, we would certainly be very like-minded.

I do not think there is anyone within IOR-ARC who would argue against the fundamental principles of international law as they relate to high seas freedom, freedom of navigation, freedom of transit. I think it is a question of reinforcing the importance of those principles so that we can have a level of confidence that in the future we are not going to be faced with any challenge to them, which would obviously have quite profound economic as well as geostrategic implications.

Senator FAWCETT: Thank you. The chair is giving me the evil eye that I only have one more question, so I will wrap a couple of things into this question. What is it costing us to support IOR-ARC? Does our chairmanship bring any additional costs and are there any activities arising from IOR-ARC that are funded with an appropriation specific to IOR-ARC?

Mr Varghese : We will handle the additional costs—and there will be additional costs—within our existing resources. We had a bit of a discussion about this yesterday in terms of our budget management of it. We have not been given new money for it. We will manage it within our existing allocation.

CHAIR: The last questions in this section go to Senator Eggleston.

Senator EGGLESTON: Might I say, just as public information, that the committee's report on the Indian Ocean rim will be coming down next week and will be publicly available. It has been a very long inquiry but a very interesting one. I want to ask about the United Nations Security Council Taskforce. Is that still in existence? Are there still officers involved in that group?

Mr Varghese : The UN Security Council Taskforce?

Senator EGGLESTON: Yes.

Mr Varghese : That is the task force that Jon Merrill is currently heading. That was the task force we set up once we were successful in the campaign and began our term. It has a staffing profile of about 14 people. It includes some secondees from some organisations like the AFP and AusAID, as I recall. I am sure Mr Merrill will give you chapter and verse on it.

Senator EGGLESTON: It was not a task force set up to run the bid; it has been set up to manage our involvement—

Mr Varghese : We did have a task force set up to run our bid and then we set up a separate task force to manage our participation on the council.

Mr Merrill : Slight confusion there. They both were called UTF in bureaucratic parlance. There was a campaign team and then a task force almost entirely comprised of new membership that is responsible for supporting our council term, the work of our mission in New York and overall coordination of whole-of-government effort here in Canberra—and working through, of course, our other posts with interests on the UNSC agenda.

Senator EGGLESTON: How many people are involved in your group?

Mr Merrill : As the secretary said, we have a current establishment of 14 positions. That is 11 DFAT officers. We also have three seconded officers from other agencies—Defence, AusAID and AFP.

Senator EGGLESTON: Where are they mostly based—in the mission in New York?

Mr Merrill : No. The UNSC Taskforce is based in Canberra, within the department. We also have a UN Security Council team in New York, which is essentially a subset of our total mission presence in New York.

Senator EGGLESTON: Are you able to give us any idea of your budget?

Mr Merrill : I can take that on notice, certainly. This is just in relation to the task force?

Senator EGGLESTON: Yes, that is correct.

Mr Varghese : Yesterday, Senator, we did go through the budget for our period on the Security Council. We have been allocated $27.5 million. That is to cover substantial additional staffing in New York. It is to cover the staffing of the task force. It is to cover some additional resources in our Africa area, because 60 per cent of what the Security Council does is Africa related. It is to strengthen slightly our staffing dealing with UN sanctions related issues. It includes money for posting some additional officers in Africa to help us with our understanding of African issues. So $27.5 million is what we are working on in terms of covering all of our costs for the two-year term.

Senator EGGLESTON: Is that greater than the cost of the task force as such?

Mr Varghese : Yes.

Senator EGGLESTON: It was just the task force that I was interested in.

Mr Varghese : Yes. It includes the task force, so it is greater than the task force.

Senator EGGLESTON: Are you able to tell us what the budget for the task force itself is? You will take it on notice?

Mr Merrill : I will take it on notice.

Ms Thorpe : We manage the thing within the $27.5 million. Jon might need to do a bit more travel, so his budget will be adjusted or something like that. Really, the indication is that we got $27.5 million; $1.7 million of that is capital. So there is about $25 million for the two years of our term. It is something that is a moving feast. The concept is that we have this amount of money that we are managing within.

Senator EGGLESTON: That is the sum and you have to work within it?

Ms Thorpe : We have to live within it.

Senator EGGLESTON: Thank you. That is an important point.

CHAIR: That concludes questions on international organisations, legal and environment.

Ms Sidhu : Chair, I do have a response to Senator Fawcett's question on ICAO. Senator, the short answer is that the remedies for dealing with investigation and accidents only exist inside the ICAO framework. There is no broader United Nations or other agency involvement in that process. I do have a bit of an explanation about how ICAO goes about it, but essentially it sits inside the ICAO framework. If you have further questions, I am sure you can put them to the Department of Infrastructure and Transport.

Senator FAWCETT: Thank you.

[11:12]

CHAIR: We will move now to security, nuclear disarmament and non-proliferation. Senator Ludlam has some questions.

Senator LUDLAM: Could you provide us with a quick update on the status of negotiations on uranium sales to India?

Dr Floyd : Thank you, Senator, for your question. The update is that we have had one meeting with the negotiating team from India. That was held in the third week of March this year in New Delhi. That will be followed up by a second session of negotiations which will be held in the last week of July. That will be here in Canberra. The first session was basically exploratory, looking at the range of issues that both sides were mindful of that the others then should know about. It was not going beyond just the airing of broad issues.

Senator LUDLAM: Could you describe for us in general terms what the broad issues are, of how the different categories or baskets of negotiations will fall out?

Dr Floyd : It is the basis of a treaty negotiation between two countries, so I cannot go into too much detail because of the sensitivity of those negotiations.

Senator LUDLAM: Keep it high level, if you like.

Dr Floyd : It is reasonable for me to say that we have the policy that we have in Australia for uranium exports. When we meet with India then we have uniqueness from the Australian side and they have uniqueness from the Indian side. We are wishing to explore and understand each other's positions in those ways. Really, it is looking at how those things come together. It is the normal elements, as you are familiar with from your time on JSCOT—the normal elements of an agreement that we need to go through, whether it is about IAEA safeguard measures that need to be in place, details of security, cessation, and all of the standard elements, Senator, that you are well familiar with in other agreements.

Senator LUDLAM: Is reactor safety one of the elements of the negotiation? Was that canvassed?

Dr Floyd : I cannot recall whether that was specifically mentioned at this first meeting, but that does fit within the broad range of issues that will be discussed in terms of safety; that is correct.

Senator LUDLAM: Okay. As distinct from proliferation issues, which is not the framework under which these negotiations are occurring but normally would be?

Dr Floyd : The proliferation issues are clearly the major part of these agreements. There are other allied issues that are folded in often, to do with security, which may not be proliferation related specifically, and then safety also.

Senator LUDLAM: So a second session in the last week of July. How many sessions after that do you anticipate will be required before there is some agreement that would then come to the treaties committee?

Dr Floyd : It would be cheeky of me to say I'll take that on notice, but I really have no idea. It just depends on how the negotiations develop. So I really could not answer that, Senator.

Senator LUDLAM: No way of guessing how long this is going to take to conclude?

Dr Floyd : No, Senator.

Senator LUDLAM: Okay. Do these things have to go into abeyance when the government goes into caretaker mode in August?

Dr Floyd : When we go into caretaker mode, there can never be any entering into commitments in that period. So that clearly could not happen. There could be continued discussions, but it will all depend on what happens on the fourth week of July as to what the next steps would be. So exactly what happens next will not be clear to us until the fourth week of July.

Senator LUDLAM: Are representatives of mining interests present in these negotiations? Were they in Delhi?

Dr Floyd : No; it is negotiations between the two governments that take place.

Senator LUDLAM: Is there any update on negotiations on an agreement with China or has that stalled pending further decisions by BHP?

Dr Floyd : If you are referring to the concept that was floated some time ago about copper ore concentrates with uranium—

Senator LUDLAM: Yes, a sales agreement with China that would probably have required an amendment to our bilateral safeguards agreement.

Dr Floyd : That is correct. That is the situation. No, there is no progress on that. As you are aware, the Olympic Dam expansion project has been held in abeyance by BHP Billiton. We have no clarity at all as to whether or when that would move forward, and also any decisions BHP Billiton might make about how they would wish to process that ore. Until there is more clarity we would not be moving ahead on this issue.

Senator LUDLAM: Dr Floyd, I believe you attended the Oslo conference recently, at the invitation of the Norwegian government, on the Humanitarian Impact of Nuclear Weapons. Ms Millar, did you attend that one as well?

Ms Millar : No, Senator.

Senator LUDLAM: Dr Floyd, you were in attendance at that?

Dr Floyd : That is correct, Senator.

Senator LUDLAM: I understand there is now a proposal for Mexico to hold the next conference in this series. Will Australia participate in that one?

Ms Millar : We have not yet looked at the question of participation in that conference.

Senator LUDLAM: If negotiations for a nuclear weapons ban begin soon after the Mexico conference, which seems entirely possible, would Australia participate in those negotiations?

Ms Millar : That would be a matter for ministers.

Senator LUDLAM: Did any Australian representative make any presentation or representation of any kind at all at the Oslo conference, at which 50 other governments spoke?

Dr Floyd : No, we did not take the floor at the meeting. The meeting was convened as an opportunity for greater understanding to be developed on this issue. It was certainly very helpful in that regard, both formally, then informally, with discussions with other participants at the conference.

Senator LUDLAM: But 50 other governments thought it worth putting a view. For what reason was Australia entirely mute as far as the official proceedings of the conference went?

Dr Floyd : As I said, the prime purpose of the meeting was for understanding of these issues. Certainly our objective was to gain understanding. That was our objective, and I think it was achieved.

Senator LUDLAM: If Australia does choose to send a representative to the Mexico conference, will we make any contribution to that one?

Dr Floyd : That is a hypothetical question because it is a significant step forward from this point in time. We would need to consider it at a time when that is on the table.

Senator LUDLAM: On 26 September there is a high level meeting on nuclear disarmament at the United Nations. That is only a fortnight after the federal election. Without knowing who the Prime Minister is even going to be at the time of that conference, what kind of preparation are we making? Are we planning on attending, at some level, that conference?

Ms Millar : I am not aware of the conference to which you refer.

Senator LUDLAM: It is being spoken of as 'the high level meeting on nuclear disarmament at the UN on 26 September'. Not something familiar? I will see if I can get a little bit more info for you. What proposals is Australia taking to the UN open-ended working group—that was set up last year—to develop proposals to take forward multilateral nuclear disarmament negotiations for the achievement and maintenance of a world without nuclear weapons? I understand Australia has made a few off-the-cuff comments responding to presentations, but we have not made any formal statements on that yet.

Ms Millar : Senator, I would have to take that on notice to get details for you. The issues covered in that open-ended working group are the ones that we have been trying to get progress on in a range of UN forums over many years. There will be nothing particularly new in our position. It will be just another forum in which to try and get some movement, given particularly the paralysis in the Conference on Disarmament.

Senator LUDLAM: So Australia still supports the eventual achievement and maintenance of a world without nuclear weapons, I take it; there has been no substantive shift in policy?

Ms Millar : No, there has not.

Senator LUDLAM: How do we reconcile that with the 2013 Defence white paper, which rather embarrassingly continues Australia's support of the use of nuclear weapons in our security policy?

Ms Millar : As the white paper states, as long as nuclear weapons continue to exist, the government will rely on the nuclear force of the United States to deter nuclear attack on Australia. Of course, our goal is a world without nuclear weapons—but we are not at that point.

Senator LUDLAM: But we will never be at that point while we continue to support deterrence theory and the benefits of Australia remaining under a nuclear weapons umbrella. It is rather contradictory, isn't it?

Senator Bob Carr: The logic of that position, Senator, would be that Australia withdraw from the US treaty relationship.

Senator LUDLAM: The treaty relationship is bound on much deeper foundations than simply the use of nuclear weapons, surely.

Senator Bob Carr: Yes, it is. But still the deterrent impact to a nuclear attack on Australia implied in that treaty is real. Therefore, to do what you have just advocated a moment ago would mean Australia abrogating the ANZUS Treaty.

Senator LUDLAM: Why would we not simply renegotiate the treaty, rather than unilaterally abrogating it? Does Australia still set its own foreign policy, Minister Carr?

Senator Bob Carr: Australian people still support—they have made this very clear over very many years—the security relationship with the United States, and implied in that is that America, as a nuclear power, represents protection for Australia against a nuclear attack.

Senator LUDLAM: By the threat of mass incineration of whoever has attacked Australia. So we are still playing with a 1950s doctrine of Mutually Assured Destruction?

Senator Bob Carr: We are strongly committed to a world without nuclear weapons, as we on this side of politics have been since the initiative of the Canberra Commission.

Senator LUDLAM: Which was an extremely welcome initiative.

Senator Bob Carr: We remain committed to that.

Senator LUDLAM: While still supporting the existence of nuclear weapons in Australian security policy. Perhaps I am the only one in the room who sees the essential contradiction in that.

Senator Bob Carr: I am just asking you to follow through on branding it a contradiction and say that you favour a policy of armed neutrality for Australia—because that is the alternative to the American alliance. If you say Australia should abrogate the defence relationship we have with America—because that implies nuclear protection for Australia in the event of a nuclear threat to Australia—then the logic of that is that Australia must look after its own defences. That means armed neutrality, unless you are arguing for a disarmed and neutral Australia.

Senator LUDLAM: Minister, I am not sure whether you are deliberately or accidentally misconstruing my point. Are you aware that all five of the legally recognised nuclear states, as defined in the NPT, plus the others that we know of, are all actively renewing and upgrading their nuclear weapons arsenals, which you would have to view as being in violation of article VI of the Treaty on the Non-proliferation of Nuclear Weapons, which is one of the three pillars, so to speak, of the treaty?

Senator Bob Carr: Yes, it is. The treaty, agreed on in the late sixties and ratified in the years immediately after, carries an obligation on nuclear powers to commit to disarmament that has not been fulfilled. That was why a Labor government set up the Canberra Commission—to place on the international agenda the challenge of fulfilling what was specified as a goal of the Treaty on the Non-proliferation of Nuclear Weapons.

Senator LUDLAM: Our ally, the United States—which continues not only to deploy nuclear weapons but to modernise and upgrade them—would appear to be, along with all the other nuclear weapon states, in direct violation of article VI. So what is Australia doing about that?

Senator Bob Carr: Australia is an advocate of nuclear disarmament. We want a world without nuclear weapons.

Senator LUDLAM: But we just wrote it back into our 2013 defence policy.

Senator Bob Carr: Australia, while nuclear weapons exist, has got to accommodate the possibility that we might one day be threatened by a state that has nuclear weapons. If you want to abrogate the possibility of us falling under the American nuclear umbrella in respect of a nuclear attack—not a conventional attack on Australia—you must follow through on that logic. That logic mandates abandoning the ANZUS Treaty, withdrawing from the ANZUS Treaty.

Senator LUDLAM: Or renegotiating it.

Senator Bob Carr: All right—renegotiating it to say that we would not seek the deterrent force of America's nuclear capacity in the event of a nuclear attack on Australia. Put that to the Australian people.

Senator LUDLAM: You have just told the committee, and I welcome the comment, that we do not support the continued existence of nuclear weapons and that we have been working towards disarmament for decades—the ALP on two instances with the Canberra Commission, and former Prime Minister Rudd's more recent initiative with the Japanese government on the joint commission on nuclear weapons—and yet you are not prepared to actually embed that in Australia's security—

Senator Bob Carr: While disarmament has not taken place, the defence of this continent has got to be taken care of. Hence my remarks. It is not remotely contradictory to say that we want a world without nuclear weapons. While the world has nuclear weapons, before a negotiated destruction of nuclear weapons has occurred, we still must attend to the future of this country. When I say this to you I am speaking to a representative—I say this politely—of a party that hasn't got a defence policy. You have not got a defence policy.

Senator LUDLAM: We do; I will download it for you. I will hand it over.

Senator Bob Carr: Okay. The comments you made a moment ago are the first time I have heard a Greens party senator say that we would withdraw or renegotiate, which is the same thing—

Senator LUDLAM: Which are two rather different things.

Senator Bob Carr: Which is the same thing.

Senator LUDLAM: No, it is not.

Senator Bob Carr: From the ANZUS Treaty.

Senator LUDLAM: Renegotiating the ANZUS Treaty to take Australia out from the nuclear weapons umbrella, which you have just acknowledged you would like to see dissolved.

Senator Bob Carr: How would you word that? This is an interesting exchange, a very important one, because I have never had a Greens party senator spell this out. How would you word that modification in the ANZUS Treaty?

Senator LUDLAM: Maybe, Minister, you will get to ask questions after the election from the other side of the bench, but right at the moment—

Senator Bob Carr: I want to ask them of a Greens party senator. I don't want to ask the others.

Senator LUDLAM: When I get to be the minister, Senator Carr, then you get to address the questions to me. In the meantime, I am trying to understand—

Senator Bob Carr: It's a Socratic dialogue. We advance the proposition by mutual questioning.

Senator LUDLAM: I thought it was an estimates committee.

Senator Bob Carr: Senator Kroger understands that. Senator Kroger is giving me an encouraging look.

Senator LUDLAM: I know Senator Carr is wearing all of us down, including me. I am trying to understand how you can square wanting the elimination of these weapons while writing it into security policy.

Senator Bob Carr: Chair, I think I have answered that. I have said now three times that, while we want a world without nuclear weapons, we can only get there by negotiation and that, before we have the nuclear weapon powers abrogate and abolish their nuclear weapons, we must tend to the defence of this continent, including the possibility that we could be threatened by a nuclear power.

Senator LUDLAM: All right. My final question is: which state presently threatens Australia with a nuclear strike?

Senator Bob Carr: I am not going to address that question.

Senator LUDLAM: Why is that?

Senator Bob Carr: There is no imminent threat to Australia. I refer you to the Defence white paper and the white paper on Australian security.

CHAIR: Thank you. Before I hand over to Senator Fawcett, I advise Mr Varghese that there are no questions for services to other agencies or services to diplomatic consular representatives. We are going to go straight to public information services.

Mr Varghese : Thank you.

Senator FAWCETT: Can I go to the arms treaty that was recently signed. Whilst I welcome the signing of that treaty, for all of its obvious benefits, my questions, I guess, go to the efficacy of the treaty and what specifically Australia is going to be doing to seek to make that more effective. Could you tell me where the majority of arms that are used in terrorist incidents or conflicts for example in Africa are sourced from? I do not see too many M16s or things coming out of the States. Where do most arms that are used in those sorts of conflicts come from?

Ms Millar : I will need to take that question on notice.

Senator FAWCETT: I think it is fairly widely understood that the AK 47 is the weapon of choice for most terrorists. For a lot of armies involved in revolutions and conflicts in continental Africa and other places, clearly Russia, China, potentially North Korea are the major source of the sorts of weapons that are causing much of the destruction around the world. Can tell me which countries that are major arms exporters have signed the treaty?

Ms Millar : I do not have the full list. I can certainly get it for you. Seventy-one states have signed the treaty since Monday when it opened for signature. I will get you the full list.

Senator FAWCETT: For example, France, UK, Germany, US would all be signatories?

Ms Millar : The United States has indicated it will sign the treaty. It has not yet done so because of some issues with the translations of the text in other languages, but it said it will do so. I will just have to double check. The United Kingdom has signed the treaty. It did so on Monday. I will need to check for you the exact list of signatures.

Senator FAWCETT: Which countries have refused to sign the treaty?

Ms Millar : It is not a question of necessarily refusing to sign the treaty. It is true that, at the conference on the adoption of the treaty in New York in April, three states opposed it—Iran, Syria and the DPRK. So I do not think we would expect them necessarily to be signing the treaty.

Senator FAWCETT: Of those who are significant exporters of weapons, who abstained at that vote?

Ms Millar : China, India and Russia abstained, and some others, but they are the significant states.

Senator FAWCETT: That is my point about the efficacy of the agreement in that those who have signed are the ones that generally are quite responsible in terms of where they send their weapons anyway. Those who have abstained or have voted against are actually the ones that we are probably most concerned about. So whilst I welcome the treaty, my question is: what are we going to do now to try and make the treaty effective? I would welcome your comments as to our specific strategies and commitments of people, resources and expected outcomes over the next two to five years to try to make this effective.

Ms Millar : It is a valid point and it is one that we always have to deal with when we are negotiating arms control treaties, getting as many of the countries that actually produce and export the arms into the regime as possible. We had similar issues in the landmines convention and in the cluster munitions convention. One of the things you hope for is that, by getting a very large number of states signing and ratifying a treaty, it will have a normative effect on the behaviour of a broader number of states. I think we can say that has definitely been the case, for example, with the anti-personnel mine ban convention. One of the key things Australia will be doing over the next year or two is to advocate strongly for as many states as possible to sign the treaty, for precisely that purpose, and also to be looking to encourage states to bring their domestic legislation, their practices, into conformity with the terms of the treaty.

Senator FAWCETT: For example, in our relationships with India and China, and Russia, for that matter, are we going to be engaging in bilateral dialogue? Are we going to be using multiparty forums for that?

Ms Millar : Both those things. We would raise it with a very wide range of states as a matter of course. We will be instructing our posts to do so.

Senator FAWCETT: I am not suggesting here that we would look at sanctions but when we do impose or when the UN imposes sanctions, that clearly crosses commercial and financial considerations with national security type considerations, and there is a blurring of those lines. Is there any thought or intention from DFAT's perspective to use other factors in our relationships with these countries to encourage their compliance or engagement with the treaty?

Ms Millar : At this stage we are looking at just a very strong advocacy program and outreach to as many states as possible and to engage them about the benefits of the treaty.

Senator FAWCETT: Is the plan at this stage that existing staff will just take that as an additional duty or are you looking to actually have a specific task force or group to be working at that advocacy role?

Ms Millar : That will be handled within my division and through our network of overseas posts.

Senator FAWCETT: No additional staff, no additional funding to underpin an effort?

Ms Millar : This is the kind of work that is core business for my division. We undertake it with respect to a range of other regimes, and I have mentioned several of them.

Senator FAWCETT: Are you going to be implementing a schedule of advocacy, engagement, objectives et cetera? Is that something that you can report back to the committee on?

Ms Millar : Yes, we are. We have already started. One of the things we have been doing is working with the other co-authors, the group of states that actually developed the first resolution in the General Assembly and then pushed through this treaty from the very beginning, to basically divide up the world amongst us for a program of very targeted advocacy as well as doing bilateral advocacy, as I said, to most states, and to look at very targeted advocacy where we have particular areas of interest and expertise. For example, Australia is working particularly closely with Japan and some other countries in the region, in the Asia-Pacific region. That is the very first step, to get as many states as possible to sign the treaty. Then we will be advocating for as many states as possible to ratify the treaty and be looking at what we can do to assist them in that respect. We are going to have a phased program of activity over a period.

Senator FAWCETT: Do not take my questions as a criticism. I applaud the work you have done to get us to this point, but for it to become effective and actually help the people who suffer so much violence around the world, the hard work now is actually about to begin.

Ms Millar : Yes.

Senator FAWCETT: I am keen to know, and I welcome your feedback, how you are planning to do that, what your milestones are and what our progress is towards that.

Ms Millar : It is a work in progress but it is something that we are taking very seriously.

Senator FAWCETT: Thanks.

CHAIR: That concludes that section

[11.37]

CHAIR: We are moving now to public information services and diplomacy, programs 1.2 and 1.3. Secretary, we are moving through the program quite swiftly; so we have asked the trade programs area to be on alert to perhaps come on earlier, straight after lunch.

Mr Varghese : Sure.

CHAIR: Senator Kroger, are you ready now for public information services?

Senator KROGER: Yes, thank you. I want to have an update on the Smartraveller website, for starters please. In February, you provided information on the penetration and usage of the Smartraveller website. I am interested in an update, to start with, on how that is going, how effective that is.

Mr Brown : I am happy to do that. Thanks for the question. Digital advertising has been a primary focus for us in the last several months. That will continue to be the case until the end of this month. The emphasis has been on digital display and search advertising focused on key words and destinations. That is designed to try and maximise the penetration of our messaging to key groups. One thing you might be interested in is that for the first time we are also advertising on very high volume online travel websites such as Expedia. That is to try to integrate the Smartraveller messaging into the online booking process. We think that has been quite an innovative exercise and has produced some quite good outcomes from our point of view.

We are also placing some advertising and sponsorship at the free wi-fi sites at Sydney, Melbourne and Brisbane airports. That will take place this month. That is designed to coincide with the peak travel period, the midyear departure period. We are now working with our advertising agency and the whole-of-government media planning and booking agency on new initiatives to keep our Smartraveller campaign as fresh and as targeted as possible. That is involving a considerable amount of work right now on benchmarking and tracking research and looking at analysis of the campaign to date. We have also got a mandatory requirement to report on the campaign's ongoing development to the government's overview body. So 2013-14 will be the final year of our funding for the third phase of the campaign. We will be undertaking a comprehensive evaluation of the effectiveness of it and to guide its future direction.

Last time we talked about the smart phone app. You were interested in where we were on that. The iPhone app was released in September last year. So the key functionality of that app includes access to static Smartraveller advice without the need for an Internet connection, for example. We have had over 6,000 downloads of the app as at January, which we think is very pleasing.

Senator KROGER: Since when? What period is that?

Mr Brown : Since January. I have only got the data from—

Senator KROGER: So since January, 6,000 downloads?

Mr Brown : That is right, which we think is a pretty satisfactory outcome. We are also promoting the app through our mobile search advertising that I have already referred to. We are also looking, resources permitting, at developing an android app. That is ongoing work which we hope will come to fruition before too long.

Also, our Smartraveller Facebook page was launched last November. A very important focus for that is on younger travellers, in particular schoolies, which I know you have an interest in. That has been quite well taken up. We have had nearly 3,000 likes on our website so far. That compares with about 1,300 in February; so between February and June we have had a very strong approval rating, if you like. We have got individual posts of about 1,500 people on the site. We think that has been very pleasing. That complements our Twitter and YouTube messaging as well.

Overall, if I can sum up, the campaign remains very much focused on converting general awareness of safe travel into action by travellers with our key watchwords being 'insure, subscribe and register'. Since the launch of our campaign, the number of subscribers to our travel advice has increased by 59 per cent. It is now over 111,000. In 2012, the website received over four million visits. The mobile website received nearly 400,000 unique visits.

We are also seeing a very good pick up in our daily registrations of Australians travelling. In the peak summer period in December, there were over 200,000 registrations. That compared with 140,000 the previous December. Again, we think the campaign has been quite successful in generating awareness, and these new methods to communicate with the travelling public have been quite effective, if we use this metric as a measure.

Senator KROGER: Do you do an analysis on the basis of countries or regions to see whether some are more effective than others? We have talked of Bali. We have spoken of Laos in the past where, clearly, you have a particular demographic. This would then inform you in terms of perhaps a best portal to access them. Do you do an analysis on the basis of region or country? Do you break it down that way?

Mr Brown : We do it that way and we also do it by demographic group or particular target groups which we believe we need to improve in terms of the penetration of our messaging or changing their behaviours. It is done through a variety of quantitative methods and focus group discussions. We try and slice and dice the data as comprehensively as possible so that we get as much information as we can on how we target our campaign in the future.

Obviously with Bali and Lombok and Phuket, some of those high-volume destinations, they are a major focus for our research and analysis of the campaign because clearly the volumes there mean that the messages are even sharper and of direct relevance for us. If we are not getting our messages through for individuals going to those places then the campaign is not going to be successful.

Senator KROGER: What have you got left in your budget for the last stage of advancing Smartraveller?

Mr Brown : This financial year the campaign has got a $3 million budget. Of this, $2.5 million is the media buy. TV advertising is extremely expensive, obviously. The remainder of the budget is on creative material, public relations activities, IT initiatives, research, publications and so on. We will receive approximately the same amount, we hope, $3 million, for the campaign activities next year.

Senator KROGER: You were going through some of the developments in terms of advertising through Expedia and those sorts of sites and also, as we have mentioned in the past, through travel agents, which clearly is what you are advancing there. Have you considered going directly through airline portals as well, their websites or travel sites—I will call them portals—and using that as a mechanism whereby they can click on the Smartraveller icon and go into the site?

Mr Brown : That already happens to a large extent. As you have just mentioned, our primary priority has been on the travel agency sector. We have had a very positive relationship with that industry. We are very hopeful that we will be able to improve and expand the degree to which the Smartraveller link, Smartraveller messaging, is integrated into the accreditation process for travel agents. From our point of view, that has a huge multiplier effect.

We also maintain an industry consultative process, which includes the airlines as well as the travel agents and insurance industry. Through that we try and encourage those key industry partners to pick up the Smartraveller messaging and integrate it into their websites, into their general day-to-day operations. So far we have been very pleased with the cooperation we have received, particularly from Qantas and Virgin. I think a lot of the things that you are talking about are certainly front and centre with the airlines and with other members of the sector.

Senator KROGER: You mention Qantas and Virgin. I have actually looked at their websites and I could not see it. What have they undertaken in terms of promoting Smartraveller?

Mr Brown : It is primarily through awareness of their staff when they are dealing with passengers or others in their business that they disseminate our Smartraveller messaging. We are focused on working further with the airlines to find creative ways of using technology to have the Smartraveller messaging spread through their online systems and portals, as you have mentioned.

Senator KROGER: I do not know, so I am speaking anecdotally here and not from hard-core facts, so with your indulgence, Chair. My understanding is that there is a lot more online booking going on and that is reflected in the activity of travel agents themselves, particularly with younger people too making their own bookings online. Going straight into whether it is Qantas, Virgin, the airlines offering cheaper rates and so on, there is a greater percentage of individuals booking their own flights overseas online, which is why I ask specifically about those portals for different airlines. If you are doing that then you are circumventing all the things that you are talking about.

Mr Brown : I am agreeing with you. We have taken the initiative to put the messaging onto Expedia and ZUJI and we are looking at other online booking sites to do the same. You are absolutely right. The degree to which the travelling public now go to the shopfront travel agents to book their travel is clearly a declining part of the market. Online travel is now a huge part of the market.

The three things we are doing is working with the airlines themselves to try and ensure that the messaging is reflected in a way that is going to hit the passengers in the most effective way possible; secondly, we are working with the travel agents—as I have mentioned, there is a new process of accrediting Australian travel agents and we are integrating our Smartraveller messaging as part of that accreditation process; that applies to both shopfront travel agents and online travel agents—and, thirdly, we are seeking to have our advertising put through into some of these high-volume online travel booking sites. Expedia and ZUJI is just the first step in that path.

Senator KROGER: Fantastic. Just finally, can you tell me something about the travel tales competition you ran—the purpose of that and whether it achieved your objective?

Mr Brown : As you may know, we used the Erin Langworthy case in our most recent Smartraveller campaign, the so-called 'bungee girl' who had that interesting experience of her bungee cord breaking in Africa.

Senator KROGER: Horrifying experience!

Mr Brown : Horrifying experience. The feedback we have had from our analysis of that campaign suggested it has been extremely effective in getting across the insurance, registration and subscription messages, particularly with that high-priority demographic. We have found that that is the demographic that is the most important for us, so the kind of example that Erin's ad demonstrated was very successful. We conceived the travel tales competition as a way of trying to use the new technology, social media, to generate greater interaction with the travelling public—so for people, in a way, to give us their examples of similar experiences they have had; obviously experiences which underline the key themes of our campaign. Frankly, we also saw it as a way of trawling for interesting examples of individuals who have been through perhaps not quite as colourful an experience as Erin's but at least experiences which we believe could be suitable for future inclusion in our advertising campaign. I am hoping that the winner of the campaign will in fact transition into the next phase, all being well.

Senator KROGER: Thanks very much. Thanks, Chair.

CHAIR: No other questions in this area, program 1.2 or 1.3?

Senator FAWCETT: Yes.

CHAIR: Yes, Senator Fawcett.

Senator FAWCETT: The Direct Aid Program—is there anyone that can speak to me about the DAP?

Mr Varghese : I think we have just lost the person who is responsible for it. Senator, could I take your question and get back to you?

Senator FAWCETT: Sure. This year in AusAID's budget—I could not find anything in DFAT—it says that DFAT will be responsible for $11 million for the DA Program. Last year there was not a published figure that I could find. I am interested to know whether this represents an increase or a decrease or a status quo in terms of the level of funding.

Mr Varghese : I think it is roughly the same. My recollection was that we might have had of the order of $10  million before. So it is about the same.

Ms Thorpe : It should be around the same. The 11 might be referring to some other things as well. But the official DAP funding is $10 million.

Senator FAWCETT: For this budget?

Ms Thorpe : Which is the same. We are continuing. It has been that for a little while.

Senator FAWCETT: In terms of effectiveness, the feedback I get from people involved in the field is that quite often small grants to local groups can be very effective. Do you have an ongoing program for measuring the effectiveness of grants given out under the DA Program?

Mr Varghese : Under the DA Program every project, no matter how small the funding is, has to go through an evaluation process, as I know from my time in New Delhi when we were doing this. Also, we even follow up—not on all occasions separate from the evaluation process follow-up, to see whether down the track there has been an impact.

Senator FAWCETT: You are satisfied that the programs are generally effective?

Mr Varghese : I think it is a terrific program. From a head of missions point of view, it pays a real dividend in public diplomacy terms. You can also see an on the ground impact in these small-scale projects. The more of this we can do the better.

Senator FAWCETT: I agree with you completely, which is why I am a little surprised to see that there is a fairly static level of funding under DAP, particularly in an environment where the aid program is expanding considerably. I am just interested to know why DFAT are not looking to expand the DA Program.

Mr Varghese : We would love to expand the program. I have raised this with AusAID. I hope we may get somewhere in getting some additional funding. That is still the subject of consultations.

Senator FAWCETT: Minister, do you have a view on whether the DA Program should be increased?

Senator Bob Carr: Senator, I am a spending minister. I want to see more spending. I want to see more allocated to my portfolio, but I will live with the reality of the pressures on the budget.

Senator FAWCETT: The reality, though, Minister, is that your portfolio is one of the few that are seeing year on year increases because of the commitments we have made. I am not arguing against that. What I am looking at is: how do we spend that taxpayers' money most effectively? If what we are seeing is consistent evidence that small grants given to local groups through the DA Program is effective, yet there is some question at times over the effectiveness of some of the larger grants we give, whether it is on a government to government basis or through large organisations, then why is there not any effort being expended to reprioritise some of that increase? A small fraction of a per cent of the increase that goes to other areas directed to the DAP would probably double the DAP budget. I am just fascinated that that whole constraint argument does not apply here. It is an issue of what is the priority with the funding that has been made available.

Senator Bob Carr: There is an opportunity cost in everything. We have just made a big commitment to a big program—that is, to beat polio; to wipe it off the face of the planet. That involves a big sum of money to a big NGO, a big multilateral NGO. Is that worth doing? Is it worth allocating a big sum of money to get rid of the current strains of malaria in the Solomons?

Senator FAWCETT: I do not want to—

Senator Bob Carr: I do not want to—

Senator FAWCETT: What I am saying is—

Senator Bob Carr: Everything is an opportunity cost. You cannot sneer at big programs if they are about things as good as that. We have just given a big increase to international organisations to look after those refugees I spoke to in camps in Lebanon. There is the World Food Programme and UNICEF, looking at child protection for those unaccompanied minors playing in the dust of those settlements in Lebanon. It is facile to say we can just easily trim money out of that to increase worthy programs here. Everything is an opportunity cost.

Senator FAWCETT: All I am asking, Minister, is this: is there a process whereby you have looked—because obviously the secretary is seeking to increase that part; AusAID, for whatever reason, are obviously opposing that, or it would have happened—

Mr Varghese : To be fair to AusAID, I would not characterise their position as opposing it. If you rewind that four or five years, AusAID have very significantly increased the funding. Ten million represents quite a big increase to where we were not too many years ago. I think AusAID have been very constructive in their discussions with us on this.

Senator FAWCETT: But 10 million, realistically, Secretary—what percentage is that of the aid budget that we have for 2013-14?

Mr Varghese : You are getting into lots of point zero zero zeros.

Senator FAWCETT: Absolutely. It would be a rounding error on most of the other programs that AusAID have and yet they could double the DA Program in a rounding error. I would just like to know whether there is a specific program of engagement to look at increasing it, because it is clearly an effective program. It clearly builds good relationships for our missions in countries. Part of the reason we have missions is to build those relationships. I would appreciate some feedback as to what plan we have to increase the DA Program.

Mr Varghese : Okay.

CHAIR: Thank you. Senator McEwen.

Senator McEWEN: Are you aware of any views on Australia's overseas development aid program that have been expressed recently by Senator Barnaby Joyce, who is a coalition senator?

Senator Bob Carr: I have not read Senator Joyce's comments but I think someone who is aspiring to the leadership of his party, as Senator Joyce is—and I am not sure that it would be a happy day for Australia if Barnaby Joyce is ever Acting Prime Minister—ought to be expressing pride in what AusAID delivers for Australia. There is the opportunity for us to engage with countries, some of which are desperately poor. We have built a stock of goodwill for this country. I remember being congratulated on 18 October, after we won that ballot in the General Assembly for the Security Council, and there in the queue of ambassadors coming to congratulate me was the permanent representative of Mali. He appreciated the fact that our aid to Mali had continued, even after Mali had had a coup. We were continuing to fund potable water, tents, food and medicines for their huge refugee camps. The EU had cut off aid to register a protest at the coup. Australia, putting humanitarian considerations above everything else, kept the aid flowing.

I remember speaking to Bernard Membe, the foreign minister of Tanzania, at our first meeting. We were at a Commonwealth ministers' meeting in London. We were in the garden, enjoying the spring sunshine before the meeting started. He came up and introduced himself. He said, 'Australian aid is wonderful. You built this bridge, the bridge in Tanzania. It means that farmers can get to their fields and the kids are no longer taken by crocodiles.' Apparently, a dozen kids had been snapped up by crocodiles while trying to get across this ravine. Australia had delivered that for them.

I spoke yesterday about Kiribati—the fact that there is a nation of 100,000 living on a couple of atolls, and no-one in the world is thinking about them and their future except Australia. We are running these technical colleges so that the youngsters can learn English and learn an Australian trade to Australian qualification level, so that if or when their country goes under, they can come to Australia or New Zealand as valued economic migrants. Only Australia is doing that. Without Australia doing it, funding the technical education and the English courses, no-one would be thinking about the future of little Kiribati.

In Indochina, I have spoken about the midwives being trained to bring the death rate among women giving birth down from a terrible level. It used to be 800 women dying per 100,000 births in Cambodia; it is now down to 400 or so. All those midwives being trained in Australian funded colleges, proud of their new uniforms, beaming with pride, are going to attend more births and bring down that maternal mortality rate.

Any Australian, regardless of politics, ought to be bursting with pride at the good news here. The fact that we are delivering maternal and infant health programs across the Pacific in countries that are desperately poor should be a source of appreciation, as, firstly, it is in our national interest to project to the world like this and, secondly, it is just the right thing to do.

CHAIR: Mr Rowe, you had some answers that you wanted to present. Do you want to do that now?

Mr R Rowe : Thank you, Chair. I have some responses to two questions from Senator Fawcett that I took on notice. Firstly, Senator Fawcett asked how many member states of ASEAN attend the meetings of states parties of the 1982 UN Convention on the Law of the Sea. As I mentioned, the meeting of parties is held annually in New York. Of the 10 member states of ASEAN, nine have signed and ratified the convention. Cambodia has signed the convention but has not ratified it. Of the nine ASEAN members who are parties, the nine all attended the last meeting of the states parties held in New York last June.

You also asked, Senator, how would South China Sea competing claims be placed on the states parties agenda. The rules of procedure for states parties meetings outline the manner in which items can be added to the agenda. The UN Secretary-General prepares a provisional agenda and then states parties may propose supplementary items for inclusion on that agenda which must then be approved by a majority of states parties at the opening of that meeting. I would note, however, that the meetings of states parties generally function as an administrative meeting; that is, they look at budget and other management related issues. So issues of substance like dealing with competing claim matters would not normally arise or be proposed.

I would note, too, in relation to the questions that you were asking about how parties' meetings might deal with the South China Sea matter, that of course parties' meetings are one avenue, as we were discussing, but I would also note—and we did not get into this and I did not mention it because the focus is on the other track—that obviously the UN Convention on the Law of the Sea itself contains mechanisms for resolving disputes which can be invoked by the parties. That is another track that does exist.

Senator FAWCETT: Can I confirm, then, if the annual meetings of the parties are predominantly administrative in nature, approving budgets, is that the sole outcome of those meetings?

Mr R Rowe : No. They look at how the actual convention is being implemented in an organisational way and, for example, with the secretariat that handles the law of the sea convention, any matters arising out of the staffing of that. But they tend to be mainly of a functional nature rather than a substantive nature.

Senator FAWCETT: With the substantive issues, where does a body of thought or agreement on a substantive issue find its way into that convention?

Mr R Rowe : Through discussion at the regular session of the United Nations General Assembly, where there are resolutions relating to the convention and aspects of it. That is where there would be the opportunity for substantive discussions of any issues. Those can take the form of resolutions dealing with law of the sea matters. It is more in that context than at the meeting of the states parties per se.

Senator KROGER: Chair, on a point of clarification, yesterday I asked questions in relation to the support given to the Prime Minister's spouse, Mr Tim Mathieson. The officers at the time said they were coming back today with those answers. Given that we are getting some answers back, which saves you time, and so that they do not have to be taken as questions on notice, I was hoping that Mr Varghese could clarify that for us now.

Mr Varghese : The advice I have is that no DFAT assistance or post assistance—that is, assistance by our posts—was provided to Mr Mathieson, and nor did he at any stage seek any assistance from our posts in the US.

Senator KROGER: My question was: was any official assistance given? You are advising me that there was no assistance provided. I also asked: did anyone travel with him?

Mr Varghese : Any departmental?

Senator KROGER: Yes. Was there any support in travel—

Mr Varghese : I assume from the categorical nature of the advice I have received that they would exclude that. Indeed, our post did not know about his travel.

Senator KROGER: Okay, thank you, Mr Varghese.

Mr Varghese : Chair, would this be an appropriate time to get back to Senator Fawcett on the Rio delegation?

CHAIR: Yes.

Mr Varghese : Senator Fawcett, I can confirm that the Australian delegation to the Rio+20 meeting was a total of 67 people, of whom 23, as you correctly pointed out, were from the Department of Foreign Affairs and Trade. At first glance, that does look like a high number. Can I make a couple of observations to put it into context. This was a big meeting led by the head of government in a city where we do not have a post. Each of those characteristics contributed to the size of the DFAT delegation. It was the biggest meeting on sustainable development since Rio+10. And Rio+10, incidentally, in 2002, had a delegation of 51 altogether, and that was at a time when the world was far less complicated and government was far more contained in terms of responsibility for international issues.

With the Prime Minister leading a delegation, it does create additional requirements for support and advice, including, for example, the fact that my predecessor was at this meeting. Normally, the secretary would not attend such a meeting but does usually accompany the Prime Minister. Seven of the 23 members of the delegation were from our mission in Brasilia because they needed obviously to handle the arrangements for it. A further five—so that is seven plus five; more than half—were there essentially in technical and administrative support functions, including the fact that when a Prime Minister travels there is an additional layer of technical and administrative support. DFAT is responsible for most of that.

In addition, the policy agenda of the meeting did go to a number of issues which are core business for DFAT, notwithstanding the fact that we also have a department of the environment, including a number of trade related issues connected with food security. So if you look at our key priorities for that meeting—food security, women and sustainable development, disaster risk reduction, the contribution that mining can make to economic development, and recognising the contribution of indigenous people—bringing all of those themes together is core foreign policy work, not core department of the environment work.

In addition to all of that, the Prime Minister's program necessarily has a bilateral component to it and not just the Rio component to it. One of the members of the delegation was from our Americas division, to deal with the bilateral aspects of the visit. On top of all of that, it was obviously a big opportunity to lobby for our Security Council candidature, so we wanted to make sure we had at least some capacity in the delegation to pick up that broader lobbying. With the 23 figure, which at first glance looks pretty big, when you break it down it is quite justifiable.

Senator FAWCETT: How does that compare with other visits that the Prime Minister leads to countries in terms of the number of DFAT staff who would travel with the Prime Minister?

Mr Varghese : Normally, if the Prime Minister is doing a bilateral visit, and particularly if it is a bilateral visit, as it would usually be, to a country where we have a diplomatic mission, the DFAT travelling component is usually only the secretary to the department. Obviously, the post picks up a lot of the work on arrival and in preparing for the visit and so on. This was unusual in the sense that it was a big multilateral meeting led at head of government level, but, very importantly, in a location where we did not have a diplomatic presence. So we did have to bring people in from all over the place. We brought people in from Washington to help on some of the technical and logistic transport planning issues as well.

Senator FAWCETT: You said before seven of the people were from Brasilia?

Mr Varghese : Yes. That is in the 23 on the delegation, yes. Including a couple of LES—sorry locally engaged staff.

Senator FAWCETT: Chair, can I continue with 1.2?

CHAIR: Yes, indeed. We are endeavouring—I just remind you, Senator Fawcett, that we did have a private committee meeting scheduled for 12.30. What we are trying to achieve is completing the foreign affairs portfolio before lunch, even if that means going a little bit over that, that's our intention. Thank you.

Senator FAWCETT: Can I just go to 1.2 Payments to International Organisations—I am happy to take this on notice—there is clearly overlap between different departments in payments to UN and UN bodies. For the DFAT component could you tell the committee how much we spent last year and this year in the budget—plan to spend this year to the United Nations. I notice in the portfolio budget statements there is a comment there about peace keeping operations. Do we pay a particular component to the UN to fund peace keeping operations that other nations are actually providing the forces for, as opposed to payments in relation to work that we are doing within the UN?

Ms Thorpe : I will answer the finance bit first. I think I should draw your attention, in the annual report we list every year all the various agencies and the peace keeping operations that we undertake. In the most recent annual report, it is on page 228-229 there is a detailed list of every agency and the amount of money that we spend. That should answer your question on that one.

In terms of how much we are proposing to spend in 2013-14, as you can see on page 28 in the portfolio budget statement we have a forecast in there of expending $258 million on international organisations which is made up of those international organisations in the PKOs. That figure will vary each year basically driven by inflation, Australian foreign exchange and then also some variation when the UN or people like that—

Senator FAWCETT: The key point I am trying to clarify around that figure is that that is the figure that DFAT is spending.

Ms Thorpe : Yes.

Senator FAWCETT: We heard before for example that other departments like environment, climate change, will be spending additional money.

Ms Thorpe : That is right.

Senator FAWCETT: But that is DFAT’s—

Ms Thorpe : That is only DFAT's component.

Senator FAWCETT: That is what I am trying to clarify.

Ms Thorpe : That is correct, Senator.

Senator FAWCETT: Thank you. Very quickly in 1.3 the China advanced leadership program, I understand that is a collaboration between us, New Zealand and China. Could you just tell me about the cost, the objectives and the governance of it in terms of who selects the people to go, what are the outcomes we are expecting, what is the efficacy of that program?

Mr Varghese : Looking at our depleted ranks I suspect that we do not have anyone here to answer that. Can I take that on notice, Senator, and get back to you?

Senator FAWCETT: You can, yes.

CHAIR: Senator Eggleston has a question here.

Senator EGGLESTON: Outcome 2, protection and welfare of—

[12:19]

CHAIR: No. Have we finished program—we have. Sorry. We are moving now to outcome 2 and Senator Eggleston.

Senator EGGLESTON: Consular services I am asking this is about, and travellers emergency loans, one of the things which happens sometimes is that people get injured or ill overseas and they don't have adequate insurance when they need to be flown back to Australia, medical evacuations. What kind of incidence is there of the need for the government to assist persons in that kind of situation who have not got travel insurance with medical evacuation so that they have to either bear the cost of evacuation or the government assists them? I ask this in reference to a particular case, which I do not have to go into. Nevertheless, it was a situation of this kind.

Mr Brown : Senator, can I just clarify your question? You are asking about medical evacuation specifically or about the kind of facilities we have to provide assistance for travellers who are in dire need of assistance more generally?

Senator EGGLESTON: It was about medical evacuation specifically. I am also interested in the broader issue.

Mr Brown : Thank you.

Senator EGGLESTON: Most people take out travel insurance.

Mr Brown : Certainly, as I have mentioned earlier, a big theme of our Smartraveller campaign is the requirement in our view for all travellers to be covered before they leave the country. We, in the consular area do have some small amount of funding that can be used in cases of extreme emergency where individuals are in need of assistance and this is a very important requirement, all other sources of funding have been exhausted. If individuals come to our posts and seek assistance, the first thing that we will say to them is that they need to make all possible endeavours to exhaust sources of assistance from family and friends and others. If all those sources are exhausted and we are satisfied that that is the case, then we do, in some special cases, provide some assistance. Recipients of that assistance are required to sign an undertaking to repay the loan; it needs to be repaid before another passport can be issued to them. The repayment is actively pursued by us. We do seek to ensure repayment to fullest extent possible.

As regards your specific question on medical evacuation, the department does not provide medical evacuation. It does not fund medical evacuation. We play a facilitative role. If there are individuals who are hospitalised and require medical evacuation, if that is justified on medical grounds, we can assist consular clients with providing them with advice on private companies that deliver that service. We can assist them to get in touch with companies and act as a go-between between the hospital and the insurance company, or if there is no insurance company with a medical evacuation company to enable the consular clients to have their loved one evacuated, if that is their wish.

Senator EGGLESTON: It is apparently very, very expensive, I gather.

Mr Brown : Yes. Very expensive it depends on the destination. But generally speaking it is extremely expensive. Yes.

CHAIR: Are there other questions in outcome 2, Consular Services, Senator Kroger or Passport Services? Just while Senator Kroger is organising herself, we are just working through the program and the expectations of Senators, accommodating their questions. We have determined that that we will take our lunch break as soon as we can closest to the 12.30 but, if need be, to finish this section we will go a little later.

We will take our break until 2pm when we will start the Trade Portfolio. The time allocated to the Trade Portfolio will be 2-3.30 and the tea break will be 3.30-3.45. Then we will go to AusAID at 3.45-7pm and give the time allocated in the program, bring that forward. So hopefully we should be finished by the dinner break. I hope that helps officers.

Mr Varghese : The DFAT part of it will be finished by 3.45?

CHAIR: Yes. 3.30 today.

Mr Varghese : Thank you.

Senator KROGER: This might be a very quick response. I refer to the protection that Julian Assange is being given in the UK. Is Australia providing any—are we involved in covering the costs of that in any way?

Mr Varghese : In the costs of that?

Senator KROGER: In his protection detail? And services provided.

Mr Varghese : Mr Brown can answer that.

Mr Brown : The answer is no.

CHAIR: A quick answer.

Senator KROGER: Sorry I actually didn't hear that.

Mr Brown : Your question was whether we were covering any of the costs associated with Mr Assange's current situation or any other circumstance?

Senator KROGER: Yes.

Mr Brown : The answer is no, we are not covering any costs.

Senator KROGER: Thank you. I said it would be a quick answer.

CHAIR: It was.

Senator KROGER: That is it from me.

CHAIR: Senator Fawcett you had some in outcome 2?

Senator FAWCETT: Yes. 2.1. Just consular services, last estimates—I think it was last, maybe the one before—the department expressed the expectation that with an increasing number of Australians travelling that the pressures on your consular services would continue to rise. I just notice that in terms of the table 3.2.3 on page 47, which looks at the sale of good and rendering of services, which I assume includes all the passport services and other things that you provide, that the income forecast there is a static amount of 73,299,000 across the forward estimates. I am just wondering what are the cost pressures if there is an increase, and why are you not forecasting any increase in that revenue source from an increased number of Australians travelling?

Ms Thorpe : That sale of goods and rendering of services is nothing to do with consular services. That figure is basically the rent that other overseas property office collects. They actually run a special account but it is consolidated within ours. A lot of that is revenue. We provide services, corporate services to attached agencies at post. This is genuine revenue it is nothing to do with consular service. The only consular services revenue we receive is actually not revenue but we charge for notarial services for example and a few things like that. That actually goes into consolidated revenue and is not reflected in these accounts.

The consular services, if you look how much we are spending on it, it is actually on page 32 in the—program 2.1. We have full appropriation funding for our consular services. At the moment we are managing within the resources. That I think at the moment the way we are proposing to keep managing and we will see how we go.

Senator FAWCETT: What are the thresholds that would make you seek further funding there? Is it workload here in Australia, at the posts overseas? What trends should we be looking out for that would indicate that you are going to need more funding there?

Mr Brown : Just as a general comment, Senator, we are trying to manage the workload by improving our practices, in particular technology provides us with some opportunities to deliver our services more efficiently, more effectively than we have in the past. We are also looking at more flexible and smarter ways of operating. One trend which I might highlight for you which we have noticed in previous months is that although the numbers of Australians departing overseas in any given year is increasing, it is currently about 8.5 million, the number of our live consular cases per year has been reasonably stable over the last two years. That number will go up and down, depending on whether we have a major crisis for example, where you do see big spikes in whereabouts inquiries and so on. But over the last two years, at least, we have had about 14,500—15,000 live consular cases per year. There are some interesting trends within that headline number but generally speaking we see that trend, with rising international departures with reasonably steady range of cases as a sign that we are making progress in terms of the best practices which are applying and the kind of implementation of new technology and other innovative ways in which we are addressing the demand. We also think our Smartraveller campaign is having an impact.

Mr Varghese : Often a small number of either very complicated or very high profile cases—

Senator FAWCETT: You will have to closer to the microphone.

Mr Varghese : Sorry. Often a very small number of highly complicated cases will chew up a lot of resources. If you get a kidnapping, for instance, the amount of resources that the department and other agencies have to devote to that is very extensive. The sort of regular consular work that is part of an Australian community that is travelling more in many ways is easier to deal with than the spikes you get from small in number high profile cases.

Senator FAWCETT: Thank you. Thanks, Chair.

CHAIR: Thank you, Senator Fawcett. We are in furious negotiations here. We think we will probably need to extend this session until 1pm to get through the program 3.2, just to alert people to that fact.

Senator STERLE: Why don't we put it all on notice and go home? I wasn't joking.

CHAIR: Thank you. Senator Kroger, do you have some questions in outcome 2?

Senator KROGER: I am happy to start off there. Firstly, I just want to ask about the contract signed with Fujitsu Australia. Mr Dao, I understand that we have signed a contract with Fujitsu. Could you briefly tell me what the contract is for?

Mr Dao : We signed the contract with Fujitsu Australia to help us with the development and build of the replacement passport system.

Senator KROGER: What is the length of that contract?

Mr Dao : It is a four­year program in total.

Senator KROGER: What is the cost of that contract?

Mr Dao : The total cost of the contract or the program?

Senator KROGER: The contract itself, firstly.

Mr Dao : I have the exact number; I just need to get—

Senator KROGER: They have been contracted to pursue the new passport series.

Mr Dao : I am sorry, not series but the new passport system.

Senator KROGER: The system.

Mr Dao : The assurance system. The total value of the Fujitsu contract is approximately $67.7 million. Why I say 'approximately' is that there is still a process of redefining a detailed design, and that may change the outcome.

Ms Williams : I know that you have expressed interest previously in the new P-series passport. They are quite distinct. This is the back end. This is a new printing system and a new workflow system for which we received money from government some time ago because of the increase in demand. Our actual systems needed to be rebuilt. So it is really an IT project. The P­series is a business as usual process for us.

Senator KROGER: So this year it is, as you said, for the IT system to actually manage the process and implementation of it?

Ms Williams : It is for the IT infrastructure. Yes, it is quite separate from the P­series.

Senator KROGER: I understand. Thank you for that clarification.

Ms Williams : It would be a very expensive passport if the new certificates were costing us that much money. That is very much business as usual.

Senator KROGER: You understood where I was coming from. I just did not appreciate what this was for.

Ms Williams : Yes.

Senator KROGER: Thank you for that clarification. That is all on passports for me.

CHAIR: Senator Eggleston, do you have some questions?

Senator EGGLESTON: Yes, I do. According to the portfolio budget statement, the revised budget figures on both passports and notarial acts have been lowered due to the closure of the Atlanta office in August 2012. How much consular work was actually conducted by the Atlanta office, if that is not going to cause too much difficulty?

Mr Brown : In 2011­12, the post in Atlanta handled 71 consular cases.

Senator EGGLESTON: Just over one a week.

Mr Brown : At the time of its closure in 2012, it had 21 active cases—arrests, a couple of prisoners, welfare, hospitalisation—and I understand that also approximately 1,100 passport services were provided by the post annually.

Senator EGGLESTON: How many Australian businesses operating in the US were engaged with your Atlanta office; do we know?

Mr Brown : You will need to direct that question to our colleagues in Austrade during the Trade segment of the estimates.

Ms Thorpe : It was the Austrade function that was closed, not our office.

Senator EGGLESTON: I understand that from what has been said. But the issue at the moment is passports. That was why I raised it. Thank you.

[12:36]

CHAIR: Outcome 3. Senator Kroger, do you have some questions here?

Senator KROGER: I have. Firstly, I want to ask briefly about the Bali peace park. There were reports last year that moves by the Bali Peace Park Association, I think they were called, to buy land for the park had stalled, due to the owners asking an inflated price. I think we might have touched on this briefly. I wonder whether you have an update on that.

Ms Thorpe : As you might have noticed in program 1.3, under public information services, we got $450,000 to contribute to that. The advice we have received is that they are still under negotiation. So we got agreement from government to slip that money now to 2013­14.

Senator KROGER: So that is still being negotiated?

Ms Thorpe : It is still being negotiated, yes.

Senator KROGER: There is not an agreement?

Ms Thorpe : The organisation that is running it is still negotiating.

Senator KROGER: That has been underway for some time.

Ms Thorpe : Yes. I think they are having—

Senator KROGER: It is quite protracted.

Ms Thorpe : Yes, it is. It is a very protracted process.

Senator KROGER: Is there any hope in sight?

Ms Thorpe : We have got—

Senator KROGER: Is there nothing further on that, that this might be resolved for all those who would like to turn this into a park?

Ms Thorpe : I got the money rolled over for another year; so we will see how it goes.

Senator KROGER: That is good, for starters.

Mr Brown : The issue was a dispute over the title of the land. That is why it has been taking quite a long time to resolve.

Senator KROGER: With the owners of the land, yes. Perhaps I could come to the new Australian embassy in Jakarta. I actually put a number of questions on notice following the last estimates, and I am seeking some clarification on the responses that I was given in relation to those. I want to firstly confirm the total cost of the construction of the embassy. Is that $407 million?

Mr Harmsworth : The total budget for the construction of the embassy is $407 million.

Senator KROGER: There were a few things here that did not add up. Just going to the value of the headworks contracted by Leightons, I have got that down as $237 million. Is that correct?

Mr Harmsworth : That was correct at the time of signing the contract. Of course, there are foreign exchange variations that affect the value of that contract as it works through. But essentially, broadly speaking, yes, that is right.

Senator KROGER: In view of the time, I will go through this quickly. I also have got down here the value of the design, the architect's contract, was $15.8 million, project management was $6.7 million. They are not included within that headworks contract. They are separate, aren't they?

Mr Harmsworth : That is correct.

Senator KROGER: In response to a question on notice, you provided those two values to me, along with IT installations, which you identified as $1.85 million, direct security costs to the tune of 71.1 million and operating costs of $18 million, which, doing a quick addition, came to $350 million. I was wondering where the difference of $57 million came into it.

Mr Harmsworth : There are a number of other items. There are other procurements, some of which have yet to be made. There is the furniture for both the chancery and the residences. There are other specialist consultants . There is the cost of our accredited staff that we have in Jakarta managing the project from the overseas property office's perspective. There are travel costs. There is the operating cost that I think we have identified. There are also future costs included in there for agency's communications infrastructure. So those things make up the total budget of $407 million.

Senator KROGER: Can you give me a breakdown of those costs?

Mr Harmsworth : As I said, some of those components have yet to be tendered. Before that tendering process takes place, I would not want to go down to the break-up of that level from a commercial perspective.

Senator KROGER: So you have budgeted that amount to cover expenditure in that area?

Mr Harmsworth : That is correct.

Senator KROGER: One would think that you have done that on a conservative basis to cover yourself and that it may not come to that amount.

Mr Harmsworth : The other important component of course is project contingency. There is contingency on both construction and the consultant engagements to cover the risks as the project moves forward, together with, of course, contingency required for foreign exchange fluctuations.

Senator KROGER: We did ask questions about whether the contractors were procuring major items from Australian sources or whether they were local Indonesian sources. Is it still the case that there is no determination, priority or preference offered in consideration for those tenders?

Mr Harmsworth : The contractor is still going through the major procurements currently; so I do not have a definitive outcome of that yet.

Senator KROGER: I want to come to the question of the VAT, if I can, and clarify that. In response, once again to a question which I will not repeat, you have actually said that the construction project budget has been developed and approved on a VAT-exclusive basis; therefore, in the event that favourable resolution of this matter is achieved, that is, we do not pay VAT, no savings will be recognised against the approved budget. So are you telling me then that your contingency budget, which you have just referred to, accounts for an unsuccessful resolution on the VAT matter whereby we do have to pay VAT?

Mr Harmsworth : Should we not be successful in gaining VAT­free status for the project, the cost of the VAT will have to be met from within our contingency amount.

Senator KROGER: And should we to have pay VAT, what is the estimate for that amount?

Mr Harmsworth : The VAT is 10 per cent of the contract value of the headworks contract, and the final amount is calculated on what the final contract amount would be.

Senator KROGER: So it is a significant amount. Where are we at with those negotiations—or discussions? I should not call them negotiations, the discussions.

Mr Harmsworth : In principle, it has been agreed from the Indonesian side that what we put forward as far as the construction and renovation agreement is acceptable. However, it is currently going through internal Indonesian government processes, for example, with their tax office, as would be the case here with a reciprocal arrangement, and that has yet to be finalised.

Mr Varghese : We have raised that at a very high level with the Indonesians. I raised it with Foreign Minister Natalegawa when I was in Jakarta not so long ago. So we are hopeful that we will have a satisfactory outcome.

Senator KROGER: On what date were Leightons contracted to start?

Mr Harmsworth : Leightons took over the site on 31 October 2012.

Senator KROGER: Was there a delay in that start date, that commencement date, and their being allowed on site to start?

Mr Harmsworth : With respect to what reference point?

Senator KROGER: If they were contracted to start from that date as part of the contract, was that the date that was specified in the contract?

Mr Harmsworth : That was the date that was agreed to in the contract. They took over site on time, as per the contract.

Senator KROGER: So there have been no delays in the start date that have in any way adversely affected Leighton for which they have put a claim in?

Mr Harmsworth : No, there were not.

Senator KROGER: That is all on the embassy. Unless others have something they want to continue on, I am just going through—

CHAIR: Senator Fawcett, do you have any questions in program 3.2?

Senator FAWCETT: No.

CHAIR: It is just you, Senator Kroger.

Senator KROGER: Going back to other questions from last time as well, could you give me an update about the ambassador's residence in Rome? Has Mr Ritchie moved into it? Has he returned to the residence?

Ms Perera : No. The ambassador has yet to move into our head of mission residence in Rome. The local municipality are still yet to do the works that we are hoping they will do to stabilise the hill. As you will recall, that was creating structural problems with the home. The post is working very closely with the local authorities to get that work progressed. The latest advice is that the local authorities have awarded contracts to have that work done, but the ambassador has yet to return to the house.

Senator KROGER: From memory, there was work that had to be done to that residence after the municipality undertook their own works; is that correct?

Ms Perera : That is correct.

Senator KROGER: What are you planning in terms of the time line here? What is your prediction?

Ms Perera : I suppose we are in a little bit of abeyance, given that we do not know the timing of the works by the local authorities. Once we have a clearer idea of that time frame, we will then have a look at the program that had been planned and work towards that.

Senator KROGER: How significant are the works of the local authorities?

Ms Perera : They are quite significant. The information we have to date is that the contracts that they have awarded total five million euro—that is obviously a cost to them—but the further breakdown is not available to us.

Mr Harmsworth : I can probably add to that. The local authorities' works, essentially, are to pile, to stabilise, the subsoil right down the road that is below the residence and other residences in the area.

Senator KROGER: Thank you. Has there been any request to the department to upgrade or review embassy security further to any of the earlier discussions that we had? Are there any other reviews underway or security upgrades to any embassies or posts?

Mr Varghese : We keep the security of posts under pretty constant review. There will be a number of things that we will be doing at any one time which would strengthen security procedures. The Nairobi one was in a different category, really.

Senator KROGER: Which is why I was putting that aside; in addition to that. There are no significant security upgrades that you want to share with us?

Mr Varghese : No. Chair, could I just correct something I said yesterday in relation to opening an embassy in Senegal? Senator Kroger asked me whether we had received any representations from the Senegalese government. I had underestimated the diligence of the Senegal Ambassador to Japan, who is also accredited to Australia, who had in fact seen the media report that we discussed yesterday and asked—it was not a representation—our ambassador in Japan about it and our ambassador to Japan was able to confirm to him that we were indeed proceeding with the opening of the embassy.

Senator KROGER: Terrific. What good news.

CHAIR: The impact of senators!

Senator Bob Carr: Of Senate estimates! Are you aware of that, Senator Sterle? I bet you are not.

Senator STERLE: Actually—I am sorry—I was not even listening.

Senator Bob Carr: A Japanese­Senegalese response to discussions, Senator.

Senator KROGER: Senator Sterle, you should do what you normally do and just nod your head.

Senator STERLE: No, I do not. I normally do—

CHAIR: Thank you, everyone. This hearing stands suspended until 2 pm, when we will move to the trade portfolio. Thank you very much for your assistance.

Proceedings suspended from 12:50 to 14:02

CHAIR: I call the committee to order. I welcome back Minister Carr, representing the Minister for Trade; Mr Peter Varghese, secretary; and officers of the Department of Foreign Affairs and Trade. I also welcome, when he arrives, Mr Gosper, chief executive officer, and officers from the Australian Trade Commission; and Mr Stuart Neilson, acting CEO, as well as officers from the Export Finance and Insurance Corporation. The committee has been advised that Mr Angus Armour, CEO of EFIC, will not be able to attend the Senate estimates because he will be travelling on the European Australian Business Council mission. Senators please note that questions may have to be put on notice if they cannot be dealt with here. This afternoon, the committee will hear all DFAT trade portfolios in conjunction with Austrade and EFIC. We are going to begin with the additional estimates for the department's trade program, bilateral regional and multilateral trade negotiations and trade development policy coordination and APEC. We will then hear from EFIC and Austrade to conclude the trade matters. Mr Varghese, do you wish to make an opening statement?

Mr Varghese : No. Thank you.

CHAIR: We will go straight to questions.

Senator EGGLESTON: I think Senator Back has just one or two questions.

Senator BACK: I have several.

Senator EGGLESTON: All right. I will go ahead, then, just the same.

Senator BACK: Thanks, Senator.

Senator EGGLESTON: I would like to ask some questions, first of all, about the Australian-Indonesia Comprehensive Economic Partnership Agreement with respect to live cattle. I wonder what the current status of negotiations with Indonesia is on this issue.

Mr Mugliston : Senator, that issue has not arisen in the context of the Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations.

Senator EGGLESTON: I see. What steps has the Australian embassy in Indonesia taken since the last Senate estimates were held to restore the live cattle trade with Indonesia?

Mr Cox : Could you repeat the question about the live cattle trade, please?

Senator EGGLESTON: Since the last estimates, which were in February, can you update us on what the department and the Australian embassy in Jakarta have done to seek to re-establish the live cattle trade?

Mr Cox : Over the last three months, the government has been very active, both the Department of Foreign Affairs and Trade and the Department of Agriculture, Forestry and Fisheries, together with ministers Emerson and Ludwig, in working very actively with the Indonesians authorities to try to boost and strengthen the live cattle trade and, indeed, the boxed beef trade as well. Indonesia introduced a low quota for beef this year of 80,000 tonnes. We have been doing what we can through bilateral advocacy. Minister Emerson has had a number of meetings over recent months with his trade counterpart Gita Wirjawan to seek to have a boost in that quota—an enlargement of the quota—both for boxed beef and for live cattle. In recent days—last week—the Indonesian government announced that it will do a number of things. First, it will introduce premium cuts of beef quota free. Second, it will bring forward the quarter three quota allocation of that 80,000 to this month to facilitate an increase in cattle and boxed beef and live cattle imports to Indonesia to address Ramadan needs. Growth in beef consumption during Ramadan and during the feasting time is very high. We are still trying to advocate for further reforms and liberalisation, but certainly they are two significant breakthroughs as a result of the fact that the price of beef products in the Indonesian market has been going up very significantly. Our ambassador on the ground and senior officials, including the secretary and others, have been very actively working with senior officials as well in Indonesia to achieve these outcomes. So that is a summary of what we have been doing.

Senator EGGLESTON: Thank you very much. That is quite comprehensive. Is the increased price related to diminished supply?

Mr Cox : Yes. The price has increased as a result of the demand being similar. As a result of these Indonesian quota restrictions, there has been an increase in the price in the market because supply has been constrained by Indonesia's policies, which are driven by a belief in the desirability of self sufficiency. The Indonesian authorities would like to build their own herds and believe they could service their own needs domestically. However, given the size of the demand, that has not been the case and they have seen prices in the market increase very significantly over the last months.

Mr Mugliston : I might come back to my own response and add a supplementary to it. I said that the issue of the live cattle trade has not specifically arisen in the context of the IA-CEPA negotiations to date. However, the general issue of cooperation on beef has arisen. So it has been at a very conceptual level in terms of a response to proposals that have been made by the Indonesia-Australia business partnership group, suggesting we could look at a possible pilot project to enhance cooperation in the beef sector as well as perhaps in the tropical products sector.

Senator EGGLESTON: That is very interesting. What would enhancing mean?

Mr Mugliston : Mr Cox may wish to add to this. We are already engaged in some cooperation activities in the beef sector in Indonesia. ACIAR is very much involved in that. The idea and the thinking is what value added could we perhaps look at providing through this Indonesia-Australia Comprehensive Economic Partnership Agreement process to the existing cooperation. So that is very much the focus of our examination.

Senator EGGLESTON: Mr Cox, when you spoke of the boxed meat, that presumably means slaughtered in Australia, frozen and transported to Indonesia?

Mr Cox : Yes. When I refer to boxed beef, I am referring to frozen boxed beef killed in an abattoir here in Australia and sent to Indonesia, yes.

Senator EGGLESTON: I have heard that there is some degree of consumer resistance to frozen beef, though in Indonesia they prefer recently slaughtered meat. Is that not the case?

Mr Cox : There are different segments of the Indonesian market. There is a strong preference by many people for warm killed meat in Indonesia, obviously for their own halal slaughter processes. They want to kill it in country. I think there is a belief that if the beef is killed live and then moved quickly to market, it is better. But I think in the more urban markets and the more sophisticated cities, there is a preference increasingly for more modern food tastes. It depends.

Senator EGGLESTON: Yes. Obviously there is some variation there. But live meat or recently killed meat seems to be preferred, from what I can gather. Is the department aware of a campaign by Animals Australia Incorporated to end live exports? Are you aware of that?

Mr Cox : I do not deal with that specifically myself.

Mr Varghese : We are certainly aware of the campaign and the objectives, Senator.

Senator EGGLESTON: Are you aware that the Department of Finance and Deregulation awarded a grant to Animals Australia worth $33,006 in March 2013? If so, have you sought assurances from the department of finance that taxpayers' moneys will not be used to campaign against Australian live cattle exports?

Mr Varghese : Senator, I was not aware of the grant. I do not know whether colleagues would have known about it.

Senator EGGLESTON: There is no response from anyone?

Mr Cox : I am not aware of that either.

Senator EGGLESTON: Well, are you able to guarantee that taxpayers' money will not be used to campaign against Australian live cattle exports?

Mr Varghese : Well, it is the policy of the Australian government to continue with live cattle exports. I cannot see us as a result consciously funding a campaign against live cattle exports.

Senator EGGLESTON: So if this organisation has been funded, do you think it is some sort of mistake?

Mr Varghese : Well, I do not know what the purposes of the funding were. I do not know what the conditions of the funding were. I do not know to what extent the money that was received by the organisation can be quarantined in terms of its objectives. I would need to have those details, Senator.

Senator EGGLESTON: Minister, are you able to give us any information about this?

Senator Bob Carr: No.

Senator EGGLESTON: You do not know any detail about it?

Senator Bob Carr: No. I know nothing about it.

Senator EGGLESTON: What is your general opinion of the Australian government funding an organisation opposed to live exports?

Senator Bob Carr: I do not know that they do.

Senator EGGLESTON: But if they did?

Senator Bob Carr: That is hypothetical. I know nothing about it.

Senator EGGLESTON: Can you confirm, Minister, that you are still a member of the governing council of Voiceless?

Senator Bob Carr: I am not sure. I would need to check.

Senator EGGLESTON: If you would and if you could let us know. As I understand it, the committee of that organisation is opposed to live cattle exports.

Senator Bob Carr: It might be. I have never attended a meeting of it. I support the cause of the humanitarian treatment of all animals, but I have played no role in the organisation and it certainly would not bind me. Its policies may well be opposed to live cattle exports, but they have not made representations to me.

Senator EGGLESTON: So since you have been in the Senate, for example, you have not provided the council with any advice?

Senator Bob Carr: No. I have not had a meeting with them.

Senator EGGLESTON: You have not had a meeting with them. Thank you. I wonder, then, if you are aware that Mr Kelvin Thomson MP, Parliamentary Secretary for Trade, took a lead role in circulating a petition calling for a permanent end to live animal exports?

Senator Bob Carr: No. He has not spoken to me about it, no.

Senator EGGLESTON: So you are totally unaware of him being involved—

Senator Bob Carr: Yes.

Senator EGGLESTON: in the generation of such a petition. Nevertheless, I wonder what sort of impression you think that sends to Australia's trading partners and to the industry that your parliamentary secretary for trade is involved in campaigns to oppose live cattle exports?

Senator Bob Carr: It has never been raised with me by any other government.

Senator EGGLESTON: Well, we have raised it now. What do you think their response would be?

Senator Bob Carr: Well, as they have never raised it with me, I do not think it has come to anyone's attention.

Senator EGGLESTON: I am sure that now we have raised it, it will. Have you raised the issue of live cattle exports with the Indonesian government in discussions?

Senator Bob Carr: I do not recall whether it has been on the agenda, but it has not been at the top of the agenda because my ministerial colleagues would deal with it and not me.

Senator EGGLESTON: Thank you very much. Have you been to the north of Australia—to Queensland, the Northern Territory and Western Australia—and been made aware of the impact of the ban on live cattle exports to the industry?

Senator Bob Carr: No. I am a supporter of live cattle exports responsibly conducted that meet all the standards we would reasonably expect.

Senator EGGLESTON: Thank you very much, Minister. I want to ask you whether your department has undertaken any recent studies in the last two years as to the value and importance of the live export trade both to the economy and to agriculture in general. If so, what were the conclusions?

Senator Bob Carr: I am not aware of it. I will take that on notice.

Senator EGGLESTON: If you would. I would be very surprised if the department of trade had not in some way looked into this. The World Society for the Protection of Animals, WSPA, one of the leading groups opposing live exports, commissioned their own independent economic study. According to media reports, that study found saleyard prices paid to farmers would plunge by something like $28 a sheep if the live export trade to the Middle East was axed. Does your department have any comment on that?

Senator Bob Carr: Well, the government supports the trade.

Senator EGGLESTON: Thank you. That is reassuring. Again on live trade and bilateral regional and multilateral trade negotiations, there was an article in the Australian on 7 March saying a live trade revival was the only hope for breeders. Given what you have just said, does the government concur with the agricultural industry and its peak bodies, including the National Farmers Federation, that it overreacted in suspending the live cattle trade almost two years ago and that it has caused very serious damage to the cattle industry?

Senator Bob Carr: I was not in the government then. I would need to refer that question to my parliamentary colleague.

Senator EGGLESTON: If you would, we would be very pleased to have the response. Of course, you are part of the government and you must have been aware at the time of the suspension and no doubt engaged in discussions with your colleagues about the impact. Can you or your departmental officials advise the committee what steps have been taken in the 22 or so months since the suspension to assist Australia's farmers in re-entering the live trade to Indonesia?

Senator Bob Carr: I will take that on notice, Senator.

Senator EGGLESTON: If you would. I would like to know how the government will respond to allegations from WA sheep farmer Michael Trant that, and I quote:

“Since the Australian government insisted on ESCAS's implementation (in Middle East markets), we have witnessed an almost complete halt to our cash flow.”

Senator Bob Carr: Again, I would need to speak to my colleague the minister for agriculture about that.

Senator EGGLESTON: We would also like you, if you can, to give us some figures on the volumes of live sheep and live cattle to the Middle East markets over the last three years. You can provide those figures on notice to the committee. Can the department of trade comment on a scenario in which Australia exited the live trade entirely? Where would the countries to which we export obtain their beef and sheep protein?

Senator Bob Carr: Again, we will take that on notice.

Senator EGGLESTON: Thank you. Of course, in all of these countries, animal welfare standards tend to be not as high as Australia's. There is a view that if we suspended our trade entirely, animals would be treated far less carefully and humanely than they are when passing through Australian abattoirs. Finally, there is a lot of misinformation in the public domain concerning the treatment of live animals on board Australian sheep vessels heading to overseas markets. I wonder what measures or processes does the government impose on live exporters to ensure animals are treated properly and in accordance with good veterinary principles when on board these Australian vessels? What sort of standards do you set?

Senator Bob Carr: Senator, let me consult with Senator Ludwig and I will report back to you.

Senator EGGLESTON: Well, one would hope that Senator Ludwig is well informed on this subject since he is the person who actually suspended the trade.

Senator Bob Carr: I believe his knowledge of this is encyclopaedic.

Senator EGGLESTON: I would think so. It would have rapidly expanded over the suspension. That is all on that topic, Minister.

Senator BACK: Mr Cox, in response to questions Senator Eggleston asked you about fresh meat versus boxed or frozen meat, you said that there are times when people want fresh meat. Are you aware that, in the main, the animals we have exported to Indonesia over time, in fact, have gone to low socioeconomic areas in the regions of Indonesia where they do not have refrigeration?

Mr Cox : Yes. As I implied in my answer, the boxed frozen meat is more for the urban markets whereas the live cattle is more for the peri-urban and smaller cities and non-urban markets. That would be right, Senator, yes.

Senator BACK: So you would also concur, in response to another question asked by Senator Eggleston, the high value meat by its very name will go to the restaurant and the hotel trade in the major cities but will not address in any way what is now a nil supply of beef in the regional areas of Indonesia, where in fact Australia was so successfully providing protein to low socioeconomic Indonesian families?

Mr Cox : I do not think there is nil supply. There is a quota of 80,000 tonnes for this year, of which one quarter of that has been brought forward now to this month to accelerate the supply, including to poorer Indonesians, I think, for the festivals over the month of Ramadan and Eid-ul-Fitr. So, in fact, I think there is certainly less supply on the market. I would not say there is none, but there is certainly less supply because of Indonesians' policies of self sufficiency, which have reduced the quota to 80,000 tonnes.

Senator BACK: One of my associates told me the other day that, of 16 wet markets that he and his colleagues manage, 14 of the 16 are closed for lack of supply. With regard to boxed meat—I think we canvassed this the last time we met—can you tell me now what has been the fate of those containers of Australian frozen beef that were on the wharf in Jakarta and were never allowed into Indonesia? I am aware that some were released and found their way to other markets. Can you tell the committee what has been the fate of the remainder?

Mr Cox : I will consult my notes. Certainly there has been some progress on them. I will see if my notes have that. I certainly can report broadly that there has been progress and that the number of containers that is left is now substantially reduced from what it was at the beginning of the year. But I will take on notice the precise numbers. I think at that time we were talking about 116 containers.

Senator BACK: We were.

Mr Cox : I think about half of those containers have now been either re-exported or sent to other markets. Certain of them were still left on the docks because of disputes over demurrage fees and other things. But I will get you the actual current figures on notice.

Senator BACK: Would the department have tracked at all what the cost has been to Australian exporters of the delay or, indeed, now what probably will appear to be the non-sale of that meat?

Mr Cox : Yes. I will get that figure for you on notice. I do know that the embassy in Jakarta, working closely with port authorities and import agencies, was working to negotiate a settlement on demurrage costs and the impact of those demurrage costs, which was initially supposed to be quite high on Australian exporters and their import partners. It was actually significantly reduced. So some compromise has been worked out on that. But I will get you the precise details on notice.

Senator BACK: Thank you for that. In response to an earlier question about Indonesians' supposed self sufficiency, is the department aware now that that objective, if ever it were to be met, which it was not, has now effectively flown out the window because most of the beef available to the market for the last few months in fact has been replacement cows and heifers who might otherwise have been the foundation stock for this replacement Indonesian beef herd? Is the department aware of that?

Mr Cox : Well, the policy of self sufficiency remains a policy of the Indonesian government. The Indonesians themselves are determined to try to build a greater cattle herd themselves, so that has not changed. But I think there has been some admission that the policy has not worked inasmuch as it has resulted in significantly increasing prices on the market. That has implications for social stability and people's views of the government. So that is why they have brought forward the quota segment for the third quarter to now. We will continue to work with the Indonesian government to lobby for increases to the quota. So that task will continue. I imagine ministers, senior officials, the ambassador and his staff will continue to advocate for further quota reforms and for a more liberal market for live and boxed beef.

Senator BACK: Thank you. Are the trade officials in location aware of the existence of, or indeed the expansion of, the illegal sale of buffalo and beef from India into Indonesia to try to meet some of this shortfall—black market sales? Would the department track that fact or its expansion at all? Foot and mouth disease is rampant in India. History has always recorded that, when beef has been imported from a foot and mouth disease endemic country, the recipient country has always also got foot and mouth disease. Has the department any knowledge of that trade?

Mr Cox : I do not have any specific knowledge of that trade, but trade colleagues in Jakarta might. So I will take that on notice as well, and we will check with our embassy colleagues in Jakarta. I am sure that if that is an issue, they would be aware of it. This has been a top focus of our trade policy work for many, many months. I am sure they will be aware of it.

Senator BACK: Indeed. I refer to a question I asked during the last estimates—I think it is question 35—in which I asked you to take on notice and advise the committee what trade agreements, treaties, commitments or other obligations, including those under WTO, Australia broke with Indonesia when we imposed the ban on live export sales to Indonesia in 2011? I have to say to you, Secretary, that I really was deeply disappointed in the two-line answer. I will read it out:

Australia has the right, under international trade rules, to take action to ensure that Australian cattle are treated in accordance with international standards.

I regard it as a deep insult to receive that answer. Clearly as a person who has been asking questions in this committee for some time on this issue, it might be apparent that I actually do have some knowledge of the trade. The questions I asked related to what agreements, treaties, commitments or obligations we broke. I know very well that Australia has the right, under international trade rules, to take action to ensure Australian cattle are treated in accordance with international standards. I have been part of the development and the maintenance of those standards in our overseas markets. I ask you again to either answer the question now or take it on notice and please answer it. Tell me what trade agreements, treaties, commitments or other obligations Australia broke. Can you answer it now, or can you take it on notice?

Mr Varghese : Senator, I am happy to take that on notice.

Senator BACK: Do you agree with me that that—

Mr Varghese : Well—

Senator BACK: answer is inadequate?

CHAIR: First of all, please let the secretary answer.

Mr Varghese : Senator, I will take it on notice and I will endeavour to ensure that the response we give you is as full a response as we can give and one that addresses the issues that you have raised.

Senator BACK: Thank you. Wonderful. In response to questions in the last estimates, I think the representative said that the department was working with the Indonesians to resolve outstanding issues, and they included the resumption of trade. I wonder if you, Secretary, or your colleagues can give me any indication as to what, if any, successful resolutions we have seen. I am aware of the small increase in high value beef, which, if my memory serves me correctly, was actually to be flown into Indonesia rather than shipped. Is there any other evidence of success in resolving these issues?

Mr Cox : Well, I should say, Senator, that the quota for 80,000 tonnes, which includes 267,000 live head of cattle, is now operational, and live cattle are going to the Indonesian market. So there is no curtailment of trade now. The trade is happening and live cattle are going into the market. In fact, this year, under that quota, we anticipate 267,000 head. We would like there to be more live animals going into the market if we can push the quota up. So it is not correct to say that there is no trade going on now. There is trade. There is trade of live animals and boxed beef. The quota free access for premium cattle is on top of that. Another measure I should mention is that the Indonesian authorities have given BULOG, the Bureau of Logistics—a stock management agency that is normally responsible for managing the rice stock—authority to manage further imports as required. So the answer is that there are live cattle going into the market from Australia. Australia is basically the supplier to Indonesia. The premium beef for the hotel market, the higher end market, is quota free. There is also the boxed product as well. So there is a range of meat options going into the Indonesian market from Australia.

Senator BACK: Has there been any attempt to engage with the Indonesians to either remove the licensing system altogether or to, indeed, increase the licence back to somewhere near the half million animals that we did have prior to June 2011? The licensing system has been the subject of discussion and negotiation between officials and Indonesian officials?

Mr Cox : Yes. Certainly. What we would like is a full liberalisation of the trade. It is consistent with our trade policy to seek a reduction in trade restrictive measures across the range of our trade with Indonesia. The imposition of quota restrictions and other quantitative restrictions is something that we consider universally in principle to be bad trade policy practice. We are certainly advocating greater liberalisation in the market. At the bottom line, we would like to see the removal of the whole quota and licensing system, but we have to have fallback positions. In addition, we are also arguing that if you have to have the quota system, we want a larger quota system. We argue both. We argue the maximalist position and we argue a realistic fallback line.

Senator BACK: We know that the US brought a complaint to the World Trade Organisation against Indonesian limits. I think it was in January this year that Australia joined in those consultations along, I think, with the EU and Canada. Is that correct?

Mr Cox : That is correct, yes.

Senator BACK: Is it also the case that in the event that a party or parties do win in the World Trade Organisation in terms of that disputation, the WTO only authorises the original complainant and not third parties to apply retaliatory aid sanctions? Am I correct in that assumption?

Mr Cox : Ms Adams might like to respond.

Ms Adams : Yes. That is correct.

Senator BACK: My understanding, then, is that by Australia joining, it has got there too late? In fact, the strength of our circumstance, as opposed to that of the US, is severely diminished. Would that be a reasonable assumption? To what extent does Australia benefit at all in coming along late to join in that disputation and negotiation?

Mr Cox : We joined the consultation process. We have now reserved our third party rights to also join in the actual panel stage of this dispute. If there is a resolution of the dispute that ends up with a settlement between Indonesia and the United States, we are enabled to negotiate also with the Indonesians bilaterally to see if we can get something. You are right; it is a deal bilaterally between the lead complainant and the respondent. But we are enabled to negotiate with them as well to see if we can get a similar outcome. So I do not think it is right to say that we are too late.

Senator BACK: Thank you for that answer. Am I correct in my understanding that, on 25 February, Indonesia gave notice that it accepted these requests but sought to consult first with the US and only then other parties? Is that something you also understand to be the case?

Mr Cox : Yes. That is, I think, correct.

Senator BACK: Which brings me back to my question following your answer. My recollection is that certainly prior to the ban on the live export trade, Australia was providing about 65 to 70 per cent of the product into the Indonesian market and the Americans were providing about three or four per cent. This has placed them at a significant advantage, has it not, by virtue of your answer that the Indonesians now seek to deal with the Americans first, one of our most bitter competitors in the meat market, and only then deal with Australia?

Mr Cox : Well, that is hypothetical, Senator. I do not think you can necessarily assume that that is the case at all. It depends, first of all, on the United States winning the case at the WTO, which we do not know; that is hypothetical. In addition, the negotiated settlement between the United States and Indonesia as a result of that is also hypothetical. What we can then negotiate with them also is an open question. I think it is not possible to make a judgement at this stage based on looking ahead to a whole series of circumstances in the market that we cannot predict.

Senator BACK: Sure. Thank you. Madam Chair, very kindly, has given me only five more minutes. I have two other topics. I wonder if you could answer very quickly. There has been this circumstance in regard to the free trade agreement with Japan, and that is cars versus cattle. You are aware of it, no doubt. Could you give me a quick answer. The cattle industry is saying, 'Please don't allow us to be hung out to dry', and the Japanese are saying that they obviously want tariffs to be reduced. Can you very briefly explain to us where we are at with that circumstance, please?

Ms Adams : Japan FTA negotiations do involve both auto access and beef access. They are both very important issues that are still in front of us in this negotiation. Of course, we work very closely with the Australian beef industry. We are united in our push for commercially meaningful market access improvements in the Japan FTA.

Senator BACK: That is as much as you can say?

Ms Adams : That is quite clear.

Senator BACK: You cannot give me any lead at the moment to give the beef industry some relief? For the other two questions, I may have to ask for more detailed answers on notice. Why do we not have a free trade agreement with either China or South Korea when, indeed, New Zealand does with China and that puts them at about a 20 per cent advantage? Again, the United States has a free trade agreement with South Korea, putting us at about a 12 to 20 per cent disadvantage with beef sales to what was, in fact, one of our most important markets. I want to stay with beef. You can either respond quickly or be kind enough to take the answer on notice and give me more information on where we are with both China and South Korea in terms of free trade agreements.

Ms Adams : I will respond quickly on both. On the Korea FTA, it is true that the US-Korea FTA is in place. However, the beef export statistics actually do not show a decline in Australian beef, even though the tariff differential is there due to multiple factors, which I am sure you are well aware of, so I will not go into them. Nevertheless, we are extremely aware, and have been for years, of this issue and are doing everything we can to remove that differential as quickly as we can, or at least limit its expansion. On the China FTA, of course, yes, New Zealand does have that agreement in place. It covers, in particular, the products that New Zealand exports, which of course are a smaller subset than our set of export interests to China. We continue to do our best on that negotiation, including this very week. The negotiators are there at the moment fully engaged in the market access issues to conclude them as soon as we can.

Senator BACK: Thanks, Ms Adams.

Senator McKENZIE: In late 2012, the OECD released its annual review of national agricultural policies. Can you confirm total government support measures for Australian agriculture are the lowest of any developed nation when expressed as a percentage of national GDP?

Mr de Cure : The OECD releases these figures, I think, on an annual basis. Australia is not the lowest. It is close to the lowest. I think New Zealand is slightly lower at about one per cent and ours is around two to three per cent.

Senator McKENZIE: That is right. So lower than Chile, Canada, the European Union, Mexico and Japan et cetera.

Mr de Cure : Lower than all those others that were surveyed, yes.

Senator McKENZIE: Whilst the average across the OECD is 18.8 per cent.

Mr de Cure : I do not have those numbers with me.

Senator McKENZIE: I think it is. We will go with that. We know the pressure that Australian industry, particularly food processing, is under, with a number of well-known Australian companies shedding jobs. This leads me to my line of questioning, which is around safeguard actions and, in particular, to SPC. When did you become first aware of SPC Ardmona's request to the Minister for Agriculture, Fisheries and Forestry for emergency safeguard action under the WTO?

Mr de Cure : Well, I think, from memory, the company wrote to the Prime Minister on this issue on about 29 April. We became aware of it shortly after that.

Senator McKENZIE: How was that communicated to your department and on what date?

Mr de Cure : The letter was copied to our minister, so it would have been conveyed from the minister to us. I do not know the date, but it was fairly shortly thereafter.

Senator McKENZIE: During estimates on Tuesday, it was confirmed that the minister had met with SPC Ardmona. Have you received any advice from the minister to investigate safeguard action?

Ms Adams : Minister Emerson, do you mean? Minister Emerson has not yet met with the company, as far as I know.

Senator McKENZIE: What communication has your department had with Treasury in relation to SPC's request?

Mr de Cure : We have had extensive consultations with not just the Treasury but the department of agriculture and the department of industry on this matter over the last several weeks.

Senator McKENZIE: Could you outline the broad brush aspects of that communication or advice?

Mr de Cure : Essentially just discussions about the nature of the issues that Ardmona or SPC Ardmona face and the growers in the Goulburn Valley; a discussion around what a safeguard is and how it would operate; and what sort of process might be pursued in order to have this matter addressed in accordance with Australian law and regulations and our international obligations. I guess the point to make here is that these are very exceptional circumstances—safeguard actions. We have only had two requests in Australia since the formation of the WTO, both relating to pig meat—one in 1998, I think, and the other in 2007. So there is not a lot of history around these sorts of processes. A lot of it is about understanding that and trying to get a better sense, as I said, of the problems that the company and the industry face.

Senator McKENZIE: Do you think the utilisation of safeguard actions is exceptional internationally, or is it just Australia that is exceptional?

Mr de Cure : I think it is fair to say, particularly for a developed country, that it is exceptional. In fact, WTO rules require that it be used only in exceptional circumstances, yes.

Senator McKENZIE: But given that we have only pursued this twice, are there other developed countries that have obviously a higher number of—

Mr de Cure : I do not have that information with me.

Senator McKENZIE: Could you take that on notice, please?

Mr de Cure : I could take that on notice, certainly.

Senator McKENZIE: So you would be confident, then, Mr De Cure, that governments now, as of today, are quite au fait with the process and where to go forward from here with the request made by SPC Ardmona, given the extensive consultation, I guess, that you have outlined?

Mr de Cure : We certainly have a much clearer sense of the situation—the possibilities and the options, yes.

Senator McKENZIE: So we are confident that we know where we are going?

Mr de Cure : What the next steps are, you mean?

Senator McKENZIE: Yes.

Mr de Cure : Well, that is an issue for government, clearly.

Senator McKENZIE: But they have got all the information they need to make the decision?

Ms Adams : Senator, I will come back to your earlier question. In fact, Minister Emerson was speaking about the SPC Ardmona issue with me this morning and is seeking to meet with the company, because they have not yet come to see him. There have been very active discussions amongst all relevant agencies. Yes, we are fully on top of the issues.

Senator McKENZIE: Yes. And, I hope, the urgency of the issue.

Ms Adams : And the urgency of the issues. I also spoke to the managing director of SPC shortly after receiving the letter.

Senator McKENZIE: Amongst all the discussions that have been occurring around departments and with industry, have any preliminary discussions occurred with the Productivity Commission?

Ms Adams : Not from our portfolio. It is, of course, a Treasury portfolio agency.

Senator McKENZIE: And not from the minister?

Ms Adams : I could not say, but not to my knowledge.

Senator McKENZIE: Has the department met with unions to discuss what options exist to reduce the pressure on our agricultural industries?

Ms Adams : Not DFAT, but I know there have been union representatives speaking to various people around Canberra. But not DFAT, as far as I know.

Senator McKENZIE: I go to the earlier conversation about the exceptional nature of this request. Is the department confident that it has the resources it needs at its disposal to pursue a safeguard action?

Ms Adams : Well, our part of it, yes.

Senator McKENZIE: Excellent. Could you advise when the government and the minister for trade will actually be making the decision?

Ms Adams : No. I cannot provide you with that information. All I can say is that it is a matter very much at the forefront of ministerial attention and, as I said, agencies across Canberra. I cannot tell you when decisions will be made or announced.

Senator McKENZIE: Given the urgency, Ms Adams, the end of financial year approaching and my understanding of the timelines required, I am disappointed, I guess, that you cannot give us some indication whether it is going to be days, weeks or months before a decision is made to initiate an action.

Ms Adams : Well, I can say that I do not think it will be months. It is more likely sooner rather than later. Everybody is aware of the urgent nature of the issues.

Senator McKENZIE: Minister, do you have any advice to give them?

Senator Bob Carr: No. I would have to take it on notice.

Senator McKENZIE: If you could take that on notice and speak with Minister Emerson, I am sure the growers and workers of the Goulburn Valley would appreciate a prompt response.

Senator Bob Carr: I am very happy to do that.

Senator McKENZIE: Are you aware of any other countries that have had successful anti-dumping or emergency safeguard actions implemented to preserve a domestic food processing capacity more broadly?

Ms Adams : That is a broad question.

Senator McKENZIE: It is.

Ms Adams : I am aware of New Zealand anti-dumping duties that are in place on certain of the canned vegetables in question. Beyond that, I cannot answer your question off the top of my head.

Senator McKENZIE: Are you aware of New Zealand?

Ms Adams : Yes.

Senator McKENZIE: I want to confirm the importance, obviously, to the dairy industry of getting the FTA with China signed off. My understanding is that agricultural services, government procurement and investment are still all in the basket as they were in 2006 in terms of being part of the FTA.

Ms Adams : I am sorry, but could you read your list again? All the issues are still in play, yes.

Senator McKENZIE: They are still in play. Thank you.

CHAIR: Senator Eggleston has a question and then we have some information coming forward from DFAT. It is a response.

Senator EGGLESTON: I would like to ask about Myanmar, which of course is opening up. Its economy is now developing quite well or quickly. I note that correspondence received by the secretariat from the minister's office informed the committee that Senator Carr was going to be absent from these estimates so as to attend the World Economic Forum in Myanmar. I wonder what became of the forum, Minister. Is it still going ahead?

Senator Bob Carr: The forum proceeds independent of my attendance. I would have appreciated a rescheduling, but I did not suggest that. Wiser heads in the government prevailed. The view was that I should be here with you.

Senator EGGLESTON: Minister, that is such a compliment to the committee.

Mr Cox : We have representatives attending on behalf of the government. There is a forum to promote our chairmanship of the G20 in 2014.

Senator EGGLESTON: It is very good to know that we have such a senior person there with fairly local knowledge. Could the department provide an update on the appointment of a trade commissioner to Myanmar?

Mr Varghese : You might want to take that up with Austrade.

Mr Gosper : We announced in March the appointment of an Australian trade commissioner to take up the position in Myanmar. It is Mark Wood. He will be taking up the appointment on 6 June.

Senator EGGLESTON: That is very good. Myanmar has been described as a new frontier for investment in Asia. I wonder how Austrade views the country as an economic prospect.

Mr Gosper : The reason we are putting someone there is we can see the very strong interest on the part of Australian industry in knowing more about this market as it opens. This is all anecdotal, but we have had strong interest expressed by more than a dozen Australian companies in investment in the mining and oil areas. We get a steady flow of inquiries about the potential of the market and issues relating to companies seeking to know more about it and to take some presence. So there is certainly a good level of interest from Australian companies in this market and, of course, a good level of interest from companies from many of our competitors as well.

Senator EGGLESTON: I understand that they are interested in mining. What particularly are they interested in mining? Are there any particular mineral assets that Myanmar has which could be exploited?

Mr Gosper : It is a mineral rich country, as I understand it, so there are a number of particular interests. But we have strong interests from Australian mining equipment, technology and services companies. They assist miners develop projects via the logistics of operations and all the additional bits that are required in a mining operation. In fact, the interest from the Australian sector is quite broad.

Mr Cox : In addition to Mr Gosper's comments, I can say that a strong focus is oil and gas, both onshore and offshore. Myanmar is a very prospective region for oil and gas exploration and production.

Senator EGGLESTON: That is very interesting. I went to the APIA conference last weekend, where they told us that the cost of oil and gas developments in Australia was now so high that we might not have much further feature investment in those areas. Myanmar, in that case, could well be a competitor. Is that not a fair conclusion?

Mr Cox : Well, I think it is far from being a competitor in the sense that it is still a very underdeveloped market. So I do not think it is a competitor. But certainly the oil and gas market globally is a very competitive place.

Senator EGGLESTON: Indeed.

CHAIR: Okay?

Senator EGGLESTON: If you say so, Madam Chair. I do have other questions.

CHAIR: Well, I am very mindful of how we are trying to manage this next 35 minutes.

Senator FAWCETT: I am happy to defer to Senator Eggleston initially if he has questions.

Senator EGGLESTON: One of the things that I am interested in is the Australia-India comprehensive economic cooperation agreement. What is the current status of negotiations with India on that subject? When did the last round of negotiations take place? What are the hoped for outcomes? They are all the questions rolled into one.

Ms Adams : The fifth round of negotiations with India was held in Canberra on 20 to 21 May, just recently. We continue to make progress at the early stages in that negotiation.

Senator EGGLESTON: What do you see as the outcome long term, though? We export a lot of gold and uranium to India now. What other commodities do you think will become commonly traded as a result of this agreement?

Ms Adams : What we always seek to do in these negotiations is reduce or eliminate the market access barriers imposed by the governments to trade across the board goods, services and investment. So we can see a range of possible areas for increased exports, but we do not target particular sectors in a managed sense. We try to eliminate all the barriers that we can. Of course, we do focus on our commercial priorities informed by stakeholders consultations, so they are across the board.

Senator EGGLESTON: Across the board trade. Thank you. Dare I ask another question?

CHAIR: You dare.

Senator EGGLESTON: Could you advise us on the current status of negotiations on the free trade agreement with Japan?

Ms Adams : Yes. We have been working very intensively with Japan for some time, but particularly since late last year. We have made a lot of progress in agreeing on the treaty obligations across the various chapters in the agreement. So it is quite advanced. In fact, the most recent round was last week in Tokyo. Minister Emerson met the agriculture, forestry and fisheries minister from Japan, Minister Hayashi, last week in the margins of OECD ministerial to also press for, in particular, market access outcomes that will be required to conclude that negotiation, including, in particular, the issue of our beef exports and our need for commercially meaningful market access on beef exports.

Senator EGGLESTON: Do you think that we are going to get there? Has the National Farmers Federation provided any input, given the importance of this market potentially?

Ms Adams : The National Farmers' Federation and the entire range of beef industry groups and individuals have been in extremely close contact with us and the minister. We are working very, very closely with them.

Senator EGGLESTON: Lastly, we have a number of free trade agreements around the Asian area. There is also this trans-Pacific partnership, which the United States seem to be very interested in promoting. How will our free trade agreements fit in with the trans-Pacific partnership? Will it be, if it occurs, a smooth arrangement or will there be some hiccups?

Ms Adams : No. We see them all as complementary. In the TPP grouping, as you have noted, we have concluded bilateral agreements with various countries. They stand. Any additional obligations or market access openings that would be secured in TPP would be on top of that. That is all perfectly workable.

Senator EGGLESTON: Thank you very much. I will leave it there.

CHAIR: Senator Fawcett has a question on South Korea.

Senator FAWCETT: Korea. Your website highlights that we are in negotiations, but that is about all it says. It does not actually give any indication as to what the issues are that are holding it up. Certainly industry has been very vocal about the cost to industry. David Farley, for example, from AACo describes it as a horrible failure in negotiations of the FTA and it is costing Australia about $3 million a week. Scott Hansen from Meat and Livestock Australia says about $28 million a year. Can you give the committee an idea of the main sticking points and what your plan is to engage and address those points both with the Koreans and with the relevant stakeholders in Australia?

Ms Adams : Thanks very much, Senator. I think Minister Emerson, as recently as Monday, said that it was well known that the outstanding issues in the Korea negotiation relate to beef market access and investor state dispute settle moment provisions. So that is no secret. We are well aware of the tariff differentials, as I said before, that are now in place in the Korean market given the entry into force of the US-Korea FTA. Luckily, for various reasons, the Australian exports to Korea are holding up very well, but we are well aware of the need to resolve that issue as soon as we can.

Senator FAWCETT: Is the size of the Korean market growing?

Ms Adams : Last year, actually, beef imports fell overall, for various reasons, including the fact that the year before had been remarkably high in the wake of the FMD outbreak in Korea that dramatically reduced the supply of pork. So there was a peak in beef exports that year, and then 2012 came down off that peak. And the relative prices of other meats in the Korean market were such that there was a generally reduced demand for beef. But, within that, the Australian market share has been holding up despite the tariff cuts, not that we are complacent about that—on the contrary.

Senator FAWCETT: The final part of my question is: what is your path forward? Clearly, if you just keep going back with the same position, you will probably get the same answer. What work are you doing with stakeholders here or in Korea to try to find a path forward?

Ms Adams : Well, we are very persistent in these trade negotiations, so we never give up. I would also point out the obvious—that there has been a presidential election in Korea that has some impact on how these negotiations can proceed, and a significant restructuring of the bureaucratic structure in Seoul that means the trade negotiation function has moved into a separate department. So there have been some factors on the Korean side as well.

Senator FAWCETT: Has that triggered a new round of activity by Australian participants to engage with people in Korea ahead of another round of negotiations?

Ms Adams : We stay in touch. I spoke recently to my counterpart in Korea, but we do not have a formal round of negotiations scheduled.

Senator FAWCETT: Do you have a time frame from an Australian perspective in which you want to try and have the next round scheduled?

Ms Adams : Well, we do not have one scheduled, but we stay in touch and will be—

Senator FAWCETT: I do not accept that you have one scheduled. Does the department have its own view as to when it is aiming to have one scheduled?

Ms Adams : Well, we have made clear to Korea that we stand ready to re-engage whenever they are. So we are ready at any time.

CHAIR: Thanks, Senator Fawcett. We need to move on, if that is all right.

Senator FAWCETT: Thanks, Chair.

CHAIR: I am trying to accommodate the other members of the committee who have questions. We are going to move to the Export Finance and Insurance Corporation now and then to Austrade. If there is time for any additional questions on trade development and policy coordination, we can deal with them before the afternoon tea break at 3.30 pm. We are up to EFIC. And we were waiting for some advice from the department.

Mr Cox : Chair, with your permission, I would like to correct some evidence that I gave yesterday. Yesterday, in response to a question from Senator Madigan regarding the agreement on maintaining security, I was given some advice. I have now received further advice which corrects that advice from yesterday. The answer to the question of Senator Madigan is, in fact, that the treaty or the agreement on maintaining security was formally abrogated by the Indonesian government in a diplomatic note from the foreign affairs ministry of Indonesia to the Australian embassy dated 16 September 1999. So the Indonesians did formally abrogate that treaty on that day by this note.

CHAIR: But the agreement is contained in the Lombok treaty. Is that right?

Mr Varghese : The Lombok treaty effectively superseded this agreement that was terminated by the Indonesians in 1999.

CHAIR: Thank you very much for that correction.

[15:07]

CHAIR: We will move to EFIC.

Senator RHIANNON: EFIC's environmental and social risk assessments for high-risk projects, as we have heard from you before, are not publicly released. Why was that decision made? Why are they not publicly released?

Mr Pacey : EFIC works in a commercial environment. We are provided with information from customers who are subject to commercial confidentiality. EFIC is required to provide confidentiality undertakings. That information is very important to our risk assessment and our ability to make decisions in terms of managing environmental and social risks. In terms of compliance with social policy and transparency, EFIC makes a commitment to have its compliance with our environmental and our policy and procedure audited every two years. That audit report is made publicly available on our website. The most recent audit was conducted from September to November last year. That audit confirmed that we do comply with our policy and procedure.

Senator RHIANNON: But without the actual mandatory public reporting on the environmental and social risk assessment for these high-risk projects on the projects themselves, how can the government assure the Australian public that the human rights and environmental standards in these countries impacted by EFIC supported projects are protected? We have heard from you a number of times about the commercial imperatives that you are dealing with. But you are part of the government that has these other responsibilities. Without the public disclosure, how can we be assured that the right thing is being done for the people? There is a development aspect to any project when it goes into a low-income country, which is what many of your projects are doing. So how, without public disclosure, can that be achieved?

Mr Pacey : EFIC makes a commitment to apply the OECD common approaches to the transactions we examine. We benchmark projects in those markets against the IFC performance standards, which are best practice international obligations in evaluating such projects for environmental and social risks. The transparency we provide, I think, is not—

Senator RHIANNON: Before you move on, I want to ask about the IFC performance standards. When the evidence was given at the inquiry we held recently, it actually came across, when I went back to look at it, that you use those standards as a guideline, not as something that has to be applied. I went through some of the material about this Mongolian mine that is quite controversial. A number of international environment and social justice groups have made an assessment that that project has broken with a number of the IFC performance standards. My question is about how you use the IFC performance standards. It appears that they are a guide, not something that has to be followed.

Mr Pacey : We make a commitment to adopt the OECD common approaches and to benchmark our transactions against the IFC performance standards. I can ask a colleague of mine who is an expert in this area to provide greater information, if you require it.

Mr Parsons : Would you mind just repeating the question?

Senator RHIANNON: It is precisely about the IFC performance standards. We were together last when you were giving evidence to the EFIC inquiry into the bill before the Senate. When I looked at the transcript, the way you described it, it came across that you use those performance standards as a guide, not as something that has to occur.

Mr Parsons : Well, no. They are the benchmark that we use to assess projects.

Senator RHIANNON: But let us explore the word 'benchmark'. That means it sometimes occurs. You have a lot of wriggle room, have you not?

Mr Parsons : No. There is no wriggle room. Our policy is that we will apply the IFC performance standards unless there is something equivalent to, or more stringent than, them. If a project does not meet the performance standards, we will decline that transaction. That is clearly stated in our policy.

Senator RHIANNON: I will give you one example from the Mongolian mine. I understand that, under performance standards 1 and 3, waste rock and tailings management plans are supposed to be publicly available, but there are not any. I have a whole lot of other items where performance standards 1, 5, 7 and 6 have not been met. That is why I came to the conclusion, after reading your evidence again and looking at some of this material about how that mine is proceeding, that these standards have not been met. It seems to emphasise that they are a guide, not mandatory.

Mr Parsons : No. That is actually not correct. The project's environmental and social impact assessment addresses the management of the waste rock and the tailings storage facility. Some operational environmental and social management plans are currently still being worked on. At the time, the EIS was released back in August, there was an action plan released at the same time which identified that those operating environmental and social management plans were still being prepared and would be released at a later date. That is entirely consistent with the IFC performance standards.

Senator RHIANNON: What about performance standards 3, 4 and 6—that plans for a coal-fired power plant are not compliant with World Bank coal guidance, requiring an alternative analysis?

Mr Parsons : The project is currently sourcing its electrical power from power stations in China. The project's investment agreement has an agreement with the Mongolian government to source power from within Mongolia within four years of operations commencing. Operations, as defined in the investment agreement, have not commenced yet. The project and the Mongolian government are still determining where power will be sourced from. If power is to be sourced from an on site coal-fired power station, a supplementary ESIA will be prepared and publicly submitted. But there is no decision yet on where the power will be sourced.

Senator RHIANNON: So are you saying that because that decision has not been made, you are not actually bound by performance standards 3, 4 and 6 yet?

Mr Parsons : Well, they have not made a decision on the power station. The power may actually be sourced from a power station that is remote from the project, which may be a multiuser power station. Until that decision is made, there cannot be an assessment of the power station. But all performance standards relevant to the project were assessed and reviewed in the project's ESIA. I think the only one that was not relevant was performance standard 7, which deals with indigenous peoples.

Senator RHIANNON: That is one of the other ones that I had down. Performance standard 7 has not been followed as well. Could you just elaborate on where that one is up to, please?

Mr Parsons : Well, performance standard 7 applies to a project when the project is affecting indigenous peoples. The people within and surrounding the project site are not indigenous peoples as defined in the performance standards and are not identified as indigenous peoples by a whole series of experts on the topic.

Senator RHIANNON: But considering these are herders who have been there a long time, it has been widely recognised that disruption is going to occur. They are part of that community. Has it not become a convenient way to get past performance standard 7 by saying these are not indigenous people?

Mr Parsons : No. Performance standard 7 deals with indigenous people and it recognises indigenous people as specific people who, for various reasons, may be specifically vulnerable to a project. The herders in the area are just normal members of Mongolian society. They do not identify themselves as separate to society. They do not have any features which distinguish them from the rest of Mongolian society, so they are not actually indigenous people. Therefore, that performance standard is not applicable to the project. The Asian Development Bank has done similar projects in the area and also come to the conclusion that the herders are not indigenous people under the normal recognised meaning of that term.

Senator RHIANNON: Apart from the Asian Development Bank, who else has determined they are not indigenous?

Mr Parsons : Well, there is an independent group whose name escapes me at the moment that deals with minority rights, or the rights of minority peoples. They too have not identified the Mongolian herders as indigenous peoples.

Senator RHIANNON: Could you find out the name of the group? I am interested in who has determined that they are not indigenous. Could you come back to us about that, please?

Mr Parsons : Sure, yes.

Senator RHIANNON: Take it on notice.

Mr Parsons : Yes.

Senator RHIANNON: Thank you. I want to move to the issue about EFIC and national interest decisions. At the moment, we have EFIC making these national interest decisions. Because of this issue of commercial-in-confidence and the way EFIC works, we are having decisions effectively made by individual government officials that are exercising enormous discretion about what constitutes a national interest benefit. The public and MPs—like the MPs here—are excluded from any of those deliberations. So how can we be confident that it is in the national interest when, in fact, it cannot be assessed in any open way?

Mr Pacey : I think DFAT would be best to answer that question because EFIC does not make decisions on the national interest account. We make a referral to government for their consideration.

Senator RHIANNON: Could DFAT answer that, please?

Ms Adams : I am sorry, Senator, but I will have to ask someone to come to the table and ask you to repeat that question.

Mr Gerovich : National interest decisions are taken by the cabinet.

Senator RHIANNON: So in terms of an EFIC project, they go to cabinet and the cabinet will then assess the national interest. Could you run us through briefly at what level that has to occur, please?

Mr Gerovich : My understanding is that the EFIC proposal goes to the cabinet through the minister for trade. Cabinet then considers whether it conforms to the national interest guidelines. If it does, it approves the project.

Senator RHIANNON: So, beyond cabinet, there is just no possibility for the public or MPs to interact with that process? So there is no other level? When something is determined on the basis of being of national interest, there is nobody else who can intersect with that process outside cabinet? There is no accountability? There is no oversight?

CHAIR: I think the officer has advised that it is a decision of the cabinet based on the advice that comes from the minister for trade.

Mr Gerovich : Yes, Senator. That is my understanding. Once the cabinet has taken the decision, it is a decision of the government to support a project proposed by EFIC on the national interest account.

Senator RHIANNON: Minister, could you come in on this? How is it justified that there is no parliamentary or public scrutiny of EFIC's national interest account decisions? There is an enormity here. We have this tension between the commercial interests of Australia and the often considerable damage to human rights and environmental protection in low income countries. The resources industry, as we know, has sometimes a damaging track record in these countries. We are talking about the national interest of Australia, but we are talking about what happens in low-income countries. How is that resolved? Why should there not be a public or parliamentary oversight?

Senator Bob Carr: Well, I return to position I have outlined in these debates with you before. The evidence is overwhelming that resource investment enables poor countries to achieve middle income status. Again, think about Myanmar, which we were talking about yesterday. If half the kids born end up being stunted because of inadequate nutrition and half of them do not finish primary school, there is a case for saying that a bit of responsible investment in the country, giving their mums and dads secure income and good jobs, is a big step forward for a country with only an agricultural base and, at that, an inadequate one. Second, I have not seen an indictment of a big Australian company for reckless or socially irresponsible behaviour in a developing country. If there is such evidence, I will alter my view and not hesitate to pick up the phone to a CEO of an Australian company and tell him or her that their outfit is behaving in a way that damages Australia's reputation and does more harm than good.

Senator RHIANNON: But can you give us an example of an extractive industry in a low income country that has brought benefits to that country and the bulk of the profits have not gone overseas? Can you give us an example where the extractive industry has worked for the local people?

Senator Bob Carr: They are two separate concepts. Whether it has done damage to local people and, second and separately, whether most of the profits go overseas.

Senator RHIANNON: I am happy for you to take it separately. Can you give me an example?

Senator Bob Carr: It would be harder to nominate an example where it has not provided a benefit.

Senator RHIANNON: Well, where there has been.

Senator Bob Carr: It is up to sovereign governments. Take the example of Mongolia, which we were canvassing yesterday and which our former ambassador to Mongolia, the non-resident ambassador based in Seoul, could elaborate on more effectively than me. A government like Mongolia confers the conditions attached to any development approval for a mine. Take the Rio mine as an example, which you referred to yesterday. It has imposed quite hearty and robust initiatives gaining an income flow to itself, which I can only assume will be—

Senator RHIANNON: Minister, I have five minutes left. Would like you to take on notice an example where the extractive industries have worked for low-income countries.

Senator Bob Carr: Well, take that example, because you raised it yesterday. I do not think you were present.

Senator RHIANNON: The Mongolian one is one. I would be interested to see if you would bring that back to us as an example—

Senator Bob Carr: But I did.

Senator RHIANNON: because of what happened with their mining tax. Their mining tax was overturned.

CHAIR: Senator Rhiannon.

Senator RHIANNON: I am going to lose time.

CHAIR: We have five minutes left in this whole of the department of trade, so please.

Senator Bob Carr: Chair, I did come back. Senator Rhiannon may not have been here. I did come back to the committee and list the benefits to the Mongolian community. There are benefits to the Mongolian community in terms of jobs, income to the government and training. I urge Senator Rhiannon to look at that supplementary answer I gave yesterday.

Senator RHIANNON: I will, but can you take it on notice, please?

Senator Bob Carr: But you are asking me to list the benefits of resource extractive industries.

Senator RHIANNON: Just some examples. Just examples.

Senator Bob Carr: Why do we not take that as a case study and you look at my answer? It was a long list of the benefits accruing to the people of Mongolia from that huge mine.

Senator RHIANNON: I have never had a minister fail to take a question on notice, so it is disappointing, Minister. No, he has not given an example. Not one example.

CHAIR: Senator Rhiannon—

Senator Bob Carr: But that is an example. The Mongolian mine is an example, and I gave the answer yesterday.

CHAIR: I ask senators who may have additional questions on EFIC to organise to put those questions on notice. We have advised the department and the staff that we will be finishing with the department of trade at 3.30-ish, when we go to the afternoon tea break, and we are going to come back to AusAID. We will now move to Austrade, because I know that there are some questions. Senator Sterle has been waiting patiently. I am sorry, Senator Sterle.