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Thursday, 29 October 2009
Page: 7610


Senator BOB BROWN (Leader of the Australian Greens) (12:31 PM) —I am grateful to both Oxfam Australia and Manna Gum for information upon which I will base my remarks on the Asian Development Bank (Additional Subscription) Bill 2009. The Greens have been concerned for a long time about the Asian Development Bank’s spending, the lack of control and the note being taken of local communities, and the social and environmental outcomes. Not least amongst those is the building of hydro schemes on the Mekong River. The Australian government ought to be in much closer liaison with community groups in the countries which are recipients of Asian Development Bank spending to ensure that the Asian Development Bank’s own charter is upheld in the expenditure of moneys.

The decision by the G20 finance ministers in London in April to channel an additional US$850 billion to international financial institutions ultimately has resulted in the Asian Development Bank’s fifth general capital increase. Although discussions around the increase were already underway before April, the G20 agreement provided the trigger for the bank’s member countries to agree to a 200 per cent increase in capital. To enable Australia to put into practice the agreed capital increase, Treasury has drafted the Asian Development Bank (Additional Subscription) Bill which we now have before us. If it is approved it will result in payments of $240 million over the next 10 years on top of what would have happened and an additional $6.8 billion callable capital being distributed through the bank.

The bill was approved in the House and we are now dealing with it in the Senate. I need to point out that the capital increase for the bank is in line with Australia’s commitment to increase multilateralism. That is no problem. The Asian Development Bank is a multilateral donor and it is in the strategic position to channel aid flows to developing countries. However, while well intentioned, the bank’s projects and programs can be counterproductive as far as communities, their environments and their human rights are concerned.

Let me go to some specific examples. The Highway 1 project in Cambodia was approved in 1998 with the spending of US$40 billion to upgrade the highway between Phnom Penh and Ho Chi Minh City. As a result of the construction, about 6,000 Cambodian villagers living along the highway experienced economic and social hardship due to full or partial loss of their houses, agricultural land, businesses and/or jobs. In violation of its own policy, the bank failed to ensure that the affected communities received adequate compensation in time. There were delays of years. This failure forced families to borrow from black market lenders to finance the reconstruction of their homes, businesses and livelihoods, plunging them into further poverty and debt cycles in which many families remain. A decade later, hundreds of families are still waiting adequate redress. I would like to hear what the government’s attitude has been to ameliorating that stress on those families as a result of the Asian Development Bank operations.

In the Greater Mekong subregion, the bank’s flagship Subregional Economic Cooperation Program in the Asia-Pacific means that $11 billion has promoted large-scale infrastructure, primarily transport and energy, in Mekong countries. The investments facilitated rapid and unsustainable natural resource exploitation in the form of logging, plantation agriculture, hydro power and mining in a region where over 75 per cent of the population still depends directly on lands, forests and rivers for their livelihood. The bank publicly claims that such developments have led to poverty reduction, but let us look at the bank’s own empirical studies of actual poor communities in Laos to see what the real picture is:

 [Compared to the year 2000] villages that were revisited in 2006 were found generally to be either about the same or worse off ... the survey shows that poor villagers increasingly experience difficulty in providing food for their families. Natural resources were said to be seriously depleted in almost all locations ...

The bank is a ‘vigorous promoter’ of the hydropower projects I previously referred to. My briefing from Oxfam says that this is the case:

... particularly in Burma, Yunnan and Laos, where independent civil society participation and open debate are stifled. The bank’s dams in Laos such as the Nam Theun-Hinboun, the Nam Leuk and the Nam Song have negatively affected approximately 40,000 people, many of whom are still waiting for adequate compensation. And the ADB has neglected better renewable energy solutions and planning processes that would avoid this destructive path.

I have no doubt that the bank will read this transcript and I am inviting the bank to send a response to the Senate either through the government or directly, if it will. We will ensure that that goes into the transcript. The Oxfam briefing continues:

The ADB has contributed funding for the controversial Nam Theun II Hydropower Project in Laos (approved 2005, total loan amount US$ 70 million, plus US$ 50 million political risk guarantee), which involves large-scale involuntary resettlement and will cause fisheries losses—

as well as potentially blocking the migration paths of major fisheries and fish stock—

increased flooding and water quality problems for over 120,000 people. The dam will be fully commissioned in 2010—

yet it promises limited outcomes as far as the local people are concerned as well as great stress on those societies. The same can be said about the Visayas base load power project in the Philippines, which is a circulised fluidised bed coal-fired station that is leaving locals with a great deal of concern about, for example, coal ash from the plant. I have raised problems that we have not seen acknowledged in the debate in the House but which are very real for the people, particularly poor people. The assumption that increased funding equals increased results for those people is wrong. The government must be held to account to ensure that the additional resources are well used. I again invite the government to respond to the matters I have raised or to have the Asian Development Bank itself respond to the Senate on these matters. There are initial signs of that intention but it will take a concerted effort from all sides to ensure that Australia’s contributions to the bank are used in a way that promotes long-term sustainable development without disadvantage and without wrecking the livelihoods of local people.