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Thursday, 17 October 2002
Page: 5417

Senator STOTT DESPOJA (4:06 PM) —I am always keen to have science issues, and particularly the issue of space, debated in this parliament. For some of us here, it seems like only yesterday that the Space Activities Act was introduced and debated in this place, and I think there are still some issues hanging over from that original debate. Certainly, in some of my amendments on behalf of the Australian Democrats I will reintroduce some changes that I attempted to make when the original legislation was debated and passed in this place.

There are two provisions in the Space Activities Amendment Bill 2002 that are of concern to the Australian Democrats. These are insurance liability provisions. Most of the other amendments the bill makes to the Space Activities Act are relatively minor and technical. The most important of those are the definition of `space' and the tightening of some of the safety standards in the licence application process. There are also a number of issues that this bill raises which are not directly part of the bill but are fundamental to the bill's purpose. These issues have not been addressed through the parliamentary processes thus far.

The first of the two areas of concern is item 31, amending section 48(3). The amendment provides that the company may cap its liability insurance at $750 million. The second area of concern is item 53, which amends the current section 69. This provision provides that the Commonwealth is liable to pay compensation to Australian nationals for damage caused by space activities beyond that covered by insurance set out in section 48 of up to $3 billion. The act does not require that the company bear the entire liability insurance burden and specifically envisages some Commonwealth coverage, although it does not require such coverage, does not indicate how extensive that coverage should be and does not provide any method for apportioning liability exposure between the government and the private company.

As the opposition have pointed out in their second reading debate contributions in the House of Representatives, capping the liability insurance requirements of a private company and providing government guarantees for liability beyond that amount is all very kind, and certainly something the Democrats have pointed out too, but why isn't the same generosity occurring with, for example, sporting clubs or non-government organisations that are facing massive increases in their liability exposure and do not have the capacity to meet those premiums? One answer is that if the government does not indemnify private operators then the cost of space launches will become prohibitive. So there may be a case for government support for the development of an Australian space industry, but it is a case that the government has not made effectively. Indemnification, just like subsidies and grants, should occur in a policy context that is committed to an Australian space industry.

A second answer could be that every other country with a space program does it, but the Democrats do not consider that really to be an argument at all. We are after world's best practice, obviously, with the regulations and the legislative regime that we produce in this country, especially when we are talking about enhancing and developing our own space industry. Perhaps the final answer will be that the actual risk to the government of ever having to pay anything out is minuscule. That is certainly an argument that we have heard. Is this the criteria, then, for government providing this kind of assistance, or is it that space launching is very big business, representing multinational investment, and the government does not want to jeopardise this industry's development and will therefore foot a significant part of this potential bill?

Do not get me wrong, I find space and space activities to be an extraordinary and exciting area and one that we should be supporting. But I think these issues deserve debate and due consideration, especially when we are talking about taxpayers' dollars and looking at it in a financial context, let alone looking at the issues of the significance of what can happen if things should go wrong. The government has capped not only private liability but its own. It is pretty clear that, although this is a generic bill, this provision is primarily in response to concerns expressed regarding the Christmas Island space base.

To a lesser degree, these concerns also apply to Woomera, in my home state of South Australia. The WA government and the oil industry have indicated that they believe the potential liability risk in relation to launches from Christmas Island could be as high as $25 billion. The government has indicated that it believes the risk to be so low that there is no need to seek coverage to such an amount. On the other hand, it could be argued, of course, that if the risk is so low then why doesn't the government assume an unlimited liability, as most other countries do? After all, the Christmas Island space base is, with Russia, being promoted, facilitated and negotiated by this government. Why won't the government therefore take full responsibility for the risks involved? Who will bear the costs if there is a catastrophic incident— for example, an accident involving offshore oil rigs? Who will bear the cost if gas supplies to Perth are cut—a scenario that both the oil industry and the WA government have raised?

In relation to technology transfer, because obviously this is a significant debate surrounding this legislation and Christmas Island in particular, part of the justification by the Commonwealth for entering into the rocket launch business was the prospect of Australia developing its own space industry. In order for that to happen, there must be agreements with other countries involved in the space industry in Australia that ensure that there will be technology transfer. We want to ensure that transfer of technology to Australia. It is not enough that we are simply a launch pad for other countries. In August last year, when these changes were being introduced and this was being debated for the first time, former Senator Schacht made the following statement regarding the technology transfer:

Two of the four projects envisage the use of Russian launch technology. However, the sensitive and dual use nature of the technology requires agreement between governments to facilitate its release and to ensure control of access. Without a bilateral agreement, the Russian government would not transfer the technology and expertise to Australia, blocking the development of the two space launch projects which are based on Russian systems and depriving Australia of an opportunity to capture a share of the lucrative global satellite market.

The agreement between Australia and the Russian Federation, which, as I have said, was signed on 23 May 2001, provides a legal and organisational framework for the transfer of space technologies, equipment and expertise to the Australian commercial space launch industry. We should all welcome this as we will see the transfer of space technologies from Russia, which has a well-proven record in space technology.

That makes us wonder about media reports, such as the one in April this year, that the Russians were:

... worried about Australia's insistence that customs officials have the right to examine all incoming material ...

That was a wire story from 15 April 2002. This impediment appears to have been overcome by the time the minister went to Russia. But it is patently clear that an agreement ensuring real technology transfer is a long way off, because if we are having difficulty agreeing on fairly standard inspections—the kinds of inspection regimes you would assume would happen—how far away is an agreement that allows Australian access to Russian rocket technology?

At a recent conference on space, held just over a month ago I think, it was reported to the Australian Democrats that Australia and Russia were negotiating yet another agreement regarding the transfer of technology. So it appears we are going to have multiple agreements but no technology. I hope that, perhaps in the committee stage of this bill, the minister can outline the progress that has been made to date and provide some specifics on that. Of course, in a fashion, this has become one of the hallmarks, unfortunately, of this government—the push for legislation, for approval and for regulation, all of which facilitate, support and even fund projects— while there are a number of fundamental matters that remain unresolved.

We have seen the same problems with, for example, the nuclear reactor at Lucas Heights. The Australian Democrats have just received clarification of answers provided to Democrat questions during the estimates process in June. As some senators may recall, we questioned the status of geotechnical studies that were being carried out at the Christmas Island space base—something I raised in previous debates on this issue in the chamber. At the time, the government made public statements that there was no problem with the location of the space pad and that this had been confirmed by the geotechnical work. Now we have received the following clarification:

Environment Australia has yet to receive sufficient information on structural stability.

Not only is this a case of not getting straightforward answers to questions but, as I recall, we were lampooned at the time but also told that we were incorrect in even raising these questions and these issues for debate. So we are not getting straightforward answers in relation to Australia's space industry—that is, everything from the stability of a proposed site to the status of the technology agreements. We are again finding that work that is critical to any prospect of the viability of a space industry has not been resolved. No-one should make the mistake of thinking that this is not fundamental, because these issues are fundamental. On Christmas Island, for example, we have been locked into a number of decisions, including significant financial commitments without the work being completed, that should have preceded those commitments being made.

While this bill, I acknowledge, is not exclusively about Christmas Island, it is important for us to step back and understand why the Australian government is committing money and resources, and legislation, for example, to a development when even the basic agreements regarding access to technology have not been resolved. It seems quite extraordinary. When the objective of entering into bilateral international agreements is not even likely to be met, why are we proceeding down this path? Perhaps the answer lies in French Guiana, the site of the proposed joint space venture between the French and the Russians. In an article in Space News on 22 July this year, which is thoroughly recommended reading, the Russian space agency commented:

Both projects are at a preliminary stage and we look at both of them with equal interest. We are not favouring one or the other. Financial aspects of projects like these are very important and the devil is in the detail.

The Australian minister claims that the agreement is 90 per cent complete. The Russians seem to have a very different view based on those comments and other feedback. One does not have to read this too closely to begin to understand what is actually happening. The Russians are looking for the best deal—and why not? They are playing off the French against the Australians. It is no surprise, then, that there has been no agreement on technology transfer. It is no surprise that the Australian government portrays the right to conduct customs inspections as a negotiating success. It is also no surprise that the Australian government has injected $100 million into this project and has pushed through the permits and the approvals. We are racing for the bottom. What a surprise this is! After all, Australia is giving, giving, giving when it comes to this arrangement but unfortunately it does not seem that we have anything to show for it.

In July this year, the Russians were saying that they are not promising anything in particular but they are indicating that we are in fact only at the beginning of the process. So what next? What is required? How much more money? How many more approvals? What is the government's bottom line in order to ensure that we launch something from Christmas Island? But the race to the bottom has a context well beyond Christmas Island. The economic viability of the space industry at the moment is quite tenuous. Expenses are high, there is an oversupply of launch facilities and demand is dropping. That may well change, but in the short term we seem to be promoting an industry at the wrong time if Australia is going to reap the kinds of benefits that this government originally promised.

I have already circulated amendments to four key areas of this bill. These amendments were tabled on 16 September, so members of the Senate have had adequate time to examine them. I have changed one after very worthy advice from the department—and I thank them for that—in relation to the definition of a toxic material. That amendment should be circulated shortly, I hope. One of the amendments being proposed by the Australian Democrats is designed to ensure that we finalise and undertake the negotiations relating to technology transfer. In those cases where we are entering into bilateral international agreements—that is, before we inject money into construction, before we give permits or finalise an impact assessment—an example of why this may be important is in relation to the insurance cap itself. Australia is effectively guaranteeing the safety of the Russian rockets and technology in assuming liability of up to $3 billion. We have heard the claim that the risk is minimal, so low as to be meaningless in fact, but if we do not have full access to inspect the rockets and the other materials how can we properly assess the risks that we are indemnifying?

This leads me to the second Democrats amendment. The government, with the support of the Productivity Commission, has claimed that this bill does not require a regulatory impact statement because it has no financial implications—that is the rationale. The $3 billion of exposure by the Commonwealth surely needs assessment, particularly in light of the broader debate of current insurance liability concerns. The Democrats accept that the risk is low, although I think in this modern world we wonder about risks, especially when we think of some of the things that we could never have imagined happening which clearly have not only human but economic consequences, such as the events at the World Trade Centre. But we have to accept that even low-risk activities are not no-risk activities.

A regulatory impact statement should look at the effect of a catastrophic event in economic and financial terms. That assessment is deserved. It does not mean the event will happen, of course, but as senators and legislators we have an obligation to understand all the potential consequences of the decisions we make and of the legislation that we pass. An incident could cost up to $25 billion, as has been given to us in estimates from the oil industry and the WA government. We need to find out what the impact of such a catastrophic event would be in terms of the financial stability and activities of the Commonwealth. Until we know that, we should not be passing this legislation; we should not be passing this bill. The Democrats amendment prevents this bill, if it should be passed—and clearly it will be, given the numbers in the Senate—from taking effect until the regulatory impact statement is prepared and tabled. So I hope that the opposition will consider that favourably. It means you can pass the bill but at least provide for a regulatory impact statement to be made under that legislation.

The third of the four Democrats amendments will further address the liability issue. It is an issue that I raised back in 1998 when we were originally debating this bill. As the act is currently written, the liability period is limited, as is the amount. The new liability under this amendment would cover the entire time from the launch until the time the object returns to the surface of the earth. The amendment proposes extending the launch period to cover the existing launch period as well as the time the object is in space and until the object begins a planned re-entry or an event which results in re-entry. Where there is no re-entry, such as when the object is sent out of the earth's orbit, like the Galileo probe for example, the launch period would be open-ended.

Our final amendment, also derived from an issue I raised back in 1998, seeks to ensure that special assessment and approval provisions apply to launches that involve radioactive and toxic materials. Once again this is a matter of fully understanding and preparing for the risks involved in payloads and materials that are potentially hazardous. There is no doubt that space debris travelling, for example, at 15 kilometres a second represents a dangerous projectile, but those dangers are heightened considerably if there are radioactive or toxic materials present in the payload. It is hard to understand how a proper risk assessment can occur without this information being part of the decision making process.

These amendments are important if Australia's entry into the space industry is going to be best practice, not big business at any cost. We understand that the opposition supported this bill when it went through the House. However, in the time that has passed since then the evidence is mounting that the concerns that these amendments reflect have not been addressed. In fact, they have become more urgent. We urge the government and the opposition to support these measures that will ensure that Australia develops an independent and vibrant space industry.