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Foreign Affairs, Defence and Trade Legislation Committee
01/06/2018
Estimates
FOREIGN AFFAIRS AND TRADE PORTFOLIO
Department of Foreign Affairs and Trade

Department of Foreign Affairs and Trade

[09:03]

CHAIR: I now welcome Senator the Hon Concetta Fierravanti-Wells, Minister for International Development and the Pacific, representing the Minister for Foreign Affairs; Ms Frances Adamson, the secretary; and all officers of the Department of Foreign Affairs and Trade. Minister, would you like to make an opening statement?

Senator Fierravanti-Wells: No, thank you.

CHAIR: Ms Adamson, would you like to make an opening statement?

Ms Adamson : No.

Senator RHIANNON: I start off with questions to do with Sri Lanka, attacks on Muslim communities and issues to do with terrorism. In May and April there were reports of Buddhist extremists attacking Muslim homes, businesses and mosques. Has the Australian ambassador to Sri Lanka, the foreign minister or any other government representative raised concerns with the Sri Lankan government about these developments or made any inquiries about what has happened? Can you update the committee on what DFAT understands has happened?

Ms Adamson : Thank you for those questions. My colleague Kathy Klugman, head of the South and West Asia division, will be able to answer them. We're hoping she will walk in the door any minute. Could I ask you to go to your next question? I have made notes of the first one.

Senator RHIANNON: Should I leave those questions, go to another area and come back to that?

Ms Adamson : If you wouldn't mind. I'm sorry; it's most unusual that she's not here.

Senator RHIANNON: I move to questions about climate finance.

Ms Adamson : Yes, we can answer those.

Senator RHIANNON: How much of the $1 billion over five years in international climate finance pledged by the Prime Minister under the 2015 Paris Agreement roadmap to US$100 billion has been expended to date?

Mr Suckling : I don't have a figure of how much has been expended to date. It's about $250 million a year since 2015, so around $750 million, but I can take on notice the exact figure.

Senator RHIANNON: What are the current allocations in this financial year, 2017-18? I am particularly interested in all major allocations for this current financial year, or at least some of them.

Mr Suckling : For this financial year I don't have those. I have what we spent last year on climate finance, which was $249 million, and $268 million in 2015, but I don't have the total allocations for this financial year.

Senator RHIANNON: That is surprising. It's estimates. We're going to be asking questions about this, as we regularly do. We don't have this information here at all?

Mr Suckling : We can try to get it, but we look at these things like climate finance retrospectively, because climate finance is fairly complicated in how it's—

Senator RHIANNON: But there's allocations of the money. It's not all retrospective. A point comes at which you make decisions and forward planning. If it could be supplied it while we're here this morning, I'd appreciate that. Can you take on notice the current allocations for 2017-18 and the expected allocations for 2018-19?

CHAIR: I reinforce the request from Senator Rhiannon. This is a budgets estimates. I appreciate your point about retrospectivity, but if you can get those figures today or explain in a bit more detail why they're not available, I think the committee would be grateful.

Mr Suckling : We'll do that.

Senator RHIANNON: How is DFAT tracking expenditure against this pledge of $1 billion over five years? Is it using climate markers? Can you talk me through the system? I'd like to understand the system DFAT is using.

Mr Suckling : We use the Rio markers, which are established through the OECD's DAC, to account for climate finance. There are different categories in the Rio markers for whether you count something as 100 per cent climate finance if it's dedicated to a climate finance project, or a lesser amount if it's part of a project but not 100 per cent climate finance. For example, if you're climate-proofing a road and the additional cost of climate-proofing that road is 10 per cent then only that 10 per cent gets counted as climate finance.

Senator RHIANNON: The Rio markers are the only system of climate markers you have?

Mr Suckling : They're the internationally accepted benchmarks for climate finance worked out by the OECD.

Senator RHIANNON: To be clear: that's all you're using?

Mr Suckling : Yes.

Ms Adamson : I think our chief financial officer will be able to help with your previous question.

Mr Wood : Thank you for your question. I would direct you to a couple of our budget documents, which I think can assist you. Firstly, our Australian aid budget summary 2018-19—the relevant pages are 107 and 108—talks about some of our programs in the climate change area. One of the big commitments that the government have made is the $200 million commitment to the Green Climate Fund. That's a commitment over a number of years to 2018-19. And, as our aid budget summary notes, we're committed to provide at least $1 billion to developing countries over five years to address climate challenges. In 2018-19—and it's the case for 2017-18 as well—we'll invest more than $200 million in a range of programs to reduce carbon emissions and build resilience. In addition to the Green Climate Fund, we have investments, such as the $75 million to the Australia Pacific Climate Change Action Program, and there's also some really important work that we're doing on the Pacific Blue Carbon Initiative. Those are some of the big-ticket items.

In terms of our retrospective reporting, we provide some really detailed information in what we call our statistical summary. Its official title is Australia's international development assistance: official sector statistical summary. Table 11, which is on page 15, discloses in quite a considerable amount of detail the type of climate finance work we do. For the 2016-17 financial year, that added up to $249 million—

CHAIR: Mr Wood—sorry to interrupt—I'm not sure Senator Rhiannon has a copy of that particular document. Have you got another copy or perhaps one that you could provide?

Mr Wood : I don't, but I'm happy to arrange a photocopy.

CHAIR: That's all right. I think the secretary's got it. Thank you, Secretary.

Mr Wood : We have two documents. That's the budget one, which is for the forward years. The one for historical data is our statistical summary. I can arrange for a copy of that also to be provided to Senator Rhiannon.

Senator RHIANNON: That would be great. Thank you.

Mr Wood : There's a heap of really detailed information in here and I'm sure that will be of use to—

CHAIR: It's very helpful information. I just wanted to make sure that Senator Rhiannon had something there to refer to when you were discussing it. I think we've got the document from the secretary.

Senator RHIANNON: Thank you very much. You've actually answered many of my questions. There was one I wanted to ask specifically—

Senator Fierravanti-Wells: Senator Rhiannon, could I add to that, if I may? A good portion of the funding that's gone to the Green Climate Fund—about 10 per cent of that funding—was actually given to Pacific Island countries and the Pacific, for building resilience and a whole range of other things. In addition to that, about $300 million of that $1 billion over four years is actually committed to assisting in the Pacific. So there are a lot of things that we are doing in the Pacific to help build resilience and to help adaptation and mitigation. They're small things but very, very valuable things in terms of the work that we're doing in the Pacific. We can go down a bit more granular if you like, particularly in some of the work that we're doing in the Pacific.

Senator RHIANNON: Thank you very much.

Mr Wood : The page that I could arrange to be photocopied supports the minister's statement: a considerable proportion of that assistance is for the Pacific, for PNG and the other Pacific countries. We'd be pleased to provide that.

Senator RHIANNON: I really appreciate that. You've second-guessed my questions, so most of them have been asked. I just have one more in this section. You mentioned the Australia Pacific Climate Change Action Program. When is it expected to begin operations?

Mr Wood : I have my fingers crossed that Mr Sloper has the answer.

Mr Sloper : The new regional program you're talking about, the Pacific Climate Change Action Program, consists of $75 million. It will run from 2018-19 to 2021-22. We're in the process now of concluding that design, and it should be implemented very shortly. It will provide a range of services to our posts, in terms of giving advice on how to insert climate related resilience, if you like, in more standard projects, but it will also undertake a range of other activities, which I can outline if you wish.

Senator RHIANNON: Have you got any material on that? I'm conscious of time and I've got a meeting.

Mr Sloper : I don't. We don't have a glossier or a statistical table yet, but we can prepare some information for you on notice.

Senator RHIANNON: Okay; you can prepare the information on notice. Thank you. I want to move on to West Papua and pick up on some questions that my colleague Senator Rice asked yesterday.

Ms Adamson : Ms Klugman is now here, when you want to go to Sri Lanka.

Senator RHIANNON: I'll go to Sri Lanka then. In March and April this year, and I think for a period of time, there was a state of emergency called. There were scores of mosques and homes and businesses of Muslim people destroyed. Could you provide the committee with an update, first, on what DFAT's understanding is of what happened and, second, has the Australian ambassador to Sri Lanka, the foreign minister or any other government representative raised concerns about these developments with the Sri Lankan government?

Ms Klugman : You're referring to some disturbing communal violence that happened, as you say, in the March-April period in a few different parts of Sri Lanka. There was some trouble in the eastern province, which, as I think you know, is an area where the population mix is about equal between Buddhist, Hindu and Muslim. Then there was a spike relatedly in the middle of the country, in Kandy, from 5 to 7 March. There was violence and there was damage done. The details of who did what to who are still playing out.

We have been urging the Sri Lankan government to undertake an independent inquiry into what happened. The Sri Lankan government was most immediately concerned to deal with the communal violence. It declared a state of emergency, as you say, for 12 days, sparked by that communal violence in Kandy from 5 to 7 March. We have been active on that front and in relation to the rights of all minorities in Sri Lanka, urging the Sri Lankan government to deal swiftly and in a transparent and accountable way to bring the perpetrators in this particular case to justice but also, as you know, more broadly adding our voice to those encouraging the Sri Lankan government to move forward with its broader reconciliation agenda in Sri Lanka.

Senator RHIANNON: Before you arrived, when I was asking the question, I said I wanted to ask questions in the context of terrorism as well as what's happening in Sri Lanka. The reports that I have read about this have identified that attacks on mosques, Muslim businesses, et cetera, have increased since the end of the civil war in 2009. It has been raised, and this is where my questions go. I note that there's a group called BBS, Bodu Bala Sena, and a number of other Buddhist extremist groups that have been identified as being involved in this violence. Could you comment on that, please?

Ms Klugman : Yes. First, you asked if we had the sense that attacks against Muslims, like mosque burning and other events, had increased since the end of the civil war. It's hard to say. This year has seen a spike of instances. They were not unknown in the past, though. There were outbreaks of disturbance, communal unrest and some communal violence against and involving the small Sri Lankan Muslim community over the last couple of decades. It was masked, in terms of external attention, by the fact that the civil war with the Tamil Tigers was a more immediate concern in that country. You referred to politically engaged Buddhist extremist groups. Yes, they are definitely a factor in Sri Lanka.

Senator RHIANNON: This might be a question to your people working on the terrorist issues. I note reports that in 2014, Ashin Wirathu, a Buddhist monk in Myanmar who was on the record as inciting violence against Rohingyan Muslims, offered to support the BBS, Bodu Bala Sena, in its fight with Muslims in Sri Lanka. Can you comment on those reports, please?

Ms Klugman : I am not aware of those reports. I haven't heard of those reports. But it's true to say that there are links in religious teaching and in a cultural sense between the Buddhist sangha in Sri Lanka and other parts of Asia, in particular in South-East Asia. But I'm not aware of those specific reports.

Senator RHIANNON: Considering a large part of the DFAT budget, I understand, goes to fighting terrorism, could you inform the committee what work is being done with regard to some of the Buddhist extremist groups that have been linked with terrorist acts, including BBS, Sinhala Ravaya, Sinhal and Mayasan Belaya. I acknowledge my pronunciation is not good, and I'm happy to spell those names if required!

Ms Klugman : That's fine; no need. The Australian effort, including through our aid program but more broadly in Sri Lanka, has a strong core that is about supporting reconciliation in that country. I could list for you some of the things we have done in the expenditure of about $400 million in aid to Sri Lanka since the end of the conflict in 2009. Some of that is in practical matters like taking landmines out of the ground, rebuilding houses, rebuilding schools in Muslim and Tamil areas—

Senator RHIANNON: Sorry to interrupt; I'm conscious of my time. I am specifically interested in the antiterrorism work that DFAT conducts in South-East Asia. What of that work is engaging with these Buddhist extremist groups that aren't just in Sri Lanka but in other parts of South-East Asia? What we hear about is the Islam groups. There are other groups, and I'm just trying to get a sense of what work is done in that area.

Ms Klugman : We don't have an extensive counterterrorism program in Sri Lanka these days. The work that we do, as I said, helps to strengthen institutions, including human rights-related institutions in Sri Lanka. Counterterrorism, in the sense that I think you're envisaging, is not a feature of our aid program in Sri Lanka.

Senator RHIANNON: Ms Adamson, I was trying to go beyond Sri Lanka to understand if Australia's antiterrorism program and the assistance we're providing South-East Asia go beyond the groups that are identified as being linked with Islam or Muslim groups?

Ms Adamson : We do indeed, with a particular focus on South-East Asia rather than on South-West Asia or South Asia, have a focus on countering violent extremism. I'll need to take on notice the specific elements of your question in relation to Buddhist extremists. I understand exactly where you're coming from. I'd like, potentially, to be able to come back in the course of the morning. If we can't, I'll take it on notice.

Senator RHIANNON: Thanks. I'll just mention the groups again: Bodu Bala Sena, Sinhala Ravaya, Sinhal and Mayasan Belaya. It is relevant to the issues that you deal with in the main. Some of the reports coming out of Sri Lanka say that, because of these tragic communal fights, Muslim youth can become radicalised. I would have thought your work would be quite developed in that area.

Senator MOORE: Ms Klugman, rather than calling you back later, I have a couple of questions about Sri Lanka and the Human Rights Council, if that's okay. I thought it would be a better use of time to do it now. In March there was a discussion on the Human Rights Council agenda, as there has been quite regularly, about the Sri Lankan situation. Following the UNHCR in March 2018, a joint statement by key UN resolution-sponsoring nations, including the UK, the US, Macedonia and Montenegro, was released. It expressed concern about what they saw as slowness on Sri Lanka's progress on human rights towards the UNHCR resolution. Those resolutions have been passed, as you know, at consecutive Human Rights Council hearings, and at this one there was another year given for Sri Lanka to meet the promises that they've made.

Ms Klugman : That's right.

Senator MOORE: But a letter was circulated expressing concern about that with those countries that I named. Was Australia asked to sign that letter? Was our delegation at the Human Rights Council involved in discussions around that?

Ms Klugman : I will need to take on notice the specific answer about whether we were consulted on this particular resolution. As you know, group statements are quite a common feature of the way we do business in a place like the Human Rights Council. The focus of our attention for that session, when it came to Sri Lanka, was on our own national statement. In that statement, we set out clearly, within the tight limits of words allowed, that we wanted Sri Lanka to move forward with more speed and resolution to implement the commitments that it has already made, including in previous sessions of the Human Rights Council. The Sri Lankan government needs to move forward. We are conscious that an election cycle will be restarting in the not-too-distant future in Sri Lanka. Elections themselves are not until 2020, but things are starting to move in that direction. Our advocacy, both in Geneva and very richly and deeply through our high commission in Colombo, with the Sri Lankan government, is very focused on doing what we can to move the situation forward.

Senator MOORE: Can you take on notice whether we were asked by the other nations?

Ms Klugman : I'll do that.

Senator MOORE: My understanding was there was considerable discussion and there was frustration expressed about the slowness of the Sri Lankans' response. But the end result was we understand the limits and so on. Can you ask whether we were in discussion with those other countries with whom we've worked very closely in the past on this issue?

Ms Klugman : Yes.

Senator MOORE: There was some concern raised when you compare the letter that came with those signatories and the Australian statement. The letter was much stronger. It expressed much more concern about what was going on and identified ongoing concerns about the current situation as well, which was missing from the Australian one. On notice, could you get some information on that for us—

Ms Klugman : Certainly.

Senator MOORE: and the reasons—it's hard to get the reasons until you look at the background—that we as a nation decided to go with the alternative position?

Ms Klugman : Yes.

Senator RHIANNON: The issue of human rights regularly comes up with West Papua, and comments are made about the state of play there. How does the department form its view about the human rights situation in West Papua? What sources do you use? How do you collect the data on this so you can be giving informed, evidence based advice?

Ms Heckscher : We canvassed some of these issues yesterday. You may have caught up with responses on those. The issue of human rights across Indonesia is something on which we are constantly engaged, both directly in the regions and with the Indonesian government. On the situation in Papua, the Australian embassy in Jakarta closely monitors developments in the Papuan provinces, including through regular visits. The embassy has good access to a large network of contacts, spanning police, government officials, students, lawyers, NGOs and the media. You asked for a little bit of evidence. Just for example, Australian officials regularly visit the Papua provinces and continue to do so. So far in 2018, Australian officials have conducted eight visits. Just by way of comparison, in 2017, Australian officials conducted 26 visits, for example. During those visits, as occurred when then Attorney-General Brandis made an official visit to Papua in 2016, there are meetings with local human rights bodies, local activists, local NGOs and the like. Our embassy is on the ground regularly and talking to people so that they are actually hearing directly what the situation is.

In terms of the situation on the ground, the Indonesian government has made a commitment to improving the situation in Papua. For example, in May 2017, during Indonesia's UN Human Rights Council, UPR, Australia made a number of recommendations, including that Indonesia finalise investigations of human-rights cases in Papua. Indonesia accepted that. We've registered with the Indonesian government the importance of safeguarding freedom of expression and the like, and we've registered with Indonesia the importance of access to the Papua provinces for credible observers, including journalists.

You might be aware that President Widodo has, himself, made a number of visits to Papua. He announced in May 2015 that reporting restrictions on foreign journalists visiting Papua provinces would be limited. That was a very positive development. A number of Australian and international organisations and NGOs operate in the Papua provinces, including World Bank, World Vision Australia, Oxfam and the like. Most recently, we welcomed Indonesia's hosting of an official visit by the UN High Commissioner for Human Rights, who was in Jakarta in February. He called on President Widodo and met cabinet ministers. He confirmed in a press conference that he's been invited to visit Papua as well.

The Widodo administration has been very focused on Papua and has made a number of comments. There have been a number of improvements seen under President Widodo.

Senator RHIANNON: I still want to understand how you collect the data. It's so controversial. There is so little information that comes out about it, particularly very little, what appears to be, objective evidence based information. For many people in West Papua, Indonesia continues to be seen as the coloniser or the occupier. Can you inform us if you're meeting—it seems as though, and correct me if I'm wrong, that when I've asked this question you've answered it in the context of, 'We're meeting lots of people.' So when you're meeting lots of people are you meeting people who are strong critics of the Indonesian government and looking for independence for West Papua? Do you meet those organisations?

Ms Heckscher : I did say that we meet local human-rights activists and a very wide range of contacts.

Senator RHIANNON: Yes, I realise that. I'm then asking the question: are some of those people working with West Papua to be independent from Indonesia? This is where there's a huge conflict. People are dying. It remains a big problem.

Ms Heckscher : I do understand that. Our embassies right across the region are constantly monitoring human-rights situations and they are well aware of the need to meet broadly. I don't have in front of me a list, and I wouldn't expect to have a list either, of all the individual organisations, community groups and the like that our embassies meet on a regular basis. But our embassies go specifically so that they can get a clear sense from those on the ground—critics and supporters, a wide range of contacts—of what is going on. There is little better evidence than going to the province and visiting and talking to the people.

Senator RHIANNON: I'd like to move on to the Cartagena Protocol. It's an agreement designed to project nations from the possible negative impacts of importing living modified organisms. I'm still learning about this, but I understand the protocol establishes an advanced, informed agreement procedure for ensuring that countries are provided with the information necessary to make informed decisions before agreeing to the import of organisms into their territory. What consideration has been given for Australia to become a party to the Cartagena Protocol?

Mr Sloper : I have come to the table not because I'm primarily responsible for this but because I might be able to provide a comment to assist your inquiries. The department is not responsible for the convention which this is attached to, the protocol, and, as you just noted, Australia is not a signatory. We've been advised that the department of environment has primary responsibility for this.

Senator RHIANNON: Okay, thank you. I was directed here because of the international treaty aspect of it, but you don't look after it.

Mr Sloper : That's right.

Senator RHIANNON: Thank you for correcting that. I'll finish off with some questions about PNG. It's fairly specific, with regard to the Torricelli Mountain Range Protected Area. This is quite a fascinating project and hopefully a good news story, but I'm not sure. I'm told that DFAT's involved with about 50 villages, UNDP, various conservation organisations, Australian volunteers et cetera. I would be interested to understand what DFAT's engagement is with the proposal in the first instance.

Mr Sloper : I'm afraid I don't have those details with me, but I'm happy to take them on notice.

Senator RHIANNON: Okay. I think I've got about a minute, so I will just ask the rest of it. I said it was potentially a good news story, but you never know in this world. There are reports of a proposed new road to be built by a logging company through the middle of the proposed protected area. This protected area is really encompassing a huge territory of PNG, some of its amazing natural habitat, particularly its tree kangaroos. For some of these tree kangaroo species, there are not many of them left. So there's a concern about the road. So I would be interested to know: do you know about the proposal for the new road to be built by a logging company, and has the Australian government made any representations to the PNG government about it?

Mr Sloper : I'll take that on notice.

Senator RHIANNON: Thank you.

Senator FAWCETT: Secretary, this may be before your time, but I'm hoping that you can still provide an update. In May last year, the Kimberley Process was a conference held in Perth, and we saw what was described as outrageous and disgusting behaviour where the Chinese government delegation shouted down the proceedings to the point where the welcome ceremony—the Indigenous welcome and the foreign minister's introduction—couldn't go ahead. In the end, what transpired was that they were after the Taiwanese delegation to be evicted from the conference. The statement at the time was that the government had raised concerns with the Chinese embassy. I'm just wondering if you can give any feedback as to a response as to why they felt that behaviour was justified.

Ms Adamson : I'll ask Mr Fletcher to respond in detail. I recall the meeting well. I wasn't present, but I also recall the subsequent meeting held, I think, in Brisbane. Australia was chair of the Kimberley Process at the time. I think Mr Newnham was there and, as a result of what I would call some good diplomacy behind the scenes, the meeting ran very smoothly and we were able to achieve our objectives without the sort of disruption to which you referred. But let me invite either Mr Newnham or Mr Fletcher to respond to your questions in more detail.

Mr Fletcher : Yes, last year we were the host of the Kimberley Process in Australia, and there were two meetings held. The first meeting in May, as you mentioned, was disrupted. We raised that matter at a senior level with the Chinese government, and we now consider the matter closed. There is a difference of views about what the correct arrangements are for Taiwan's participation in the Kimberley Process. In the last few years, different hosts have had different arrangements. So there was our view on what the precedent should be for Taiwan's involvement. China did not agree to that, and some other members of the meeting also did not agree with us. So that was the reason for the disagreement, or the origin of the disagreement. But, as the secretary has said, at the end of the year there was the plenary session in Brisbane, and I think the arrangements worked satisfactorily for that meeting.

Senator FAWCETT: Sure. I guess the principle I'm highlighting here is that there are normal and accepted rules of behaviour—if you like, a global rules based order that the world tends to work to—but what we saw there was coercion in order to get a particular outcome. In January this year, some 36 airlines around the world received letters demanding that they change the way that they referred to bookings to Taipei or face sanctions. My understanding is that in May, having made some initial changes, Qantas received a follow-up email to say that those initial changes weren't to the satisfaction of the Chinese government, and that more coercion was applied. I understand from media releases that both the foreign minister and the opposition shadow minister made comments that they felt that kind of coercion and interference with our companies was not appropriate and that those concerns were relayed to the Chinese embassy. Can you give the committee an update on what response was received as to the Australian government's view that that kind of coercion and interference with the free operation of a commercial business is not welcome?

Mr Fletcher : The foreign minister's comments were made to the media, not to the Chinese embassy. The thrust of her comments was that businesses should be able to proceed unhindered. Whatever Qantas may decide to do with its website is a matter for Qantas.

Senator FAWCETT: Sure. My understanding is also that other governments are taking an active role in negotiating or trying to understand the Chinese position and the threats that have been made against, for example, the booking websites of airlines—in fact, I think they already have shut down, for at least one week, one of the American hotel chains that didn't acquiesce to their demands. Is the Australian government planning to take any steps to protect the values that our nation is built on, in terms of government not interfering in such a coercive way with the private sector, on behalf of companies that are based here in Australia?

Mr Fletcher : The government's values are very clear as to how our government operates, how we administer events in our country and how we think our companies should be treated overseas. Other governments sometimes approach things in different ways and so do consumers. At the end of the day businesses make decisions about what is best for their shareholders and their bottom line. They have to view what's going on internationally in respect of that. The Australian government, as I said, has the viewpoint in relation to Qantas that this is a matter for Qantas to determine itself. Other governments may treat it differently, but we are here in Australia. Other airlines around the world are making their own decisions about how they respond to that particular issue.

Ms Adamson : I add the clear statement that the government is strongly opposed to the exercise of economic coercion. Part of the discussion with the committee yesterday afternoon was about capacity to deal with this phenomenon—the geo-economics that we have been talking about. I want to be very clear with the committee that, while we may express views in a variety of ways—sometimes very publicly; sometimes behind the scenes—the government cannot be in a position to tolerate the exercise of economic coercion.

Senator FAWCETT: I'm very pleased to hear that, Secretary. Continual appeasement to economic coercion is very much like Chamberlain, and history tells us that the free world needs more Churchills. Will we be taking the opportunity next week, when the IATA conference is here in Australia, to restate Australia's position that, particularly for people in the airline industry, coercion is not acceptable?

Ms Adamson : I think we've reinforced each other in what we've said.

Senator FAWCETT: The question was: will we be taking up the opportunity next week in Sydney—

Ms Adamson : I thought you said 'we would be'.

Senator FAWCETT: No, I'm asking: will we be taking up that opportunity to restate the government's position on that?

Ms Adamson : I will need to take that on notice.

Senator FAWCETT: Thank you.

Ms Adamson : I need to have a better understanding of the meeting and the way it's likely to be conducted. As I said, our position is clear, but the way in which we seek to prosecute that, if you like, will vary according to the circumstances—sometimes that will be very public; sometimes it will be more effective to work less publicly. I simply make that point as a matter of fact. We need to assess each situation on its merits while being very clear that this is a principle that we adhere to. It's a point made in the foreign policy white paper as well, and I want to ensure that there is no doubt in the committee's minds about our commitment to implementing it.

M r Newnham : Your question started with a reference to the Kimberley Process. Notwithstanding—following the secretary's comments—the disruptions last year, we did in fact very successfully chair that process. That involved a reform agenda in the Kimberley Process, which, as you know, has to do with the supply of diamonds and illicit trade. We strengthened the scope of the mandate. We looked at ways in which we could draw in greater stakeholders to that process, and it was rounded off with the facilitation of the adoption of the annual resolution of the UN, driven by the foreign minister, who delivered Australia's statement in March last year. It reflected our reformist role in that process, just to give you a sense of how that was followed through.

Senator ABETZ: Can I start by asking and confirming what I think was agreed previously—that Prince Charles's assessment some time ago that Christians were the most persecuted religious group in the world—is still the view and assessment of the department?

Ms Adamson : You ascribe that view to Prince Charles?

Senator ABETZ: Yes.

Ms Adamson : And you said, 'Is it still the view of the department?'

Senator ABETZ: Delete Prince Charles's reference then if that causes you any concern or consternation. Do we accept that Christians are the most persecuted religious group in the world?

Ms Adamson : I would simply note that there are many persecuted people in the world. I would not, personally—and I don't think the department would either—be in a position to make a judgement about relative rates of persecution.

Senator ABETZ: Really?

Ms Adamson : No, really. I know you will have views on this, and I'll be very interested and respectful in hearing them, but I think we don't draw a distinction. What we are concerned about is to ensure that religious persecution, wherever it is, is not tolerated. We have a number of programs working towards that, but I wouldn't myself be in a position, Christian though I am, to make that judgement.

Senator ABETZ: All right. I would agree with you that any persecution, whatever it may be based on, is unacceptable. But every now and then there is a particular cohort that is targeted, and I would've thought we might have been able to get acceptance from the Department of Foreign Affairs and Trade of that. In times gone by, certain other race/religious groups have been the targets of persecution, and it's never been swept under the carpet by saying, 'All sorts of races and religions get persecuted.' We have said that a certain group have been particularly targeted, and I would've thought, with the facts and figures in the world today, that we might be able to agree to that assertion, which Prince Charles in fact made, but whether he said it or not doesn't make it fact, of course. But I was wanting to know what the department's assessment was, given the rate of religious persecution around the world, as to whether Christians are particularly targeted and in fact the most targeted.

Ms Adamson : I'll ask my colleague, Dr Lee, to respond in whatever detail he may have. You suggested or implied that things were being swept under the carpet. I'd like to firmly reject that assertion if indeed there was an implication that this department was in any way doing that.

Senator ABETZ: The suggestion in your answer—and I don't want to get bogged down in this—was that it's sort of all relative, and, yes, there's a bit here; there's a bit there.

Ms Adamson : No, that's not what I said. I reject that very firmly.

Senator ABETZ: That is what I understood. I'm very happy that you've clarified that for us on the record. We can then get back to the issue: which is the most persecuted religion in the world?

Dr Lee : I'll touch on the question of Christians specifically, but at the outset I'll say that Australia does advocate for freedom of religion or belief—

Senator ABETZ: Sorry, time is very short. We know all that. Does the department have any information which allows it to say that Buddhists are the most persecuted religious group in the world, or Muslims are, or Christians are, or Hindus are? Do we have any information in relation to that?

Dr Lee : I would just like to say that, at our Human Rights Council in the 37th session, we issued a statement at the interactive dialogue with the special rapporteur on freedom of religion or belief on 2 March, expressing concern about the situation of religious minorities in the Middle East, including Christians, Yazidis, Ba'hais and some Muslim minority groups. We specifically made references to those groups in that situation. More generally, we do make regular representations through our annual bilateral human rights dialogues and also to states during the universal periodic reviews—

Senator ABETZ: With great respect, you either have the figures or you don't. I know that Australia is very consistent in its condemnation of religious persecution. I just want to know whether or not the department has any evidence, or is willing to state, that the plight of Christians, be they in China, North Africa, the Middle East, which you mentioned, Indonesia or India, are the most persecuted religious group in the world. If you're unable to say so, fine, but I would find that very disappointing if you couldn't bring yourself to say that, given the overwhelming evidence.

Senator Fierravanti-Wells: Senator Abetz, I think what we could perhaps do is look at each country. There are different countries around the world where there are persecuted minorities. In some parts of the world, there are more Christians than there are other religions, and I think that, if we break it down into a more granular examination, we may be able to put some information together. I think it's appropriate that we take it on notice and see what we have in terms of information in the department that in turn enables us to have programs and other things where we assist a persecuted minority. Obviously, to come to that assessment, we do have information in the department that enables us to do that.

Senator ABETZ: All right. Of course, if you go into that granularity, I would've thought adding them up then would give you a picture of the total—

Senator Fierravanti-Wells: It may not be complete—

Senator ABETZ: As good as you can get it.

Senator Fierravanti-Wells: But we may be able to give you at least a snapshot.

Senator FAWCETT: If I could perhaps suggest—in 2016-2017, there were a number of studies conducted, which you can reference, by Angela Merkel, David Cameron and other world leaders which bear out the point raised by Senator Abetz. They've referred to those studies and those figures, and that may be a useful place for the department to start.

Senator Fierravanti-Wells: Thank you.

Senator ABETZ: It's a matter of concern that that does not seem to be available to the department. But thank you for your intervention, Minister; I'll draw a line under it there. Can I move onto questions on notice. I asked last time about the review undertaken by the Hon. Dr Brendan Nelson and the extension of postings from three to four years and the potential savings. I asked, somewhat provocatively I accept:

How much would it have saved the long-suffering Australian taxpayer? … Could you please take on notice what savings might have been achieved had we adopted that policy.

I'm then given, as sadly is the wont from this department from time to time, a whole list of savings which are all very interesting but don't tell me what I was actually asking, which is: what would we have saved had we adopted the policy? So, I invite the department to take that on notice yet again. But I want to express on the Hansard record my displeasure at being told about all sorts of other savings that I hadn't asked about and ask you to specifically tell me about what savings may have been achieved had we adopted the Nelson review. Is Mr Newhouse still with the department?

Ms Adamson : Yes, he is, but he's preparing for an overseas assignment at the moment, shortly to be announced.

Senator ABETZ: I wish him well in that regard, because last time round he did agree. In fact, he said, we'll be happy to do that—that is, to convert shekels into Australian dollars, which of course never occurred—and then I got another answer once again referring to shekels. We'll leave Mr Newhouse alone and wish him very well in his new endeavours.

Ms Adamson : I think you'll be pleased with his appointment, Senator, once it's announced.

Senator ABETZ: I'm sure I will be. Can I be given an insurance that DFAT officials abide by the requirement that they don't fly first class.

Ms Adamson : Absolutely, Senator. That is in my secretary's instructions. First-class cabins, I think, are fast disappearing from airlines; I rarely see them. However, we are obliged under secretary's instructions to decline upgrades. I have a permanent annotation in my travelling details with Qantas that I'm not to be upgraded, and I know that that is a policy which is abided by by my colleagues.

Senator ABETZ: Good, as is the wont with these things, we are given information by punters from time to time. That is why don't make an allegation; I simply ask.

Ms Adamson : I would be disturbed were that to be the case.

Senator ABETZ: Thank you for that answer.

Ms Adamson : That is certainly our policy.

Senator ABETZ: Great; thanks for that. Can I then move to the questions on notice and answers supplied in relation to aid programs on the issue of child protection which I asked a substantial bracket of questions about. It is a matter of some concern, and some of the answers which I received—it was Mr Gilling.

Mr Gilling : Good morning, Senator.

Ms Adamson : He's back.

Senator ABETZ: You foolishly promised me—on the Hansard, we have very comprehensive information. And yet, with some of the answers, DFAT's data does not differentiate et cetera. I want to tease out where we do have some comprehensive information. If I could turn to—there we go: James Bond's number—007, additional estimates. Do you have that answer?

Mr Gilling : I do.

Senator ABETZ: Great; thank you. I was given a substantial table, for which I thank you, but there seems to have been a spike in 2017-18 within the categorisation—first, forget the spike, sorry. Allow me to go to the category: Criminal Offence—does that mean people have actually been convicted of a criminal offence?

Mr Gilling : Yes, it does.

Senator ABETZ: So there may have been people charged with criminal offences that were not proven?

Mr Gilling : My understanding is that criminal offence means a criminal offence was proven.

Senator ABETZ: Coming back to the spike—how do we explain the spike?

Mr Gilling : Thank you for drawing attention to this table, which I think provides a range of information.

Senator ABETZ: It does, and it was very helpful.

Mr Gilling : You're pointing to a spike in the figures for 2017-18. That table, says, for the record: Total In-Scope Child Protection Policy Notifications. What happens is we receive notifications internationally and then we explore them and see whether or not they actually are in scope. There are three stages—a bit like your point earlier about suggestions that somebody may have flown first class, we get suggestions that there may be some contravention of our policy. We then look at the accusation. Some of them clearly don't hold water from the very beginning, and we are able to reject them. Some of them have clearly got some substance to them, and we investigate them. Some of them after investigation prove to be consistent, and we need to take action on them and indeed others need to take action. The reason that there is, as you perceive it, Senator, a spike in 2017-18 is that those are still notifications. I would be absolutely confident that, at the end of the financial year, once those notifications are investigated, that number will come down to be more consistent.

Senator ABETZ: All right, thank you. I asked in question on notice 008, additional estimates:

Have we allowed any people to resign?

That is in the context of child protection allegations. The answer was:

DFAT's data does not differentiate between a person resigning and being allowed to resign in notification management.

Well, your data at that moment mightn't allow for that differentiation, but this is a serious issue and I would have thought it would not have taken too much effort to, in fact, undertake that task to ascertain what the numbers were of those resigning during a notification.

Mr Gilling : Thank you for that point. The answer is correct, in that we don't provide that. We don't break down that information in notifications. We have the raw data available. If I allocate staff to provide that breakdown, we could come up with some greater cross-tabulation to give you more detail, but—

Senator ABETZ: How great a task would that be?

Mr Gilling : I'll have to take it on notice, but we get a vast range of both fraud and child protection notifications—in the hundreds—and it's a very small team. We have right at the front of our priority child safety. So our responsibility is not just to the numbers but also to make sure there is safety for the children who are involved in these cases. I have, as manager, to make a decision on how best to allocate that time. But, certainly, if you have an urgent need for the data clarification, I will talk to the staff and make sure that it's deliverable within those time frames.

Senator ABETZ: If it is not an inappropriate use of resources, then I would be obliged. There's no great urgency with it, but it is a matter that you may have gathered has exercised my mind and continues to exercise my mind. I agree with you: at the end of the day, the issue has to be protection of children, but exposing this as an issue to which everybody ought be alert, especially within departments and elsewhere, I think would be helpful.

Ms Adamson : Particularly given what Mr Gilling said about his small team and the pressures they're under and the priority that they have, would it be acceptable if they looked at the data and gave you a broad indication? You know from your interactions with this department that we take—

Senator ABETZ: Whatever is reasonable.

Ms Adamson : very seriously the need for accuracy. That is what would take the time. If we could give you a broad indication, we could do that more quickly.

Senator ABETZ: Whatever's reasonable and then, if need be, I'll follow up in October.

Senator Fierravanti-Wells: Given the sensitives, it might be better just to have a short briefing with DFAT officials on this issue. That might actually be an alternative for you.

Senator ABETZ: Mr Gilling, if I may, I'll leave it to you. See what you can do on notice. If you feel more comfortable, then please pick up the phone and I would be, subject to the minister's approval, happy to have a briefing. Thank you for that. In question on notice 010, I asked, 'So what have we done with follow-up for the victims?' The answer was:

DFAT does not collect this information.

You didn't really answer—

Mr Gilling : Your question, I think, was specifically around whether or not we paid compensation to the victims.

Senator ABETZ: Yes.

Mr Gilling : The point I tried to make last time—and maybe I can make it more eloquently this time—is that our key focus is on managing the child who's come under concern as a result of this. So our total focus is on making sure that we help deploy the support services available to that individual. We work in the countries that we're in to ensure that the appropriate social services—

Senator ABETZ: I accept that, but where we have an identified victim, all I wanted to know is whether or not compensation—

Mr Gilling : We do not pay compensation.

Senator ABETZ: As an Australian government, we don't, or just not DFAT?

Mr Gilling : In relation to these child protection cases that we are talking about, DFAT is not in the habit of providing compensation for those cases.

Senator ABETZ: Can I ask the policy reason? So if we are convinced that there is a victim of child abuse, we do not pay compensation? Hopefully now in Australia, we will be paying it to our own. Why wouldn't we be paying it to those that we accept some responsibility for in overseas countries?

Mr Gilling : We're bound by the legal requirements of the countries in which we operate. When the cases come to light, we help to ensure that those cases are prosecuted according to domestic law and we also make sure that the resources that the support services that are available within the local constituencies and other support services in addition to that are available, but we do not make a practice of paying compensation.

Senator ABETZ: You say we don't make it a practice; have we ever paid compensation?

Mr Gilling : To the best of my knowledge, we have never paid that but I shall trawl the records again to see if that's correct.

Senator ABETZ: On the face of it, I find that disappointing because I would have thought if we have got a proven victim—

Mr Gilling : I would hate to leave the impression that we leave the victim abandoned. What we're talking about is ensuring that the local legal actions work.

Senator ABETZ: And, you know, in Australia there are all the support mechanisms available as well as payment of compensation. Anyway, I will leave that. Then I was told in 11 that the department is not aware of any such complaints and that, in such situations, the Australian Federal Police is advised. Can I ask: have you advised the Federal Police of any such?

Mr Gilling : It's part of our practice. We're bound to notify the Australian Federal Police when criminal situations arise as a result of our notifications.

Senator ABETZ: Are you able to tell us how many times such advice has been provided to the AFP?

Mr Gilling : I don't have the number of AFP—

Senator ABETZ: You can take it on notice.

Mr Gilling : I will take it on notice.

Senator ABETZ: Moving on to 12, I was told, for example, a policy breach could be an organisation not providing child protection. In the figures that I was provided, can we differentiate between what was just a breach of having the correct policy as opposed to a problem with an individual child?

Mr Gilling : So maybe if I refer you back to the table in 007, which differentiates for those years between criminal offences and misconduct. So I think that, if I understand your question correctly, that will clarify whether we're talking about misconduct which could, for example, be—

Senator ABETZ: The policy breach could be an organisation so that would be under the category policy of non-compliance.

Mr Gilling : That's correct.

Senator ABETZ: And policy non-compliance, I can take as not having an actual victim associated with that category?

Mr Gilling : I wouldn't describe it as that. It might not go to a criminal offence but it can include spending time with a minor after work. It can include showing a minor pornography. It can include sharing alcohol.

Senator ABETZ: Showing a minor pornography et cetera, is clearly a lot more serious than simply an organisation not providing child protection training. I would have thought any individual does not need child protection training to tell them they shouldn't be showing pornography to a minor.

Mr Gilling : This is the point. This is the challenge of our work. We're working in a range of environments with a range of jurisdictions where there is a range of criminal offences. So the reason we have that in—

Senator ABETZ: If you can provide some greater clarity in relation to that, I'd be much obliged. And then can I ask, finally in this bracket, how do we stack up in relation to other countries in how they handle these situations of child abuse and protection and, if I may, given time, ask you to take that on notice?

Ms Adamson : If Mr Gilling can come back very quickly, I think needs to say three words.

Mr Gilling : I only need to say two: world-leading.

Senator ABETZ: World-leading? Very good. Thank you for that. In relation to North Korea—can I move on to North Korea? The Australian government has obviously welcomed the positive steps that have been taken in recent months. Can we just confirm that that's been the most movement in relation to North Korea in a substantial period of time?

Mr Fletcher : Yes, it is.

Senator ABETZ: In terms of the sanctions imposed against North Korea, how important has China's support been in effecting this positive outcome?

Mr Fletcher : We believe China's role has been crucial in assisting the UN Security Council to strengthen the international sanctions regime on North Korea.

Senator ABETZ: In layman's terms, it was basically the US, China and South Korea working together in cooperation that has led to the developments thus far?

Mr Fletcher : Yes, not to forget North Korea's continued provocations over the last several years, which have brought about this international coalition or this international consensus that we had to act together to put pressure on the government in North Korea.

Senator ABETZ: I will put a lot of other questions on notice. I may turn briefly to Iran.

CHAIR: This will be your final series of question?

Senator ABETZ: Yes.

CHAIR: And then we'll go to Labor.

Senator ABETZ: I asked a bracket of questions the last time in question on notice 754 and I was given a number of answers, for which I thank the department. In relation to the protests by the women of Iran in relation to the oppressive garment, the hijab, which they were seeking to discard, is it correct, from the information that the department has, that some of these women who were protesting against the hijab are now being charged with inciting prostitution?

Ms Yu : I'll have to take that on notice.

Ms Adamson : Senator, would you mind just repeating the QON number?

Senator ABETZ: There's a good question. It was 754, on notice. I asked about the 'assessment of the scale, impact and momentum of the public protests against the Iranian government which began on December 28, 2017', which has seen so many women demonstrate throughout Iran against this oppressive item of clothing. Reports are now coming out that these women—or some of them—that have been imprisoned are now being charged with inciting prostitution. What representations, if any, has the Australian government made to offer support to these brave women?

Ms Yu : My apologies, Senator. Other than the responses to your question on notice, I don't have that information available on me. I'll take those questions on notice.

Senator ABETZ: Given these wide-scale protests and women willing to risk arrest, imprisonment and separation from their families, is the government still pursuing this—what do we call it?—hijab fashion policy or promotion?

Mr Byrne : I can answer that question. I think the particular public diplomacy event you're referring to is the Faith Fashion Fusion exhibition which toured Australia for a number of years and then, with some support from DFAT, was exhibited in Kuala Lumpur and Jakarta earlier this year. We don't have any further plans to support any further international touring of that exhibition at this stage.

Senator ABETZ: That is good. No matter how colourful the hijab, it's like diamond-studded, golden handcuffs; they might look good, but they still deprive liberty. To seek to promote the hijab as some fashion item in circumstances where hundreds, indeed thousands, of women are risking arrest, imprisonment or separation from their families just, I think, sends a very wrong message to the rest of the world. My time is up, and the rest of my questions will be on notice. Thank you.

CHAIR: It is, with five seconds to spare! Thank you, Senator Abetz. Before I go to Senator Gallagher, just an update on the program for today: we will go to the break as scheduled.

Senator GALLACHER: I don't think you should be updating on the program if we're running behind, because you're being a bit selective and pre-emptive.

CHAIR: Senator Gallagher, we are right on time.

Senator GALLACHER: I'm just advising.

CHAIR: Senator Gallagher, if you'd like to be grumpy you can keep that until the break!

Senator GALLACHER: I need someone to answer some questions about protocols, people and some very precise information about someone's service. Who are those questions best directed to?

Ms Adamson : Could you just be a little more specific, Senator? Do you mean protocol in relation to staffing and human resources or protocol in relation to diplomatic—

Senator GALLACHER: Every organisation would have a protocol with respect to the political activity of its officers.

Ms Adamson : So not our protocol branch? The diplomatic protocol?

Senator GALLACHER: No, just how you handle people's lives in general—

Ms Adamson : Sure.

Senator GALLACHER: if they are standing for political office or running a political campaign while also a DFAT officer.

Ms Adamson : Fine, yes. I'll invite David Lawrence, our acting Chief People Officer up. I might be able to help you myself, but—

Senator GALLACHER: I would assume that within DFAT there are rules about political activity for DFAT officers? Is that a written protocol?

Ms Adamson : This is the Public Service, so there is the Public Service Act and the APS Values. As a department, we are absolutely in step with the broader APS on these things.

Senator GALLACHER: Perhaps on notice could we just be pointed in the right direction to get the protocol that applies to DFAT through the Public Service rules?

Ms Adamson : We can point you to the Public Service Act and the APS Values, but we would be happy to provide those to you.

Senator GALLACHER: In the event that someone were, say, a campaign manager and also a DFAT employee, how would you handle that?

Mr Lawrence : Senator, if I may? As the secretary mentioned, the Department of Foreign Affairs and Trade framework for handling suspected misconduct—

Senator GALLACHER: I'm not even suggesting misconduct; I'm just asking how you would handle that.

Mr Lawrence : No, but our Conduct and Ethics Manual follows the Australian Public Service Commission directions. If we believed that the person acted inappropriately, then we would—

Senator GALLACHER: I'm sorry, I'm not even going anywhere near that. I'm just saying that a person's allowed a life outside of their employment and I'm asking how you would handle it? If I were one of your employees and I decided to become a campaign manager for a political party, how would you handle that?

Ms Adamson : Well, Senator—

Senator GALLACHER: A campaign manager for a campaign which would be for three months?

Ms Adamson : Sure, you're right that people can have lives outside work, but they need to be clear about the separation between work and anything that they might do outside work. When we go into election campaigns, we normally reissue to staff instructions that anyone who is involved in a campaign mustn't use departmental resources and should not be undertaking that kind of activity during our normal working hours or in relation to their job. Obviously, if they were to become a full-time campaign manager we would expect them to take leave or to resign.

But, obviously, you're heading in a particular direction—

Senator GALLACHER: No—

Ms Adamson : The APS has to be apolitical, and there are clear rules around these things. But, as you said—and I think from both parties—we've had people who have gone into politics and become ministers from the Public Service.

Senator GALLACHER: Absolutely, and I'm not casting any aspersions on anybody's past or future behaviour. I just want to ascertain the rules. If I go very specifically to the now candidate for Mayo, Ms Georgina Downer, she was a former DFAT employee. That's correct?

Ms Adamson : For a period, yes.

Senator GALLACHER: Yes. So we're going to go to the specifics of that. One of the reasons that these questions are being asked is that it is on the public record that Ms Downer has cited DFAT experience as one of the key reasons why she should be elected to parliament—not that that's a matter for you, Ms Adamson, or the department, but that is a matter of public record. What I'd like to ascertain is, according to the LinkedIn profile, Ms Georgina Downer joined the Department of Foreign Affairs in February 2007. Is that a fact that someone is able to substantiate?

Ms Adamson : We can check that.

Senator GALLACHER: And she left the department in April 2015.

Ms Adamson : Similarly, we'll check that.

Senator GALLACHER: Is it possible that it could be checked reasonably quickly?

Ms Adamson : Yes. I'm sure someone will be doing it while we're speaking.

Senator GALLACHER: According to the LinkedIn profile, Ms Downer was the second secretary at the Australian embassy in Tokyo from March 2010 to January 2014. Once again we're quoting publicly available information, seeking confirmation. If you could confirm the dates, that would be excellent. Did Ms Downer have any other overseas postings outside that of second secretary at the Australian embassy in Tokyo?

Mr Lawrence : Once again, Senator, we may need to check that and get back to you.

Ms Adamson : I suspect not, given her commencement and resignation dates. People are typically in the department for three years or so before they undertake a posting. We can confirm that, but I think probably not.

Senator GALLACHER: Forgetting Ms Downer for a second, an officer joins the department as a graduate or—

Ms Adamson : People can join the department in a variety of capacities, but we do have graduates join us, yes, and undertake training before posting.

Senator GALLACHER: I'm just trying to get some statistical information about the normal length of time people serve before they get posted.

Ms Adamson : These days it's typically, I'd say, probably two to four years, and three is probably an average. Is that right, David?

Mr Lawrence : Yes, that would be correct.

Senator GALLACHER: So it's quite normal to be posted within two or three years of joining?

Ms Adamson : Closer to three these days, yes.

Senator GALLACHER: We have got some information here, and because we don't know precise dates we have a question on it. According to the LinkedIn profile, between May and November 2014 Ms Downer was the campaign manager for Ms Shannon Eeles, the Liberal candidate for Albert Park in the Victorian Legislative Assembly. Was Ms Downer a DFAT employee at the time?

Ms Adamson : We'll take that on notice.

Senator GALLACHER: That then leads into: is there a declaration process that an employee needs to carry out if they're going to, you know, do stuff that could be in conflict—what do you need to do say if you are an employee of DFAT and you choose to do this and there's no restriction on that, what are the processes you have to follow? Do you have to notify your supervisor: 'I'm doing this in my own time'? How does it all work?

Ms Adamson : You have to abide by the APS Values and Code of Conduct, but there is no, to my knowledge, notification requirement. In various positions one needs to declare actual or potential conflicts of interest. That depends a little bit on level of other things. It will be quite sensible for someone to do that, but I'm not sure that—I don't think—there's any requirement. I'll just ask our chief legal officer to confirm that.

Mr Larsen : The APS Values and Code of Conduct contain quite specific provisions concerning APS employees as citizens. Those provisions, of course, impose an obligation on an APS employee to uphold the integrity and good reputation of the agency, and they also advise employees to take particular care about their behaviour as citizens, including political activities. But as you would expect, the APS Values and Code of Conduct seek to create a balance between the rights of the individual APS employee as an individual and their obligations as an employee. For obvious reasons, that balance seeks to protect the rights of that APS individual employee so that the employee can, of course, exercise their personal rights as an independent individual citizen. So there's a balance. If there is a circumstance where there is a potential conflict of interest, of course, you are required to declare that conflict of interest. But in circumstances where you're acting outside the course of your duties, when you're not making public statements on the basis of your information acquired in your professional capacity as an ongoing employee, those are all factors that are taken into account in determining whether or not that balance is satisfied.

Senator GALLACHER: Ms Adamson, I know you have only recently taken over the department. But would it be unusual for a diplomatic public servant to engage in campaign manager sorts of roles and things like that?

CHAIR: Certainly not for the Labor Party. There's a fine history of DFAT officials supporting Labor campaigns.

Senator GALLACHER: I'll take that interjection. We'll get that on the Hansard. I have no problem with this. I just want to find out what happens.

Ms Adamson : Can I answer it from a different perspective. Clearly what you're talking about, I think, is envisaged because the APS Code of Conduct—and one of my colleagues has just handed me the relevant section, 6.4, Participating in political activities—envisages the sort of situation that we are discussing. Under the section 'Political campaigning and fundraising', it says:

Some employees, as private citizens, choose to campaign for candidates for political office. The role they play may range from handing out how-to-vote cards on election day to activities with a higher profile.

If an APS employee has a significant role in a political campaign, there is potential for a conflict of interest between taking a position on issues and impartially performing their official duties. The employee should discuss such potential conflicts with their agency. Ways of resolving such conflicts might include the employee taking leave, rearranging existing duties, transferring to other duties, or agreeing to take a less significant role in the political campaign.

If an APS employee is involved in political campaigning, they should make it clear they are not undertaking these activities as part of their official duties. For example, they should not wear anything that identifies them as an APS employee…

All of that's good advice. I would hope that it would be followed to the letter in my department. Of course, an APS employee may apply to take leave without pay, annual or recreation leave to assist with an election campaign.

Senator GALLACHER: That's very clear. Thank you for putting that on the record. Every organisation in Australia would probably operate the same way, I would imagine. I only have two other questions. The second question is, at the time of this campaign manager activity—I've asked whether or not she was a DFAT employee, because I'm not quite sure about that—was she based in Canberra or Melbourne, if she was a DFAT employee? Where was she actually based?

Mr Lawrence : We'll take that on notice.

Senator GALLACHER: Because we've only got November and May; we haven't got specifics. I'm not suggesting there's anything untoward at all. The policy is clear, unequivocal and fully supported by probably everybody on this committee. Thank you, Chair.

Senator FAWCETT: One quick follow-up question on the policy issue that you just read out there. 'Significant role' were the words that I think you used. The inference was 'if there was a public perception that there might be a conflict of interest'. But if the role—for example, campaign manager—is predominantly internal to the campaign and doesn't have a public-facing role, so there's no public visibility of statements made, then I'm assuming that the intent of that significant role wouldn't actually align with a role like campaign manager.

Ms Adamson : We'd always look at potential conflicts of interest in specific circumstances on a case-by-case basis, but there's certainly nothing that you've said that I would regard on the face of it as being inconsistent with this. The key thing is to ensure that there can be no perception of conflict of interest. As we all know, mostly the sensible way of achieving that is to declare it.

CHAIR: Thank you very much.

Proceedings suspended from 10 : 29 to 10 : 46

CHAIR: This hearing is now resumed. Before I hand back to Senator Gallacher, I understand the secretary has another response to a question on notice.

Ms Adamson : I do but, before I do that, if I could please just make a very minor clarification. In response to Senator Gallacher's questioning before the break, I quoted from something that I said was the APS Code of Conduct—in fact it was the APS guide to the code of conduct; a little more detail elaborating on the shorter code of conduct and published by the Australian Public Service Commission. I just wanted to correct that, and now invite Mr Sloper to come back on a—

Senator GALLACHER: So, to be clear on that, if you read the code of conduct, these were explanatory guidelines?

Ms Adamson : Yes, that's right. Just to make absolutely sure that everyone understands what's required.

Mr Sloper : I'd like to read out some answers, if the Chair agrees.

CHAIR: Please, Mr Sloper.

Mr Sloper : They are in response to Senator Singh's questions from last night—and the senator's just come in. She asked a series of questions about tourism in Manus. If I may, I'll just go through them, but if you want to interrupt and ask additional questions, please do. The first was referring to the ABC article, I think, on the Australian government supporting tourism. I can confirm we are. Manus Province is one of six areas where Australia's agreed to work with the government of PNG to pilot support for their decentralisation agenda. We're providing support to a range of provincial governments. The Manus provincial government requested our assistance under that program, specifically to help with their economic development with a focus both on fisheries and tourism. At the moment, other regions receiving tourism assistance include New Ireland and the Kokoda Track. We are funding that support, and that's to the value of $146,000 for a duration of up to 180 days. There's an additional provision of allowances for the adviser concerned, and that's been contracted out by Abt—which you mentioned last night—which is a contract that undertakes a range of services in Papua New Guinea for us.

I wasn't aware of the CIBTvisas website. We don't have anything to do with that company; the information there is just their own. We're aware of travel within Papua New Guinea, including to Manus, not being restricted. They sometimes have requests from journalists to seek permission before they visit, but we're not aware of any direct restrictions on travel there at this stage.

Manus itself already has a small, niche, tourism industry, and it's featured quite a lot on the PNG Tourism Promotion Authority primarily for hiking, walks and historical sites, and visits to reefs and beaches. But they're obviously in a competitive position, because there are a number of other sites within Papua New Guinea which have similar attractions. In terms of where the idea came from—you asked me specifically—it was raised by the Manus provincial administration itself directly with us. They'd identified tourism and fisheries as priority industries for generating jobs for their island and economic growth. Our mission has been involved in oversight for the support, but that's part of our broader decentralisation and economic agenda. The actual decision around the contracting was with Abt Associates.

Senator SINGH: I think I asked where the idea came from.

Mr Sloper : There was a request from the provincial government in Manus.

Senator SINGH: And they requested the funding as well?

Mr Sloper : They requested advice in developing a tourism plan, so the funding goes towards an adviser who will be developing a plan with them.

Senator SINGH: Is the difference between DFAT's approach to permission for tourist access compared to CIBTvisas going to be—

Mr Sloper : We don't control access or otherwise within PNG for travel. That is the responsibility of the PNG government. The only advice we give is what is on our Smartraveller website for Australians travelling overseas, and that is regularly updated. However, that is an Australian decision in terms of how that language is articulated. You are probably familiar with that—

Senator SINGH: Is the information on the CIBTvisas website different from PNG's policy?

Mr Sloper : As far as we know it is inconsistent with it. But we have no relationship with the company and we don't control the information on the websites of private commercial organisations. These issues are really a decision for the Papua New Guinean government. We are not aware of restrictions on a visa basis for travel within PNG at this stage.

Senator SINGH: Is the 146,000, plus allowances, for the adviser not just for Manus Island? Is it for other parts of PNG?

Mr Sloper : No, that is specifically for this particular project.

Senator SINGH: Specifically for Manus Island?

Mr Sloper : That's right.

Senator GALLACHER: Ms Adamson, I am sure you are aware the Australian Public Service Commissioner publishes data on the number of APS employees across the entire service who receive financial incentives or bonuses based on performance. Does the Department of Foreign Affairs provide bonus payments or financial incentives to any staff, based on performance?

Ms Adamson : I will invite our chief people officer to answer that in data.

Mr Lawrence : The Department of Foreign Affairs and Trade operates a performance management system—

Senator GALLACHER: So the answer is yes, is it?

Mr Lawrence : The answer is yes.

Senator GALLACHER: If I have a number of questions here probably the best use of our time would be to say the answer is yes, you do have financial incentives or bonuses. How many staff, and at what levels, have been paid bonuses or provided financial incentives on top of annual salary?

Mr Lawrence : At levels, I would have to take on notice. However, I can let you know that in the SES service there is no bonus payment for SES officers. It is for APS-level staff.

Senator GALLACHER: Senior executives?

Ms Adamson : No. Your question is around financial incentives or bonuses. Staff at the APS level—so, below the SES—advance through the pay points in their bands. This is salary only. It is not additional to salary. Instead of running many, many promotion rounds to get from one point in a pay bracket to the next, people advance through those in accordance with the quality of their performance.

Mr Lawrence : That's correct and—

Senator GALLACHER: So you don't go up on years of service; you go up on achievement of qualifications?

Ms Adamson : On performance. It is not a bonus. Broadly, they are incentives for good performance, but that is to advance through the pay points of the bands.

Mr Lawrence : That's the case if staff are working their way through a pay grade. However, if they are at the top of the pay point there is a payment of a bonus.

Senator GALLACHER: Could you take on notice to describe that differentiation?

Ms Adamson : Yes, we'll do that.

Mr Lawrence : Yes.

Senator GALLACHER: How many staff, and at what levels, are paid bonuses, and then those that have been provided financial incentives on top of their annual salary. I'm not sure that is the question about people normally going through.

Ms Adamson : Exactly, but we will be very clear in our answer so you can distinguish it from that kind of situation.

Mr Wood : Page 235 of DFAT's annual report has a table, table 15, that lists performance bonus payments by levels for the 2016-17 financial year, which is the last full, complete year. It notes the average amounts, the minimum and maximum amounts, as well as the levels and numbers.

Senator GALLACHER: Are you saying that that includes the breakdown of each payment on each level and the dollar value, or is that a generic report?

Mr Wood : It lists the levels—APS3, APS5, APS6, EL1 and EL2. It lists the number of staff, the aggregate amount, the average amount, the minimum amount and the maximum amount.

Senator GALLACHER: My questions—and it is probably a combination of answers—one is to look at that report and the other is: could you also include the breakdown of each payment on levels and a dollar value?

Mr Wood : I think that table answers it.

Senator GALLACHER: Ms Adamson, what is the rationale behind the bonus payments? Is there are published rationale. Do people know how they earn a bonus? How does it work?

Ms Adamson : Through our performance management scheme. Staff have an annual appraisal and a midterm appraisal and, in discussion with their supervisors, they are rated either 'performing exceptionally'—that is a rating we give on average to only 10 per cent of staff, because by the natural meaning of the word it needs to be a relatively small group. 'Performing well' is the standard and then 'needs development' is for those who are not in that category.

Senator GALLACHER: If I worked there, and heaven forbid that I did, and I didn't get a bonus, how would I know how someone had got a bonus? Is it published somewhere? How do you know what you have to do to get a bonus? You are not actually selling widgets, are you?

Mr Lawrence : Part of the performance management cycle is that you establish a performance agreement at the start of that cycle with your supervisor. In that agreement we have expectations for staff to meet to perform. There is a mid-term discussion with your supervisor halfway through the performance cycle, at which time you openly discuss with your supervisor how you are performing, how you are going through the year, and what you need do to lift your performance. During that discussion, supervisors and staff will discuss what the requirement is—

Senator GALLACHER: I would be ruled out at the first couple of hurdles! Is this published? Is there a document that people can see?

Mr Lawrence : Our performance management—

Senator GALLACHER: How do you attract a bonus? How do you get a bonus?

Mr Lawrence : As you mentioned, we have a range of staff—

Senator GALLACHER: There must be some manual—

Ms Adamson : There is published material.

Senator GALLACHER: Published material—and that will explain the rationale?

Mr Lawrence : Yes.

Senator GALLACHER: And it will explain how it all works as well, obviously.

Mr Lawrence : Each of those—

Senator GALLACHER: We would like that policy tabled. If you could table it for us—

Mr Lawrence : For each of those performance levels there is a description of what staff need to do to obtain a performance rating.

Senator GALLACHER: Are these payments or incentives available to all staff or only to certain levels or classifications?

Mr Lawrence : As we mentioned earlier, they are not available to SES staff, but to APS1 to APS6 and EL1 and EL2 staff.

Senator GALLACHER: Is that policy position contained in documentation?

Mr Lawrence : Yes.

Senator GALLACHER: Do we have that?

Mr Lawrence : Yes.

Senator GALLACHER: How do you deal with a situation where people would strive for a bonus and may not fit into the appropriate band?

Mr Lawrence : Sorry?

Senator GALLACHER: Does everybody get a bonus?

Mr Lawrence : No.

Senator GALLACHER: So, those who don't get a bonus, they may have two problems. One is that they are in the wrong band. How do you deal with that? Is it that in a certain area you are eligible to participate in a process, which allows you to get a bonus, but not in other areas?

Ms Adamson : No. You are eligible in every area. It is not a question of being in the wrong band. All employees in the department participate in a performance management scheme.

Senator GALLACHER: So, no employee of the department would not be able to participate in it and achieve a bonus?

Mr Lawrence : There is a requirement for a certain number of days' service to be eligible within a performance year. Other than that, all staff have the potential to receive performance bonuses.

Senator GALLACHER: What is the qualifying service before you can have a bonus?

Mr Lawrence : I will have to take that on notice. I believe it is 100 days, but I will get back to you.

Senator GALLACHER: How long has this system been in place?

Ms Adamson : In one form or another, for many years—for decades.

Senator GALLACHER: Did you ever pay financial bonuses on just individual performance?

Mr Lawrence : Not for many years.

Ms Adamson : Do you mean specific to an individual as distinct from their level?

Senator GALLACHER: Yes. Has a department ever paid financial bonuses to staff based on their individual performance, and if so, when did the practice stop? Perhaps you had better describe the situation over the last decade.

Ms Adamson : We can do that. There were individual bonuses paid, but they were the same amount at the same level. So they weren't individual in that sense. From recollection, through a period in the 90s—the late 90s—but let's get our history straight. We will take that on notice.

Senator GALLACHER: Is there commonality between DFAT and other departments in the way bonuses are paid? Is it a common public service outcome or are you different?

Ms Adamson : There are variations across the service. In fact, this also goes to enterprise agreements, but I'm sure you're aware that at the same band across different departments it is quite possible to be paid at significantly different rates.

Senator GALLACHER: Is there a specific reason why DFAT staff wouldn't have a commonality of bonus payments with Human Services, or anyone else?

Ms Adamson : There is nothing special about DFAT. This was decentralised some time ago and different departments have taken slightly different approaches to it. There is a common theme around rewarding good performance and encouraging, driving good performance, but the ways in which that is implemented vary from one department to another.

Senator GALLACHER: Perhaps if you could describe the situation you have been in for the last decade and how people fit where they fit and if there are any qualifying periods. I'm sure your documentation will be able to answer that. Is this the plan for the future or does it change? Is the policy you have at the moment set in stone?

Ms Adamson : The fact that we have a performance management scheme is part of the enterprise agreement that we have with staff. That is negotiated. The current one runs to three years and it is locked in. But it could conceivably be negotiated. The constraint, and it’s a very firm, practical constraint, is our budget. Mr Wood may want to add to what I've said on that basis. There's no extra money for this from anywhere else. Obviously it needs to come from our own funds and, ultimately, to keep paying it we need to find efficiencies and make productivity gains.

Mr Wood : To reiterate what the secretary said, obviously this all needs to be affordable and needs to be found from within our finite resources.

Senator GALLACHER: Do you evaluate whether it's working or not?

Mr Wood : Sorry?

Senator GALLACHER: Can you broadly measure the impact of these incentives and bonuses to satisfy yourselves that it is mutually beneficial to both the taxpayer and the department?

Mr Wood : That will be part of our consideration for the enterprise agreement. We are coming to the end of one enterprise agreement and we are heading potentially into another. As part of that process we would consider a range of those productivity measures.

Senator GALLACHER: Prior to renegotiating do you measure the achievement against those performance indicators of the system that is in place?

Mr Wood : We do look at the performance criteria, yes.

Senator GALLACHER: Is it going upwards or flat-lining?

Mr Wood : I would have to check. I've only just got the information for the last year.

Senator KITCHING: Ms Adamson, I might want to go back to—was it the guide to the APS Code of Conduct.

Ms Adamson : Yes.

Senator KITCHING: I will ask specifically just about His Excellency Mr Brandis. I think last night evidence was given that he started that role on 27 April? Is that correct?

Ms Adamson : No. Mr Downer completed his assignment on 27 April. Mr Brandis commences on 1 May.

Senator KITCHING: On 8 May there was an article in Fairfax in which Mr Brandis gave an interview to Peter Hartcher. Are there any guidelines around not expressing political opinion after an appointment? I will give you some examples. For example, Mr Brandis comments upon One Nation, and he comments about former Prime Minister Abbott's leadership. Are there guidelines around the expression of views once an appointment has started? I think some of this might have been touched on in response to Senator Gallacher, but I'm wanting some further clarification.

Ms Adamson : We certainly have guidelines for DFAT public servants, whether they are at home or abroad, in terms of engagement with the media, and they are issued against the backdrop of the things that I mentioned earlier today. But you will also be aware, Senator, that there is a long history, on both sides of politics, of political appointees, or non-career appointees to some positions, and in those instances, while they are aware of the guidelines that we have—including the encouragement that we give them to engage with local media, and the desirability of keeping in touch with the department on media that is likely to run in Australia—essentially, it's a question of their judgement. And really, that's the way it's always worked.

Senator KITCHING: But it would be—this has become a loaded adjective recently—optimal not to. I can understand commentary to media that might further a particular mission or particular projects which that mission may be engaged in. But is it appropriate to reflect, for example, on another political party?

Ms Adamson : Senator, I think these are really matters of judgement for the heads of mission involved. If something came to my attention that I thought was inappropriate, I would have no hesitation in raising it with the DFAT officer, no matter what their origin concerned.

Senator Fierravanti-Wells: Senator Kitching, if I could add, when you look at the list of non-career diplomats, going back across different governments of different persuasions, if you're going to go down that avenue, I think you'll find that there were probably other people who may have, similarly, said things that may fall within the parameters of the question that you're asking. As the secretary said, I think it's a question of judgement.

Senator KITCHING: Yes. Could I go to Yemen. I indicated last night—

Senator Fierravanti-Wells: From Brandis to Yemen, that's quite a leap.

Senator KITCHING: It is quite a jump—I like to be broad-ranging. I think I indicated last night that I want to ask similar questions to those which I asked about Syria. Can I get an update on the situation in Yemen? For example, has it improved, or deteriorated?

Mr Isbister : Maybe I will make a few comments in relation to the humanitarian situation and challenges, and then my colleague, Ms Yu, may want to add to them. The short answer to that is no. The situation remains hugely challenging. There are over 20 million people who continue to depend on humanitarian assistance, and eight million of those in very serious need. The ongoing challenges of access to the Al Hodeidah port mean that both humanitarian assistance but also broader commercial and other supply is an ongoing challenge. And, obviously, the ongoing fighting on the west coast is resulting in further displacements.

Having said all that, the operations of a lot of humanitarian agencies is really impressive. Dealing with very difficult challenges in negotiating access with respective parties has been critical. The funding that we have provided to the World Food Program and UNICEF has, firstly, been trying to meet the needs of those communities that have been displaced but also, as we move into the wet season, has been trying to prevent, as we have had in the past, major outbreaks of cholera.

Senator KITCHING: I read in a media report that they estimated that 50,000 children were going to die from the cholera outbreak in 2017. Has that, sadly, proved to be accurate?

Mr Isbister : On these issues, there are a lot of statistics that get put out there. I would be surprised if the figure was that high, but the challenge with cholera is determining what is directly the result of cholera as distinct to malnutrition and whatever else. But we do know that the epidemic in late 2016-17 was the worst the world had seen for many years and it had a disproportionate impact on young children and mothers. Hence the focus around trying to ensure that vaccinations and assistance is able to be getting to those affected communities.

Senator KITCHING: Maybe a month or so ago the Minister for Foreign Affairs indicated that there had been an outbreak of diphtheria. How many people have been affected by that?

Mr Isbister : The minister announced additional funding to UNICEF and part of that was to try and address the diphtheria situation and outbreak.

Senator KITCHING: And that aid money went to UNICEF and they are distributing the vaccine?

Mr Isbister : That's right. In terms of the exact numbers that have been impacted, I'd have to take that on notice. The challenge with all these issues, particularly moving into the wet season—and we've just had two cyclones going through parts of Yemen—is that the outbreak challenge for displaced communities is exacerbated—multiplied.

Senator KITCHING: There have been quite a number of media reports about people being on the brink of starvation. I think the figure you gave before was there are eight million people in serious need. Is that the figure? The population is just under 30 million and 22 million are requiring humanitarian assistance. Those eight million are the ones who are most severe. The ones without humanitarian assistance face the risks of starvation but also the risk of death from waterborne diseases.

Senator KITCHING: In the 2017-18 budget, how much aid has the Australian Government given to the United Nations Central Emergency Response Fund?

Mr Isbister : The minister announced probably two years ago a four-year $44 million partnership with the Central Emergency Response Fund, CERF. I imagine, Senator, that you have some familiarity with the CERF, but it's a pooled mechanism that is about half a billion dollars that donors like ourselves contribute to. Its role, really, is to provide rapid funding into either underfunded or emerging crises or sudden onset crises. CERF has been one of the significant generous donors to the Yemen crisis. So, beyond the $13 million that we've provided this financial year to date specifically for Yemen, there has also been funding through the Central Emergency Response Fund and obviously through the core funding that we do provide to other partners, like WFP and others.

Senator KITCHING: Of the $44 million, what will be given in the next financial year?

Mr Isbister : It's $11 million each year.

Senator KITCHING: So it's an even spread?

Mr Isbister : Yes.

Senator KITCHING: Did you mention the World Food Program?

Mr Isbister : Yes.

Senator KITCHING: How much is earmarked to go to the World Food Program?

Mr Isbister : We provided, I think, $5 million to the World Food Program this financial year and the rest has gone to UNICEF and to Save the Children.

Senator KITCHING: What about in the next financial year—how much?

Mr Isbister : Obviously we are continuing to monitor the situation. As the government has done in the past, we will continue to look at how to best target our support in the crisis. One thing to flag is the strong advocacy the government has put in. It is trying to encourage greater contributions and engagement from the Middle East. The Saudi contribution to the Yemen crisis is about half a billion dollars and the UAE contribution is about $350 million.

Senator KITCHING: Has the contribution by the gulf states increased dramatically more recently?

Mr Isbister : Certainly, this year has been by far the largest amount. They have made commitments in past years, but this is significantly more than they have provided before.

Senator KITCHING: Sometimes peer group pressure can be good.

Mr Isbister : Yes.

Senator SINGH: I have some questions in relation to modern slavery and the Australian Modern Slavery Act and, perhaps for the ambassador, in relation to trafficking and people smuggling. Firstly, what role has DFAT taken, if any, in drafting the Modern Slavery Act for Australia?

Dr Shaw : The drafting of the legislation is the responsibility of Home Affairs—

Senator SINGH: I know that, but I'm just seeing if DFAT played any role.

Dr Shaw : They have had consultations with us, but the actual drafting is their role.

Senator SINGH: You have had consultation with the Department of Home Affairs. Was that on the drafting of the legislation?

Dr Shaw : No, it was more on the policy dimensions as the legislation and the ideas were being developed, including when we were looking at the responses to the Senate inquiry into slavery.

Senator SINGH: Has that been in your role as an ambassador or was this in your previous role on the task force?

Dr Shaw : It's been ongoing for some time now. It has been the task force and the department.

Senator SINGH: Both?

Dr Shaw : Yes.

Senator SINGH: What responsibilities will DFAT have, if any, in the implementation of the proposed legislation?

Dr Shaw : That will be, again, Home Affairs. Our responsibility is looking offshore. We are promoting—through the Bali Process, for example—greater transparency in supply chains throughout the business world.

Senator SINGH: I will get to the Bali Process. Has DFAT assessed the level of risk of modern slavery in the supply chains and operations of businesses in the region?

Dr Shaw : No, we haven't.

Senator SINGH: Was the department consulted on the establishment of the anti-slavery unit, which is at page 127 of Budget Paper No. 2?

Dr Shaw : There were discussions with Home Affairs.

Senator SINGH: Once this antislavery unit is established, will DFAT have any role in relation to it?

Dr Shaw : No. My understanding is that it will be a unit established within Home Affairs, in accordance with that press release.

Senator SINGH: In your role as ambassador for people smuggling and human trafficking, have you at any stage been consulted on the drafting of this legislation? It is about supply chains in the region, so I would see your role, or at least DFAT's role, as being integral to this legislation.

Dr Shaw : We were consulted in the process leading up to developing the legislation but not in the drafting itself. Of course, the legislation is impacting on companies in Australia which may have supply chains in the region. So there have been consultations. We have been working closely with our colleagues in Home Affairs, but not on the drafting itself.

Senator SINGH: What kind of form did these consultations take—whether on the legislation or the policy formation or this new antislavery unit we found out about in the budget?

Dr Shaw : We've had meetings with Home Affairs, and it's not just DFAT; a number of agencies have been involved—for example, Jobs—because of the forced labour protocols. So there have been interdepartmental committee discussions.

Senator SINGH: Throughout what period of time?

Dr Shaw : I'd have to check, but it has been ongoing for some time—

Senator SINGH: Are there meetings scheduled for the future?

Dr Shaw : Not specifically on this piece of legislation at this time, no.

Mr Isbister : I would add: obviously, a wide range of recommendations came out of the inquiry which DFAT was engaged with across government in terms of how we would implement them and take those issues forward, including issues, for example, around orphanage tourism and orphanage trafficking. As you know, the minister has announced a campaign on that, and there is a number of very active initiatives that the department is taking forward across government about how to reduce the risks of orphanage tourism and trafficking in orphanages overseas with the tourism sector and others. So there has certainly been, with the inquiry and leading into the drafting of the legislation, quite a lot of consultation across government—including, as I said, with the department of education—around raising awareness and the understanding of schools around the whole risk of orphanage trafficking.

Dr Shaw : If I may add as well, we provided a submission to the joint standing committee, and we gave evidence in three public hearings.

Senator SINGH: Yes, I remember. I have to wrap up, but I did want to know when members of the Bali Process will next meet, particularly now that the Bali Process has been expanded to include the private sector.

Dr Shaw : We'll have a senior officials meeting in Sydney at the end of this month where we'll have representatives of the business co-chairs observing.

Senator SINGH: What's the focus of that meeting?

Dr Shaw : That'll be preparing for the ministerial conference. The ministerial conference will take place in Bali on 6 and 7 August.

Senator SINGH: Yes, but what's on the agenda?

Dr Shaw : On the agenda will be: looking at the recommendations that businesses have been developing since the August launch of the government and business forum. They've been looking at three specific areas, one being ethical recruitment, one being supply chain transparency and one being redress mechanisms for people who have been exploited. So that is one tranche of work that will be developed. As well, there will be the consultations on the ongoing work for the Bali process. There are a number of working groups which will make reports on what their activities have been, for example. There will probably also be an update in terms of the consultation mechanism and the progress that we've had there.

Senator SINGH: Can I just put this on notice because we've run out of time: how will the introduction of an antislavery unit enhance Australia's ability to combat human trafficking under the core objectives and priorities of the Bali process?

CHAIR: Were you waiting for an answer on that?

Senator SINGH: No, that's on notice.

CHAIR: That might be a good segue into a couple of issues that I wanted to raise before I hand back to Senator Moore. I would like to congratulate the department on the lead that you've taken globally on antislavery. As you might be aware, I went to CHOGM recently—and I'd assure my colleague Senator Kitching that I and my partner paid for ourselves completely to do this. We went to CHOGM and participated in a range of side events. Secretary, I'd like to give a very heartfelt thanks to the department for their engagement on the issue, particularly on the issue of orphanage trafficking and the associated issues of orphanage tourism et cetera. The department and the staff—Matt Anderson, the ambassador and all of the staff there—were just brilliant. In all of those side events, by working together at the diplomatic level and with civil society and others who are interested in this issue, I think there was an extraordinary breakthrough within the Commonwealth, and, since then, even over the last month, there has been some extraordinary work done globally now in terms of raising the profile of this issue and tackling it. It would not have happened without the amazing support and engagement of the foreign minister but also of your staff. So could you pass on my sincere thanks for that.

Ms Adamson : Thank you very much, Senator. Could I just acknowledge your own leadership on this. I know, having read the transcripts of the foreign minister's remarks in London, that that was publicly acknowledged, but it's been a genuine pleasure for the department to work with you on this and to achieve progress in a very important area.

CHAIR: Thank you, and in a very short period of time as well. The feedback again—and I have written to the foreign minister and Minister Hawke as well—is that I think that there is a great opportunity for Australia to keep taking leadership on this and taking what we already have in civil society on this issue of orphan trafficking, and to put a great package together for the next CHOGM. Some of the Commonwealth countries and other African countries, for example, are already taking action to close down these illegal facilities and look for better home care and child protection for the children in the facilities. So I think it's been an extraordinary outcome.

I also wanted to say thank you to the Africa division. As you know, I've been working with them on a number of areas, and they tend to get a little bit overshadowed with everything else that's happening in the world, but they continue to do an extraordinary job, and I'm very excited about a report that the references committee has coming up on that. Anyway, just a little bouquet. I can see some of them down the back there on that.

I will put some more questions on notice about the child trafficking issue, but I have one comment—not actually a question. With my engagement with those who represent Home Affairs, who obviously now have the carriage of implementing a large part of the modern slavery agenda for Australia domestically, including child trafficking, I think they—I'm now being a bit naughty—would benefit from closer engagement with DFAT on this issue and how to implement it domestically, because I'm sensing that DFAT is here, and perhaps some other domestic agencies that are now part of Home Affairs are not quite at the level of understanding of this issue. That's just a little gratuitous comment, but I would be happy to follow that up later.

Ms Adamson : Thank you, Senator. Can I just assure you that we work very collaboratively across government and are always willing to act on the kind of advice that you've just given us.

CHAIR: Thank you. Just on that—and DFAT have taken that globally—there is more work to be done now, I think. It's not just Home Affairs; it's really to get past that dissonance in the Australian community and in some of our other domestic agencies. This is actually something that exists here. It's not just about DFAT working overseas with other countries; it's something that's right here that we need to deal with. Anyway, thank you—a little bit of chair's prerogative and a little bit of commentary. Again, my hearty thanks. Secretary, Senator Rhiannon has just got a question on notice that you were going to come back on today, I believe.

Senator RHIANNON: Thank you, Chair. Ms Adamson, yesterday I asked about the terminology DFAT uses to describe the Israel-Palestine region. Could you share with us what you've ascertained in the last 24 hours.

Ms Adamson : Yes, of course I can, but I did read into the Hansard record last night the answer to that question. With a minute, I can probably find it again, but I did give a fairly complete answer.

Senator RHIANNON: Did you? Okay, I'll go and find it. Sorry, I missed that. Thank you.

Senator MOORE: If you can find the piece of paper, it might be useful.

Senator RHIANNON: Yes, sure.

Ms Adamson : I'll be happy to do that.

Senator MOORE: I just want to say to the minister: thank you very much for providing the briefings that we get. I find it very useful. You'll be unsurprised that I'll be asking for a large number.

Senator Fierravanti-Wells: Sure. I understand that, Senator Moore.

Senator MOORE: There are two areas I want to put on record before we finish. We talked yesterday evening about the impact on Indonesia of the aid changes that have come through. I just want to get one particular question on the record. I know that one of the officers was taking away a number of things on notice about the impact on Indonesia, but I have a specific question that I would like to get on notice, which is around the changes in the ODA budget: can you confirm that the IOM assistance to refugees in Indonesia, comprising $40 million, came from ODA and that that has now been completed, as reported on 15 April in The Guardian?

Senator Fierravanti-Wells: Can I just add that Senator McAllister and I recently participated in the Australia-Indonesia dialogue. It was a second-track dialogue. It was a very, very useful dialogue, and I think that you'll find the impression that certainly both of us got over that time—I stayed for the full time; Senator McAllister for day one—was that the relationship is definitely a changing one. It was very clear from that dialogue that we are changing and it will be moving into potentially other areas. These were the suggestions that were made as part of that dialogue, and obviously we will receive the report of that dialogue formally to government, but it was very clear from that that it is a changing relationship and one which will—

Senator MOORE: Minister, we had discussion around that last night and about the changes, but I just wanted to clarify that issue about ODA.

Senator Fierravanti-Wells: Certainly we'll take that on notice.

Senator MOORE: The other area—and this will lead to a request for a briefing for sure—is in the Pacific, and it's around the shortage of drugs in Papua New Guinea at the moment. I do have five minutes, so we can get some discussion on that.

Ms Adamson : Yes, certainly.

Senator MOORE: Mr Sloper, there has been a lot of discussion recently in terms of a crisis with access to medications in the PNG health system. We've talked before about this, and I know that we had the evaluation of the multilateral agreements, which also highlighted this as a major issue. I'm aware that the way the system operates at the moment in Papua New Guinea is that we work very closely with the Papua New Guinean government and there's a division of responsibility. It would be useful if you'd put that on record again. But the particular crisis which has been identified at the moment—and it's not just in the regional areas, which we know about—is in Port Moresby at the main hospital. You would have seen Glen Mola's blog that came out a couple of weeks ago, which was quite gut-wrenching. That's the particular issue. Can we get some more information about that?

Mr Sloper : I can make some points, and if you need further information we'll come back. As you know, responsibility for the procurement of medical supplies does rest with the government of PNG. Recently we've seen significant reporting around retroviral treatments running out of stock. Our funding for medicines itself ended in late 2013, which I think you're familiar with and the reasons behind that. But, on the record, we were not satisfied with quality of the processes involved in the procurement of the drugs at that time, so we withdrew from those processes. Obviously, the supply of drugs in PNG is not always as reliable as we would wish for, and we're aware of those reports that you mentioned, particularly around the HIV medications, but they do extend beyond that. We've just confirmed, though, that a new shipment of HIV medication has arrived in PNG in recent weeks, and it has now been distributed. The CEO of Port Moresby General Hospital has denied reports that the hospital has now run out of drugs and supplies, and we have staff now from the Australian high commission in Port Moresby discussing health sector issues, including this issue of the supply of drugs, with the PNG government and also other relevant organisations, including UNICEF, to consider what response might be required.

We're also looking at some systemic constraints. We've discussed this before, but it's actually about the distribution of those supplies, because sometimes they reach provisional centres but don't go beyond. We're looking to provide a range of broader health services in PNG now. But, in the end, we're not ultimately responsible, as you know, but we recognise the severity of the current issue and are in discussions with the Papua New Guinean government.

Senator MOORE: With the health specialists at our post in Port Moresby, I know this is an issue that they watch very closely. The complaint about the drug issue has been going on from extensive period of time. Did the post have any indication that there has been this recent extended crisis, or was that something where it was situation normal, because it just seems that over, particularly, the last three months there has been more and more commentary about medication issues, and that also linked around not just the retrovirals, which I have a particular question about; it was other basic medication.

Mr Sloper : We're certainly seeing more media reporting, but the stocking-out, if you like, of drugs across the country is not a new phenomenon. It's been around for some time, including before the 2013 procurement issue I talked about. We do monitor it, and we're talking particularly with other partners out of government who are providing medical services in most regions in Papua New Guinea.

Senator MOORE: Was this issue raised particularly with the outpost?

Mr Sloper : We haven't specifically raised the issue, but we're in regular discussion with the post on it. The health sector program people are looking into that.

Senator MOORE: But you did not get particular information about a recent crisis, as it's been described in the media?

Mr Sloper : Not characterised in those terms—it's an ongoing phenomenon that's continuing. It's a real challenge, and we shouldn't underplay it; but there are pockets of positive stories as well as the broader challenge, on TB, particularly, where we've seen a greater uptake and regular use of the drug and the success of it—

Senator MOORE: and malaria.

Mr Sloper : and on malaria as well. Over the last week we've seen some negative reports on maternal mortality and childbirth and so on. They're very serious reports, and the data is not good. But, having said that, we are actually seeing an uptick in the response and an improvement in measures taken to address that.

Senator MOORE: And there's the particular issue around retrovirals, with the problem that a break in the treatment can actually put the treatment right back.

Mr Sloper : That's right.

Senator MOORE: Certainly we talked alot about the AIDS funding in PNG and the change in the process. Was that particular issue raised with the high commission about the retroviral drugs running out and what that's going to do to the uptake of treatment?

Mr Sloper : In response to the latest media reports, we saw an update from the post, and that fed into some of the advice I gave you previously about engaging with the PNG general hospital and others on the state of the situation. We were assured that new medicines were coming through. You're completely correct: the threat is not only to the individual but to the broader community, given the nature of HIV. In relation to other medicines and other drugs, it varies.

Senator MOORE: Minister, I will be asking for a briefing, because this is systemic. Mr Sloper has been very helpful in giving us information about the ongoing considerations, but there is so much outcry at the moment about the impact on medication. We've spent so much money on building health outposts and putting money into future construction and to build things in places like Lae. If there are no drugs—

Senator Fierravanti-Wells: I am in furious agreement.

Senator MOORE: I know.

Senator Fierravanti-Wells: I absolutely share your concerns. I think, as part of that briefing, what would be helpful also—there are two big loans that PNG will be taking, which I suspect will have a major impact on the health system, and we'd be very happy to outline those parameters to you.

Senator MOORE: Are these imminent loans, or have they already been agreed?

Senator Fierravanti-Wells: These are the World Bank and the Asian Development Bank loans—$300 million each.

Mr Sloper : If I recall correctly, I think these loans relate particularly to TB. But we've engaged with the World Bank and others, as the minister has pointed out, in trying to leverage, if you like, other donors into this space where we can see there's a need for more financing, given the tight fiscal situation.

Senator Fierravanti-Wells: We've also got one program where we are working with China—China, Australia and the Papua New Guinean government—particularly on malaria. We can give you an outline of all the things that we are actually doing, but the systemic issues go back to the basic problem—

Senator MOORE: Absolutely.

Senator Fierravanti-Wells: and the responsibility of the Papua New Guinean government. We can do what we do and give the support that we give, but ultimately this is the issue: they have a sovereign right to spend their budget where they wish. But certainly these systemic issues are things that we have constantly and continually expressed concerns to the Papua New Guinean government about. I know; I have done it myself.

Senator MOORE: Thank you. I'll put a lot more on notice.

Ms Adamson : Chair, with your agreement, could I respond to a question on notice from Senator Rhiannon, who asked whether Australia's delegation at the Human Rights Council was asked to sign a group statement on concern around the slowness of Sri Lanka's progress on human rights promises. The group statement was made by the US, the UK, Macedonia and Montenegro. The answer is that the UK informed Australia in advance that the core group would make a statement, but it was not open for other countries to join, including Australia.

CHAIR: Thank you. We'll make sure that Senator Rhiannon is aware of that.

Senator MOORE: I think that could have been my question.

Ms Adamson : Was it your question? I'm very sorry. I was informed it was Senator Rhiannon's question.

Senator MOORE: That's all right.

CHAIR: I'm sure Senator Rhiannon would be equally interested.

Ms Adamson : I know you asked a series of questions this morning on Sri Lanka.

Senator MOORE: The letter that was there about the Sri Lankan situation—I'll come back to that. I want to get some more information about that, but we can do it on that.

Ms Adamson : Sure.

CHAIR: Thank you, Secretary. Senator Moore.

Senator MOORE: That's it. No, I won't take time now. But I will come back, because that's different to what I asked.

CHAIR: Are there any more questions for the non-trade programs of DFAT?

Senator GALLACHER: I have one question. Secretary, reflecting on the answers—and I appreciate they were full and frank answers—about the Dubai pavilion, the thought I had was that you obviously consider whether or not to do this stuff, but is it a decision of government? Do you make a recommendation about participation in the Dubai Expo 2020?

Ms Adamson : It is a decision for government, and typically there is fairly detailed consideration of the issues across, potentially, a range of departments. Obviously, we have the lead, but typically it then comes down to hard-headed decisions in a budget context which of course are always difficult to make and depend to some extent on priorities.

Senator GALLACHER: And given that it didn't get into the budget it was supposed to get into. I think that is one of the reasons why the timetable is curtailed. It only got into the most recent budget.

Ms Adamson : It did.

Senator GALLACHER: It was a budget late, wasn't it? Does that mean there was serious consideration of not going?

Ms Adamson : It was debated backwards and forwards—for the reasons that I think were behind your questioning last night. These things do cost money, and we need to be very mindful of and consider deeply the cost benefit. But, as I mentioned last night, the UAE is our largest trading partner in the Middle East, and, for other associated reasons, the government decided to proceed.

Senator GALLACHER: But, at the end of the day, the department will give a position to the respective minister, and it's up to them to take it to cabinet or wherever it gets approved.

Ms Adamson : Essentially, yes.

Senator GALLACHER: Thank you.

CHAIR: There being no further questions for the non-trade programs, I thank very much the minister and the officers for their attendance but also for their engagement and responsiveness to senators' questions over the last day and a half.

[11:42]

CHAIR: I now welcome Senator the Hon. James McGrath, Assistant Minister to the Prime Minister, representing the Minister for Trade, Tourism and Investment; and officers from the department with responsibility for trade programs. Good morning, Minister, and welcome back, Secretary. Minister, would you like to make an opening statement?

Senator McGrath: No.

CHAIR: Secretary?

Ms Adamson : No, Chair.

Senator GALLACHER: Just to get a couple of exploratory questions out of the way. The value of imports to Australia from China—does someone have that at hand?

Ms Adamson : Yes, we do. Mr Fletcher is probably best placed to give them. He and I were looking at them only the day before yesterday.

Senator GALLACHER: Hopefully, they're growing day by day.

Ms Adamson : They are indeed. It's quite impressive.

Mr Fletcher : Senator, could you please repeat the question?

Senator GALLACHER: The value of imports to Australia from China.

Mr Fletcher : In 2017, the figures were $64,070,000,000.

Senator GALLACHER: Exports from Australia to China?

Mr Fletcher : These are merchandise exports and imports: $99,724,000,000.

Ms Adamson : $99.7 billion.

Senator GALLACHER: So the two-way investment between Australian and China is a combination of those two things, is it?

Mr Fletcher : For goods, yes.

Senator GALLACHER: Have you got that figure at hand?

Mr Fletcher : Yes, it is $183 billion total two-way trade goods and services.

Senator GALLACHER: Clearly, this relationship with China is far and away our largest trading relationship.

Mr Fletcher : That's correct.

Senator GALLACHER: I struggle to know who would come second.

Mr Fletcher : Japan.

Senator GALLACHER: What are the figures for Japan?

Mr Francis : It's about half, I think, but it all depends what you're measuring. If it's total two-way trade in goods and services, it's one figure. We often think in terms of export markets rather than two-way, and often in goods rather than in services, but frankly we should be thinking about goods and services together. I now have the figures. Total two-way trade with China, as I said, is $183 billion; Japan is $71 billion.

Senator GALLACHER: Okay. That puts some sort of perspective around the questions. When did Australia sign an agreement with China to increase market access for Australian beef? Was that March of last year?

Mr Fletcher : Yes. It was an MOU.

Senator GALLACHER: How many companies could export beef before this agreement was signed?

Mr Fletcher : I'll have to take that on notice.

Senator GALLACHER: Did the signing of this agreement open up live export or more—

Mr Fletcher : No. We export a lot of beef which is frozen. We don't export so much which is chilled. The point of this new arrangement was to expand access for chilled beef, which is a higher value product.

Senator GALLACHER: Did it also include live export?

Mr Fletcher : No.

Senator GALLACHER: As a result of this new agreement, how many Australian companies would be able to participate in this higher value supply chain?

Mr Fletcher : I'll have to take that on notice.

Senator GALLACHER: You signed an agreement, but there would have been some studies and underpinning evidence to facilitate the signing. You would have had a ballpark figure. Is it a doubling of the number of companies that would have moved from frozen to now chilled? No idea at all?

Mr Fletcher : What we're doing is expanding the scope for companies that are already exporting to China to increase the range of products they export. Now, it's up to companies to decide what they want to sell to China. At the moment, there are a limited number that can export chilled beef; we're wanting to expand that. I don't know how many companies want to expand. There are a range of options out there. We sell a lot more beef to Japan than we do to China. Companies have contracts and obligations, but they also have opportunities that they wish to explore, and our job is to expand the range of opportunity for them.

Senator GALLACHER: I appreciate you're going to take it on notice, but I will be perfectly clear with the question: how many companies could export beef to China before the agreement was signed and how many Australian companies can now export beef as result of the agreement?

Mr Fletcher : Yes, we'll take that on notice. Beef trade did expand by 24 per cent last year.

Senator GALLACHER: One of the things that the committee—or at least some members of the committee—struggle with at times is that we get the positive announcement but we don't find the underpinning economic evaluation. Who does this affect; how many more people get into the market; what did it bring us? I accept it might be that they have to go and do their work and sell their company and their beef, but it's always good to know. If before the agreement 10 companies can do that, and after the agreement 100 companies can do it, that might be—

Ms Adamson : If I could add to that, there is an element of that, but some of the same companies already exporting frozen beef will then be able to expand their product range. While I understand and fully support the evidence base you want to go forward with this, that particular market access request was made after a number of representations from companies already exporting beef. So the increase may not be in the order of magnitude that you've suggested, but, nevertheless, it will open a valuable further export opportunity for Australian companies.

Senator GALLACHER: These questions are, basically, trying to assess in detail. I've given you the companies that could before; how many could after the signature?

Do any Australian businesses currently export beef to China which could not before the agreement was signed? Does it bring new people to the world, or to the business?

Mr Fletcher : I'll take that on notice.

Senator GALLACHER: What increase in beef exports with China can be directly attributed to this agreement?

Mr Fletcher : I'll take that on notice.

Senator GALLACHER: That's a continual thing with a lot of the agreements—that it's sometimes either not measured or difficult to measure. Is there a time frame in which you would need to make an appropriate assessment? Would it need to be done within 12 months of the agreement, or six months?

Mr Fletcher : Yes. Trade does fluctuate. As I said, last year, in 2017, our exports of beef were 24 per cent higher than they were in 2016. They were $835 million last year. The previous year, they were $670 million. But, in the previous year, 2015, they were $1,006 million worth. Now, why was that? Was it weather? Was it stocking levels? Was it opportunities available elsewhere for exporters who preferred to sell it to Korea or Japan or the United States? There are a lot of factors involved. And demand from China fluctuates as well—not so much with meat but with other agricultural products—depending on their own harvests and needs.

Senator MOORE: What's the process you'll use to answer that question? It sounds like a really straightforward question: what increase has been directly attributable to the change in the agreement? It sounds straightforward. You've begun to say why it varies, but what methodologies would be used to assess that?

Mr Fletcher : The simplest one is just to look at the trade figures as they come in month by month, and then look at them at the end of the year. The other way, which we also do, is to talk to the market.

Senator MOORE: You do survey type work as well?

Mr Fletcher : We'll talk to our colleagues in the department of agriculture and we have our own dealings with exporters. Some of the major companies there talk to our embassy in Beijing and they come and talk to us here, and we just say to them, 'How's it going, where do you see problems, what else do you need?'

Ms Adamson : I want us to be clear with you—and I recall Mr Fletcher saying last night, when asked about this all yesterday—that, although that agreement was reached last year in March to expand access, we are still working to implement that agreement. The answer to your question is it hasn't yet happened.

Senator GALLACHER: That was the final question in this series. Are Australian beef producers currently able to access the full market entitled to them under the agreement signed in March?

Mr Fletcher : No. It has not yet been implemented.

Senator GALLACHER: If we were to take this tiny segment of your trade treaty work, what would be a reasonable time to evaluate this treaty? Is it 12 months, two years?

Mr Fletcher : Yes.

Senator MOORE: Twelve months or two years?

Mr Fletcher : The longer the better, frankly, because it gives you more perspective.

Senator MOORE: To be clear, two years would be—

Mr Fletcher : Once it's implemented, 12 months minimum, preferably two years.

Senator MOORE: Okay. That's better.

Senator GALLACHER: I'm not being critical—I think this is probably an apolitical statement—but whoever signs these agreements is keen to get them out in the public arena as soon as they can, but there's clearly a lot of work that goes on after the initial signature to get the market developed and working properly. In your experience that is at least 12 months, if not longer?

Mr Fletcher : Yes.

Senator GALLACHER: Thank you. In respect to Australian wine, there've been some media reports about the issues facing the exporters, and I know you touched on this yesterday. It's quite a comprehensive brief, so I'll try to pre-empt, rather than you having to start answering questions I haven't asked yet, which you probably will in an overabundance of helpfulness! The first one is: you're familiar with the media reports?

Mr Fletcher : Yes.

Senator GALLACHER: Where did you first become aware of these issues? When was DFAT first made aware of issues facing Australian wine exporters?

Mr Fletcher : Thank you for that question, because I now have additional information to what I said yesterday. The embassy in Beijing was informed towards the end of April that there was some delays in processing and paperwork for one of the wine companies. We became aware in Canberra on 15 May.

Senator GALLACHER: How were you made aware of that? Was that a direct communique from the embassy in China?

Mr Fletcher : I think the company concerned contacted the trade minister's office, and his staff contacted us immediately.

Senator GALLACHER: Were any members of the department briefed or included in correspondence from Australian wine businesses about this issue?

Mr Fletcher : Yes.

Senator GALLACHER: When did this happen?

Mr Fletcher : The initial approaches in China occurred during April, at a low level from the company concerned; and then we were in touch with the company at a more senior level, immediately we found out about it—on 16 May.

Senator GALLACHER: Those are the dates you gave Senator Wong yesterday, aren't they?

Mr Fletcher : Yes.

Senator GALLACHER: And the only additional information is that the embassy was—

Mr Fletcher : Yes. Some of the agricultural staff in the embassy in Beijing had a conversation with someone from the company in April.

Senator GALLACHER: Which wine businesses have you been contacted by about issues of exporting their product to China? Treasury was one.

Mr Fletcher : Treasury Wine Estates is the main company that we've been dealing with.

Senator GALLACHER: Are they in the public arena because they are publicly listed? Is that how it works?

Mr Fletcher : They issued a statement to the stock exchange on 17 May, and I think the chairman was quoted in the media as well.

Senator GALLACHER: So no other wine businesses have contacted the department with issues about exporting. Is that correct?

Mr Fletcher : We know of four other companies. I don't know how we know of that.

Senator GALLACHER: Would they have gone through the minister's office?

Mr Fletcher : Not to my knowledge. I think TWE is the company that's most prominent, and possibly the one that has the most trade affected by this.

Senator GALLACHER: Would you know if the minister's office had been contacted by wine companies on this issue?

Mr Fletcher : It may be. I don't have all the information in front of me, but I can find that out.

Senator GALLACHER: So if a wine company was to ring the minister's office, someone would take a file note and then they'd refer it to the department? Is that how it works?

Mr Fletcher : I don't think they would waste time to make a file note, I think they'd contact us, either by telephone or email, immediately.

Senator GALLACHER: They should take an actual, literal note of the time, the date and the person, though. Quite often when I get a message of an urgent nature, I don't know the person's last name or what day or topic. So when I say a file note, it might be an old-fashioned term, but they should have some chronological basis.

Mr Fletcher : It's an electronic communication these days. Any time there is a difficulty or a disruption or a delay of a significant nature in our trading relationships, we find out very quickly, and we immediately assess whether we need to take any action informing our posts et cetera.

Ms Adamson : Could I just add: it may not have been entirely audible, but Mr Fletcher did say 'any time there is any disruption or issue with our trading relationships'—plural. I just want to be clear, because it is a point that Minister Ciobo has made, that this is possible in all of our markets, and from time to time there is a need for our embassies, and staff within them, to become involved in support of the smooth running of trade, and normally that means Australian exports.

Senator GALLACHER: So it would be reasonable to assume that the minister's office, or the minister personally, would have been contacted directly by the industry. Is that correct?

Mr Fletcher : Yes.

Senator GALLACHER: And that would be by phone, written correspondence, WhatsApp or a personal email. Is that quite normal?

Mr Fletcher : Yes. I think it was a telephone call.

Senator GALLACHER: What I'm trying to get to is: what happens then? Does that come to you as something to deal with?

Mr Fletcher : Yes. The minister's office contacted us and said: 'There's a problem that one of our companies has identified with their trade. What's going on?' And so we asked the embassy in Beijing to tell us what was happening, and we talked to the company, and then we started talking to the Chinese government about the paperwork issues which were involved.

Senator GALLACHER: Could you tell us when this correspondence first happened?

Mr Fletcher : Yes; it was on 15 May.

Senator GALLACHER: Could you table any written correspondence to the minister's office or the minister, including emails to the minister's personal email, from wine companies regarding export issues with China?

Mr Fletcher : I'll take that on notice.

Senator GALLACHER: Did the minister's office brief you or did you brief them on the issues?

Mr Fletcher : It was both ways. They informed us immediately of what they had heard from the company, and then we started briefing them back as soon as we had information. There was a constant two-way flow. Fortunately, the minister happened to be travelling to China the next day or shortly thereafter and was able to personally make representations in Shanghai with a representative from the Chinese Ministry of Commerce and with the local administration. The problem was occurring in Shanghai.

Senator GALLACHER: We've dealt with the first briefing, which was on the 15th. What advice did the department provide to the wine industry about dealing with the issue? After your discussion with the minister's office, was there advice back to the industry?

Mr Fletcher : Yes, we told them what we found out about the—the process of verification of a certificate of origin is something that is set out in the China-Australia Free Trade Agreement. I think the company probably knew about that process, but we were able to explain to them exactly how the processing would occur. I'm pleased to say that things are now moving and we have achieved some progress in that regard.

Senator GALLACHER: So, if you said: 'Look, the proof of origin is contained in the agreement. You need to comply with those requirements, and that should get you through your'—

Mr Fletcher : There is a mechanism in the treaty which allows the receiving country to query or clarify the validity of the certificate of origin, which, in the case of the Australian industry, is usually delivered by one of the industry associations. Now, that involves a process between the receiving country sending the documentation to our customs authorities, who then send it to DFAT or, I think, home affairs. There's a process where it gets delivered to the government, then gets sent to the issuing authority in Australia, which is an industry body—there are a number of them—and then the response goes back to the Chinese through the same mechanism.

Senator GALLACHER: I'm being parochial: if I had been exporting a container of Grange into China every week, every day or every month for a year, and then my rule of origin certificate is questioned on a day and I go to the department and/or the minister and say, 'Look, I've been doing this for a year and now all of a sudden my paperwork is being questioned,' what's your answer to that?

Mr Fletcher : Both countries are entitled to query the validity of the documentation in relation to imports into their jurisdiction. That gives both sides confidence, if they believe that there's some problem, that it can be sorted out. There is an ongoing series of queries from time to time that the Chinese and we are able to undertake.

Senator GALLACHER: Okay. So, it's happened—there's a query of the certification under the agreement—and you advise that you comply with the agreement, and then it would be elevated in a dispute-settling procedure?

Mr Fletcher : For whatever the reason, there were a number of these queries which had not been delivered to us. On 16 May, we said, 'There appear to be delays in processing the paperwork; can we speed it up?' That's what we've done, and the paperwork is now flowing. As a result, things are returning to normal.

Senator GALLACHER: So, it happened and people were inconvenienced, and there's definitely a measurable delay, but you're saying it was fixed up because someone made a phone call? How did it get resolved?

Mr Fletcher : Because we took action, in light of the minister's visit, to urge the authorities in China to activate the processes which normally are undertaken.

Senator GALLACHER: Would you have sought legal advice on whether any of the issues faced by Australian exporters were in breach of the China-Australia Free Trade Agreement?

Mr Fletcher : No, we had no concern that the agreement wasn't being implemented.

Senator GALLACHER: You didn't look at that path? Basically, we had an operating certificate procedure that was not seeming to trouble some wine exporters at all. It did for how long? What was the exact period?

Mr Fletcher : This began earlier in April. It was a period of four or five weeks.

Senator GALLACHER: Is that just a new official, a new governor, a new mayor or a new person in charge of the port?

Mr Fletcher : I don't know.

Senator GALLACHER: Is that something you look at?

Mr Fletcher : Our objective is to get the processes flowing again. I don't think we're looking into the reason for the delay.

Senator GALLACHER: I've read media reports that Australia's wine into China is growing at an exponential rate.

Mr Fletcher : Yes. I can give you the figures, if you'd like.

Senator GALLACHER: That's why I'm concerned, that in that growth cycle suddenly you have a month where someone says, 'We have to check their origin.'

Mr Fletcher : The industry maintains stock in China. It's not as though they didn't have product to sell. But there's a lead-time of several months that they wouldn't want to see disrupted.

Senator GALLACHER: Did the minister meet with Chinese officials specifically regarding the difficulties of the wine industry because he was going there the next day and you were able to make those meetings happen?

Mr Fletcher : Yes. Similarly, the embassy in Beijing, with the authorities there, were talking to the Chinese embassy here, and on Tuesday the secretary in Beijing with the foreign ministry.

Senator GALLACHER: Was it the minister or his office that asked the department to arrange the meetings, or did he go ahead and do it himself?

Mr Fletcher : We knew that this needed to be done. I can't recall who suggested it first.

Senator GALLACHER: Perhaps on notice—you might have collectively done it if it was an urgent thing and the minister was going the next day. Maybe both offices were organising meetings.

Mr Fletcher : Yes. I'm sure that it was his office. They didn't have to be given advice from us that the minister should raise this.

Senator GALLACHER: I'm sure! Were there any formal or informal requests for meetings with Chinese officials made by the minister, his office or the department on the minister's behalf? How broad were these meetings? Do you have straightforward line of sight and then you might have expanded the people involved or—

Mr Fletcher : It depends on who we're talking to in China—which ministry they belong to and whether it's a central government official or a local government official. They all have different responsibilities. Depending on who we're talking to, we calibrate the kinds of issues which are raised. There are some issues which are worth raising with whoever you're talking to. Seniority is another factor. The most important person the minister met was the mayor of Shanghai. In an Australian context, that doesn't sound too important, but the mayor of Shanghai is a seriously important political leader in China—probably ministerial level, if not higher. Everything that is said in a meeting with a senior Chinese figure of that rank is carefully noted down and reported throughout their system, which is a good opportunity for us to register messages. During the meeting with the mayor, we would cover all of the main issues that are of importance to us.

Senator GALLACHER: Which would be the largest port for the importation of Australian wine?

Ms Adamson : It would be Tianjin.

Mr Fletcher : I'm advised that it's Tianjin, but we can take that on notice.

Senator GALLACHER: Is that Shanghai?

Mr Fletcher : No.

Senator GALLACHER: So, if you've got a problem at a port on the coast, you go and meet with the mayor in Shanghai? That's the level—

Mr Fletcher : Shanghai is a very big port.

Senator GALLACHER: But it's not the importation port for Australian wine.

Ms Adamson : There are a range of them. The problem occurred with the certificates in Shanghai. In fact—

Senator GALLACHER: So, it's even more complex than I'm trying to—

Ms Adamson : In fact, Tianjin is a major port. We should take this on notice.

Senator GALLACHER: Was there any problem in Tianjin?

Ms Adamson : Shanghai was absolutely the right place to make the representations.

Mr Fletcher : The location of this problem was Shanghai.

Senator GALLACHER: And that isn't the major importation port?

Mr Fletcher : It's a significant—

Senator GALLACHER: It's significant, but not the major importation port.

Ms Adamson : I may need to amend that advice. Different ports are used for different purposes, obviously, and I think possibly on reflection that Shanghai would be the major port for Australian wine. But let's just check that. We can see how many cases—

Senator GALLACHER: Can we get that map? So are we very, very clear and sure that the department did not seek legal advice on whether the issues faced by Australian importers breached the China trade?

Mr Fletcher : That's correct.

Senator GALLACHER: Was considered and ruled out, or was not considered?

Mr Fletcher : We simply asked our colleagues in the regional trade agreements division, which manages implementation of the China-Australia Free Trade Agreement, for clarification as to the processing of the certificates of origin. We got that advice. It's not formal legal advice, it's simply an explanation how the treaty operates. We got that the same day.

Senator GALLACHER: Given the very quick and prompt way the minister was able to get into the argument, so to speak, is it possible to provide who the minister met with, the Chinese officials, regarding the difficulties? What were their titles and reason for meeting? Is that possible?

Mr Fletcher : Yes.

Senator GALLACHER: So you could provide the dates, times and titles of the people he met with in relation to this issue?

Mr Fletcher : Yes.

Senator GALLACHER: Were officials from the department present at the meetings with the minister?

Mr Fletcher : Departmental officials from the consulate in Shanghai were present.

Senator GALLACHER: There weren't two lines of meetings? It was only the minister and the officials—there weren't officials meetings and then ministers meetings?

Mr Fletcher : On this issue there were meetings in Beijing by the embassy, and there were meetings in Canberra by the department. When the minister was in Shanghai he had a meeting on 17 May with somebody from the commerce department. On 19 May he had a meeting with the mayor of Shanghai. What I don't know is the name of the person that he met on 17 May. We'll find that out on notice.

Senator GALLACHER: On notice could you describe the multiplicity of efforts that you had going on?

Mr Fletcher : We can give you a full tick tock, as they say, of who met whom in Beijing and Canberra as well as Shanghai.

Senator GALLACHER: Thank you. Were there any meetings with officials and Australian wine companies in China?

Mr Fletcher : There were discussions, yes.

Senator GALLACHER: They would be raising firsthand what's happening to them?

Mr Fletcher : Yes.

Senator GALLACHER: If there were formal meetings or informal meetings, perhaps we could be appraised of those. It's on the public record that the minister says he was only alerted to these issues when he took a phone call from the CEO of Treasury. It's your evidence that you provided no information to the minister before that time. Is that correct, Mr Fletcher?

Mr Fletcher : Yes.

CHAIR: Can I clarify something? From the discussions we had yesterday, I understand that a full list of Minister Ciobo's visits and engagements was actually tabled yesterday. I remember we had a one-page full list.

Mr Fletcher : Yes.

Senator GALLACHER: It's good to be getting them twice.

Mr Fletcher : It was a list of every meeting that occurred, not the full identities of all the participants in the meetings.

Senator GALLACHER: Look, by way of clarity, we had a foreign minister shadow yesterday, and we have a trade minister shadow today. They're quite entitled to pursue the questions in their respective areas of interest, foreign affairs and/or trade.

CHAIR: It was just a point of clarity.

Senator GALLACHER: How many people would have been working to resolve this? Do you do that? How many full-time employees does it take to resolve these issues? Do you just throw all your resources at it? How does it work?

Mr Fletcher : Probably about a dozen individuals across our network would have been involved—three or four in Canberra, the same number in Beijing and a handful in Shanghai with the minister. But that's not 12 people working full time on this and nothing else. Certainly there were three or four of my staff in the North Asia division, a couple of individuals in Ms Witbreuk's division and perhaps a couple of others. It would be about a dozen.

Senator GALLACHER: Finally on this, do you make an assessment of the cause of these issues? It's been reported that this could be a result of someone saying something in a foreign affairs area of maybe the South China Sea, and someone says something else in another area, and the trade minister is out there saying, 'No, no, we're strong here on this issue.' Anyway, we have a problem that we didn't have, and it only occurred for a short period of time. How do you assess it? Do you make an assessment of what caused this?

Mr Fletcher : It's difficult to say. Disruptions and delays occur from time to time in a number of markets. With China perhaps it's more obvious to us than others because of our close relationship with the industry and because it's a very big export market for us. Our priority is always seeking to understand what's going on and resolving issues.

Senator GALLACHER: But you will do an assessment with 20-20 hindsight of what went wrong there; how do we fix it; this is how we fixed it; what was the cause of it—would it be a normal process for you?

Mr Fletcher : Yes. We have experience that goes back a long time with a number of sectors in our trade with China. When difficulties occur, what's the best way of resolving the problem? We'll do that in this case as well.

Senator GALLACHER: I see we've got former Prime Minister Howard saying we should end the deep freeze this morning. Is it possible that it's connected to some political activity?

Mr Fletcher : We don't think the relationship is frozen. I think the evidence of the secretary yesterday was that we believe we're able to move things forward step by step.

CHAIR: Is it possible that the headline in the paper and the story doesn't quite reflect the content of the article either?

Ms Adamson : That was my thought on reading it. Obviously that would not be unique situation.

CHAIR: A bit of editorial flourish?

Ms Adamson : Yes.

Senator GALLACHER: I'll go to progress in the negotiations between Australia and China for their Memorandum of Understanding on an Investment Facilitation Arrangement. Is that you, Mr Fletcher?

Ms Witbreuk : We're not negotiating on the IFA. We're undertaking a review of it, as we're also undertaking reviews of the services and investment sections of ChAFTA. So there isn't at this stage a renegotiation on any of those things. There's just—

Senator GALLACHER: Maybe this is just bad grammar. There isn't a negotiation, but there is a review?

Ms Witbreuk : Yes, that's correct.

Senator GALLACHER: So to understand the progress of the review between Australia and China on the Memorandum of Understanding on an Investment Facilitation Arrangement, is that what's going on?

Ms Witbreuk : There is a review. We've had one meeting on that review. To be clear, there are three reviews underway: services, investment and the review of the MoU on the IFA as part of that. We've had one discussion.

Senator GALLACHER: So it's not a negotiation; it's a review.

Ms Witbreuk : That's correct.

Senator GALLACHER: When was the last meeting about the IFA in ChAFTA?

Ms Witbreuk : October of last year.

Senator GALLACHER: Where and with whom was that meeting?

Ms Witbreuk : That was with representatives of the Chinese Ministry of Commerce in Canberra in October last year.

Senator GALLACHER: Can you provide the people that attended?

Ms Witbreuk : Probably, yes.

Senator GALLACHER: And people from our side that attended. Was there a future meeting proposed at the last meeting?

Ms Witbreuk : We are still trying to schedule the next meeting on these three reviews that are taking place.

Senator GALLACHER: So the meeting got up in October and said, 'We'll talk about a meeting later', but didn't have a schedule?

Ms Witbreuk : That's right.

Senator GALLACHER: Is that normal?

Ms Witbreuk : We find with our very busy trade agenda and China's very busy trade agenda it's not always that easy to reschedule meetings.

Senator GALLACHER: So it's currently being negotiated or talked about, the next meeting. What is that—swapping diary dates?

Ms Witbreuk : We are trying to find a mutually agreeable date.

Senator GALLACHER: Is that likely to be this year?

Ms Witbreuk : I certainly hope so.

Senator GALLACHER: But it's not agreed, though?

Ms Witbreuk : It's not yet agreed.

Senator GALLACHER: It's 1 June today—a pinch and a punch for the first of the month. So the negotiations are not completed. You didn't complete everything in October?

Ms Witbreuk : The reviews are not completed, no.

Senator GALLACHER: Do we have a timetable for completion?

Ms Witbreuk : No, we do not.

Senator GALLACHER: Do we have a breakdown of which parts are being reviewed?

Ms Witbreuk : The services and investment chapters and the MoU are being reviewed in their entirety.

Senator GALLACHER: So the whole investment facilitation arrangement?

Ms Witbreuk : There are three elements that are under review. There is the investment chapter of ChAFTA, the services chapter of ChAFTA and the MoU that is associated with ChAFTA, which is on the IFA.

Senator GALLACHER: And they're all under review?

Ms Witbreuk : They're all under review.

Senator GALLACHER: Forgive me, but didn't we just sign the agreement? Was that always going to be work in progress? We signed a headline agreement, here is a bit we've got to work out through the—

Ms Witbreuk : Our agreements, especially big ones with countries like China, are always living agreements. We often put in them review clauses so we can update, modernise and improve the level of liberalisation achieved under the original agreement. That's the standard practice in our free trade agreements.

Senator GALLACHER: So is this quite normal, this circumstance we find ourselves in now? Or is it unusual?

Ms Witbreuk : In what sense?

Senator GALLACHER: We've had a meeting, we don't have another one planned and we haven't made significant progress?

Ms Witbreuk : I don't think there's a pattern here. We have had one discussion with the Chinese on it. We are obviously keen to keep moving this forward. As I said, both countries have pretty big trade agendas, so finding a time that works for both of us is something that we haven't locked in yet for the next meeting, but it's a conversation we're having with the Ministry of Commerce.

Senator GALLACHER: Have you done this before in other agreements?

Ms Witbreuk : Having built in agendas?

Senator GALLACHER: Having an agreement made and then having matters that are going to be progressed?

Ms Witbreuk : Certainly, yes.

Senator GALLACHER: Is there a characterisation of how long that normally takes?

Ms Witbreuk : No. Each situation is different.

Senator GALLACHER: How would you characterise this? Successful progress? Modest progress? No progress? Difficult?

Ms Witbreuk : Perhaps at this early stage, we would talk about modest progress.

Senator GALLACHER: And has there been ministerial representation to bring the matter closer to finality?

Ms Witbreuk : We talk regularly through our post to the Ministry of Commerce in Beijing about scheduling the next discussion and keeping things moving forward.

Senator GALLACHER: Is our minister or his office involved in it?

Ms Witbreuk : I would have to take that on notice as to the last time our minister talked to the Chinese about the reviews. He certainly raised it the last time he was in Beijing, if I recall, but I'd want to clarify that.

Senator GALLACHER: Could you take on notice whether the minister's office has been asked to make representations about bringing the agenda along successfully with a timetable for another meeting and resolution?

Budget paper 2, page 105, details 2017 foreign policy white paper initiatives. This is about a $15 million allocation in the budget for a package of initiatives.

Mr Wood, page 105 of budget paper No. 2 details the foreign policy white paper initiatives and it says that no new money has been allocated. Is that correct?

Mr Wood : No, Senator. This has been offset within the government's overall funding levels. There is additional funding coming to the department—$15 million over the forward estimates. It's a $15-million package which, as the minister stated in his budget media release, is focused on continuing to tackle non-tariff barriers and on trade; on increasing the competitiveness of our services sector; and on strengthening dialogue with the business community on foreign policy and security issues. There is some additional funding coming into our departmental resourcing and some associated staffing level resources.

Senator GALLACHER: Okay. So $15 million is there.

Mr Wood : Correct, over the four years.

Senator GALLACHER: The $15 million allocation in the budget is for a package of initiatives to support the business community over four years. What does that actually mean?

Mr Wood : So—

Senator GALLACHER: Sorry, we're getting through this very well so perhaps I'll do it this way: how much money would be spent each year?

Mr Wood : Good question, Senator, thank you. I'll give it you to one decimal place. It's about $4.1 million in 2018-19, $3.7 million in 2019-20, $3.7 million in 2020-21 and $3.5 million in 2021-22.

Senator GALLACHER: How many initiatives would this money support?

Mr Wood : Principally, there are four components, relating to stronger community outreach; a fairly significant amount for addressing non-tariff barriers; amounts for boosting service exports; some on strategic dialogue with business; and some for revamping economic diplomacy.

Senator GALLACHER: Is that five? Did you—

Mr Wood : That is five, yes. I think I've done very well with numbers up until just now! Yes, that would be five—

Senator GALLACHER: There would be five initiatives, and various amounts would be spent?

Mr Wood : Yes.

Senator GALLACHER: How were those initiatives chosen? Were they chosen by the department or the minister's office?

Mr Wood : It relates to a submission that was put forward by the department. It follows the white paper. As we've noted elsewhere over the last couple of days, there was additional funding provided for white paper initiatives. This forms part of those. In addition to these business engagement activities, there was funding for our new consulates in Kolkata and Funafuti, and also for expanding our engagement with emerging Indo-Pacific leaders. So it was badged under the white paper initiatives and the government's funding of those.

Senator GALLACHER: What types of business and community representatives would be eligible for this funding?

Mr Wood : I might need some assistance from colleagues here.

Senator GALLACHER: Do they put in a submission for a grant or something, do they?

Mr Newnham : I can certainly speak about the business dialogue with government. We haven't yet settled on membership of that group, but it would largely depend on the agenda. It would be an invited group to discuss various foreign national security policy issues and the overlap with business. We haven't actually settled on attendees of that at this stage.

Senator GALLACHER: Okay. So would industry need to match Commonwealth funds under this scheme? Is that—

Mr Newnham : Just to be clear: it's not a scheme of grants or loans or concessions. It's simply a committee to discuss topical issues with both a commercial and business element and a foreign policy and national security element.

Senator GALLACHER: Are there any underpinning key performance indicators for this project? How will you measure success?

Mr Newnham : It's to be chaired by the secretary. Measuring success would be difficult—

Senator GALLACHER: It's chaired by Ms Adamson, is it?

Mr Newnham : That's right.

Ms Adamson : That's correct.

Senator GALLACHER: That's probably going to indicate success then, isn't it?

Mr Newnham : Sorry, I missed that.

Ms Adamson : I didn't; it's alright.

Mr Newnham : As yet, we haven't bedded down how we would test that. Of course, it would be in our interest to make sure it's a productive exchange. We've got very senior people involved in these sorts of exchanges, and it's not in our interest that it not be helpful to both policymakers and also the private and commercial sector.

Senator GALLACHER: I accept that there wouldn't be any sort of easily identifiable or writable KPIs for it, but the checks and balances are in place. What do they look like?

Ms Adamson : We're in the process—the budget has only just been brought down—of seeking to develop those. I should perhaps say that we do, naturally enough, quite a lot of business outreach, but, in the process of doing that business outreach, we've discovered there is a very strong demand—a demand that we've not really been able to meet within our existing resources. So we're responding to indications from the business community that they would welcome greater dialogue with us on the interface between business and strategic issues. And we want to be able to do that in the sort of way that the white paper envisaged. But regarding your point about performance indicators and what does success looks like, that is our normal template for our work, and we want to be quite thoughtful about that as we stand this thing up.

Mr Newnham : I will just add, of course we'll be also be very mindful of making sure this is value-add, and not overlapping with other existing mechanisms—and also making sure there's sufficient buy-in from the right parts of government and the right parts of the private sector.

Ms Adamson : We would do it on a whole-of-government basis. It wouldn't just be DFAT; it could include colleagues from other departments and agencies.

Senator GALLACHER: The minister's joint media release on budget night stated that the budget:

… includes a $15 million business engagement package to continue tackling non-tariff barriers on trade, which materially impact on Australian exporters.

But this actually includes more than just non-tariff barriers, doesn't it?

Mr Mina : Perhaps I can talk a little bit to that particular measure. First, to confirm that the package, across its various initiatives, as Mr Wood's already described, does cover—

Senator GALLACHER: This is a political question. We're saying that the minister said it was non-tariff barriers, and that's not entirely correct, because—

Mr Mina : The large part of the funding, if I'm correct—and Mr Wood will correct me if I'm not—does go to the non-tariff—

Senator GALLACHER: That's the next question: what percentage of the $15 million will go directly to non-tariff barriers?

Mr Wood : From the media release, the next sentence says that the package 'will also increase' other things, so it may just be how you read that sentence, or how it appears—

Senator GALLACHER: You're saying I've been selectively quoted to! So, what percentage of the $15 million will go to non-tariff barriers?

Mr Wood : Off the top of my head, just under half—about 40 per cent; 6.6 divided by 15 million, so that's about 40 per cent.

Senator GALLACHER: How many FTEs are now working on non-tariff barriers as a result of this new funding? Is it providing people to work on these issues?

Mr Mina : As the secretary has made clear, we are gearing up these initiatives—the budget has just been brought down—and we will be allocating FTE over time to these initiatives.

Senator GALLACHER: So the answer is zero, at the moment?

Mr Wood : No, the answer is that there are around 19 associated with the whole package. I don't have that broken into the individual components, but there is staffing associated with this measure. We will come back on notice with that information.

Senator GALLACHER: Is the $15 million mentioned in the budget papers for the foreign policy white paper initiatives the same 15 million?

Mr Wood : Correct. It is a subcomponent of the $40.2 million that was announced in Budget Paper No. 2.

Senator GALLACHER: And that went to some of the expansion of the diplomatic—

Mr Wood : Correct—$19.2 million for two new posts and $6 million for an expanded program for engagement with emerging leaders.

Senator GALLACHER: Is the non-tariff barrier strategy mentioned in the white paper?

Mr Mina : The white paper does reference the fact that the government was in the process of working towards a strategy on non-tariff measures, yes.

Senator GALLACHER: Are we able to distil the non-tariff barrier area? Do we know what it looks like? Is it different with every agreement we've got or is there a particular area of interest that we're looking at?

Mr Mina : It's a difficult thing to give absolute precision to. The sort of discussion we've been having just this morning on some of the barriers that one can experience at ports is the sort of issue that will be covered by this initiative.

Senator GALLACHER: But there's no discrete paper that says, 'These are the non-tariff barriers we are experiencing. These are the ones that are most egregious and we need to fix them first.' Is there that level—

Mr Mina : That is going to be, very much, part of our exercise here. It is to find the scope of this particular initiative. To perhaps supplement a response to an earlier question you asked—'Is there nobody working on these issues at the moment?'—of course we have a very significant machinery right across government, across different agencies, working on non-tariff barriers in a variety of ways. This includes the use of our existing FTA and WHO legal machinery and the use of our particular representation at different embassies, as Mr Fletcher illustrated this morning in the case of China, and a range of contacts and fora with business.

All of that machinery will stay in place. What we are doing here is supplementing those resources with additional resources in DFAT to drive whole-of-government coordination and improve the manner in which we track, record and feed back to business some of the outcomes of that work.

Senator PATRICK: I would like to ask some questions in relation to ISDS provisions for trade agreements. Is there any risk, in any of the past treaties we've negotiated—or, indeed, in future treaties—that we could have a situation where a corporation could sue the government for not going ahead with a legislative corporate tax because they have to react to some economic situation or some form of promise not to increase a tax?

Mr Mina : We are very careful to ensure that as we negotiate these treaties the appropriate safeguards are put in place, including our right to regulate in respect of tax policy and other legitimate public policy objectives.

Senator PATRICK: How was that different to, for example, the ISDS matter in respect of plain packaging for tobacco? That went to the High Court and was found to be lawful. It was then litigated in the Hague. Were you of the view, prior to that litigation, that you had that covered off?

Mr Mina : It's clear that there were a number of questions going to jurisdiction of that particular agreement. We asserted our rights in respect to the jurisdiction of the Hong Kong Bilateral Investment Treaty for tobacco. Over time, practice has been evolving in this area. One of the things we have been very careful to do is ensure that as we negotiate new ISDS arrangements—and the government looks at these things on a case-by-case basis—those mechanisms include legitimate public policy exceptions, such as for health or, in specific detail, tobacco. Even tobacco control measures are referenced in the treaty as an area in which government policy-making can continue without application of the ISDS mechanism. That was the case, for instance, with respect to the recently concluded TPP-11 agreement, where we were able to put in a very explicit carve-out for tobacco control measures.

CHAIR: We have 20 minutes left and still have a number of questions. If we could be reasonably snappy with our questions and answers, that would help us get through it the 20 minutes we have left.

Senator PATRICK: Sure. In the instance of Philip Morris, that was never really tested in the context of the exercise of a particular right; it was only tested in terms of technicalities of jurisdiction and involved really what was an abuse of process. Is it possible that that could be re-litigated in another jurisdiction?

Mr Mina : The matter of the tobacco plain packaging measures, which were at issue under the Philip Morris case, under the Hong Kong bilateral case, were litigated and Australia won that litigation. With respect to other fora, it is true that Australia did face a case at the World Trade Organization. That case was also found in our favour. There is, of course, always the potential that it may be appealed.

Senator PATRICK: That went to the substandard issue. The Philip Morris case never went to the substantive issue. The WTO one did—is that correct?

Mr Mina : I'd have to come back to you with further detail on precisely the scope of the case, whether it went beyond the jurisdictional questions, when I consult with the trade lawyers.

Senator PATRICK: In relation to the recent ban on recycled materials going to China—and this was traversed a little bit at the Environment and Communications Committee last week—Australia was notified of their intention to prevent recycled material going into China in 2017. Is that correct?

Mr Mina : That's correct.

Senator PATRICK: Is it our view that there was enough notification for us to react accordingly?

Mr Mina : I won't make a comment on the question of timeliness, but I will say that we took immediate action to raise our concern about the restrictions with Chinese authorities.

Senator PATRICK: I'm mindful of the chair's last comments. Perhaps on notice, could you outline the representations made by the Australian government on the issue and any responses that they may have made? Did Australia at any stage make a written request seeking consultation with China under the mechanisms outlined in article 6.13 5(b) of the China free trade agreement?

Mr Mina : We did raise our concerns, both in Beijing and at the World Trade Organization, and asked for clarity from the Chinese side on whether the measure was in compliance with the WTO and ChAFTA obligations.

Senator PATRICK: That was raised through that particular mechanism?

Mr Mina : Through those two mechanisms.

Senator PATRICK: Fantastic. That will be included in the answer on notice to the previous question?

Mr Mina : Yes.

Senator PATRICK: I'll put the rest on notice.

Senator GALLACHER: I go to TPP-11. How many countries were signatories to the original TPP agreement?

Mr Mina : Twelve.

Senator GALLACHER: Twelve, and it's back to 11. The projected budgetary cost of reducing tariff revenue from the original TPP?

Mr Mina : Senator, I will need to look into our details and perhaps come back to you during the course of—

Senator GALLACHER: I could probably give it to you. Is the answer $195 million over the forward estimates from 2016-17?

Mr Mina : We'll be able to come back to you on that during the session, I imagine.

Senator GALLACHER: You don't have the proposed reduced tariff revenue?

Mr Mina : I'm fairly confident we can obtain that rather quickly but I just don't have it right at hand this moment.

Senator GALLACHER: The United States is a very significant part of the original TPP and if it's not in it, how can you be applying the same savings or reduced tariff revenue?

Mr Mina : Let's look at those figures as they come through. What I will note is that Australia has a free trade agreement with the United States. There is very little impact on the goods and therefore on the customs revenue side of the US's absence from the TPP 11.

Senator GALLACHER: What we are looking for is how much of a difference will the withdrawal of the United States make to those figures? I accept there is a free trade agreement.

Mr Mina : I think the answer to your question is not much, given the fact that we already have a bilateral free trade agreement with the United States.

Senator GALLACHER: If we move to the capability, the five WTO cases, who will handle that?

Mr Mina : I will handle that.

Senator GALLACHER: How many are we currently involved in?

Mr Mina : We are active members of the WTO dispute settlement system. We are therefore involved in a number of cases as a third party—that is, as an active observer. We are also involved as a principal party in two cases at the moment, one leading into consultations with Canada on one and a second one on anti-dumping with Indonesia.

Senator GALLACHER: In the interests of time, on notice, how many cases is Australia currently involved in? How is the action against Canada progressing very specifically? Are you able to elaborate on that at the moment?

Mr Mina : I can elaborate on that question on Canada. We are at an early stage in respect of our consultations with Canada. We held consultations with Canada on 1 March this year, which was the first stage of a WTO dispute settlement process. We hoped that, after hearing our concerns, Canada would move promptly to remove the discriminatory measures which are an issue. Now it is open to us to proceed to establish a WTO panel, which will be the next stage in the dispute settlement process. We have had those consultations and are waiting to hear back from the Canadians.

Senator GALLACHER: How many cases is the Australian government actively considered initiating and in what industries? Have you had discussions with those industries? With whom have you had discussions about it? Can we get a picture of how many you are currently involved in, and how Canada is going? What are you looking at into the future?

Mr Mina : I can answer now. For Canada, as I mentioned, we are waiting for the response to those consultations. With respect to the other questions you raised, we are always looking at and discussing with industry how we might be able to use WTO rules. This is an important part of the government's commitment in the white paper—that Australian business will be able to continue to benefit from the robust application of WTO rules—so we will keep that under constant review.

Senator GALLACHER: If we can have on notice just what work you are doing, and progress in that area. What budgetary allocation is given to the WTO action? Do you have an annual budget for the running of cases?

Mr Mina : We do have a disputes budget. My division is resourced on a regular basis, and I can give you those figures. It is around about $1.1 million for travel and administrative resources, including for our trade lawyers. There is usually a component which is looked at annually, given the variability of this caseload, for disputes. That's something in the order of $300,000 to $400,000 depending on the variability of the disputes load.

Senator GALLACHER: How many FTEs work on WTO cases in the department?

Mr Mina : We have a trade law branch which addresses the priorities in my division relating to the multilateral system but also in Ms Witbreuk's division in relation to a range of our free trade agreement discussions. Those trade lawyers not only look at the enforcement of the existing law but also advise on future trade agreements. In that group, which is a very hardworking group of talented lawyers, there are around 18 FTE at the moment.

Senator GALLACHER: We accept that the government has initiated proactively that you're going to be doing this work. The question is: do you have sufficient funding at the moment to carry out the work that you've got underway and the work that you see coming? Are you sufficiently resourced as we speak?

Mr Mina : I think we were advised yesterday, weren't we, Secretary, that the answer to that is never no! But the point I would make is: we are constantly looking at the priorities that face Australian businesses. There is also this question that relates to the negotiation of future FTAs, which is a very active agenda, as Ms Witbreuk has already mentioned, and these lawyers are working very hard on that, and we can meet our current needs on both fronts.

Senator GALLACHER: Has DFAT asked the minister to provide more funding for WTO matters?

Mr Mina : These would be matters relating to the department's allocation of resources. As we do every cycle of budgetary discussion, my own discussion with the secretary and senior executives, we review these matters on a regular basis.

Senator GALLACHER: So the sugar industry has been lobbying for WTO action—that's correct?

Mr Mina : The sugar industry has certainly been clear on a number of interests it has, including in South Asia at the moment, where the assertion of our WTO rights is an important priority. We've been working with the sugar industry to examine how certain actions that they've been concerned about may relate to WTO law and WTO rules.

Senator GALLACHER: Is it wrong to characterise their position as being that they've been told that there are not sufficient resources to carry out what they want?

Mr Mina : I'm not going to speak for the sugar industry.

Senator GALLACHER: If you were asked to do a WTO case for the sugar industry, would you have the resources to do it?

Mr Mina : I am confident that, as the government directs our agency to handle our interests in the WTO system, appropriate resources would be made available. That's a responsibility for me and the senior executive of the department—to work through those resourcing questions and make sure we have the appropriate resources as necessary.

Senator GALLACHER: I want to go to Australian steel in the US now. What tariffs are currently applied to Australian steel exported to the United States?

Mr Mina : As I mentioned earlier, we have a free trade agreement with the United States, and the tariffs in relation to—

Senator GALLACHER: We've got a free trade agreement with Japan, but there's still a 30 per cent tax on beef.

Mr Mina : The tariff in relation to steel is zero.

Senator GALLACHER: So there are no tariffs. What tariffs were potentially going to be placed?

Mr Mina : The president made clear in his proclamations in March that he was contemplating 25 per cent tariffs on steel and 10 per cent tariffs on aluminium as part of the so-called 232 measures under the US trade act of 1962.

Senator GALLACHER: We got an exemption from that?

Mr Mina : That's right.

Senator GALLACHER: Is that a written exemption?

Mr Mina : There were a series of proclamations, including in March and then 30 April and then, I understand, most recently overnight, yes.

Senator GALLACHER: Is that in a form that says that Australian steel is exempt, or is it just by way of proclamation, I think you said?

Mr Mina : The proclamation covers, as I mentioned earlier, the President's trade actions—

Senator GALLACHER: Is that something the President signs?

Mr Mina : Indeed—in relation to steel and aluminium that were undertaken pursuant to the Department of Commerce investigations made into the question of the steel and aluminium industries in the United States. Yes, the President did sign proclamations in March and then, most recently, as I say, 30 April and then again overnight, clarifying the application of those measures.

Senator GALLACHER: I've never seen a proclamation, but does it say that Australia doesn't have to pay 25 per cent?

Mr Mina : It refers to a range of different countries and it explains the treatment of those countries under the proclamation.

Senator GALLACHER: How many countries are in these proclamations that are receiving an exemption?

Mr Mina : In relation to the question of exemptions, we know that Australia, Argentina, Brazil and South Korea were all given exemptions from tariffs.

Senator GALLACHER: Excellent. How does it work? Is it permanent or is it just in place until the next proclamation?

Mr Mina : These things are being kept under review constantly by the US government, and I imagine there will be further discussions. It's clear that this is an issue of some concern to the Department of Commerce, and they'll continue to keep the matter under review.

Senator GALLACHER: So we basically have zero by way of a presidential proclamation, and that continues until it's replaced with another proclamation?

Mr Mina : That's right. The understanding is that the existing arrangement, the presidential proclamations, will continue.

Senator GALLACHER: How is the exemption communicated to the Australian government?

Mr Mina : We have representations to the United States government and back to the Australian government at a variety of levels.

Senator GALLACHER: How did you first find out about it—that we were okay?

Mr Mina : I think it's on the public record that the Prime Minister and trade minister have been very clear on this matter. On 1 May, the Prime Minister and trade minister issued a press release indicating their satisfaction with the arrangements.

Senator GALLACHER: So the US department or government communicated directly with the minister or the Prime Minister? Is that what you're saying?

Mr Mina : On the question of direct contact with ministers and the Prime Minister, I'd refer to the early discussions between Prime Minister Turnbull and the President on 10 March. There were some tweets where both the President and the Prime Minister made clear their satisfaction about the arrangements. As I say, on 1 May, Prime Minister Turnbull and Minister Ciobo issued a press statement indicating they welcomed the confirmation from the President of the arrangement.

Senator GALLACHER: Is the exemption dependent on any other action by the Australian government?

Mr Mina : We have been conscious that the US is seeking to prevent transhipment and other actions which would lead to exempted countries significantly increasing their exports to the United States. We're in continued discussion with the United States on this point. We can understand the concern they have, of course, and we are cooperating with the relevant authorities.

Senator GALLACHER: So the exemption, I think you've confirmed, will continue until it's rescinded, but there's no history of these things being rescinded, is there? How does that work? Is it permanent, for all intents and purposes?

Mr Mina : I think the point I'd make is that these are extensions of existing arrangements. We have no reason to believe there would be any change to those arrangements.

Senator GALLACHER: So we've had zero tariffs and we've now got an exemption so we're continuing as we were before. There doesn't appear to be anything that we have to do to maintain our status, other than the matters you spoke about, as to using the exemption to gain better access or bigger access?

Mr Mina : The point I was making earlier is that there is of course some concern on the part of the US administration in relation to transhipment of steel through exempted countries and, therefore, circumvention of arrangements they have with other countries. I will just quote the Prime Minister and the Minister for Trade, Tourism and Investment's comment from 1 May:

Australia knows where our steel comes from and where it goes, and will continue working with the US and our other trading partners to prevent practices such as dumping and transhipment.

Senator GALLACHER: That would be the only circumstance that you're aware of that would precipitate the agreement being rescinded—if we were to not comply with that?

Mr Mina : I know that the government has a very strong commitment to fulfilling those comments made in that press statement relating to transhipment.

Senator GALLACHER: The only obvious way we could have this rescinded is to breach that—which we wouldn't do. But if it were breached—

Mr Mina : Obviously we're not going to get into hypotheticals, but we certainly have a very firm intention to give effect to that undertaking.

CHAIR: Senator Gallacher—

Senator GALLACHER: We can move an extension until 11 o'clock tonight, if you like.

CHAIR: Absolutely, if you want to, but—

Senator GALLACHER: I've still got another 40 seconds, but you just stole 10 seconds off me, and I'm on my last question.

CHAIR: Senator Gallacher, goodness me! You've got five seconds.

Senator GALLACHER: Will the exemption be reviewed by the United States at any point?

Mr Mina : I'm not in a position, obviously, to speak for US authorities on this matter. But, as I mentioned earlier, I'm sure it's the case that the US is keeping these matters under constant review.

Senator GALLACHER: Thank you very much.

CHAIR: It being one o'clock, the committee will now break for lunch. We will come back at 1.40 pm. Senator Gallacher, have you finished with the Trade portfolio?

Senator GALLACHER: I was just about to finish when you rudely interrupted me in my last five seconds.

CHAIR: I know, the chairs can be pretty tough, Senator Gallacher. That concludes the committee's examination of the Department of Foreign Affairs and Trade. I thank officials for their attendance here today. At 1.40 the committee will move to its examination of Tourism Australia.

Proceedings suspended from 13 : 00 to 13 : 40