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Friday, 5 May 1989
Page: 1889


Senator RICHARDSON (Minister for the Arts, Sport, the Environment, Tourism and Territories)(9.55) —in reply-In looking at the contributions this morning, it is pleasing to note that Opposition and Australian Democrat senators support the Bill. I would like to answer a number of the points made, in particular those made by Senator Boswell.

Senator Sanders referred to the Australian Capital Territory election, to the d'Hondt system and to his faith in the Hare-Clark system. It has always been my experience in politics to expect people to support systems which have elected them. The Hare-Clark system has not been unkind to Senator Sanders in the past. I can understand why he would wish to see that system spread, particularly now that he is seeking new directions in his career in territories very close to this Parliament. We have seen a reference to a parliamentary committee on the Australian Capital Territory election. Like other senators I anxiously await the results of that committee's deliberations.

I turn now to Senator Boswell and his reference to the Christmas Island mining proposal. In a question in the Senate only a few days ago I was asked by Senator Boswell whether or not an unsuccessful tenderer offered 30 per cent more, I think, in royalties than did the successful tenderer so that returns to the Commonwealth were not being maximised. I forget the words of the honourable senator's question, but it was along those lines. Today the honourable senator has said something similar. Let me go into some detail of these matters and what has been supplied to me. I will not comment on the court case, on who did what to whom. Given that there will be an appeal shortly, those matters are sub judice and I do not wish to canvass them now. I will do so at a later time if the honourable senator wishes me to. Given his interest in the matter, I think it would be appropriate if I went through the details.

The proposal accepted by the Commonwealth maximises returns to the Commonwealth, both through net payments for assets and for royalties. Tenders for the privatisation of the Phosphate Mining Corporation of Christmas Island were assessed by the liquidator of the Corporation, Mr Yeomans, a chartered accountant and professional liquidator with the Duesburys organisation. Mr Yeomans recommended that the Minister give him approval in principle to negotiate with Elders Resources Ltd for the recommencement of mining. He also recommended that if, for any reason, negotiations were not satisfactorily concluded with Elders, they could be instituted with Mr John Booth, who submitted a tender on behalf of a consortium. There was also a third tenderer, Century Metals and Mining, again a consortium with some other interests.


Senator Boswell —And Islanders.


Senator RICHARDSON —And Islanders, yes. The liquidator noted in his conclusions that the Elders proposal was superior both to Century and Booth in respect of financial resources, production and technical expertise, mainland support bases, research and development and quality of submission. In effect, he concluded that Elders was a major Australian public resources company and that it had the expertise and the back-up to deliver on its tender. That conclusion was consistent with the advice of the Attorney-General's Department to which Senator Boswell referred.


Senator Boswell —They also said that Booth was an experienced performer and company.


Senator RICHARDSON —I do not think we are necessarily disputing that. I suppose it is a question of looking at who could best deliver. In the end, one always has to decide on a tender. The advice of the Attorney-General's Department of 12 May 1988, to which Senator Boswell referred, was that the liquidator should not be concerned with viability of proposals except in so far as such matters may have affected the capacity of a potential purchaser to pay the liquidator under proposed arrangements for the sale of the Corporation's assets.

The liquidator in the conclusions to his report also noted that both the Elders and Booth proposals provided for the same net payment to the liquidator for the assets of the Corporation. On the issue of royalties, he concluded the following:

Payment by Elders of royalties of $1.70 per tonne shipped, exceeds the offer contained in the Century proposal and compares favourably with the Booth proposal which, however, does offer slightly higher royalty payments.

But as well as the $1.70 per tonne Elders provided, as spelt out in its tender, there was $1 per tonne to be used for rehabilitation of previously mined areas. That makes the payment of the Commonwealth for future mining equivalent to $2.70 per tonne with some 37 per cent of that being spent on the island's environment. The remainder would be available for capital works and other infrastructure upgrading on the island. The $2.70 per tonne is equivalent to about 6.5 per cent of the current phosphate price. That compares more than favourably with the 5 per cent, which was included in the Booth offer.

In negotiations with Elders it has also been agreed that the $2.70 will be indexed. The liquidator, my Department and the Attorney-General's Department have been negotiating leases and a contract of sale with Elders. Elders, in turn, have been negotiating with the union of Christmas Island workers on the workers' equity participation in the mine as well as on award conditions. I understand that negotiations between the Christmas Island workers and Elders have been proceeding well. Our information is that those negotiations will very shortly be satisfactorily concluded.

The Minister for the Arts and Territories, Mr Holding, will be visiting the island to finalise some of these arrangements and to talk with Christmas Island workers. I think that process will occur within the next couple of weeks. When one takes into account not just the $1.70 per tonne but the extra dollar, then I think one would have to conclude that returns to the Commonwealth have been maximised. As I said in the Senate the other day in my answer to Senator Boswell's question, we saw no reason to regret the decision that Mr Yeomans had made some time ago. I have not changed my mind since I answered Senator Boswell's question a couple of days ago. I hope what I have just revealed does something to allay the honourable senator's fears in that respect.

The honourable senator also mentioned the Cocos (Keeling) Islands floating hotel proposal. I agree with the honourable senator that the future of the Cocos (Keeling) Islands will no doubt rest on tourism. We need to ensure that we do all we can to bring about more tourist activity there. Naturally enough, given the environment of the area and its relatively untouched state, we do need to be careful. I do not have a briefing on that issue with me at the moment. I have checked on this matter in the last couple of weeks, and my recollection was that the Commonwealth has asked for some information of the developer of that floating hotel quite some months ago. Up until the last time I checked, we had not received a reply. We are still awaiting information from the developer before we proceed. From memory-I will check and get back to the honourable senator-I believe it is a matter of my making a decision on the environmental impact statement process and how far we want to go along that track. As I said, the Department has asked for more information from the developer before we make a final decision. I commend the Bill to the Senate.

Question resolved in the affirmative.

Bill read a second time.