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JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE
07/12/2010
Australia's relationship with the countries of Africa

CHAIR —Welcome. Thank you for your submission and attendance. I understand you have provided us with a hard copy of the publication Risky business, which is also included in your initial submission. Thank you for that. I invite you to make some opening comments and then we will proceed to questions and discussion.

Ms Webb —On behalf of Jubilee Australia, we wish to thank you, Senator Forshaw and members of the committee, for the opportunity to be here today. We also would like to acknowledge the work of the secretariat in facilitating this. We welcome this inquiry and the interest of the Department of Foreign Affairs and Trade in Australia’s relationship with the countries of Africa. Jubilee Australia is committed to addressing the underlying causes of poverty, bringing to light the policies and the structures that keep communities and countries in long-term poverty, and advocating for reform of such policies.

As you would be aware, Africa remains the continent with the most people living in extreme long-term poverty. We acknowledge that the causes of poverty are not simple; nor are the solutions. On a personal note, I know this to be true from experience living in Africa myself and from having undertaken some graduate studies in development through the University of South Africa. I know the complexities of Africa very well. However, in our submission and in our comments today, we are drawing on Jubilee Australia’s work in three key areas. We are the only civil society group which has a dedicated focus on investigating and examining the debt cycle of less developed countries. We are the major watchdog of Australia’s export credit agency, EFIC. In particular, our research work has focused on the role of EFIC in supporting Australian investment in extractive industries in less developed countries. Thirdly, we work with colleagues internationally on issues of global governance, including issues of tax and transparency.

The extractive industry sector is central to both Australia’s current involvement with the countries of Africa and the continent’s potential for future development. Therefore, it is no surprise that the discussion of the extractive industry sector has been a key part of this inquiry, and in making our brief opening remarks I would like to emphasise two points that relate to extractive industries in Africa. The first: resource based development strategies or growth strategies are not a new idea in Africa, yet to date, as you would be aware, they have failed to deliver, for a number of reasons. We believe that the Australian government is well placed to contribute over the next decade to significant improvements in both the governance and the development outcomes of extractive industry investment in the countries of Africa.

The momentum for greater corporate transparency has increased dramatically in recent years. In July this year, following years of campaigning by the Publish What You Pay coalition, and following the political pressure that was generated in the US for greater transparency of the oil and gas industry after the BP disaster, the US Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires US-listed companies operating in the oil and gas and extractive industry to disclose payments to governments on a country-by-country and project-by-project basis. This unprecedented accounting standard is a welcome addition to the Extractive Industries Transparency Initiative, EITI, which was launched in 2002. It will allow financial flows between parent companies and subsidiaries to be monitored and tax avoidance to be detected. It is estimated that developing countries lose revenue worth up to $160 billion per year through trade related tax evasion. This is more than they receive in aid. The new standard will also make it harder to hide corruption and so make host governments more accountable. We believe the Australian government is well placed to support similar legislation to that of the US.

The second point we would like to emphasise is that Australian trade and investment policies designed to make our exporters more competitive in the global marketplace should not come, in our opinion, at the expense of the livelihoods or natural environments of people overseas. Australia’s export credit agency, EFIC, is a little-known government agency yet it is Jubilee Australia’s belief that the activity of the agency in providing financial assistance to secure business for Australian exporters is of public interest. We believe this particularly when the financing relates to large-scale projects in fragile environments, including oil, gas and mining projects with significant social and environmental impacts. Over the last decade 25 per cent of EFIC’s financing has been to support Australian companies investing in the extractive industries projects in less developed countries, including investments in the African countries of Mozambique, Kenya, Zambia, Ghana and Mali. EFIC operates on a statutory basis, either directly or indirectly using public funds to operate its business. We believe EFIC should be more accountable for its financing decisions than it currently is and that it needs to catch up with the global trend toward greater corporate and institutional transparency.

The objective behind our research has culminated in the Risky business report that you have in front of you. It was not only to generate what we believe to be a much-needed public debate about the role of EFIC in supporting oil, gas and mining projects overseas but also to do a case study of the application by EFIC of its environment policy. The policy was adopted in 2000 following significant civil society pressure but EFIC’s compliance with the policy has not been tested until now by civil society or government. The report gives an overview of the operation of EFIC as well as doing a case study of EFIC involvement in two recent projects, one in Papua New Guinea and one in the Solomon Islands.

EFIC seems to be positioning itself to take advantage of the increased investment by Australian companies in the minerals boom in sub-Saharan Africa. We refer to the 2008 Lowy Institute paper Into Africa: how the resource boom is making sub-Saharan Africa more important to Australia, which was written by two economists from the export credit agency. We also note that in the last financial year EFIC provided a new loan to facilitate Australian investment in gold mining activities in Ghana and Mali. We draw the committee’s attention to the need for increased government scrutiny of EFIC to ensure its support for our exporters does not come at the cost of social and economic development and environmental protection of the countries of Africa. Thank you. We will do our best to answer any questions that you have and we will also be willing to take questions on notice if necessary.

CHAIR —I might start with a couple of questions. In the publication Risky business, at page 10, there are a few paragraphs that go to the crux of the concerns that you are raising. I will read one. It says:

There is greater cause for concern about this lack of transparency when it is revealed that ECA-backed transactions—

ECA being the export credit agency—

have often been implicated in corruption. A 1999 report by Transparency International suggested that export credit agency behaviour was ‘close to complicity with a criminal offence.’

Then there is a reference to a British based NGO and a quote from them. There is also a further paragraph:

Thus many argue that ECAs contracting with dictatorial regimes have been responsible for much of the world’s odious or illegitimate debt.

We have had submissions in earlier hearings raising on the one hand the concerns about increased exploration and mining activity in Africa and the involvement of Australian companies and issues to do with the nature of some of the regimes. We have had industry say, and no doubt others will come again to say, that they are doing everything they can to ensure that their investments are socially responsible and that they are looking at how they can benefit the local populations with employment, education and so on.

My question is this. You are focusing on EFIC as an agency that gives financial support loans to companies. Do you have any evidence that EFIC’s role is actually leading to the sorts of outcomes that you are concerned about in Africa itself? It is one thing to say that there is a broader problem with export credit agency type financing, but is there any hard evidence that you can point to that would suggest that EFIC’s role is one that should be seriously questioned or questioned at all?

Ms Webb —First I will address your earlier comment that this part of the report that you referred to is the crux of the argument. I should note that, although this is very important to our work and we are strongly interested in what is presented here, I would not make the reflection that this is the crux of the Risky business report, which does not look so much at the accumulation of debt caused by export credit financing but rather at the impact of projects which are financed by export credit agencies and, in particular, EFIC.

I would also make the comment that in the report we refer to previous accusations of export credit agencies being implicated in corruption. We should note that, thanks to civil society pressure, there has been reform and improvement in anti-bribery policies and anticorruption measures taken by both business and government agencies, including export credit agencies and EFIC. So we would no longer make these statements about the current activities of EFIC, although we think that these statements stand for past activities. Our concern stems from the fact that countries including Indonesia are still repaying debt from a period when EFIC was without adequate safeguards against corruption and bribery.

On your point about the role of EFIC in particular in projects in Africa, as you will note, the report has detailed case studies about projects in the Pacific region. We have not undertaken to that depth research into EFIC supported projects in the countries of Africa. We are concerned about EFIC’s willingness to adequately apply a due diligence process to its financing decisions. Our opinion is that that impacts on projects wherever they be; whatever region in the world they might be in. We note that very recently EFIC supported through loan finance an Australian investor to do underground mining at two gold mines in West Africa, in Ghana and Mali. One of these mines in particular is extremely notorious for both environmental impact problems and inadequate compensation for 10,000 subsistence farmers who were moved from their land.

Mr FITZGIBBON —Is that Barminco?

Ms Webb —That is the Ahafo gold mine in Ghana.

Mr FITZGIBBON —I think that the Australian company is Barminco.

Ms Webb —No.

CHAIR —It would be good to let the witness answer the question rather than you suggesting what the answer might be. I was about to ask but I did not want to interrupt the witness. Rather than just saying a company, unless there is a difficulty, which you can raise with us, it would be preferably to name the company rather than just make the allegation.

Ms Webb —Not at all. I would note that we are not making any allegation against this company, but simply pointing out the role of EFIC.

CHAIR —What you are saying to us is that a company has been funded by EFIC—

Ms Webb —Yes. That would be the—

CHAIR —in a region where there is—

Ms Webb —It is African Underground Mining Services. We would consider it important to visit the site to do adequate research of the kind that you were referring to. But we have concerns about the disclosure of EFIC of its involvement in this project and EFIC’s reliance on the risk assessment undertaken by the World Bank’s private lending arm, the IFC. We think that they should have done their own risk assessment before providing finance for this project.

CHAIR —When you say that you are concerned about the disclosure, I am having a little bit of difficulty here. You have the information or the information is readily available that EFIC has made this investment.

Ms Webb —No. In fact, with this particular investment the loan was approved in the last financial year. A media release was only put on EFIC’s website in August of this year. Until then, we were not aware at all that they were considering providing this finance. If we had been aware, we would have, as per our normal practice, made a submission. We would have contacted local groups about concerns that they might have had about EFIC involvement in this project. We would have submitted to EFIC our views about what they needed to be aware of moving forward.

CHAIR —EFIC are going to appear later. To your knowledge, what is the extent of EFIC’s investment in mining and extraction industries in Africa? Do you have a figure?

Ms Webb —It varies from year to year, obviously, depending on the projects that they finance. It can be very large. For example, in 2006-07, 85 per cent of EFIC’s financing went to support extractive industry projects in Africa.

CHAIR —Is that figure of 85 per cent in your submission?

Ms Webb —That is right. It is in the Risky business report. We have documented every EFIC involvement in extractive industry projects for the last three decades.

Mr FITZGIBBON —I think it is important that we drill down into this, if you will excuse the pun. We do have EFIC coming later today and it is really important to understand exactly what you are asking for. I understand that the loan facility for the African underground mining project that you mentioned was about $30 million, which is a substantial amount of money. You raised concerns about safety in that part of the world. Are you saying that we should not be assisting investment in projects where there might be safety risks for local indigenous employees?

Ms Webb —Safety is certainly one area of concern but, more broadly, we are not wanting to put a halt to all supportive or extractive industry projects. We simply want to see more rigorous safeguards put in place to ensure that, when we do provide financing support, the decisions that the government agency is making are the right decisions for the host countries and the host region.

Mr FITZGIBBON —I am sorry, I have not read the summary report that you brought along. Are you making the point that we should not be assisting investment where there might be leakage in taxes or some form of corruption involved in that particular project? Was that your main point?

Ms Webb —Again, I would not say that we are calling for a halt to all assistance. We are saying there are measures that the Australian government can take to address the leakage, as you say, from tax evasion and to improve the transparency of our companies who are investing as well as the transparency from the side of the budget processes of the host government.

Mr FITZGIBBON —Are you advocating only for more transparency, or are you also advocating a Norway oil fund type arrangement where the company has a list of certain principles—for example, they will not invest oil fund money into cigarette companies? Are you advocating that EFIC have a list of principles to ensure that it does not invest in areas where you think they should not?

Ms Webb —We are engaged in an ongoing discussion with EFIC regarding their environment policy, which includes any limitations to their investment. Certainly we would like to see that process become more rigorous and more accountable to the public.

Mr FITZGIBBON —Thank you.

Dr JENSEN —By way of background, I spent the first 19 years of my life in South Africa so I am quite aware of the problems in Africa. I have a couple of questions in relation to EFIC. You mentioned the figure of 85 per cent; what quantum of money is that, rather than just a percentage?

Ms Webb —It is probably easiest to refer you to the Risky business report, in which there is a detailed table that outlines every transaction and the amounts. I could do a calculation for you now.

Dr JENSEN —No, that is fine. If I were to give you a blank sheet of paper, what processes would you look at putting in place to get the results from EFIC that you would want?

Ms Webb —That is a good question. We would refer to the specific recommendations in our submission, and they fall within a number of broad themes.

Dr JENSEN —If I asked you for just one, the major process that you would change within EFIC to get a better result as far as Jubilee is concerned, what would it be?

Ms Webb —We believe key to that is increased disclosure and transparency of the export credit agency. That would be translated into a number of specific recommendations but, broadly, disclosure and transparency is our key concern. We believe, as research in various capacities around the world supports, transparency has the potential to unlock many other problems that occur further down the line.

CHAIR —I note that in your recommendations you refer to the US legislation, the Dodd-Frank Act. There is also that latest one you mention. You made a reference in your opening statement, which I think is also in your submission, about the recent—

Ms Webb —That would be the same piece of legislation.

CHAIR —So it is the same piece of legislation, following the BP disaster. We will go to Ms Parke.

Ms PARKE —This follows on from Dr Jensen’s question. You have commented in your report, at page 14, that various EFIC documents are exempt from freedom of information and that EFIC is ‘one of the most underscrutinised and least accessible statutory corporations in Australia’. You conclude that there are ‘serious questions about EFIC’s accountability to Australians and to citizens in developing countries, in particular with regard to the protection of human rights, and environmental and social safeguards’. Do you have examples of situations where information is withheld which would otherwise be released by other organisations? You have suggested, for example, that EFIC publish summaries of the minutes of its board of directors and summaries of its risk assessments for category-A projects. Are there other organisations that would provide that information?

Ms Webb —Yes. To answer the last part of your question, yes, there are. The US export credit agency, Ex-Im, publishes summaries of its board minutes dating back to 1998. EFIC is still refusing to do this. In regard to publishing summaries of risk assessments, the Japanese export credit agency, JBIC, complies with this practice and it assists civil society groups and affected communities in understanding more thoroughly the financing decisions of the export credit agency.

In regard to the first part of your question, in 2007 Jubilee Australia began a freedom of information process whereby we were trying to obtain details from EFIC of debt which was still being collected from Indonesia resulting from loans made under the Development Import Finance Facility scheme, which ran throughout the eighties and on until 1996. As of 2009, 97 per cent of the debt that Indonesia still owed Australia had resulted from this DIFF scheme. We had serious questions about the legitimacy of still collecting debt that had resulted from a scheme which had been subsequently discontinued and had been highly contentious in terms of its compromising of the Australian aid program with commercial interests and so on. There was also evidence that, very dubiously, one of the most notably corrupt men and one of the richest men in Indonesia was the head of the subsidiary at the Indonesian end of the deals. We were unsuccessful. We made a number of freedom of information requests to try to extract information from different parts of the export credit agency and its operation. We were unsuccessful. We took that to the Administrative Appeals Tribunal. We got to the point of receiving evidence from EFIC before we were to go to a hearing. As you might understand, we are a tiny NGO. We were swamped with documents and our legal representation decided that it was just too burdensome to proceed. But we believe we had demonstrated our point, which was that it is virtually, if not, impossible to get information about past loans of the export credit agency.

Ms PARKE —Do you think that with the new FOI legislation in place it would be easier now to get the information?

Ms Webb —Unfortunately not, because EFIC is one of the agencies that is exempt under the freedom of information legislation. Anything done by EFIC under parts 4 and 5 of the EFIC Act is exempt.

Ms PARKE —You have drawn attention to a recent bill presented to the Canadian parliament whereby Canadian mining, oil and gas corporations operating in developing countries which receive support from the Canadian government were to be held accountable to international, environmental and human rights standards. You said that the bill was dismissed by an extremely close margin of votes. Do you know what that margin was?

Ms Penman —The margin was less than 20, I believe, but we would have to take that question on notice.

Ms PARKE —Do you know what sanctions were envisaged for those companies that failed the accountability test?

Ms Penman —Basically, the bill outlines a complaints mechanism involving ministerial oversight. The bill’s purpose is to ensure that Canadian corporations engaged in mining, oil or gas activities and receiving support from the Canadian government act in a manner consistent with international environmental best practice. The sanctions envisioned arise from the complaints mechanism that would adjudicate claims from Canadian citizens or citizens abroad, and it was proposed that it function entirely within the Canadian domestic jurisdiction.

To answer your question, the sanctions envisioned would basically be in the form of withholding financial support and as a result of Canadian corporations not complying with the guidelines set from the minister—the reviewable guidelines on international human rights and environmental standards. This complaints mechanism would involve Canadian government funding of their export credit agency, Canada Pension Plan and the support and facilitation provided from the Canadian trade commission, our equivalent of Austrade.

It is interesting to note that the C-300 bill actually originated from the very counterpart of this committee, Canada’s standing committee on foreign affairs, which brought out a report on the outcomes and results of Canadian mining in Canada in 2005 and originated a broad roundtable stakeholder engagement process involving Canadian mining companies, non-government organisations and academics. The bill was presented in early 2009. I cannot tell you the exact margin of votes on which it went down. It happened recently, this year. We would have to get you the exact margin. It was extremely close.

Ms PARKE —The UN special representative on sexual exploitation, Margot Wallstrom, visited the part of the Congo where some terrible rapes happened earlier this year. Three hundred women and children, including boys, were raped by militias connected with mining in that area. She recommended that all countries introduce legislation requiring disclosure by companies as to the origin of their minerals. Do you know if any countries have actually done that?

—Yes, that would be comparable to what the US have just initiated in their new legislation, which requires all US listed companies engaged in activities in the oil, gas and mining sector to disclose all payments to governments, such as the DRC government, on a country-by-country and project-by-project basis. This is unprecedented and it will be extremely helpful. We know that the momentum is certainly being carried forward. The European Commission is in a consultation phase about similar legislation. The British parliament is considering similar legislation. A parliamentary motion put forward by the UK Publish What You Pay coalition has so far been signed by 43 members of parliament, and we know that US congress members have been contacted by members from the UK about how to do that. Certainly, the World Bank in their involvement with extractive industry projects are promoting that other countries do the same. We would note the continual emphasis of the G20 on the importance of strengthening tax regimes and improving transparency.

Ms PARKE —I am assuming that you will be suggesting that Australia do the same thing.

Ms Webb —Indeed.

Ms PARKE —Thank you.

Senator TROOD —On the point that you are making about the need for greater transparency and accountability on EFIC will that require changes to the legislation or do you think this is an attitude of culture within the organisation?

Ms Webb —That is a good question. I think the answer is both. It would potentially require amendments to the freedom of information legislation. There is nothing specifically in the EFIC Act which prevents them from proceeding with the type of disclosure that we are asking for. We also believe that it is a cultural shift within export credit agencies. Since 2007 when we have been following their activities they have been, for want of a better term, ‘bunkering down’. They have had a bunkering down kind of mentality. For us this is concerning as obviously their official requirement—

Senator TROOD —Are you making an argument that EFIC is specifically prone to do that kind of thing? Is there a culture within EFIC that is especially resistant to the kind of changes that you are advocating?

Ms Webb —Yes, we would say that.

Senator TROOD —Where do you think that comes from in the organisation? Is it a result of, for example, imperatives of government, is it a result of the attitudes of board members or is it just a practice that has grown up over time? Do you have a view on why this is such a problem for EFIC?

Ms Webb —As you would know EFIC is an interesting agency. It operates on a commercial basis and it also operates a national interest account on behalf of the government. In terms of its commercial account it operates as a commercial bank only that, in doing what it does, it is fulfilling a public policy function. I can only assume that the culture of non-disclosure comes from that commercial side of EFIC’s operation. Export credit agencies in other developed countries are slightly differently formatted. Some of them are entirely government funded whereas EFIC has a slightly different structure, which from our experience tends to lead them to act rather as a commercial bank than as a government statutory authority.

Senator TROOD —Thank you for that. The report refers to what you regard as the ‘resource curse’ in Africa. You allude to the problems in that context of mineral resource extraction and the consequences it has for development across African states and presumably elsewhere. You also make an argument by extension relating to corruption and breakdown of democratic accountability and all the consequences that we are familiar with in some of these states. Do you have any examples of Australian companies, which are active in Africa, that have been complicit in the consequences you are referring to?

Ms Webb —If you do not mind, I would prefer not to answer only because I do have anecdotal evidence but we have not undertaken our own research. It is not exactly our methodology to follow company by company the projects in Africa but rather to follow Australian government policy as it relates to the activities of the companies in Africa. Certainly, I believe that there are companies that are involved in things and there have been reports in the media. Paladin in Malawi, for example, is a well-documented case.

Senator TROOD —So you have your suspicions about Australian companies that are active in Africa?

Ms Penman —Probably on that point we would lend support to Oxfam Australia’s submission and their testimony before this committee in terms of their work looking into Australian mining projects in Africa.

Senator TROOD —Are Australian companies active in those countries where the problem of corruption and the failure of democratic accountability is the most serious? Malawi is a place you have mentioned quite often. In the countries where you regard resource curses as perhaps being the most acute, where the consequences of corruption and the breakdown of democratic accountability are the most serious—those countries of Africa where that phenomena is most evident—are Australian corporate mining interests very active or not?

Ms Webb —I think our emphasis in highlighting the resource curse is not to identify particular countries within Africa where investment is more dangerous, but rather to advocate for changes across the board in the way that our extractive industry companies operate—not only Australian extractive industry companies but also those of other countries. In that regard we would draw your attention to African mining vision, which is a document that was published in February last year. It was an African generated document, written by a joint task force, established by the African Union and a body of the United Nations. The governments involved in drafting that acknowledged that, for a number of reasons, they have failed to benefit as they should have from their mineral wealth. They have identified particular strategies and interventions which will help them to see that the extractive industry projects in their countries translate into future development. A number of those interventions centre on the cooperation of companies from developed countries such as Australia in paying what is due in terms of their tax and also in operating in a transparent manner.

We draw your attention to a recent comment by Paul Collier, who you might know, as author of the book The Bottom Billion. He is about to publish another book called The Plundered Planet. In that he refers to the case of the DRC, in which they have exported $1 billion worth of mineral exports but have received only $37,000 in tax revenue from those exports. These are the sorts of issues that we are trying to highlight, as opposed to the particular activities of one company.

Senator TROOD —Thank you.

Mr RUDDOCK —I am very interested in the issue of transparency to your organisation. I gather you arose out of an international conference in about 2001.

Ms Webb —Not quite. We arose out of the Jubilee 2000 movement, which was an international movement against the Third World debt crisis.

Mr RUDDOCK —So you are part of an international organisation?

Ms Webb —We are not formally part of an international organisation but we are certainly part of an international movement.

Mr RUDDOCK —Where does it come from? What is the genesis of it? What is motivating it and to what extent does it ensure a level playing field in relation to financing? Does it apply to China? Does it apply to eastern Europe? If you are looking at investments in Africa and companies that might be undertaking these sorts of developments, are you playing a role in undermining investments by what might be legitimate commercial organisations that are likely to have high levels of probity and leaving the field for China and a whole lot of other more suspect developments? Or is it an international movement that would ensure that it is a level playing field, that it is transparent and fair?

Ms Webb —With respect, we would not describe what we are doing as undermining the activities of companies. Far from it, we believe that—

Mr RUDDOCK —It may limit the amount of finance they are able to raise.

CHAIR —Mr Ruddock, allow the witness to answer the question, please.

Ms Webb —We believe that the reforms we are advocating would be mutually beneficial, and we are supported in our opinion by the World Bank, by international organisations such as United Nations bodies, and by the G20 in their recent statements on tax and transparency. We understand your concern about creating a level playing field. That is why we believe that these reforms need to happen across the board. We note that just last month the managing director of the World Bank was addressing Chinese investors at the China mining conference and made statements very similar to the ones that we are making here today in terms of helping Chinese investors to play a mutually beneficial role in the development of Africa. We are not involved in advocating to the Chinese government about the way they should regulate their extractive industry companies.

Mr RUDDOCK —Who is? I am deadly serious.

Ms Webb —Clearly the managing director of the World Bank is involved in doing that.

Mr RUDDOCK —On the issue of transparency, who is it that is behind your organisation that is essentially press-ganging Australia, the United States, Britain—which are the only countries you actually spoke about—rather than looking at how you ensure a genuinely transparent international approach that would deal with all sources of funding?

Ms Webb —Certainly we work with international colleagues—for example, the Tax Justice Network, which is an international network which is advocating for reforms at the G20 level. Obviously we cannot just go and appear before the United Nations, which is the most representative international body to advocate for what we believe to be the way forward; but certainly we operate with the full knowledge and insight from our colleagues internationally who are advocating on this basis. I would reiterate the point that I made before, that we are in no way attempting to undermine the activities of Australian companies, but we do believe that there is more that can be done by Australian companies, Chinese companies, Canadian companies and US companies. These are the major investors in the extractive industry sector in Africa. There can be more done to improve the outcomes for the people in the countries of Africa.

Mr RUDDOCK —Are you part of an international movement? Is there a Jubilee International?

Ms Webb —There are Jubilee movements in about 40 other countries. There are regional movements of Jubilee, including Jubilee South Asia-Pacific, Jubilee South Latin America and Jubilee South Africa. We are in close consultation with those groups.

Mr RUDDOCK —Where does the funding support come from? I see here in your report that Oxfam and some of the clerical organisations here in Australia funded your particular report, but internationally what is the genesis of the financial backing for such a large international movement?

Ms Webb —Each organisation finds its own funding, so I would not be able to answer for any other organisation except for our own. There is a great movement toward greater corporate transparency, and I think you will find that there is significant funding available for—

Mr RUDDOCK —But I am interested in transparency in relation to your organisation.

Ms Webb —I am not sure exactly what you asking.

Mr RUDDOCK —I know nothing of it. I hear you today and I have read the material you have submitted. I looked for the sources of funding and I found something in relation to a published report. I know little about your organisation. Maybe you have an annual report. Maybe you could give me something about the international organisation, the 40 bodies that make up Jubilee International, and its sources of support—where the funding is coming from.

Ms Webb —As I mentioned before, it is not an international organisation. We have no formal ties to each other and certainly no financial ties to each other. So I can only speak for the funding sources of Jubilee Australia. At least 40 per cent is from individual Australians and the other proportion of it is from other NGOs in Australia and faith based groups. We have also received some funding from international organisations working on transparency.

CHAIR —You have a website, I presume.

Ms Webb —Yes, we do.

CHAIR —If there is any further information you can send to the committee about Jubilee Australia—for example, its membership, structure, funding et cetera—that would be helpful. As I understand it, you are appearing for Jubilee Australia; you are not appearing for Jubilee International.

Ms Webb —No; certainly not.

Senator IAN MACDONALD —I have two questions and I will ask them both at once. If you are suggesting that EFIC should only help invest in those countries that are not corrupt and that meet, for example, Greenpeace’s environmental rules, would you accept that there would be no investment from Australian companies in any part of Africa at all? That is the first question for you to comment on. If you agree with my proposition, is it better for EFIC to support investment, which may do some good, even though it may be going to countries that work as if corruption were the norm and for whom, by and large—I am not being accusative—environmental issues are very much secondary to poverty and simply staying alive and dealing with hunger and famine? Is it better for EFIC to support those and to invest something and hopefully create some jobs and over time get a better future for some of the people there?

Ms Webb —I am unfamiliar with the Greenpeace document, so I would not be able to comment.

Senator IAN MACDONALD —I only use that as an example of extreme environmental concerns. I am not an expert on Africa, but I suspect that their environmental record is not—

CHAIR —We are not—

Senator IAN MACDONALD —Sorry, that was just terminology. I will rephrase it. If you want EFIC to only support investment into countries that are not corrupt and that have a good environmental record, would you concede that there would be no investment into Africa? That is the first question. If so, what is better: putting some investment into countries that are corrupt and do not have good environmental records or is it better to just withdraw Australian investment altogether?

Ms Webb —To answer your question fairly simply, I think we would state that we do not believe that any investment is good investment. We think the history of extractive projects in Africa demonstrate that. It is not our intention to place boundaries on which countries EFIC should and should not deal with. Again, I reiterate that our emphasis is more on the process that they follow in making those financing decisions on a project by project basis and that they themselves would be making decisions that do not compromise the environmental, economic or social development of the countries in which they are investing.

Senator IAN MACDONALD —This is pretty broad but any investment anywhere in Africa is hardly likely to be without inducements and the environmental record of Africa as a whole is not, I would think, a patch on Australia, for example. Are you suggesting that EFIC should perhaps be looking for investment in other countries where there is not any corruption or hint of it and where the environmental record is pretty good?

Ms Webb —No, I would not say that we are suggesting that.

Ms Penman —In terms of the standards we are advocating that should be upheld, they are very much standards that have been agreed by the OECD, the OECD common approaches and the International Finance Corporation. We are asking for due diligence on standards held by a number of nations. On trade and the environment in Africa, a large number of African nations have signed up to the Extractive Industries Transparency Initiative. So a road is being marked out to improve the investment climate in Africa. We do believe that this is widely held and there are possibilities for investment and important possibilities of course for investment by Australian companies. However, we do recognise the risky context as recognised by EFIC senior economist Ben Ford, who basically said that it remains extremely risky to invest there, especially in some countries in western Africa. We bring these concerns to the committee to see how the Australian government can have a stronger role in looking at our responsibility there.

Mr MURPHY —How do you think EFIC measures up against the performance of export credit agencies of other countries?

Ms Webb —We are encouraged by the willingness of EFIC to consult with civil society on its environment policy. In some areas, EFIC may be doing as well as other export credit agencies and in other areas not as well. We also make the distinction between the policies of export credit agencies and the practice. EFIC may not have been involved in such large-scale projects in the past as other export credit agencies have. Certainly the way we engage with EFIC in discussing improvements with them is to bring to their attention what other export credit agencies around the world are doing and what the global trends are for corporate and institutional transparency, international standards of environmental and social risk assessment and so on.

Mr FITZGIBBON —We have talked about transparency and given EFIC’s statutory status and its accountability to the minister, I would have thought that through the minister and other democratic process you would have no shortage of capacity to tackle the hard questions. Members of parliament have from time to time agreed to put questions on the Notice Paper that are guided by outside interests, and there is the Senate estimates process. The secretary of DFAT sits on the board and who of course appears before the Senate estimates. In the past, have you pursued any of these concerns through those processes and what results if any have you had?

Ms Webb —All of the above. We have obtained the information that we have largely through those processes.

Mr RUDDOCK —Do you think there is any place for commercial in confidence?

Ms Webb —Certainly, we do, and we respect the right of companies to hold certain information that affects their competitive status as confidential, but we believe there should be a reasonable balance with the public interest like there is in other capacities and in other government agencies.

CHAIR —Thank you very much for your appearance this morning and for your evidence and submission. If you could take on notice that it would be helpful for the committee if you could send us some background material on the structure and form of Jubilee Australia. We will search the website, but it would be particularly helpful for Mr Ruddock.

Mr RUDDOCK —And its international interests.

Ms Penman —We also have the question from Ms Parke regarding the marginal votes in Canada. I would just like to note that that piece of legislation was very much seen as an opportunity for the mining industry to be a competitive leader. I will just leave it at that.

CHAIR —Thank you very much.

Proceedings suspended from 10.30 am to 10.44 am