Title Foreign Affairs, Defence and Trade Legislation Committee
Australian Agency for International Development
Database Estimates Committees
Date 16-02-2012
Committee Name Foreign Affairs, Defence and Trade Legislation Committee
Page 115
Questioner CHAIR
Boyce, Sen Sue
Fawcett, Sen David
Ludlam, Sen Scott
Kroger, Sen Helen
McEwen, Sen Anne
Eggleston, Sen Alan
Rhiannon, Sen Lee
Responder Mr Baxter
Mr Batley
Conroy, Sen Stephen
Mr Brazier
Mr Exell
Mr Gilling
Mr Proctor
Ms Walker
Ms Rauter
Mr McDonald
System Id committees/estimate/7afd22ed-c48e-4bfa-afdd-f0c6c22a0235/0004

Foreign Affairs, Defence and Trade Legislation Committee - 16/02/2012 - Estimates - FOREIGN AFFAIRS AND TRADE PORTFOLIO - Australian Agency for International Development

Australian Agency for International Development

CHAIR: Good evening, everyone. The minister is on his way, but I think we can get started. The committee now will examine the additional estimates for AusAID. 29 March has been set down as the date by which questions on notice should be returned. Senators are asked to provide their written questions on notice to the secretariat by the close of business 22 February. I have already made this statement today, but under standing order 26 the committee must take all evidence in public session. This includes answers to questions on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearing, but if they need assistance the secretariat has copies of the rules. I draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised and which I now incorporate again into Hansard.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to dis-close the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal delib-erations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be re-quired to provide a statement in accordance with paragraph (3).

There are copies available on each table.

Mr Baxter, do you have an opening statement you would like to make?

Mr Baxter : Yes, if I may. It will be brief. Last time I appeared before this committee—October last year—I outlined some of the steps that the agency was taking to implement the government's new aid policy, An effective aid program for Australia: making a real difference—delivering real results, and I wanted to give you a brief update on progress since that time. Of the 38 recommendations that were agreed or agreed in principle by the government, 27 have now been implemented in full and implementation of the remainder is well underway and will be completed by the end of this year. In the aid policy the government announced its intention to issue a transparency charter committing AusAID to providing more information on what we fund and the results we achieve. This has been delivered. On 23 November last year the minister launched the new transparency charter, and on the same day over 150 documents were published on the new transparency pages of AusAID's website.

Those new documents include new thematic strategies covering the main areas of our work, internal administrative audits from four of our bilateral country programs and revamped web information pages for Australia's aid programs in the Philippines and Vanuatu. By the end of this year all AusAID country programs will have new transparency pages and we will also roll out local language versions of those web pages.

Effective aid also committed the government to undertaking an assessment of the effectiveness of our multilateral partners, and we have now done this. An assessment of 42 multilateral agencies was undertaken in the second half of 2011, and the Australian multilateral assessment report is nearing finalisation and is expected to be released publicly in the near future. The outcome of the assessment will inform decision on our core funding for effective multilateral organisations.

The government also committed in Effective aid to preparing a four-year whole-of-government ODA—official development assistance—budget strategy. This is well advanced, and details of the four-year budget strategy will be released in the 2012-13 budget. That strategy will outline the geographic and sectoral distribution of the aid program.

Recommendation 39 of the independent review stated that the scale-up of the aid program to 0.5 per cent of GNI should be subject to the progressive achievement of predetermined hurdles. The review panel outlined a suggested plan of action for the aid program which includes hurdles to be met every year from last financial year through to 2015-16. The hurdles are linked very closely to the implementation of the specific review recommendations agreed or agreed in principle by the government. For example, one hurdle for this financial year is the introduction of a transparency charter. Another is the adoption of a four-year budget strategy; and, as I have said, both have now been completed. As far as I am aware, AusAID will now be the only agency required to report to cabinet annually on the totality of its program, and we will do so for the first time in October this year. All of the aid funding that is spent across government will be assessed in one process by the cabinet.

I can also confirm that all of the hurdles proposed by the independent review panel set down for 2010-11 have been achieved and all of those set down for this financial year are either complete or will be completed by the end of this year. Consistent with the hurdles and recommendation 34 of the review we have developed a three-tier results framework, and this framework will sit alongside the four-year budget strategy. Further details on the framework will be made public as part of the minister's 2012-13 budget statement.

We are also preparing for the first annual consultative forum between AusAID and the business community. We have established a business engagement steering committee made up of representatives from peak business bodies, including the Business Council of Australia, the Australian Industry Group and the Australian Chamber of Commerce and Industry, and that committee met for the first time earlier this month. A new civil society engagement framework is under development and will be completed in the next few months, and a new independent evaluation committee will be established before the end of this financial year.

We have also continued to increase our investment in risk management, fraud prevention and detection and internal audit. We have strengthened AusAID's internal audit committee by appointing two additional external members and an independent chair. We are establishing a dedicated risk and fraud branch which will commence in early March. We have also appointed dedicated risk and fraud officers in countries where the incidences of fraud are highest, including Papua New Guinea and Indonesia. We continue our drive to demonstrate value for money in the implementation of the aid program, and we are on track to meet our commitment to reducing the number of technical advisers by 25 per cent. Of the 257 positions the government agreed to phase out with our partners, 191 have already been phased out. The savings that we are making from these cuts are being reinvested in activities of more benefit to the poor.

I will further update the committee on the implementation of our new aid policy following the release of the budget in early May. Thank you.

CHAIR: Thank you very much, Mr Baxter. I congratulate your agency on the work that you have done on the implementation of the independent review recommendations. I commend you for the improved technology that is around the gateway and the update to the website. I think it is proving to be a very effective portal, and I receive lots of feedback about how improved that portal has become. I put that on the record.

Mr Baxter : Thank you. We are doing a big website redevelopment program this year.

CHAIR: Great. Senator Boyce has some questions for you.

Senator BOYCE: My questions relate to the TB clinics in the Torres Strait and their transfer to Daru. Is the Daru General Hospital ready to treat all the cases of TB that will present? As you would be aware, today was the last official day of TB clinics on Boigu and Saibai treating Papua New Guinean nationals with TB.

Mr Baxter : Thank you for your interest in this question. Health is a priority sector for Australia under our program with PNG. Excluding HIV and AIDS, we will provide about $76 million to the PNG government this year in assistance with health. We have increased our support to PNG health authorities to strengthen the TB services in Western Province and we have allocated just under $8 million to do that. We have been working since early last year on strengthening the capacity of Western Provincial health authorities to deal with the TB issue. I will ask my colleague Mr Batley to go through in detail the process that we are going through to transition the patients from the clinics in the Torres Strait back to the PNG health authorities.

Mr Batley : As the director general noted, part of our support for the health authorities in Western Province of PNG is the support for these joint TB clinics that have been held over the course of the past few months from July 2011. The most recent clinic was held yesterday and today.

Senator BOYCE: It is not as though those clinics have not gone on for a very long time before that; it is just a different format, isn't it?

Mr Batley : These are joint clinics.

Senator BOYCE: But the clinics have existed. The way of providing the services has changed. That is all, isn't it?

Mr Batley : Yes. It is designed to facilitate the transfer of the patients back to the care of the health authorities in Western Province. We will be doing an assessment with all of those interested parties over the course of the next few days to judge whether further of these joint handover clinics are warranted. We have funding set aside and available for that if that is deemed necessary.

Senator BOYCE: So these would be extra clinics past the date when it has been said this will be the final clinic.

Mr Batley : That is right.

Senator BOYCE: How much money have you put aside for that?

Mr Batley : We have a further $146,000 available.

Senator BOYCE: How many clinics is that for? I know that is probably a fairly blunt measure, but roughly how many clinics does that provide?

Mr Batley : I would have to take that one on notice. I am sorry. But, to elaborate on the points that the director general was making, our support for these joint clinics is really part of a much broader range of support that we are providing to the authorities on the PNG side of the border.

Senator BOYCE: I am particularly interested in Daru and Western Province.

Mr Batley : That includes, in particular, upgrading of Daru hospital.

Senator BOYCE: Has that begun?

Mr Batley : Absolutely. That began last year.

Senator BOYCE: When will it be completed

Mr Batley : Elements of that have already been completed. For instance, last year we funded the construction and equipping of a communications centre to support TB management and TB referrals, including from the Torres Strait. That work was completed in December last year. Construction of an interim TB isolation ward was completed last month, and we expect that to be fully functioning later this month. There were some delays experienced due to difficulty—

Senator BOYCE: Where are those patients going in the interim?

Mr Batley : Those patients are being managed through this cross-border arrangement.

Senator BOYCE: Are they in other wards in Daru? Are they in Thursday Island Hospital? Are they in Cairns?

Mr Batley : I would have to take that on notice.

Senator BOYCE: Thank you. Could you also give me the numbers in each and when those occurred?

Mr Batley : That is right. Further work that we have committed to doing to Daru hospital is to fund a purpose built TB ward to upgrade their facilities. We have been drawing up plans for that ward and expect to release the tender shortly. Construction of that will take place over the course of this year. PNG itself has also earmarked some funds for this as we have.

Senator BOYCE: Had you finished with the resources list?

Mr Batley : No, not quite. We are also providing a new X-ray unit for the radiology department at the Daru hospital and a machine that will provide an accurate diagnosis of TB within a couple of hours.

Mr Baxter : I will add two things. One is to say that we have a commitment that PNG patients will not be handed back to Western Province unless there is established community treatment support in their local area. Between October and December last year, 41 PNG TB patients who were being treated in the Torres Strait have had their management of their TB treatment handed back to the Daru health authorities. I will be going to Daru next week to inspect the work that is being done—the construction of the TB clinic, the specialist isolation ward, the engagement of staff and all of the aspects that Mr Batley has outlined—so I can see for myself the progress.

Senator BOYCE: To come back to that, then, Mr Baxter. Given that we are on the resources side at the moment, is there a functional overhead X-ray unit in the Daru hospital?

Mr Batley : That is what we will be providing. I am not aware of one being there at the moment.

Senator BOYCE: Are there TB patients in the hospital in Daru at the present time?

Mr Batley : I think there are TB patients who are being managed in their communities from the hospital.

Mr Baxter : That is right.

Senator BOYCE: So people who need to be in hospital are where? Western Province people who require hospital treatment because of TB are where?

Mr Batley : They are not all required to remain in the hospital.

Senator BOYCE: I realise that, but some are.

Mr Batley : Our principle is that they are not handed back to PNG from the Torres Strait side unless those arrangements are in place.

Senator BOYCE: Okay. If you are not aware whether there is a functional overhead X-ray unit in the hospital at the moment, could you take that on notice? Could you also tell me how many TB patients have been X-rayed in the hospital in the last two quarters?

I have another question about resources. There was a question on notice last year. We were told that the purchase of a maritime vehicle was imminent. Has that vessel been purchased? It is needed to go to outlying areas in Western Province to ensure that people are following the management regime, is it not?

Mr Batley : That is right.

Senator BOYCE: And treat them.

Mr Batley : Yes. The boat is currently in the final stages of construction. We expect it to be in operation next month. In the interim we are providing funding to enable the hire of boat transport.

Senator BOYCE: Boat transport or maritime based clinics?

Mr Batley : It is not a seaborne clinic. It is a boat that would enable the transfer of patients.

Senator BOYCE: But you have to go see the patient first.

Mr Batley : Yes.

Mr Baxter : This hire boat would allow the Western Province TB doctor who was engaged in September last year and the TB program coordinator to get to those more isolated areas.

Senator BOYCE: Is that Dr Moaki?

Mr Baxter : I do not know his name.

Senator BOYCE: Okay. To come back to your earlier statement: how do you know that people who have been sent back to have their TB managed out of Daru are having it managed? What is the process?

Mr Baxter : It is a very good question. I think it touches on some important issues. As you would be aware, one of the issues with treating TB patients is the requirement that they actually undertake a full course of treatment. We have been working with the World Health Organisation to look at some of the issues that have caused the drug resistant TB problem in particular. The World Health Organisation has advised us that partial treatment has been one of the issues that have contributed to the problem, so we are working to have a community treatment program so that we can monitor TB patients and ensure that they complete a full course of medication. Volunteers across Western Province are being trained to directly observe TB patients taking their daily medications. That will commence next month. We are also increasing community awareness about TB, its symptoms and the importance of completing a full course of treatment. That education program will also commence next month.

Senator BOYCE: But the clinics have officially closed in the Torres Strait?

Mr Baxter : Yes, apart from the joint handover clinics that we have already discussed.

Senator BOYCE: You may be interested to hear that at the last clinics today there were 14 Papua New Guinean nationals with TB presented at Boigu. Nine of those were new cases. At Saibai, out of the 70 Papua New Guinean nationals who presented, 20 were new cases. Does that suggest that people have faith in treatment in Daru?

Mr Baxter : We are going through the process of building the capacity of the Papua New Guinea health authorities to deal with the health problems of their own citizens. I am sure you are aware of how difficult the conditions are in Western Province to bring about rapid improvements. We are making a big investment, as I mentioned: $8 million over the next few years. We think that our allocation of that funding is in accordance with best practice as identified in our discussions with the World Health Organisation. So we do expect to see an improvement in the PNG authorities' capacity to deal with this issue.

Senator BOYCE: This is in terms of the fact that the WHO recommends that they be seen in situ and that their condition be managed in their own country. Has the view ever been put to you that the confidence of Papua New Guinean citizens in treatment at Daru is such that they will continue to come into the Torres Strait whether there is a clinic there or not and possibly try to secretly get to the mainland to get treatment, thereby exposing Australia to far greater risk of the very infectious disease TB?

Mr Baxter : No, it has never been put to me.

Senator BOYCE: Have you had discussions with Queensland Health around the issue of the method that is currently being adopted and whether it is a timely way of dealing with TB?

Mr Baxter : We think the best way to deal with this problem is to build the capacity of the Papua New Guinea health authorities to deal with their own health issues. I understand your question—

Senator BOYCE: I do not think anyone argues with that. It is the timing of the doing of it. I must admit I have asked Customs and Border Protection during this estimates. I have asked the Department of Immigration and Citizenship. I have asked the Department of Health and Ageing. I have asked the Chief Medical Officer. What is the process that is in place so we can be sure those people are being adequately treated there and, therefore, are not likely to come here? I have asked you that question, and the answer from everybody is, 'We haven't got that process in place yet.' You cannot see that perhaps there would be some concerns both in the Torres Strait and in Cairns on this issue?

Mr Baxter : With respect, I run an international development agency. My responsibility is to administer the delivery of the Australian aid program in Papua New Guinea. That is what we are doing. We are providing, as I mentioned, very enhanced assistance to the authorities in Western Province. I understand the issues that you are concerned about. We are playing our part as part of a broader Australian government effort to help deal with this problem.

Senator BOYCE: Thank you. You are quite right. My exasperation on this point is not directed to AusAID but to the Australian government in terms of the timing of this issue.

Can you confirm that no Papua New Guinean patient who previously accessed the TB clinics in the Torres Strait has gone untreated since they have gone back to PNG?

Mr Baxter : I do not have that information with me. I would have to take it on notice and check.

Senator BOYCE: But you could find that information within a day or two?

Mr Baxter : I am not sure. I will be there next week and will be able to tell you on the basis of my first-hand account. I will be very happy to follow up with you after that visit.

Senator BOYCE: I would very much like that, but what I would also like to hear from someone on the Australian side is that we have a system for knowing how well this is working in PNG and, therefore, what the risk is to Australia of this extremely infections and, in most cases, multi-drug-resistant disease.

Mr Baxter : I think that is a very reasonable proposition to put. AusAID monitors all its activities. It evaluates them and, if they are not achieving their objectives, we either reform them or stop them and do something different that produces a better result.

Senator BOYCE: Okay. Is AusAID aware of any Papua New Guinean child dying after travelling to the TSI clinics and seeking treatment and being refused aero evacuation to Thursday Island Hospital and treatment on up to four occasions?

Mr Baxter : No, we are not aware of that at all.

Senator BOYCE: Would you expect to be aware of that if it had occurred?

Mr Baxter : In the Torres Strait?

Senator BOYCE: Yes.

Mr Baxter : No, because our work is in Papua New Guinea, not on the Australian side of the border.

Senator BOYCE: But you have regular meetings with Queensland Health on these issues, don't you?

Mr Baxter : We have meetings with the Department of Health and Ageing and the Queensland authorities, yes, but that is not an issue that is central to our concerns. Again, our concerns are to try to strengthen the capacity of the PNG authorities. The Queensland health authorities and the Commonwealth Department of Health and Ageing discuss this issue, as you know, quite frequently, and we are party to those discussions, but our element of them is what we do on the PNG side of the border.

Senator BOYCE: But if a child were refused treatment on four occasions, that is because of the current policy, is it not? It is the fact that you are being asked to ensure that treatment occurs in PNG and, therefore, stop treatment in Australia that would cause someone to be refused treatment on four occasions.

Mr Baxter : I cannot comment on the particular case, because I am not aware of it, but we do not get information about particular individual cases from the Queensland health authorities. That is not our role—

Senator BOYCE: I realise that, but I am suggesting that there would be a crossover and linkage. One would have thought that it would have been raised.

When did AusAID first become aware of the need—and was a request made to you—to invest in TB services in the South Fly region of PNG?

Mr Baxter : I would have to check on the exact timing, but certainly it was early last year when we made the allocation of funding to start the process of strengthening the capacity of Western Province health authorities to deal with the TB problems in that area.

Senator BOYCE: If you could take that on notice, that would be fine. You mentioned earlier a figure of $146,000 in case you need more handover clinics. Why $146,000? What happens if the $146,000 runs out before the need for the clinics runs out?

Mr Baxter : I had already mentioned, with regard to the latter part of your question, that we will not be transferring any patients back to Western Province without established community treatment support in their local area. That $140,000 is an estimate of what we think it would take to run a couple more clinics. If we need more money to run more clinics then we will do that in consultation with the relevant authorities.

Senator BOYCE: Who are?

Mr Baxter : Who are the Queensland health authorities and the PNG health authorities.

Senator BOYCE: And the Australian government, whose task it should be to ensure that Australia is not subject to the high risk of infectious TB, just wipes its hands, as it has for the last three or four years. That is a comment. I will be quiet now. Thank you.

Senator Conroy: We are a long way past a question.

CHAIR: That is right, but on this same issue Senator Fawcett has a question.

Senator FAWCETT: Yes. For Western Province in particular the Effective aid review recommendations 15 and 16 talk about increasing core funding to NGOs and partnerships. We had a presentation late last year from an NGO that already has a clinic vessel that operates in Western Province. They were seeking funding form AusAID. Are you able to provide any updates on your general approach to partnering with NGOs, specifically with regard to the one in Western Province?

Mr Baxter : I am aware that there is a proposal around by a group that are not necessarily experts in the medical field that have a vessel that may be able to provide some transportation services. But our approach has been to fund the construction of a purpose-built vessel so that mobile clinics can be conducted. So that vessel would have on board the right equipment to do testing and to do treatment in the remote areas because, I am sure you are aware, for people in some parts of Western Province the trip to Daru is a long and arduous one.

The government has more than doubled our funding to NGOs over the last few years and we now have multiyear funding agreements with 10 of the largest NGOs in Australia. We have a very close and very positive relationship with our NGO colleagues and we do provide funding for NGOs in PNG, including in the healthcare sector. For instance, we work with CARE Australia in Papua New Guinea. We also work very closely with the churches in Papua New Guinea to deliver services, particularly in the areas of health and education. I am sure you aware the churches have networks in Papua New Guinea which really are unrivalled by any other organisation including the government. So we use whatever delivery vehicle gets us the best results whether it NGOs, churches or the business community as well. We have had, for instance, textbooks delivered in Papua New Guinea working in cooperation with Exxon Mobil. We try and be as innovative as we can.

Senator FAWCETT: I will come back to the NGO question and funding a bit later because it is slightly off the Western Province topic.

Senator LUDLAM: I am going to shift us to a different part of the world and ask a couple of questions about Burma. We had an exchange earlier in the day with your colleagues in the department and got a sketch of how the political situation has changed over the last six or eight months. Can you tell us whether there has been any material difference in how the changes that are occurring there have affected AusAID's work in the country?

Mr Baxter : I will make some introductory comments and ask my more expert colleagues to answer the detail of your question. The reforms that have been undertaken so far have improved our operational environment, in particular the willingness of some of the more reform minded ministers and their departments to engage directly with us on issues relating to development challenges that Burma faces. We still do not deliver any of our program through the Burmese government. We still rely on multilateral agencies and NGOs for the delivery of our program. But we are certainly looking at what opportunities the reform process might open up for us. As you know, Burma, by a long way, remains the poorest country in South-East Asia so there is no shortage of work to do there. We made a decision about 18 months ago to increase our Burma program to $50 million a year by next year. We are very much on track to do that. We are about $48 million this year. Like everyone else, we are watching to see what happens in the reform process over the coming months and years before making decisions about other investments.

Senator LUDLAM: The funding increase was very welcome and I think very wise. Is it possible to provide a breakdown by region as to where the aid is distributed?

Mr Baxter : I am sure we could do that but we would not have that with us. We have the sectoral breakdown but would be very happy to take that on notice and give you a geographic map of our assistance.

Senator LUDLAM: I suspect most of it still runs in through Rangoon but it would be interesting to know. Are there places that you are able to access now that you could not before? Have you tested those boundaries?

Mr Brazier : As Mr Baxter noted, the operating environment has improved but we have not yet changed the geographic footprint of programs in response to that.

Senator LUDLAM: So, you have not tried to. It is not that you have been blocked or anything. Are there places that you would like to be able to get to that you have not been able to thus far? Is that under consideration?

Mr Brazier : Not yet, Senator.

Senator LUDLAM: Perhaps I will be specific, rather than have you guess what I am on about. There is still a pretty serious humanitarian crisis in Kachin State in the north. I understand that since June of last year at least 60,000 people have fled their homes because of military attacks and ongoing human rights abuses. Aid to those internally displaced persons obviously continues to be restricted by the government and the army. My understanding is that the UN agencies have only had one visit since that conflict blew up again. Is there anything that we are doing to try to increase the flow of aid or access to that part of the world specifically?

Mr Brazier : Yes, as you said, armed conflict resumed in Kachin State in mid-2011 and resulted in the displacement of around 60,000 people in Kachin itself and in Northern Shan State. Insecurity and logistical constraints make it difficult to regularly assess the needs of and to provide assistance to those affected populations. The World Food Program and the humanitarian community believe that insecurity will persist in Kachin over at least the next six months. In recognition of those humanitarian needs Australia provided $200,000 to the World Food Program for emergency food assistance to those affected by the conflict in December last year.

Senator LUDLAM: Is that additional to your regular budget or did that come from that?

Mr Brazier : That is in additional to Australia's contribution of $12.25 million to WFP's broader operations in Burma supporting two million food insecure people.

Senator LUDLAM: Where did that come from, if not from AusAID's regular appropriation for that country?

Mr Brazier : It came from the Burma budget. It is additional to the contribution for WFP, though.

Senator LUDLAM: The answer to my earlier question is that you would not have tried to get in there. You have not tried to work in there directly. You have been working through the WFP instead.

Mr Brazier : Yes, that is right.

Senator LUDLAM: Much of Burma is still off-limits to aid organisations—I might have to channel this question through the minister; I do not know whether I am drifting into politics here—particularly in areas where internally displaced and other extremely vulnerable people are. I am wondering what we have done either at the level that you guys work at or at a diplomatic level to address the ongoing restrictions that are imposed on aid organisations—not just in Kachin, but in the other areas where there have been ongoing conflicts.

Mr Baxter : There is certainly a greater willingness on the part of the Burmese government to engage with organisations such as AusAID, and we are looking for opportunities through that dialogue to encourage the Burmese government to allow greater access to those areas that at the moment and, as you know, for some time have been off limits. There is an element at the moment where a lot of countries are willing to assist Burma but there is limited capacity within the government to actually deal with the enhanced interest of the donor community. We have seen this phenomena occurring in many countries that have opened up relatively quickly, where there is a gold rush of development assistance. If not dealt with correctly it can actually become a problem in and of itself.

Senator LUDLAM: That is happening in Afghanistan at the moment.

Mr Baxter : So we are certainly talking to the Burmese government about how they may be able to be assisted to deal with what is a much enhanced level of interest by donors from the EU and the UK. You have seen the steady stream of visitors to Burma over the last few months, most of whom are offering some enhanced packages of assistance. This is an ongoing issue.

Senator LUDLAM: We are still one of the largest donors.

Mr Baxter : We are the second largest donor.

Senator LUDLAM: Who is the largest?

Mr Baxter : The UK.

Senator LUDLAM: I would like to backtrack to a comment you made earlier about the fact that we are solely in a multilateral capacity there.

Mr Baxter : And with NGOs, I said.

Senator LUDLAM: Yes. In a recent interview the foreign minister did say that Australia was providing bilateral aid to Burma. Are you familiar with that instance? Was that just a misstatement or has there been a policy change?

Mr Baxter : It is bilateral in the sense that it is between Australia and Burma. We have a scholarship program that we have piloted now for one year. We thought very long and hard about resuming a scholarship program in Burma, and we have done so on the basis that we select the successful applicants. We run the whole process. So people apply to the Australian embassy and are selected through a process we run rather than being government nominees. So there are some things that we are doing directly as AusAID, and that is what the minister was referring to.

Senator LUDLAM: Thank you. I will leave it there.

Senator KROGER: Mr Baxter, I listened to your opening statement in relation to the recommendations and you indicated that 27 of 39 recommendations have been implemented. I commend you on that. You touched on this in your opening statement so I just wanted to follow up. Recommendation 39 in relation to the scale-up of the aid program to 0.4 per cent of GNI is subject to the progressive achievement of pre-determined hurdles. You mentioned a couple of those hurdles being—this is just demonstrating that I was actually listening to your opening statement—the transparency charter. Is that correct?

Mr Baxter : Yes. The second was the three-tier results framework, which we have developed, and a four-year budget strategy.

Senator KROGER: It was the four-year budget strategy that I picked up on. How many hurdles—and hurdles is an interesting word—were identified that had to be dealt with in order to scale-up the program? Were there other hurdles?

Mr Baxter : There were. The panel that conducted the independent review made some suggestions about what might be hurdles that AusAID would be required to meet to get our annual appropriation. What they said when they put forward their suggestions was that the detail of those hurdles would obviously be left to government to decide but they hoped that whatever framework was developed to evaluate our performance annually would incorporate some elements or all elements of their suggestions. And we have certainly done that in developing a results framework which is part of our four-year budget strategy. And that, you will understand, is going to be released after the budget process is over, and then I will be able to talk about it in great detail. We have gone beyond the hurdles that were suggested in the independent review report because many of those are administrative or management hurdles. We have also, in our results framework, gone to the heart of the matter, which is what the development impact of our program is, what is the development effectiveness measures that we can apply to see whether we have actually delivered outcomes where we said we would.

Senator KROGER: You have identified other hurdles which you have put together in a consolidated list which you are going to publicly table but not until after the budget.

Mr Baxter : Yes.

Senator KROGER: Why is that?

Mr Baxter : One of the decisions that was made as a result of the government's response to the independent review was that the cabinet would conduct an annual review of all aid spending across government. The results framework will be the measure against which they can conduct that evaluation.

Senator KROGER: Okay. Am I right in assuming that the minister would sign off on all of these recommendations? Do you get ministerial sign-off on this?

Mr Baxter : There are two changes to the process as a result of the government's response to the review that are important to note. The first is that the minister presents a whole-of-government submission on the aid program, for the first time this year. So, whether it is the Federal Police or the Department of Immigration and Citizenship, they are all in the one submission so government can make a judgment about the relative priorities of different areas of spending, and then the minister would take to cabinet the annual review of that spending.

Senator KROGER: You also spoke about the review process and the auditing process. I note that you said that there were going to be an extra two or four independent auditors in the process. I am trying to think of the description you gave that committee.

Mr Baxter : We now have four external members of the agency's audit committee, an independent chair, who is the former deputy ombudsman and deputy auditor-general, and we have three other independent members of our audit committee. I think you will find that it is certainly best practice in terms of the public sector to have so many independent members on your audit committee.

Senator KROGER: Would they conduct their business like auditors in other institutions and randomly audit various programs across the board? Is that the intent?

Mr Baxter : Yes, it is. Last year we appointed a chief auditor as part of strengthening our management capacity. The chief auditor presents the internal audit plan to the audit committee and they approve it or not approve it. They have detailed knowledge of what is going to be examined in what period of time and they make suggestions about areas of risk in the organisation, in our operations, that might be worth examining to ensure that we have the right controls around those risks.

Senator KROGER: Since you have been with us in the AusAID capacity, do you believe there is an increased incidence of fraud being detected? This has been the subject of many estimates hearings.

Mr Baxter : You would be surprised to know I looked at this again today. Over the last decade, the average rate of fraud, in terms of the amount of the program that is under investigation, is .02 of a per cent, so it is very low. The independent panel looked at this issue as a specific part of their terms of reference and they found that AusAID had a serious and systematic approach to fraud control and they found that the incidence of fraud in the program appeared low. So that was an external view of it. That is not to say that we, of course, do not take it extremely seriously. As you know, we work in the most high-risk environments, by definition. The countries we work in are very difficult.

Senator KROGER: By virtue of the size of your budget, even though the percentage of fraud may be deemed very low—

Mr Baxter : It is still a lot of taxpayers' money.

Senator KROGER: Yes. It equates to an lot of money; hence, the concern. There was an article in a paper, which I am sure you are going to be questioned on, in relation to contracts. I think they termed it 'fat cats', in terms of the size of contracts that were being awarded to individual partners. Do you have any observations to make on that?

Mr Baxter : I do. I thought the article was inaccurate.

Senator KROGER: The one I have is the Adelaide Advertiser, but I think I saw it in something else.

Mr Baxter : I think it was generally run in the News Ltd papers. The first thing I would like to say is that, between 2005-06 and last financial year, the amount of the Australian aid program that is delivered through managing contractors has basically halved. We have gone from 42 per cent to about 22 per cent. That is because we are delivering more of our program directly through the government systems of the countries that we are working in. We are working more with NGOs and we are working more with multilaterals. That is a very significant change in the pattern of our business. When we decide to use a managing contractor, we do so because of the capability that they bring to the program and their ability to organise large numbers of experts to deal with particular development issues in the particular countries that we are working with. But they always go through a competitive process which is designed to demonstrate value for money. We have open competitive tendering processes. The number of contractors that are winning business with AusAID has increased from 409 to 2006 to 443 in 2011. Most of those are working on small-scale contracts.

It is true that a relatively small number of large companies win a lot of our business. That is because we need companies that have capability and there are not 100 of them around the world to apply for our business. It is also worth nothing that a lot of the Australian companies that win contracts with AusAID are also implementing the British aid program and increasingly the American aid program because they are good at it and they do good work. We think that the percentage of the program that is implemented by contractors is about right. We comply with all of the Commonwealth procurement guidelines, just like every other public sector agency. We have open and transparent processes. We will continue to look for ways to improve those.

Senator KROGER: One of the other aspects of this that we have dealt with during the last couple of estimates is individual contractors—individuals as opposed to businesses. I recall that we also discussed those who were former AusAID staff who had left AusAID and were then successful in tendering for work as independent contractors. Previously you have advised that it was difficult to identify who some of those people may have been. Have you explored that aspect of it further? Do you think there is a potential abuse there in former employers, who knows from the inside how things operate, leaving and getting a better deal by working as contractors?

Mr Baxter : I am not aware of us engaging any ex-AusAID staff since we had that discussion, which was a couple of estimates ago.

Senator KROGER: Yes, it might have been. It was not the supplementary estimates but the full estimates.

Mr Baxter : We comply with all Commonwealth requirements in terms of the separation periods that are required for people living the public sector and then being re-engaged. There is not any blanket prohibition on ex public servants going and working in the private sector and using their experience as part of their professional responsibilities. It is not an issue that has been drawn to my attention as a particular problem of late.

Senator KROGER: Have you established any guidelines in relations to it?

Mr Baxter : I will ask Mr Exell. We did some work on this about a year ago.

Mr Exell : There are two aspects to this. The first is where ex-employees apply under a bid or tender as part of a large managing contractor and the second is where they apply as individuals. In both those cases, we have guidelines that are set by standards including the APSC around the amount of time that must pass before they can be employed. It is six months or 12 months, depending on the direct interest of their engagement and what they have formally been involved in.

Senator KROGER: Turning to the introduction of your multilateral ratings systems for NGOs, which came out of a recommendation, you were in the process of bringing that in last time and I have heard that you have completed that process.

Mr Baxter : That is right.

Senator KROGER: Have you come up with a similar assessment to that of other countries in terms of your rating system?

Mr Baxter : A better one.

Senator KROGER: Of course.

Mr Baxter : One of the recommendations from the review that the government accepted—and I am paraphrasing—was that we should increase core funding to effective multilateral organisations. To determine their effectiveness, it was recommended that we conduct an assessment. We did that. We applied seven criteria to those multilateral agencies, which cover both their management and the delivery against the mandate that they were set. That is the biggest methodological difference between us and the UK, who conducted a similar exercise about 18 months ago. They did not look at whether or not the multilateral agencies were meeting their mandates. They looked at them more from a management and a development effectiveness perspective, but did not look at the mandates of the individual organisations.

We met with 39 of the 42 organisations directly as part of that process. We appointed a panel of experienced people to conduct the assessment. As I mentioned, it is being finalised at the moment. It will be out shortly. We are committed to annually producing a rating of multilateral agencies.

Senator KROGER: Were those who undertook the assessments officers from within AusAID or were they independent assessors?

Mr Baxter : They were people from outside of AusAID. They were senior ex public servants, along with a consultant from the UK. Unfortunately, she passed away during the process and so we had to replace her with somebody else from Australia.

Senator KROGER: I had the great opportunity to visit a couple of projects that AusAID fund and support in Sri Lanka in December. One of them was the housing reconstruction projects up in the north near Jaffna. Firstly, I want to commend AusAID for the way in which the whole project is structured. If you wanted to put up a project as a great example of working with partners to come up with the most effective outcome, that is one of the most impressive projects I have ever seen. The reason that I thought that was largely because AusAID is firstly providing money to the individual to help them rebuild. Secondly, if they did not have the capacity to do that they are given assistance—whether to source a plumber or a bricklayer or whatever. It is very much directed towards empowering the individual, who would want to get the most of the money given to them. The principle and the way that it is applied is terrific; fantastic. We saw evidence of it working very well on the ground. Is that same approach being applied across the board in a whole number of different areas?

Mr Baxter : Thank you for those comments. I was in northern Sri Lanka in late 2009 with then Foreign Minister Smith when we started that program. We went up and talked to the people who were pushed out of the IDP camps and back into areas where there was very little preparation done for their resettlement. I am pleased that your monitoring trip found that it was going well. We do take a similar approach in many areas of the program. A good example is the work that we are doing with the Indonesian government on its national poverty reduction program. This is a small grants program through which communities are given money. There are 80,000 villages in Indonesia involved. We are the largest foreign donor component of that program.

Those villages are given a certain amount of money. They have to come up with a project. They have to build whatever it is and are given technical assistance to do so. Then they own it. It might be a chicken coop, a new school or some water and sanitation facilities. We also use that approach with our school-building program in Indonesia. The funding goes to the local community. The input of Australia and the Indonesian government is to provide them with the design and the expertise to build the school. But they provide the labour, they do the maintenance and they build the school. The community then owns it. With that ownership, they look after it and cherish it. Community empowerment programs absolutely work because of that interest that the participants have. If you go in and build facilities for people—and sometimes you have to do that—you may not get the same sort of buy in that you do when you work directly with the community.

Senator KROGER: What was particularly interesting with that housing reconstruction project was that it was the community that was asked to identify—given that there are so many in need of houses—the priority list of individuals who were most in need of support. That took away a huge bureaucratic layer, which is very costly, and made it an incredibly efficient program through which the people got huge value for the money that we put in towards those individual houses. I want to put on the record my congratulations to you. I hope that is used as a model for how to roll out other partnership programs.

Mr Baxter : Thank you.

Senator McEWEN: There was discussion earlier on about AusAID meetings the targets arising from the recommendations in the review. One of those targets was to reduce the number of advisers, which you said that you are doing. Is there a monetary amount that AusAID will save in meeting its target in terms of reducing the number of advisers?

Mr Baxter : Yes, there is. We have quantified the savings that we are going to make. I guess there are two aspects to the saving. By cutting the number of advisers—the 257 positions—we are going to save an estimated $62 million. In addition to that $62 million saving, you might recall that we brought in new remuneration scales for advisers working in the aid program. We have reduced our costs for short-term advisers on average by about 40 per cent and for long-term advisers over 25 per cent. We think that we will save an additional $30 million just by cutting the rates that we were paying. All up, we will save a bit over $90 million, so it is a serious amount of money. We are reinvesting that money back into programs that provide more direct assistance to the poor.

Senator McEWEN: I was going to ask you where that money is going to go.

Mr Baxter : We do that jointly with whichever government we are working with. In Papua New Guinea, we are cutting the most number of advisers. So we are sitting down with the PNG government and asking them where we should allocate the savings—health, education or elsewhere. I should also point that since we started going through this process we have identified an additional 70 positions in PNG that we are going to phase out over and above the 257. So we will end up with a total reduction of about 320.

Senator McEWEN: Do you know the amount of money that that will liberate to put directly into programs?

Mr Baxter : I do not have the figure for the additional 70, but I can get that for you. What we have done in PNG is establish a joint monitoring committee with the PNG government so that any future requests we get for advisers are prioritised through a process rather than through an ad hoc process for requests from a whole range of areas. The equivalent of the head of the PNG civil service is running that process.

Senator McEWEN: That sounds good. I will stay on PNG. There was discussion earlier on about health issues in Papua New Guinea. It might be useful to put on the record what exactly the Australian government, through AusAID, is doing specifically to help address the health issues in Papua New Guinea in terms of establishing clinics, providing support to hospitals, establishing community health posts et cetera.

Mr Batley : Is this specifically in relation to Torres Strait?

Senator McEWEN: Not necessarily. I am talking about Papua New Guinea.

Mr Batley : I will ask someone to come to the table who knows a bit more of the detail than I do.

Senator McEWEN: Is there a partnership with the Asian Development Bank?

Mr Gilling : Our main interest in health and sorting out health in Papua New Guinea is driven by the fact that MDG4, which is about reducing child mortality, and MDG5, which is about improving maternal health, are both quite significantly off track. Of course, it is no easy matter to solve this. It is certainly not solvable just by the Australian government alone. Our approach has been to understand what the main problems have been. As I may have said in previous estimates, it is not as simple as there being simply one problem. It is not that there are not enough nurses or that there is not enough money; it is the whole system that is weak. As a consequence, we find that there are few skilled birth attendants. I think across the Pacific you will find that PNG has one of the lowest rates of ischemic birth attendance. It is under 50 per cent. So our work is aimed at getting more birth attendants. To give you an example of how we have done this, we have trained about 500 midwives and we have got eight international midwifery trainers to strengthen the schools in PNG. These trainers started teaching in August 2011. We have in fact helped to rehabilitate all of the four PNG midwifery schools in the country and we are building a new fifth school in East New Britain. We have provided obstetrician gynaecologists in Mount Hagen and Madang. I think I am right in saying this is the first time that we have actually had qualified gynaecologists operating in the highland, which has the highest concentration of population in Papua New Guinea. We have a major program of drug distribution. We call them kits. A kit is essentially a very large box with everything you are likely to need. Of course, it cannot cover every possible eventuality but we have taken responsibility for delivering these kits right around the country and in fact they end up going to thousands of health posts. We have also worked on purchasing emergency obstetric equipment for district hospitals. We have worked on refurbishing rural health facilities. As I said before, one of the areas that we focus on is actually building staff housing. But I think it is an important point to raise that we cannot possibly solve the problems just by us coming in with helicopters and boxes and dropping them. What we need to be able to do is to work with a reform minded ministry—which we are very lucky to have at the moment—in PNG and to work with them on their priorities. One of the things that we have done in the last 12 months is this: in effect, we have bought them time to sort out really significant problems that they have had in the procurement of drugs. We do not have time to go into it today, but basically the whole process had been severely compromised and the people who were seeking procurement were also the people who were gaining from it. What we have been able to do is come in and actually purchase those drugs for the government while we have helped them to go right down to the basics of root and branch reform of their procurement system. And that is what our work has been doing this year in procurement reform. So, you see, it is a mix of very practical stuff like health kits and training staff as well as reform of areas like procurement, which do not on the face of it seem all that important.

Senator McEWEN: Is there a figure amount that you could delineate as specifically going to health aid in PNG?

Mr Gilling : We split it into two components. We have a health program which is worth $70 million this year and we have a HIV program, which is, I think, $36 million a year. That has been split because the responsibilities within PNG have been split as well. But our engagement in HIV has been very significant over the last few years. I think the fact that PNG has not experienced the levels of spread of the disease that other countries have has got something to do with the work that we have put into it. My colleague Murray Proctor might be able to add something on this.

Mr Proctor : To add to my colleague's comments, Australia has invested over many years in a response to HIV in Papua New Guinea. The initial view was that it would be a major challenge. Although it did not spread to Africa-like proportions, it did lead to a considerable number of state hospital beds being occupied by people with AIDS, and it has spread quite considerably. The good news—and the bad, I suppose—is that about one in 100 adults in PNG carries HIV, which is down from a previous estimate of two per cent. So I think prevention is possibly working, and also the ability to know the virus, so the number of people with the virus has improved. In that regard Australia, through its assistance, has assisted PNG to more than double the number of voluntary testing centres, so the data is better and also people are more likely to get treatment because they know they have the virus. In addition to that, Australia works through the National AIDS Council and, increasingly, the provincial AIDS councils, to ensure these centres are set up and technically functioning properly.

We have a major initiative, which I visited last year, with the PNG government and the Clinton Foundation to reduce the transmission of HIV from mothers to newborn children. There has been a project in the Southern Highlands, around Goroka, which has now been expanded. It has been starkly successful with the combination of awareness, peer counselling by mothers who have HIV, and better testing and treatment. We have gone from a position where almost every baby in that area acquired HIV, and of course most would have died in the first five years, to a figure—I do not have the exact one—of well over 85 per cent of children now surviving those five years, many of them because they do not acquire the virus. They get adequate prophylactic treatment for the mothers before the birth, and follow-on counselling assures they do not pass the virus later. The majority of Australian funding has not been for the pharmaceuticals in this area; it has been a very big investment in working with high-risk groups, the churches and other community groups to get the message of prevention out around the country. That remains the biggest single focus of our HIV work there.

Senator McEWEN: Given that there are increasingly areas of big resource development in Papua New Guinea, which brings with it concentrations of men working in mines and so on, are we doing anything to ensure that sexual and reproductive health issues are given some focus in those communities?

Mr Gilling : Mr Baxter talked earlier about the spread of the aid programs, the modalities and the types of people we work with. We have been talking closely and developing cooperation with some of the mining companies to address exactly the risks that you identified.

Mr Baxter : We are also looking at what assistance we might provide in the context of the PNG election, which I know you are interested in, because when you have mobile men with money we know that there is probably a job of work to do there.

Mr Proctor : In conjunction with the Asia-Pacific Business Coalition, which AusAID partly funds here in Australia, the business coalition in PNG, called BAHA, is very active in funding helplines, distributing condoms and workplace training to prevent transmission of HIV. In a more recent development, one of the major companies in oil and gas development in PNG, Oil Search, has set up a foundation to assist the delivery of health care and HIV related matters in PNG. It has become one of the prime recipients for Global Fund funding in that country, which is a very important development.

Senator McEWEN: Thank you very much. This is not PNG specific but I want to ask about AusAID-funded scholarships, which I think are called the Australia Awards.

Mr Baxter : That is right.

Senator McEWEN: I understand there is a budget allocation to increase the number of those scholarships. Is that right?

Mr Baxter : It is certainly our intention to increase the number of scholarships, yes.

Senator McEWEN: How many scholarships are we looking at in 2014 and what is the increase on the current numbers? Does that bring us back to anywhere near the number of scholarships that we had in the 1990s, which I think were around 6,000?

Mr Baxter : Last calendar year, 2011, we provided a bit over 3,700 scholarships, both short- and long-term courses, and we are on track to get to our target of about 4½ thousand by 2014.

Senator McEWEN: It is not as good as we were but we are getting back to where we were.

Mr Baxter : Yes. Included in that 4½-thousand target is a commitment from the government to provide 1,000 scholarships for Africa by 2013. We are well on track to meet that. It means fundamentally that at any one time there will be over 10,000 students from developing countries studying in Australia on AusAID scholarships—the Australia Awards.

Senator McEWEN: Can some of those students can bring their families with them?

Mr Baxter : The long-term recipients can, yes.

Senator McEWEN: Is there a breakdown of residents from countries which benefit from those scholarships?

Mr Baxter : I can give you the top five recipients for 2011.

Senator McEWEN: That would be good.

Mr Baxter : Indonesia received about 21 per cent of the total scholarships—that is, 690; Vietnam 465 or 14 per cent; Papua New Guinea 305 or nine per cent; the Philippines 159 or five per cent; and Bangladesh 140 or four per cent. Those top five are spread across universities in Australia.

Senator McEWEN: And across study subjects?

Mr Baxter : Very much so. We link the scholarships to the particular development priorities of the countries that receive them. If there is a particular need for people to develop expertise in health, education or the extractive industries, we tailor the allocation of those scholarships to their development needs.

Senator McEWEN: This is not scholarships per se, but do you still have a role to play in the Pacific Seasonal Worker Program?

Mr Baxter : Yes. My colleagues might have more to say but we certainly work very closely with colleagues in other arms of government, particularly on the preparatory process and providing funding to prepare the guest workers to come here for training, for cultural awareness and that sort of thing.

Senator McEWEN: We were in a trial phase for that program. I think we have adopted it now and it is ongoing. Is that right?

Mr Baxter : There are a number of aspects to it. The trial phase applied to a number of Pacific countries. At last year's Pacific Islands Forum, the Prime Minister announced an extension of the program to other countries, including the Solomon Islands and Papua New Guinea. This will the first year of that coming into effect. Separately, there is a scheme with East Timor to send guest workers for the tourism industry in the north of Western Australia.

Senator McEWEN: Is it going well?

Mr Baxter : It is just starting. I know the first group of East Timorese has turned up and started work in Broome. On average, the studies have found that workers from the Pacific guest workers scheme are remitting about $12,000 so it has a big impact on their local communities when you consider that for many Pacific Island countries remittances are a major form of national income.

Senator McEWEN: That is right. I know that this is not your bailiwick but when the scheme was mooted, I remember people were worried about recidivism, about people escaping and not returning to their countries of origin. Have we had any evidence of that happening?

Mr Baxter : As you say, it is not our responsibility, but I think the return record is very, very good. You now see people coming back for a second or third year of work.

Senator EGGLESTON: I am quite interested in the East Timorese coming to the Kimberley. I heard that discussed, and the possibility of it happening, a couple of years ago at a Kimberley economic forum. Can you give me some more details of that program?

Mr Baxter : I will ask Mr Brazier. Hopefully he has some details of it.

Mr Brazier : It is above all a matter for the department of immigration to answer, but of course we are aware of it. We are supportive of it because of the development benefits that remittances can bring and for Australia there are labour shortages in some parts of the country. But, as you say, Senator, the East Timorese workers will be focusing mainly in the northern part of Western Australia. As I understand it, they are to work in the tourism sector and perhaps in the pearl industry. I am pretty sure that none have yet arrived, because the organisers of this program are very keen to undertake precisely the sort of training and preparation of those workers that will maximise the chance of their success in Australia.

Senator EGGLESTON: That is very interesting. There are a lot of opportunities in the hospitality industry, shops and so on up there. There are a lot of Asian students up there. I noticed last July when I drove through that they were working in service stations and shopping centres. How many East Timorese are we talking about? Do we know?

Mr Brazier : I do not recall the precise number. I think it is in the hundreds per year.

Mr Batley : Or even less. We are reaching the limits of our knowledge, unfortunately.

Senator EGGLESTON: That is all right. I understand. It is not your program fundamentally; it is that of the department of immigration. This is the first time I have heard that the idea that I listened to being presented two years ago is actually being put into practice.

Senator RHIANNON: Thank you, Mr Baxter. With all the challenges that you have, I do appreciate your time. I want to start with your submission—to do with reproductive health and women, particularly in Cambodia. I understand that AusAID has announced a funding round based on partnering with NGOs to support the Cambodian maternal and child health strategy. It might be called Partnering to Save Lives. I think that this is a priority for the Cambodian government. Will AusAID support NGOs to provide programs in the context of the Cambodian government priority? Will they be comprehensive sexual and reproductive health programs?

Mr Baxter : I do not have any details of the program with me. Unless my colleagues do, we will have to take it on notice.

Mr Brazier : I do not have those details in front of me.

Senator RHIANNON: Perhaps you could take it on notice. The questions I have asked are to understand which programs have been prioritised in the context of the comprehensive sexual and reproductive health services that I understand the Cambodian government has a policy for. Staying with this theme but not just within one country, you would obviously be aware that the provision of family planning services is fundamental to the achievement of the Millennium Development Goals, particularly goal 5. There is also the alarming figure that 200 million women have an unmet need for contraception. I am interested in understanding how our aid money is contributing to this need, both through bilateral and multilateral programs.

Mr Baxter : I certainly very much agree with the comments that you made about the availability of reproductive health services and that they are fundamental to women. You probably know that a couple of years ago there was a process in this place, a cross-party group, that developed new guidelines on family planning activities within the aid program. They were issued in, I think, August 2009, and guide the spending that we undertake in this area. We have committed publicly to spending $1.6 billion between 2010 and 2015 on maternal and child health and, of course, family planning services are part of dealing with the issue of maternal health. We work through our programs at the bilateral level but we also work with multilateral organisations, like UNFPA—

Senator RHIANNON: Sorry to interrupt you, Mr Baxter, but you just referred to maternal health. I was actually asking about sexual and reproductive health. As you are probably aware, there is an important distinction here. I am obviously incredibly pleased that maternal health is there but, of that $1.6 billion, where does the sexual and reproductive health come in?

Mr Baxter : I was just getting to that.

Senator RHIANNON: I apologise.

Mr Baxter : You asked what the mix was in terms of bilateral and multilateral NGOs. We work in all those ways: bilaterally and through multilateral organisations, including UN organisations. We also work with the NGO community. We are formally part of the International Alliance for Reproductive, Maternal, and Newborn Health, which also includes the United States, the United Kingdom and the Bill & Melinda Gates Foundation. The alliance is contributing to three global targets, including 100 million more women using modern contraceptive methods by 2015. I will ask my colleague Mr Procter to give you some more details of where we are actually spending the bulk of our funding.

Mr Proctor : In relation to the component of reproductive health, the government has committed to increasing its assistance in family planning. That is happening; there has been a large increase from 2009-10 to last year of from $10 million to $40 million and an estimate of at least $28 million this year. The reason it has gone up and then down is that there was a major commitment to a commodity fund with UNFPA last year.

Senator RHIANNON: To commodity funds?

Mr Proctor : Contraceptive commodities. As the Director General has said, under the alliance we are working in partnership with countries where more than one of the donors is involved. I will just go back to maternal and child health funding, where—I take your point—something like $270 million in that category is estimated to be spent this year and is rising strongly through the next three years. So there is considerable focus here.

I would like to comment on Cambodia. You were asking specifically about that. There are two NGO and UN activities in Cambodia that relate to reproductive health. One is funding Australia is providing through Marie Stopes International, which is to increase access to family planning and long-term methods of contraception. That is $1.22 million. There is also support through UNFPA of almost $1.8 million for the procurement of contraceptive commodities for use in the Cambodian public health system.

Senator RHIANNON: I want to now go to the Cambodian railways project and pick up on some of the information you shared with the committee when we were last together and also in questions on notice. You responded that there have been guidelines in place since 1996 on how AusAID engages with infrastructure projects that involve involuntary resettlement. I then assumed, after I reread the material, that what you are talking about, and correct me if I am wrong, is office procedure—circular 16—on displacement and resettlement. But I cannot find it on the web and the Parliamentary Library cannot find it. Is that the document that has framed the information you provided? I will ask that question and then ask some questions about it. Is that the document that you are referring to?

Mr Batley : That would have been the document. Over the course of the past few months we have been in the process of revising those guidelines. We have undertaken a process, firstly, of developing and revising those guidelines internally and then taking them out to interested stakeholders to ensure they are contemporary and meet the needs that we have. As I say, that has been under development over the last few months. AusAID's executive has just recently ticked off on those new guidelines, so they are now on the AusAID website. We would be happy to provide you with the link to that. I will ask my colleague, Mr Proctor, if he has anything to add to that.

Mr Proctor : Only to add that you will find the revised documents, which have a similar title, will have an explanatory component but also show the actual guidance provided to our staff, in quite some detail, on handling these issues.

Senator RHIANNON: Could I just clarify. Does that mean that the document that I had trouble finding was not public? If so, why was it not public? Were you following it, if it was just an internal document?

Mr Batley : We were certainly following it internally, but under both AusAID's Transparency Charter and the government's Information Publication Scheme we are committed to putting on the website both the policy and the internal guidelines for our staff.

Senator RHIANNON: But previously it was not a public document.

Mr Batley : I am not aware that it was a public document.

Senator RHIANNON: When can we expect it to go onto the website? Will it be the full document? Or, when you say 'guidelines', do you mean a summary of the document?

Mr Batley : Yes. It is on the website already. It is in two parts. There is an explanatory statement which sets out our policy, and that provides also a link to the guidelines for our staff, but that is also available.

Senator RHIANNON: So that is the full document that is on the website?

Mr Batley : That is right.

Senator RHIANNON: And that is the final document?

Mr Batley : That is right.

Senator RHIANNON: If you could supply to the committee the link, that would be excellent.

Proceedings suspended from 21:01 to 21:11

Senator RHIANNON: We were up to Mr Baxter on the Cambodian railways project. It is perfect timing in some ways. Today Aid/Watch released the report Off the rails: AusAID and the troubled Cambodian railways project. While there may be disagreements, I think there is agreement that there have been some tragic aspects here that we need to learn lessons from. That is why I want to raise that project and that report and ask: does AusAID intend to pay compensation to those people who have not received their full rights in terms of what I think is understood when people lose their land, particularly in regard to the undervaluing of property?

Mr Baxter : No, it is not our responsibility to deal with that issue.

Senator RHIANNON: When you say that, do you mean that it is Toll Holdings or it is the Asian Development Bank? Can you just explain that, please?

Mr Baxter : The rehabilitation of the railway is a program where we have provided co-financing to the ADB and the ADB has the management and supervision responsibilities for the implementation of the program, working, of course, with the Cambodian government. Toll Holdings has nothing to do with the rehabilitation program that we are part funding.

Senator RHIANNON: You say the supervision is with the Asian Development Bank, but, considering that we are partners in the project and Australian aid money, Australian public money, goes to the Asian Development Bank, don't we have a responsibility in that context?

Mr Baxter : We have a responsibility to help ensure that the ADB's policy on resettlement is adhered to, and we have taken a number of measures to ensure that that is the case. Certainly it is true that there have been problems with the resettlement element of this program and that, as you would know, resettlement is always a difficult and challenging process if it is not managed properly. So we, as I said, have gone to quite considerable lengths to try and address some of the problems that have occurred in the resettlement part of this program. Our efforts have been acknowledged, including by some of the NGOs that have been critical of aspects of the program.

Senator RHIANNON: Thank you for spelling out that changes have been made. Could you share with us what those changes are.

Mr Baxter : I will ask my colleagues to go through the details.

Mr Batley : I think we could identify four broad areas where there have been improvements in the process of managing the resettlement over the last year and a bit. The first area is having the Cambodian government both acknowledge in principle and put into practice the idea that essential services, as in electricity and water, must be installed at the resettlement sites before families and households are relocated. That was not always the case at the beginning of this project, but that is now accepted practice. A second area where there has been progress is in this area of financial compensation. It is an area where the ADB has been particularly active, and we have backed up the ADB in their advocacy by saying to the Cambodian government that levels of compensation paid to households have not been sufficient. In September last year, the Cambodian government agreed to pay additional compensation to households to take account of rising food prices, because the calculation they had been using up until that point was based on a historic set of food prices. That has certainly worked to improve the situation of householders relocated.

Thirdly, I think there has been a lot of progress in the area of addressing grievances of households. Until about the middle of last year, there really had not been proper training of officials to manage a grievance process, and there was a concerted training process in place between June and September last year in five communes. Prior to this training, no grievances had been addressed at all. Towards the end of last year, the figures I have are that 104 letters from 501 affected households had been registered and responses have been provided to 83 per cent of those complaints that have been received. That training of officials to address grievances will continue across all the affected communes. It is happening this month and in March. It will be provided at the provincial level, the district level and the village level.

Fourthly, certainly in recognition of what were shortcomings in the initial income restoration program and the problems that some families were experiencing during the course of last year, AusAID provided an additional $1 million to the program for an expanded income restoration program. We had designed that during the course of last year. That expanded community based income restoration program began last November and it includes a range of training opportunities—for instance, in trades. It includes a revolving fund which will provide loans to affected households for income generation activities and a social safety net to provide funding to the very poorest households, such as widows, for re-establishment costs or to cushion social shocks—for instance, for people with unforeseen medical expenses.

That is a brief run-through of the four areas where I think, with the combined work of ADB in the lead and also AusAID advocating for improvements in this program, we have achieved better outcomes for the people who have been affected.

Senator RHIANNON: Thank you for running through that, Mr Batley. I notice that you said there was a period when no grievances were addressed. From what you set out, it certainly sounds like you are conscious of that. But I think it is relevant to consider the Asian Development Bank's work here and its resettlement policy. I have understood that over the years it was regarded as being actually quite good, but the problem has been that it has not been implemented. I think that that is probably what we are grappling with now. It sounds like AusAID is lifting the bar. So the question is—and it is obviously what we will come back to in future estimates—how do you make sure it happens?

Mr Batley : To give the ADB credit, they certainly were conscious that the implementation of the safeguards was not up to the standards that they wanted. This has certainly been a topic of much discussion between us and ADB. But, as I said before, we have certainly been active ourselves. I went to Phnom Penh in August last year and met with Deputy Prime Minister Keat Chhon to really underline our expectation that Cambodia would implement those ADB safeguards.

Senator RHIANNON: We will see.

Mr Batley : It may be that, in the original design of the project, the ADB overestimated the capacity of the Cambodian government to implement those safeguards. Certainly, over the course of last year, both the ADB and AusAID have had personnel on the ground specifically tasked with addressing this question, so there has been a lot more management attention.

Senator RHIANNON: Mr Baxter, on Sri Lanka: considering that, though the civil war is over, there continues to be a range of challenges in that country, do you discuss Australia's development program in Sri Lanka with the Sri Lankan government to determine where those projects should be carried out and what they should be?

Mr Baxter : We do discuss the program, because we are delivering an Australian government aid program in a foreign country. So there is a level of dialogue we have with Sri Lanka around the activities that we fund. But we do not deliver our program through the Sri Lankan government; we deliver our program through trusted partners—multilateral organisations such as the ones Senator Kroger mentioned earlier—or NGOs.

Senator RHIANNON: Considering the hour, I will ask you to take part of this question on notice. Could you provide details to the committee of the aid programs that you have in the north-east of Sri Lanka and other areas that are predominantly made up of Tamil communities?

Mr Baxter : I would be very happy to do that.

Senator RHIANNON: Could you inform the committee now—because I am not after the details of the projects—how in a situation like Sri Lanka, which still has these challenges, you ensure that the Tamil communities do get aid and that it actually reaches them? How do you find the balance?

Mr Baxter : We have AusAID officers posted permanently in Colombo, and they have made a large number of monitoring visits, including to the north and the north-east, over the last 12 months. I think the number is about 18 monitoring visits in the last 12 months. We go out and physically check that the resources we have provided are getting to the people that we have targeted at them at. Because we are working with NGOs and trusted multilateral partners, we have long established relationships with them, and they of course provide us reporting as well.

Senator RHIANNON: You were referring there to the bilateral aid programs. Are they the ones that the field trips are looking at?

Mr Baxter : These are the activities that we have funded and that are being implemented, whether it is by UN-HABITAT, by the World Bank, by the Asian Development Bank, by other multilateral partners or by our NGO partners.

Senator RHIANNON: Has the Sri Lankan government ever asked you not to take an aid project into a certain area or with a certain community?

Mr Baxter : No, they have not. I was personally involved in the negotiations of our current program with the Sri Lankan government. It is probably fair to say that those negotiations were quite robust at times, but the Sri Lankan government agreed to allow us to deliver our program as we designed it with the partners that we selected.

Senator RHIANNON: I would like to move on to the Mekong. In December last year, the Mekong River Commission was in the news with regard to the further study about the Mekong mainstream dams, which was one of the various terms. Does Australia support a moratorium on the proposed Mekong mainstream dams, including the Xayaburi Dam, while this study is underway?

Mr Baxter : I will ask Mr Batley and Mr Brazier to answer that question.

Mr Batley : Australia has not joined calls for a moratorium on mainstream dams on the Mekong. Our view is that the development and use of the waters of the Mekong River basin are ultimately sovereign decisions for Mekong governments. We obviously have a keen interest in the wise development of the region, and we are certainly concerned that decision-making processes and deliberative processes through the Mekong River Commission be transparent, well-informed and inclusive, because we do understand that the livelihoods of potentially millions of people are at stake. As I am sure you are aware, we provide funds to support this sort of transparent and well informed decision-making process. Indeed, we are the sole funder of this deliberation process.

Senator RHIANNON: To clarify: you said that you are the sole funder of the current MRC we are talking about but not of the further studies. Is that correct?

Mr Baxter : Not of the MRC but of the deliberative process provided for. It is called the—

Senator RHIANNON: This is what I was trying to clarify. When you say 'the deliberative process', you mean the one to come out of the December meeting of the—

Mr Baxter : No. Just to clarify, this is the procedures for notification, prior consultation and agreement. This is the—

Senator RHIANNON: I see—that one, yes. But I was trying to work out if you have decided to put any money into the further study. It was not really clear from that December meeting, but it has largely been called the 'further study'. Where are you up to with that one?

Mr Baxter : That is right. We are still considering our position on that. Also, we have been approached separately by the government of Vietnam, which wants to undertake an independent study on the potential impact on the Mekong River Delta, and we have indicated to the Vietnamese that we are prepared to provide $1 million to support that study as well.

Senator RHIANNON: You said 'as well'. Have you decided to put some money into the further study?

Mr Baxter : We have not taken decision on that one yet.

Senator RHIANNON: Even though you said 'as well'?

Mr Baxter : I am sorry. I misspoke.

Senator RHIANNON: I am not trying to be difficult; this is so confusing. So there is $1 million for Vietnam, and you are still to decide on the further study. Is that where we are at?

Mr Brazier : The announcement at Siem Reap last year in December called for further studies. This study being proposed to be conducted by the Vietnamese government could be considered under that umbrella.

Senator RHIANNON: But it is not clear yet, is it, if it will be?

Mr Batley : No, and we certainly have not ruled out supporting the further studies.

Senator RHIANNON: I see. It is confusing, but thank you for going through that. If Laos unilaterally decided to go forward with the Xayaburi Dam, what would be the implications for Australia's aid to Laos and for our aid to the MRC?

Mr Batley : That is really a hypothetical question at this point, I think.

Senator RHIANNON: So you are not working on that at the moment?

Mr Batley : We are of the view—and so, I think, is the Mekong River Commission—that the consultative and deliberative processes have not concluded. The governments of the region, coming out of the December meeting, clearly have asked for further study. So no irrevocable decisions have been taken at this point.

Senator RHIANNON: I am just looking back on some of the earlier statements, and in response to some questions put in by Senator Bob Brown there was quite a clear position. It was:

The Australian government is concerned that decision making processes around Mekong water resources development are not transparent, well-informed and inclusive, as often the livelihoods of millions of people are at stake.

Would that still sum up how it is viewed?

Mr Batley : Yes.

Senator RHIANNON: There was another statement that the shortcomings have been the subject of justifiable criticism with regard to the whole issue around PNPCA and the consultation. Would that still sum up how it is viewed?

Mr Batley : Yes.

Senator RHIANNON: Thank you very much.

Senator EGGLESTON: I have a few questions. The first is about Libya. In October I asked about the lack of a country strategy for Libya and we were told it would be included in the Middle East and North Africa regional strategy due for completion in 2012. I just wondered what progress had been made on that.

Mr Baxter : Our focus in Libya over the last year has been providing humanitarian assistance as a result of the consequences of the actions of the Gaddafi regime against its own people. We have made a major contribution to the humanitarian effort to alleviate the suffering of Libyan people who were caught up in that very bloody period of Libyan history. I will ask Catherine Walker, the head of the relevant area of AusAID, to talk about our strategy going forward.

Ms Walker : We are still finalising our Middle East and North Africa strategy. It has not yet been completed. We have undertaken a range of consultations, however, with key stakeholders, including countries in the region. But we are yet to finalise the strategy. In relation to Libya, as Mr Baxter has noted, we were one of the key donors to the humanitarian crisis. We provided $44.6 million through a range of UN agencies and other international organisations. We expect that the interim government will be able to assume the responsibility for most of the basic service delivery for its population going forward. Libya has access to considerable resources. At the time of the conflict it did not have access to those resources and it was necessary for the international community, including Australia, to assist during that difficult time, particularly with the large numbers of displaced people and people returning from other countries. We are not expecting to be a significant player by any means in Libya's future development, but we are of course interested, particularly in the transition phase. If there were some practical ways in which we could support that transition to a democratic government then I am sure we would look at those.

Senator EGGLESTON: What are your major priorities in Libya now, given that it has been through such a traumatic few months?

Ms Walker : Towards the end of last year we provided some assistance to a Libya Recovery Trust Fund, which is administered by the United Nations. We provided $1 million to that fund. The purpose of the fund is to provide small amounts of assistance to areas that would support the transition to a democratic government, for example, the electoral process. That is one area where we have provided support. Another is to provide support for mine action programs. We provided $2 million towards the end of last year for mine action because there was a considerable amount of unexploded ordinance around following the conflict. That prevents people from returning home as well as presenting a serious risk of injury. We have quite some history in providing assistance for mine action programs and we have provided that through the UN Mine Action Service.

Senator EGGLESTON: Are you involved in mine clearances in other parts of the world, such as Cambodia and Gaza?

Ms Walker : Yes. We are actually in the middle of implementing a five-year $100 million mine action strategy. The main focus of that program is to deliver mine action activities in countries in the Asia region, but we are also helping beyond the region, particularly in Afghanistan, in several African countries and in Lebanon. I can give you the full details of our mine action program.

Senator EGGLESTON: Yes, that would be very interesting to see. Going back to Libya, we were told that something like $41.1 million had been provided in humanitarian assistance to Libya. Has that figure increased substantially over the last three or four months since we had estimates?

Mr Baxter : No, Senator. Because of the cessation of hostilities, we are no longer requiring to provide assistance on the humanitarian front.

Senator EGGLESTON: You also told us last year that $500,000, I think, was provided to the United Nations Department of Political Affairs—the UN DPA—and I wondered what the outcome of this funding was and what the purpose of it was.

Ms Walker : The funding for UN DPA was to assist the Department of Political Affairs to provide advice to the national transitional council and, subsequently, to the interim government. Both authorities looked to the UN to help it to establish itself after the conflict, and that is a role that UN DPA assumes in a range of countries. It provides authoritative advice to newly formed governments in post-conflict settings to help them deal with the myriad issues that they have on their plate as they begin to establish themselves.

Senator EGGLESTON: Thank you; that is quite interesting. I turn now to Zimbabwe. It was reported that AusAID had opened an office in Zimbabwe at the end of 2011. What was the cost of the establishment of this office?

Mr Baxter : That is correct—we did open an office. We have expanded our program in Zimbabwe over the last few years. In fact, I went to Harare to open the office. It is an annex to the main embassy building. We do not have the details of the cost on hand, but we are very happy to take that on notice. We have two Australian-based AusAID officers now in Zimbabwe, and we have a relatively small number—six or seven— of local staff. Those staff also administer our programs in Zambia and Malawi.

Senator EGGLESTON: What programs are you running in those—

Mr Baxter : In Zimbabwe?

Senator EGGLESTON: African countries, yes.

Mr Baxter : In African countries there is a large range, and we would be very happy to give you an explanation. But we might be here for a little while, so we will try to give you that on notice. In Zimbabwe we have taken an approach we describe as 'humanitarian plus', which is to try to boost those areas of the economy and civil society that are not under the control of Zanu PF. We work selectively with ministries that are run by MDC ministers. For instance, we work quite closely with the minister for finance, Mr Biti, on things such as improving the capacity of the Zimbabwean taxation authorities to collect revenue so that they can fund their own development.

We made a major effort in 2009, following a major outbreak of cholera, to assist the Zimbabwean authorities to get the issue of clean water and sanitation under control. Most of the infrastructure in Zimbabwe is falling apart or has fallen apart, and water pipes and sewerage pipes are a big, big problem there because of the lack of maintenance for many years. We have been a lead donor in that area. We are, I think, the third largest donor in Zimbabwe at the moment. In terms of the other countries, we have a trans-boundary water program which involves Zimbabwe, Malawi and Zambia and which we are co-financing with the German government. We have a range of other programs also.

One program that I draw particular attention to in Zimbabwe is what we call the African Enterprise Challenge Fund. This is where we fund groups from the private sector to undertake activities which we think will generate employment and wealth for poor communities. I was very fortunate to visit a dried vegetable factory which we were helping, with some seed money, to reopen. It had been closed since 2008, and it will have on contract a very large number of poor farmers who will supply vegetables back into the factory. They will dry them, and they will be able to both sell them on the market and export them.

Senator EGGLESTON: That is very good. Do you have an HIV program in Zimbabwe?

Mr Baxter : No, I do not think we do.

Senator EGGLESTON: Is HIV a big issue in that country?

Ms Rauter : We do not have a specific HIV program in Zimbabwe but we do contribute to the Global Fund within Africa which addresses HIV broadly across Africa.

Senator EGGLESTON: What about obstetric support in those countries?

Ms Rauter : We have a major maternal and child health program across Africa. It focuses on East African countries, not specifically Zimbabwe. That program looks to address maternal and child health including the training of midwives, making sure there is assistance at deliveries and also looking at child and newborn health.

Senator EGGLESTON: There was an article in the Sydney Morning Herald on 10 February under the headline of $20 million aid plan for Afghanistan's poorest people. The article said:

AUSAID is considering a new strategy for Afghan assistance—spending more than $20 million over the next four years on mainly agricultural projects to assist poor residents in drought-stricken areas and to help strengthen local Afghan non-government organisations …

Could you tell us a little of the detail of that?

Mr Baxter : The article you are referring to was referring to a draft concept paper which the journalist somehow managed to get a hold of. It is the early thinking within the organisation about a new program. As you say, it is focused on the poor with a particular emphasis on agriculture because 80 per cent of Afghans rely on agriculture for their livelihood. We will develop that program but we have not made a decision whether or not to go ahead with it. As I said, it was a draft concept paper. We will see where it gets to, but it was really a working document that was published.

Senator EGGLESTON: Is this a long-term plan for you?

Mr Baxter : We have a long-term commitment to Afghanistan. The Prime Minister has made it clear on a number of occasions that our long-term commitment in Afghanistan will feature development assistance through AusAID. Afghanistan is now our fourth largest bilateral program in the world after Indonesia, Papua New Guinea and Solomon Islands. It is a big and growing program for us but also enormously challenging given the security environment in which we are trying to implement the program.

Senator KROGER: What is the number of our workers on the ground? Is it still nine? There used to be nine.

Mr Baxter : It is 13.

Senator KROGER: Has the school that we built in Tarin Kowt for the girls been opened?

Mr Baxter : Is this the one that the Defence Force constructed?

Senator KROGER: Yes, but I presume it is coming out of your budget?

Mr Baxter : Some of the funding is coming out of the official development assistance budget but not out of the AusAID budget. That money is appropriated directly to the Department of Defence. I do not have details on that program.

Senator KROGER: Do you know whether or not it is open?

Mr Baxter : We do not know. Just late last year we commenced a very large program with Save the Children in Oruzgan province focused on providing health services to people at the community level, training community health workers and also providing access to school for children in the remote districts of the province. That will be the largest single program that we have undertaken in Oruzgan. It will be about $36 million.

Senator KROGER: Is 13 people on the ground an increase?

Mr Baxter : It is an increase.

Senator KROGER: Because the people on the ground require a defence detail taking them around, do you include that in your budget when you put together programs?

Mr Baxter : What was the question again? I am sorry; I misheard.

Senator KROGER: Because of difficulties on the ground they would require a security detail, presumably by the Defence Force. When you put together programs are you required to factor that into your budgeting?

Mr Baxter : Yes. We do not pay the ADF as hired security guards.

Senator KROGER: I appreciate that.

Mr Baxter : As Australians, they are happy to defend us. But we do have enormous security overheads, like every other agency operating in Afghanistan. We have officers in Kabul, Tarin Kowt and Kandahar. These are obviously insecure areas and we take the responsibility to keep our staff safe very seriously.

Senator KROGER: And they are rotated more regularly than in other areas. Is that right?

Mr Baxter : Yes; they get regular decompression leave.

Senator KROGER: How often is that?

Ms Walker : It is two months in and one month out.

Senator KROGER: I thought it was fairly swift.

Senator FAWCETT: Obviously you are doing a lot more. Your funding is increasing. I commend you for the work that you are doing. But that also brings with it, overheads for your organisation. That is what I would like to go into a little bit. You talked, in your opening remarks, about some of the strengthening you are doing around due diligence. You talked about the independent evaluation committee and strengthening your audit committees. Are the additional two external members—you have a total of four members—full-time or part-time members?

Mr Baxter : They are part-time members. They meet when the audit committee meets.

Senator FAWCETT: How often is that?

Mr Baxter : I think it is four times a year. Every quarter.

Senator FAWCETT: That is purely a financial audit?

Mr Baxter : No, it is also on performance issues. It is not just compliance but also performance. I meet with the chair of the audit committee after every committee meeting. He gives me a briefing on issues that they may want to draw to my attention as the CEO—things they think I should be perhaps paying more attention to or things that should be starting to get onto my radar as potential issues.

Senator FAWCETT: I notice you had about 180 per cent growth over the last five years in your SES staff and around 107 per cent growth in your senior officer staff—your EL1s and EL2s. In other departments, for example Defence, they have had a fairly rapid growth over the last decade in a number of different groups. I notice that you are creating a separate branch for risk and fraud. Things like the Black review have identified that the growth of stove pipes in groups, despite the best of intentions, create a lot of inefficiencies and ineffectiveness. Is that the kind of performance that the independent evaluation committee will also be looking at in terms of the effectiveness and the efficacy of your organisation? Or will they just be looking at compliance with processes within the organisation?

Mr Baxter : The independent evaluation committee is really going to be looking at the success of our programs. So if we say we have a program that is targeting reducing maternal deaths by a certain level in a certain country over a period of time, that committee looks at whether we did that with the money that was provided to us by the government. And if we did not, the committee looks at what the problems were that may have arisen that we can avoid next time when we undertake similar programs. It is really looking at the development effectiveness of what we do: does it produce development outcomes?

Separate to that we have the audit committee which looks at compliance issues within the organisation as well as looking at whether some of these issues that have been identified in the development effectiveness types of reviews are being followed through by management in terms of real action to address problems that have been identified.

Senator FAWCETT: I apologise. I got the wrong title there. When I said 'independent evaluation' I was meaning your audit committee. Are they going to be looking at the effectiveness of your headquarters of AusAID and that SES senior officer staff in terms of the output of the governance functions that they need to have?

Mr Baxter : Certainly the audit committee has a role in looking at our governance. Indeed, the independent chair of our committee will often attend executive meetings just to observe and see what kinds of governance issues we are dealing with at the senior levels of the agency. So they do assist through that role in ensuring that we have the right kinds of structure. Your comment about the dangers of growth is something that we are very acutely aware of. Maintaining good communication across the different areas of the agency as we grow is something that we are spending a lot of time trying to get right.

Senator FAWCETT: With your assessment of actual outcomes for people on the ground, you have talked about a range of measures, including changing from your coffee internationals and other types of contractors, if that is the word to use, to other programs. How do you measure the benefit of the money you have placed in them? If you have an option of two or three programs and a certain amount of funds, how do you measure the benefit for the person on the ground? We are talking outcomes for the individual as opposed to input costs.

Mr Baxter : We always evaluate partners in terms of their experience in the country context that we are working in and their track record in similar types of programs either in that country or in similar situations. For instance, there are NGO partners who have terrific capacity in some countries but not so much in others because of their own concentration of effort. Also, in the case of multilaterals we will do an assessment not only of the overall capacity of that multilateral organisation but also of their representatives on the ground in the country we are working in, because they vary. They could be terrific, high-quality staff or they may not be at a standard that we are not comfortable working with. So we will go through a process of evaluating the options that we have in front of us in terms of a delivery mechanism, and that includes putting money directly through partner governments' budgetary systems, and then we will make a selection based on what we think will provide the best development outcome and best value for money for the taxpayer.

Senator FAWCETT: What flexibility do you have if a local agency, whether it is an NGO or a multilateral or even a government, recognises a local need that perhaps does not directly align with the program goals of the MDGs or the original intent of AusAID? We have had some feedback that some people have withdrawn from working with AusAID because AusAID was very prescriptive and it was not actually meeting the local need on the ground. How much flexibility do your programs have to adapt from what you set out with to a real need in a given time frame?

Mr Baxter : I would be very interested to know what those circumstances were because, obviously, our whole rationale is to meet the particular needs of communities that we are working with on the ground.

Senator FAWCETT: I will see if I can find the specific examples for you.

Mr Baxter : But, undoubtedly, we do have processes and procedures, like all organisations, that we expect our partners to comply with. They may be financial management requirements; they may be requirements on issues like child protection. We have a very prescriptive set of guidelines that, if you want to work with AusAID on programs relating to children, you must adhere to and we do not compromise on those. So, in some cases, there is less flexibility than in others, depending on what issue it is relating to our programs. And we do agree with our partner countries on what our program will be in a particular calendar year or financial year or over a period of years. But, if new priorities arise and the partner government comes to us and says, 'As a result of the flooding or whatever incident might have occurred there are other priorities,' we are always prepared to sit down and have those discussions. Of course, we are often locked into long-term financial commitments for programs. Even in an expanding budget, there is a finite amount of money that we can apply to any particular country.

Senator FAWCETT: I am conscious of the time and I thank everyone staying around for this. In terms of funding with NGOs, you said in your opening remarks that you had doubled the budget for NGOs. What was the baseline?

Mr McDonald : For 2011-12, funding under ANCP is $98 million. For local and Australian NGOs, our overall envelope is $488 million. For Australian NGOs only it is $290 million.

Senator FAWCETT: My understanding is that as a result of the effectiveness review there has been some work done looking at accreditation of people eligible to receive funding to try to reduce the threshold, relatively speaking. What work has been done around that such that smaller NGOs, as opposed to necessarily the very large international organisations, have some access to AusAID funding, where they are already on the ground and providing a valuable service to a community?

Mr McDonald : You will recall from the review that the accreditation process we currently have was seen as a good front-end process to manage the risk associated with that sort of funding. The rigour provided confidence in terms of the way the NGOs were delivering the program. The review went on and talked about smaller NGOs and the opportunity to consult and talk with them about whether we can minimise the accreditation requirements around that yet manage the risk associated with it. We are going through that process now as part of the Civil Society Engagement Framework. We were looking at our ongoing engagement with Civil Society as we go forward. That will be one of the issues we will be looking at.

Senator FAWCETT: Regarding the AusAID post you have in Ramallah at the moment, I have been speaking with various people and water is obviously a significant issue in the region, both for Israel and for the Palestinian people. Given what you were talking about in Zimbabwe, where there has been a lot of work to assist with that, I note that the US Agency for International Development highlights that not only is there a shortage of water in the region but the water is inefficiently used in Palestine. I am wondering whether there has been any request from the Palestinian Authority or any investigation on the part of AusAID to use some of Australia's expertise in that area to channel that through into that region.

Mr Baxter : As a general comment before I ask my colleague Catherine Walker to make some remarks, you are right. Globally in the developing world people recognise that we have expertise on water. I talked about some of the things we are doing in Africa. We think water is an area where we are able to add value and make a difference. So we are certainly looking to do more. In the last budget the government announced a major new initiative on water and sanitation—over $400 million, I think—over four years. So we have the funding to do that and, increasingly, it is becoming a feature of our programs. I will ask Catherine to make a comment.

Ms Walker : We have two programs, one with UNICEF and the other with Oxfam, that are specifically addressing improvements to water and sanitation services. But they are based at the community level, so I cannot indicate to you that they are addressing the broader question you have raised about access to water, which is a significant issue in the Palestinian territory.

Senator FAWCETT: My question was not about access, because there are people on far higher pay grades than us who are still recognising that with the two parties there are probably five different views on that. What I specifically addressed was the US Agency for International Development, which recognised that what water was there was being used inefficiently, as well as the issue of sewerage. So it is a case of asking how we can work with what is there and make it more efficient. That is my question—not access.

Ms Walker : Regarding the two programs I mentioned specifically addressing improvements, in the case of UNICEF it is quite a large program looking at improving water and sanitation in schools, particularly for girls. The Oxfam program is specifically looking at improving sewerage. I visited a program Oxfam ran in Gaza that brought sewerage to a whole range of families and improved their quality of life as a result. In a small-scale way, through NGO programs, we are looking at these issues. In a large way, through UNICEF, we are trying to make a difference in schools, particularly in the West Bank. Our support for UNRRA is also helping to address issues of better access and improvements to water and sanitation both in the refugee camps and also in schools and health centres.

Senator RHIANNON: Mr Baxter, I would like to move on to the multilateral agencies. I understand there is a draft document on multilateral engagement strategy that was written in 2009, I think. Could you inform the committee what the status of this document is. Is it publicly available? Is it finalised?

Mr Baxter : No, it is not finalised. As I mentioned in my opening remarks, we have just completed the Australian multilateral assessment and we will now finalise our multilateral engagement strategy, which we are committed to do by around the middle of this year, based on the results of that assessment.

Senator RHIANNON: So it will be released by the middle of the year?

Mr Baxter : Yes.

Senator RHIANNON: I noticed that in the aid review it found that AusAID multilateral programs were 'leanly staffed' and recommended staffing levels should be increased quickly to at least double their current levels. Has that happened?

Mr Baxter : We have certainly received more resources over the last two years and we are applying those to our multilateral partnerships. This is obviously the first budget after the independent review this year, so we will have to wait and see what happens in that context.

Senator RHIANNON: That is quite a strong statement—that they are leanly staffed and should be increased to at least double their current levels. Could you indicate what the staff levels were, what they are now and what you are aiming to get to.

Mr Baxter : The multilateral agencies are located in a number of different parts of the world. At the moment, we have staff in New York to deal with the United Nations development agencies that we find. This includes UNICEF, UNFPA, UN Women and others. We have AusAID staff in Geneva dealing with the Geneva based UN organisations as well as multilateral vertical funds such as the Global Fund and the GAVI Alliance. We have an AusAID officer who works in the executive director's office of the World Bank and obviously helps manage our relationship with the World Bank. I guess the other one I should mention is Rome, where the World Food Program and the Food and Agriculture Organisation are located. We service Rome through our officer who is based in Paris and accredited to the OECD. We are looking at increasing our representation at multilateral posts around the world as part of the increase in funding to multilateral organisations because, as I am sure you are aware, the review also emphasised the fact that any increases in funding should be followed by an increase in Australian advocacy and influence within those multilateral organisations that we are funding.

Senator RHIANNON: Thank you for that information. Could we just go back to the numbers. Could you indicate what the numbers were before the review, what they are currently and what you are aiming to increase to.

Mr Baxter : I can tell you that they are the same now as at the time that the review was concluded because this is the first budget where we have been able to use the panel's review and the government's response as part of our budget proposals. I am not in a position to tell you what the outcome of the 2012-13 budget will be.

Senator RHIANNON: So in terms of that statement about doubling current levels, you do not feel you are in a position to actually put a time on that?

Mr Baxter : The government, in its response to the review, agreed in principle with the recommendation that AusAID be provided with more resources including those for the purposes that we are discussing now. But the government's decision, on what the level of those resources will be, will not be known until the outcome of the 2012-13 budget is finalised and released in May.

Senator RHIANNON: When you explained how there will be an increase in staff, would that deplete staff working on bilateral projects or are you going to keep those numbers separate?

Mr Baxter : No. We would be looking at additional staff. But our level of resourcing, like those of all other departments and agencies, is a matter for the government to determine in the budget process.

Senator RHIANNON: Will those staff be monitoring and evaluating how the AusAID money is deployed through the development banks, or will they be just like another ADB or World Bank staffer?

Mr Baxter : No. They will be specifically tasked with managing our relationship, including monitoring and evaluating the use of our funds. The multilateral assessment process that we have talked about several times tonight is really the start of that process of ensuring that we get results—and we get results with the demonstration of value for money—from any increased investments that we make in the multilaterals.

Senator RHIANNON: With the monitoring and evaluation that you have just spoken about, how does AusAID, and this is still in the multilateral context, go about getting input from project affected people?

Mr Baxter : A lot of the multilateral organisations actually conduct that sort of monitoring themselves and they present it to their funding partners. So we do not go out, for instance, and conduct a survey in a community where a UNDP program has been implemented but we do expect evaluation information from those multilateral organisations, many of whom have separate and independent evaluation components in their organisation. With the World Bank, for instance, there is a separate area of the World Bank that just conducts evaluations, and reports directly to the executive board of the World Bank, rather than to the staff of the World Bank. We are part of that board process so we get access to the evaluation information.

Senator RHIANNON: So when we have more staff would part of their brief be to inject themselves into that monitoring and evaluation or would you be relying on how it works now, which sounds like you get feedback at some point?

Mr Baxter : We do a few things. We get feedback from them. Sometimes we conduct site visits as part of looking at what work has been done. It depends on whether—

Senator RHIANNON: When you said 'we' there, was that 'we' at AusAID?

Mr Baxter : Yes, as in AusAID. If we have jointly financed a project with a multilateral where we are the sole bilateral funder, then obviously our ownership of that program is very strong and we will do our evaluation. We are part of multilateral arrangements that evaluate multilateral organisations. There is a group called the Multilateral Organisation Performance Assessment Network, or MOPAN, which is 16 donor countries including Australia. We assess the performance of multilaterals through surveys of those organisations and the stakeholders that work with them, including government and non-government agencies. This year MOPAN will assess the World Bank, UNDP, UNICEF and UNAIDS.

Senator RHIANNON: Right, thank you. I understand that since 2008 AusAID has talked about developing a multilateral monitoring and evaluation framework. So is that what you were referring to there or is there this process purely within AusAID where you are working on a framework?

Mr Baxter : There is the MOPAN process that I just described, where we are part of a group of 16 countries that have joined together to cooperate to assess multilateral agencies. But we will also conduct our own annual rating of the performance of multilateral organisations from this year onwards.

Senator RHIANNON: So that is the framework that we have been hearing about since about 2008?

Mr Baxter : No. A specific recommendation of the independent review was that we conduct a multilateral assessment of our main partners. We have done that for 42 multilateral organisations. But then on an annual basis we update that assessment and rank those multilateral organisations and use that information to inform our decisions about increases or otherwise in core funding.

Senator RHIANNON: Thank you. I want to move on to the issue of debt and how you manage that with these multilaterals. First, how much did AusAID contribute to the Multilateral Debt Relief Initiative managed by the World Bank? Do you have the most recent amount?

Mr Baxter : This goes back to the time of the previous government, which, I think, made the original commitment of a little under $650 million over a period from 2006 to about 2019. That commitment still stands. Some of the funding has been provided. I think there is still roughly—I can give you the exact number on notice—$400 million left to pay.

Senator RHIANNON: If you could take that on notice that would be useful. I would like to understand how it actually works. Does the AusAID money go into a general pool or does AusAID track which countries receive their debt relief and what conditions are imposed on those countries?

Mr Baxter : There is an agreed process through which that funding will be used for the countries that signed up at, I think, a G7 meeting in 2006. I can provide that information on notice; I do not have it with me.

Senator RHIANNON: If I understand correctly, it has already been decided which countries and how it plays out.

Mr Baxter : Yes.

Senator RHIANNON: Thank you, if you could take that on notice that would be helpful. I would like to move on to Afghanistan. Are there talks underway with the Australian military about managing AusAID projects in Afghanistan when the Australian military withdraws? There is some urgency about this because the latest reports that I have read indicate that the troops will be out by 2013 and not 2014. They are already out of Tarin Kowt, I understand. I am interested in how that is playing out for the safety of our aid workers.

Mr Baxter : I can confirm that the Australian Defence Force remains in Tarin Kowt in exactly the same configuration it has been for the last few years. So AusAID officers that work in Oruzgan Province are provided protection by the Australian Defence Force so that they can conduct their development work in what is, as you understand, a very difficult and insecure environment.

Senator RHIANNON: My question was this: considering there have been regular reports that Australian troops will be withdrawn, are there talks between AusAID or DFAT with the military about any transitional plans for managing our aid projects?

Mr Baxter : Like all other countries that are involved in Afghanistan, we are looking very intensely at what the transition will mean for our aid program in Afghanistan. We are certainly having those discussions with whole-of- government partners. There are no discussions with Defence about handing over projects to them. The issue is how we will, as a government, configure our presence in Afghanistan after full responsibility for security is handed over to the Afghan government.

Senator RHIANNON: I appreciate that there is not a lot of detail in that; will you be in a position to give us detail about where the Australian aid program in Afghanistan is headed? Are you holding back because of security reasons? I am just trying to work it out.

Mr Baxter : For specific details, perhaps. We are providing a little over 20 per cent of our assistance in Oruzgan Province and the rest through national programs. The configuration of our program as we move through the transition process is still a matter for government to decide.

Senator RHIANNON: Was there any Australian aid money involved in the Aliceghan project?

Mr Baxter : I think there was, but it was a program that was managed outside AusAID.

Ms Walker : AusAID contributed $1.75 million in funding to the AliceGhan project in 2006. But, as Mr Baxter has noted, this activity is managed not by AusAID but by DIAC.

Senator RHIANNON: It has been suggested in reports that have been published in Australia that the project has run into serious problems. That is a significant amount and, even though you may not manage it, how have you responded to the problems that the project has run into?

Mr Baxter : That is really a matter for the Department of Immigration and Citizenship. It is a problem that they are responsible for.

Senator RHIANNON: Even though we have put in more than $1.7 million, we do not—

Mr Baxter : The department of immigration are our whole-of-government colleagues. They have engaged partners in the delivery of that program. I think earlier in the week officers from the Department of Immigration and Citizenship answered questions about how issues relating to that particular program and how they are being managed, but it is not something that AusAID is involved with directly.

Senator RHIANNON: I was aware of that. AusAID is not managing the project, even though it has given it a lot of money; it does not actually get involved?

Mr Baxter : If another agency is the lead agency and has undertaken the design and the negotiation with partners to implement that program, no, we do not.

Senator RHIANNON: Thank you. I would like to move on to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Will the government consider a supplementary pledge to its $210 million commitment to the global fund in the grant period 2011-13?

Mr Baxter : I will ask my colleague Mr Proctor to answer this question. He has been closely involved in some of the recent developments with the global fund.

Mr Proctor : Senator, thank you for the question. If I can go back one step in answering your question: the fund, as has been stated in the press, has had to postpone its next round of funding on AIDS, TB and malaria until 2014, whereas it would have been previously an annual process. As you have indicated, there is a shortfall in the funding it required to meet a new round of offers. Can I just point out that the fund has not run out of money—and I am not naive in saying that. It had so many pre-existing commitments to roll over from old grants and likely demands for new grants that it could not go forward in the next year and a half on the funding process.

Australia has already increased its funding to the global fund by 55 per cent compared to the previous three-year period. We are in this new period now. We will put quite substantial funds through in the next two years and the global fund has already factored that in. At the moment, there is no process underway concerning additional funding or any sort of shorter term replenishment process, and that in part is because a very active process of reform has been agreed by the board of the fund, on which we are represented, to meet a number of issues. Some of them stemmed from last year from a high-level panel looking at risk and fraud; some more recently have been the need to change the criteria under which the fund provides money in order to meet this shortfall—the shortfall in many ways is due to the recession; some donors in Europe particularly are finding it difficult to provide the money they pledged—and some is still in play in terms of the congress in America as to whether they will meet the full $4 billion that PEPFAR, their administration on AIDS, had initially indicated would be contributed over three years. I am sorry that is a little discursive. The short answer is that at the moment there is no process under consideration for additional funding while all these other reforms are underway.

Senator RHIANNON: I noticed you said there will be no shorter term replenishment. Would that include that you would not consider front-loading the portion of the pledge, which has not been released yet to the global fund? That is not up for consideration?

Mr Proctor : The timing of the funding was fairly much locked in in the way that it was achieved through the budget process. The $70 million is provided as of 1 July and another $130 million the next July. But the point is that the fund already has this in consideration. It knows it has the resources. We have always provided what we have pledged. It does not actually solve any of their problem to bring it forward—they have some billions in the bank—whilst they negotiate the offers from round 10, which is still being finalised. That was the last round.

Senator RHIANNON: What is the government's current position on the proposal to host a global fund donors meeting in 2012? Where are you at with that?

Mr Proctor : There was a request from the fund secretariat that we host a mid-term review of the replenishment, as it is called, in the first half of this year. The other factors that I have mentioned to you, and the major management changes that have now happened at the fund, mean the board did not want to proceed with the replenishment review in that period. So it is now under reconsideration as to how the replenishment of the fund should work, how the secretariat deals with the board in terms of reporting its financial situation and protecting the needs into the future. So it is just not feasible in this half year to have that sort of meeting.

Senator RHIANNON: I would like to move on to the Australian Mining for Development Initiative. I understand there is $127 million earmarked for this. Is this the total of the current aid money going to mining related initiatives, or is their money in other parts of the aid program? I am trying to understand whether there is money for scholarships, technical assistance, mapping and other ways to assist the mining industry.

Mr Baxter : As you know, the Prime Minister announced the Mining for Development Initiative at the Commonwealth heads of government meeting last year. I think it is fair to say that, since that announcement, we have had an enormous amount of interest from a very large number of developing countries across a number of regions to get access to the training that is going to be provided under that program. But we have provided funding for mining related activities in the aid program for quite some time. So the answer to your question is yes, there is additional money. I will give you an example. Last year we made a contribution to an IMF fund which seeks to improve the macroeconomic management in resource rich developing countries. It is called the Natural Resource Wealth Trust Fund.

We also last year undertook a number of study tours for representatives from 18 different African countries to see how our well-run and efficient mining in Australia sector operates. Again, there was very strong interest in demand for people to come to Australia to learn from our experience. We have done a range of other things, which I will not go through at length. There have been activities that we have funded in the past, and still fund, outside of that Mining for Development Initiative. I think what you will see over the next two years is everything coming under that initiative.

Senator RHIANNON: Could you give me on notice the details of aid money that has gone to the mining industry over the last five years for any related programs?

Mr Baxter : Certainly. Senator, I have to make a clarification. We do not give money to the mining industry. We give money to countries that are trying to develop a mining industry but we do not give money to mining companies. I also want to add that, as a result of the Mining for Development Initiative, we have now become the largest donor in the world to the Extractive Industries Transparency Initiative.

Senator RHIANNON: Okay. Could you take it a notice to provide more information about that initiative and also the mining related projects prior to the AMDI announcement. I would also like to know how much the study tours cost.

Mr Baxter : I can tell you that. It was $1.4 million.

Senator RHIANNON: What was that for?

Mr Baxter : That was for study tours involving officials from 18 African countries in 2011.

Senator RHIANNON: Was that for two separate visits, or one?

Mr Baxter : No, there were a number of different study tours.

Senator RHIANNON: What companies did they work with when they came here and what areas did they visit. It will take a while to go through the areas, so let us just go to the companies.

Mr Baxter : Certainly most of the major Australian mining companies were involved as part of that, and we are very grateful for their cooperation.

Senator RHIANNON: Can you give us an idea of which ones were involved?

Mr Baxter : There was BHP Billiton and Rio Tinto. I would have to take it on notice if you want the full list.

Senator RHIANNON: Thank you. BHP is in the news at the moment with a controversy about its workforce being concerned about the safety issues they face on the job. Would those sorts of issues make you reassess the companies you work with?

Mr Baxter : We work with reputable companies and will continue to do that.

Senator RHIANNON: I was asking you about this specific development.

Mr Baxter : I am not aware of it.

Senator RHIANNON: It is all over the news today. The BHP workforce have gone on strike for the first time for quite a long time. Safety is one of the main factors. Are you watching those sorts of development with the mining industry?

Mr Baxter : No. We do not rely on the mining industry to deliver these programs. We cooperate with the mining industry to bring people to Australia to see our mining industry. Obviously we have to deal with the companies as part of doing that, but the mining companies look after their own interests. Our cooperation with them is to expose African government officials to the range of issues they are interested in when developing sustainable extractive industries in their own countries.

Senator RHIANNON: But I imagine what you are also looking for is to have a good health and safety regime if those mining industries go ahead.

Mr Baxter : Absolutely. Part of the training we are providing and will be providing under the Mining for Development Initiative is looking at things like environmental regulations, safety regulations, revenue stream management and a raft of things that developing countries have great demand for.

Senator RHIANNON: That is why I was raising it. Do you reassess what mining companies these visitors engage with in Australia, if those mining companies are involved in controversy around the issues in which you are trying to teach world's best practice?

Mr Baxter : The actual instruction and the training under the Mining for Development Initiative will be provided through the University of Queensland and the University of Western Australia, not by mining companies. It is just site visits that we do on study tours rather than instruction on safety regulations or anything like that.

Senator RHIANNON: Do you pick up any of the issues about safety regulations and, if so, how?

Mr Baxter : These will be incorporated into the courses we are offering through the University of Queensland and the University of Western Australia.

Senator RHIANNON: So Australian aid money will go to those universities to help provide the—

Mr Baxter : That is right, yes. We have funded those universities, and those two universities together comprise the International Mining for Development Centre. Total funding is $31 million over four years.

Senator RHIANNON: It sounds as though these tours would become quite regular. Is that how you do it?

Mr Baxter : Those tours are part of sensitising people as to how to run an efficient and effective mining industry. I will give you an example of the kind of work we are already doing. We have just delivered training, for example, to 10 Indonesian mining inspectors. That was done through our university partners. We also produced some policy advice for the January meeting of the African Union Summit. These were on social impact assessments of resource projects and minerals royalties and other specific mining taxes—very specific, practical advice.

Senator RHIANNON: Because there has been controversy about how mining companies operate in a lot of low-income countries, what measures are you taking to ensure that this program does not play out to in fact open up low-income countries for the easier penetration by Australian mining companies or other mining companies through the use of Australian aid dollars to assist the development of mining in low-income countries? Do you see that as a problem? If you do, how will you manage that problem.

Mr Baxter : I do not see it as a problem.

Senator RHIANNON: You do not think that mining companies would abuse aid money to get into low-income countries?

Mr Baxter : We do not give mining companies aid money. I have said that before.

Senator RHIANNON: I did not say that you are giving it to them but by opening up the industry, which is clearly what this is doing—

Mr Baxter : For many developing countries, their natural resources are the one opportunity they have to develop their national wealth and improve the living standards of their population—to send their children to school, to provide hospitals, to provide infrastructure. If you look at Papua New Guinea, 80 per cent of its export earnings are from natural resources. If you look at Africa, between 2000 and 2010, it is estimated that African governments gained $200 billion in oil revenue. In a country like Botswana, mining accounts for 36 per cent of GDP. If they are going to have sustainable futures, they have to get their mining industries right, and that is why we are assisting them. As I said, this is not about facilitating the access of mining companies. Mining companies are in Africa regardless, because they are pursuing their own commercial interests. What we are trying to do is assist developing country governments and their communities to maximise the returns from mining through capacity building.

Senator RHIANNON: You mentioned PNG and Africa. The bulk of the money from the mining industry goes out of the country at the moment. I would hope we do not disagree on that. I am not saying that you are facilitating the mining companies going in deliberately. My question is to understand what steps you are taking so that is not the spin-off, the result. This is a huge shift in the aid budget.

Mr Baxter : The steps we are taking are to build the capacity of developing country governments to make wise decisions about how they develop their natural resources. They are going to be doing things like, when they come to Australia under the Mining for Development Initiative, learning about social and environmental safeguards. They will learn about revenue transparency; they will learn about how to set the regulatory framework right to ensure that they derive the most benefit from these programs; they are going to learn how to use geotechnical data; and they also going to learn how to can leverage off mining developments to provide local economic opportunities for men and women in the communities where mining is taking place. These are very practical areas which will help countries ensure they get the maximum benefit out of mining rather than the opposite.

Senator RHIANNON: Thank you for explaining that, Mr Baxter. Could you take on notice to provide the details of those programs that will be provided under this initiative?

Mr Baxter : I am very happy to.

Senator RHIANNON: Thank you very much. I move on to the Food Security Through Rural Development initiative. Can you provide details of the actual disbursements made through the Food Security Through Rural Development initiative and any future commitments that have been made? I am also interested in where and how the moneys are being spent. You may want to take that bit on notice. Perhaps we could get a general idea.

Mr Baxter : I am very happy to. About 8½ per cent of our budget this financial year will be spent on food security related initiatives. In 2009 the government announced a four-year $464 million food initiative. We are now in the third year of that four-year program. I will give you some examples. The kinds of things that we are doing include: we have an Australia-Indonesia partnership for rural development, and that helps improve farmer practices; it increases access to inputs like fertilisers and access to markets; and it improves the business enabling environment for smallholder farmers. The goal of the program is to increase the incomes of one million poor farmers by 30 per cent or more. Last year, at the Commonwealth Heads of Government Meeting, the Prime Minister announced that Australia would establish an international food security centre and that initiative is being led by the Australian Centre for International Agricultural Research. That will be about $46.8 million. We have also made contributions to multilateral organisations dealing with food security issues. In 2009-10 we made a $50 million contribution to the Global Agriculture and Food Security Program, which is managed by the World Bank and supports long-term food security, increased productivity and increased incomes in low-income countries. Countries that have benefited from that trust fund so far include Bangladesh, Cambodia, Ethiopia, Haiti, Liberia, Mongolia and many others. You can see from that that we are doing a number of things at the multilateral level, we are doing some things at the regional level and we are doing some things bilaterally.

Senator RHIANNON: Do they all come under the FSRD initiative?

Mr Baxter : That is right.

Senator RHIANNON: Your website refers to examples of programs likely to be supported, and you have some there but there are no details of the actual disbursements made since the initiative was launched in May 2009. Can those disbursements be supplied, on notice?

Mr Baxter : Sure. It would be helpful, I could go through the last five years.

Senator RHIANNON: I only have a couple more questions so if you did that it would be helpful.

Mr Baxter : In 2007-08 we were spending $185 million a year on food security; this year we think we will spend $348 million—a little less than a doubling over that five-year period. We have been progressively increasing our investment, and obviously food security is a big concern in the developing world.

Senator RHIANNON: So although the FSRD initiative brings together all those programs, the amount of money is actually increasing?

Mr Baxter : That is right.

Senator RHIANNON: We have not just brought lots of programs together and given them a name?

Mr Baxter : No, we are progressing our investments.

Senator RHIANNON: You would be aware of some of the controversy in Cambodia around the rights of in-country NGOs trying to advocate on behalf of their communities. They have been issued with formal warnings from the Cambodian government, and I think one may have been shut down. Could you update the committee on where you understand the Cambodian government is at, and AusAID's or DFAT's or the minister's response to those developments.

Mr Baxter : This is an issue that is of concern to us, and it is one on which Australia has been particularly active.

Mr Brazier : The Cambodian government released a fourth draft of its proposed law on associations and NGOs on 14 December last year. Consultations were held with civil society later that month and local media have reported that Prime Minister Hun Sen has said that consultations on the law will continue until there is a consensus on the provisions. We welcome the Cambodian government's ongoing willingness to consult on the draft. The law has been in draft form for several years. The ambassador and officials of the Australian embassy in Phnom Penh have made representations about the draft law at senior levels of the Cambodian government on at least 13 occasions, most recently on 18 October last year.

The Australian government's view is that an active civil society where NGOs have the right to operate freely makes an important contribution to the development process. The Australian government will continue to register with the Cambodian government our view on the draft law, including on the importance of protecting freedom of speech and association and ensuring that NGOs are able to continue with their activities as valuable partners in the effective delivery of aid.

CHAIR: I asked a question earlier today about progress on the Indonesian carbon partnership. I am interested in an update on that. There were several questions about deforestation.

Mr McDonald : I will give an update. In the original announcement of the partnership with Indonesia on addressing climate change, the Indonesia-Australia Forest Carbon Partnership initiative, the funding was $100 million. Australia contributed $30 million to that funding. It increased to $47 million in 2010. In terms of where we are up to on the initiative, there has been considerable progress in terms of the demonstration activity. There were some complex social and community issues that needed to be resolved. Agreements have been signed with seven of those villages in terms of the local communities that were involved. We now have 50,000 tree species planted and another 1.3 million seedlings being raised in community nurseries. The canal blocking, which was an issue, has now started, and that is very important in terms of the prevention of fires and the like. Incentive payments for the local community have also started; so far, $450,000 has been allocated in relation to those projects. So the demonstration project is progressing and producing outcomes, as I have just described. There are also lessons coming out of the REDD+ project that we would like to share more broadly across the climate change community. It is obviously a large demonstration project. That is pretty much where it is up to.

CHAIR: Thank you very much.

Mr Baxter : Chair, I would like to correct the record on one thing. I made a mistake earlier and my staff have corrected me, as they always do. I said that the average Pacific Island seasonal worker remitted $12,000. They earn $12,000 on average and they remit $5,000 of that.

Mr Batley : I would also like to make a minor factual correction to an answer in response to a question from Senator Fawcett. Our audit committee in fact met six times a year.

Senator FAWCETT: I shall look forward to hearing reports from those meetings at the next estimates.

CHAIR: Mr Baxter, thank you and all your officers for your attendance this evening. Thank you, Minister, and thank you to Hansard, the secretariat and the committee. We will see you all again.

Committee adjourned at 22 : 42