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Senate Estimates: Foreign Affairs, Defence and Trade Legislation Committee: Department of Foreign Affairs, Defence and Trade: Foreign Affairs Portfolio (Non-Trade Programs)

Thursday, 20 October 2016

Senator RHIANNON: I would like to pick up on PNG questions that I was asking earlier.

Mr McDonald: That would be Mr Sloper.

Senator RHIANNON: What safeguards have been put in place to ensure that the Australian government is not complicit, through its involvement in organising APEC 2018, in illegal land grabs, forced displacement and other forms of human rights abuses?

Mr Sloper: The safeguards are the same as we put in place for all our programs, where we have safeguards regarding displacement, community consultation in regard to the protection of children and so on. I would note that in regard to APEC 2018, as I said earlier today, we are not funding or supporting any activities at the moment.

Senator RHIANNON: But you will obviously be involved. At the start of your answer, you said the safeguards you will put are similar to other programs. Were you referring to other programs in PNG?

Mr Sloper: DFAT aid programs across the globe.

Senator RHIANNON: In general?

Mr Sloper: Yes.

Senator RHIANNON: So not specifically about PNG, despite the fact of the high levels of corruption that have been identified in that country? Nothing special for that country?

Mr Sloper: Well, we have a zero tolerance for fraud and corruption throughout the program, so it is the same procedures.

Senator RHIANNON: But I was after specifics. The key word in the question was 'safeguards'?

Mr McDonald: What we do, as Mr Sloper said, is we have safeguards around a whole range of risks, including children, corruption and the like. We have a zero tolerance. We apply that to all our investments. Depending on our risk assessment, that informs us what sort of requirements we put around that, including how we distribute the money out as a result of that. So that applies across all our programs and projects. And depending on the country and what is happening within that country, that will vary in the application of those safeguards.

Senator RHIANNON: Could you take on notice and provide what those safeguards are and what you actually do?

Mr McDonald: Yes. Absolutely.

Mr Sloper: Can I confirm whether that is in regard to APEC 2018 or all programs in PNG?

Senator RHIANNON: APEC 2018. Did DFAT express any concerns to the PNG government about any alleged human rights abuses at the Paga Hill estate development, including the destruction of homes or other potentially illegal practices?

Mr Sloper: I will need to take that on notice. I am aware of the reporting on that in Australia and the issue. I just do not know whether we did make any representations. I would expect not. But it will depend on our involvement with that particular program. You asked earlier today whether we were funding the ADB or World Bank on that and I took that on notice.

Senator RHIANNON: Thank you. Considering Paga Hill, as a former national park, is to be the APEC meeting site and research conducted by the international state crime initiative shows the Paga Hill development company illegally acquired its urban development lease and its business lease for that area, and considering the company's Australian CEO Gudmundur Fridriksson rang companies censured in four PNG public accounts committee inquiries, four inquiries all up—considering these serious developments, are you monitoring the potential for the preparation and running of APEC may involve corrupt practices? I appreciate that was similar to earlier questions, but I did want to clarify what you are doing.

Mr Sloper: Thank you. Firstly, I just note that the decisions around APEC, its hosting and so on are those for the PNG government and not for the Australian government. Of course if we are to be engaged—and we are not involved in support for the APEC hosting planning at this stage; as I mentioned, we are involved in policy discussions about what PNG may want from us. But if we were to engage in, that of course the safeguards are outlined by Mr McDonald and our concerns about corruption would come into play. We would review whatever activities we are undertaking. I have to say at this stage all the requests we have received, though, in regard to security operations and support for the events are not in regard to the hosting and infrastructure developments associated with them. They have all been decisions for the PNG government.

Senator RHIANNON: So you are not asked to do any infrastructure. You are asked to do nothing more than turn up?

Mr Sloper: No. At this stage, the discussions are around security cooperation. So they build on the police cooperation program we have and our defence cooperation program and how that may fit into the planning for APEC. As you would appreciate with a range of leaders, ministers visiting, most APEC economies normally go to quite extensive planning in that regard. That is the specific issues on which Papua New Guinea has come to us and asked for some assistance.

Senator RHIANNON: So could there be a situation where the APEC is on this site where there have been practices involved but you have not been involved in any aspect of the development but security. Your people will be working at the site. Do you have due diligence to check on how it came to be turned from a national park into a mining development into a major development for APEC?

Mr Sloper: I understand the concerns about the Paga development. I do not think I can really respond to the question, which is really speculating on whether we are to be asked in regard to a potential site for an APEC meeting in the future. I will undertake to answer the question you asked before, but I think we are getting to hypotheticals now. I would note that my understanding is that the actual APEC house that will be built for the leaders meeting is yet to be constructed and it will be on an artificial island extending out from the coast of Papua New Guinea in the port area.

Senator RHIANNON: So the company we spoke about earlier—Curtain Bros—is an Australian owned company? Is that correct?

Mr Sloper: I do not know the details of the company's ownership. I am aware that some individuals working for the company are of Australian nationality or maybe dual nationality, but I am not aware of the actual ownership arrangements for the company.

Senator RHIANNON: This is a general question. Are Australian owned companies operating overseas bound to any Australian environmental, IR, business, social or other standards?

Mr McDonald: As I said earlier, all our partners, and through the way that we put our investments in place, are required to apply the safeguards that we have within our program.

Senator RHIANNON: The question was actually about whether they are done by any Australian standards. I understand the one about paedophilia. Are they bound by any other Australian standards with regard to how Australian companies operate, particularly in low-income countries?

Mr McDonald: Unless Mr Gilling or Mr Sloper can help on this, I would have to take that on notice.

Mr Sloper: It is not an area of my expertise, but there are obligations on Australians and Australian companies operating overseas with regard to corruption and reporting of corruption and those activities. Australian legislation does apply offshore in some regards, but it is not an area of my expertise.

Senator Fierravanti-Wells: I think, Senator Rhiannon, we will take that question on notice. It does have a number of complexities associated with it. Certainly we would prefer to take it on notice to give you the best answer that we can.

Senator RHIANNON: One of your colleagues has just joined the table. I wonder if he has a response.

Mr Gilling: The minister's response there was an accurate one because the safeguards provisions that we are required to take relate to the partners that we work with and where they work. Those safeguard provisions sometimes have to apply Australian rules and sometimes do not. It depends on things like international agreements. So it is indeed a complex area.

Senator RHIANNON: Thank you. This is a slightly more general question about PNG. What steps have been taken to stop Australia from becoming a safe haven for laundered money and assets acquired through corruption in PNG?

Mr Sloper: We take this issue seriously both in terms of our earlier discussion but also in terms of potential laundering of money and that transfer of funds to Australia. Activities with regard to this are undertaken by a range of agencies, so I will speak in broad terms on some of them because detailed questions are best referred to those particular agencies. We work jointly with Papua New Guinean agencies to disrupt efforts that we are not a safe haven here in Australia for any proceedings from crime and corruption. Any allegations that are referred to us that are considered to be breach of law are then investigated. There is an evidentiary test naturally associated with that. We have a non-conviction based proceeds of crime system that can be utilised to restrain or forfeit assets related to criminal activities committed overseas. We can seize assets and cancel the visas of corrupt individuals. So we are working closely with agencies in Papua New Guinea to stop the proceeds of crime flowing to Australia. As part of that, the AFP has a senior liaison officer at the high commission in Port Moresby to facilitate police assistance on these and other issues. You might be aware we have anti-money laundering and a counterterrorism financing framework also in this regard. That is not specific, of course, to Papua New Guinea. But we do monitor it closely.

Senator RHIANNON: With your monitoring, are Australian banks doing enough to detect and stop transfers of illicitly acquired funds from PNG to Australia?

Mr Sloper: It is a comment on the nature of the banks' activity. I think they are working with AUSTRAC and relevant agencies to ensure they meet their legislative obligations.

CHAIR: Thank you, Senator Rhiannon.

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