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Estimates: AusAID

Estimates & Committees
Lee Rhiannon 16 Feb 2012

Foreign Affairs, Defence and Trade Legislation Committee

Estimates hearings, 16 February 2012

Australian Agency for International Development (AusAID)

  • Mr Peter Baxter, Director General
  • Mr James Batley, Deputy Director General
  • Mr Roderick Brazier, Acting First Assistant Director General, Asia Division
  • Mr Murray Proctor, First Assistant Director General, Sectoral Policy Division
  • Ms Catherine Walker, First Assistant Director General, Africa, West Asia, Middle East and Humanitarian Division

 

Full transcript available here

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.

[Other Senators continued the questioning]

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.

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