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Senate Estimates: Foreign Affairs, Defence and Trade Committee

Estimates & Committees
Lee Rhiannon 2 Dec 2013

Proof Committee Hansard

SENATE

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION
COMMITTEE

THURSDAY, 21 NOVEMBER 2013

CANBERRA

Senator RHIANNON: I want to return to some of the issues that Senator Faulkner spoke about, starting off
with the issue around jobs. Mr Grigson, you said you would have a better idea next year about the targets-that
there were no targets for jobs at the present time. That is what I understood. And you said that the variables are
not known at the present time. Could you identify what variables are not known?
Mr Grigson: The variables I mentioned to Senator Faulkner, which were the shape of the aid program, the
impact of the final form of our integrated structure, which will not be known until the middle of next year, and
various other savings measures that might be applied to the department.
Senator RHIANNON: You also said that in the first two months you would know the variables. Does that
mean that by the end of February the staff in DFAT and AusAID would have an understanding of how many
voluntary redundancies there would be and how many forced redundancies there would be? Is the end of February
the time line that you are looking at?
Mr Grigson: I said the first few months of next year, Senator.
Senator RHIANNON: Sorry, I put it down as 'the first two months'. You are saying the first few months?
Mr Grigson: The first few months of next year.
Senator RHIANNON: Do we define 'few' as three? That is just in trying to get some certainty.
Mr Grigson: Three is a good number.
Senator RHIANNON: So by the end of March?
Mr Grigson: No, it will be by the first few months. It may be earlier or it may be later.
Senator RHIANNON: That is when you would actually have numbers on forced redundancies and voluntary
redundancies? Thursday, 21 November 2013 Senate Page 25

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Mr Grigson: We are not considering forced redundancies. In the earlier discussion we said that at this point
we are looking at natural attrition and VRs.
Senator RHIANNON: So you are ruling them out?
Senator Brandis: You may not have been in the hearing room earlier on, Senator Rhiannon, when Senator
Faulkner was pursuing this line of questions. I objected, and my objection was upheld by the chair, to the same
question being asked, on the basis that the officer had already given a direct answer to a specific question that
there were no plans for voluntary redundancies, and therefore to put the proposition which had already been
negatived, in effect, on the footing of a hypothesis was really not an appropriate question. Mr Chairman, I would
ask you to remake, as it were, the same ruling that you made when Senator Faulkner asked the same question.
Senator RHIANNON: But to ask the question-
Senator Brandis: Sorry, I am addressing the chair, Senator.
CHAIR: Yes, I did make that ruling, so it still applies, Senator Rhiannon. Perhaps we should move on to
another topic.
Senator RHIANNON: There is obviously a lot to be explored around jobs, but are you ruling out forced
redundancies? That is a straightforward question. Are you going to stop that being answered, Senator Brandis?
Senator Brandis: Mr Grigson has told you that there are no plans for involuntary redundancies.
Senator RHIANNON: Could you repeat that?
CHAIR: That statement has been made already.
Senator Brandis: Mr Grigson has already told the committee, Senator Faulkner and now you, Senator
Rhiannon, that there are no plans for involuntary redundancies.
Senator RHIANNON: With regard to the $656 million that the government has identified will be reduced in
this financial year, what specific country and global programs and projects will be affected and by how much?
Mr Grigson: The government is still considering the final shape of the aid program, so I cannot give you the
details around that at this point.
Senator RHIANNON: When will it be released?
Mr Grigson: When the government has made a decision about it.
Senator RHIANNON: It is a lot of money that we are talking about, and that has to happen this financial
year. For those cuts to occur, by when will that have to happen in the new year?
Mr Grigson: The government are very aware of the extent of that savings task. They will provide us with
their decision in due course.
Senator RHIANNON: Will other government departments that administer parts of the ODA budget, like
Immigration and the Australian Federal Police, be included in these cuts?
Mr Grigson: The government is still considering the shape of the program.
Senator RHIANNON: Are talks proceeding through your steering committee with the other departments that
administer ODA, in possible preparation for this?
Mr Grigson: The aid budget as such, in terms of the program budget, is not being handled by the steering
committee; it is being handled through the normal budget processes.
CHAIR: Senator Rhiannon, given that, it might be more appropriate to ask these questions under the section
for international development and aid at 7.30 tonight.
Senator RHIANNON: I still have a number of questions, Chair. You set out before, Mr Grigson, the steering
committee, the task force and the working groups. Is the steering committee the top body in this?
Mr Grigson: Yes, it is.
Senator RHIANNON: Is there a union representative on that body?
Mr Grigson: No.
Senator RHIANNON: Is there a union representative on the task force?
Mr Grigson: No.
Senator RHIANNON: Is there a union representative involved in any aspects of preparation for these staff
changes and staff redundancies?
Mr Grigson: I will ask Mr Smith to answer that. Page 26 Senate Thursday, 21 November 2013

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Mr Smith: The first point I would make, by way of a general comment, is that we take the process of
consultation with staff very seriously, and there are a number of mechanisms set up in order to assure that staff
are consulted in the decisions that are taken on the integration. What we have done is to set up a integration
consultative committee which includes in its membership a couple of members of the steering committee, and the
CPSU is represented on that consultative committee.
Senator RHIANNON: In terms of that structure-steering committee, taskforce, 13 working groups-where
does the integrated consultative committee sit?
Mr Smith: It is not a decision-making body; it is a consultative committee, so that sits alongside that
structure.
Senator RHIANNON: So that is how these changes are being communicated to staff, is it?
Mr Smith: No. That is a committee that we set up at the request of the CPSU and it provides a forum for
formal consultation between the department and that particular union. But we have a number of mechanisms for
consultation directly with staff, and there are at the same time a number of mechanisms in place to ensure that
staff are provided with information about issues related to integration.
Mr Grigson: I mentioned to Senator Faulkner earlier about the various mechanisms available. One was a
monthly staff forum that the secretary runs. All staff are welcome to attend that. Another is the formal notification
process, and we provided Senator Faulkner with a couple of examples of that, around changes. Thirdly, there is a
regular update from the task force that looks after the steering committee, on decisions that are taken.
Senator RHIANNON: On the decisions that are taken, do you mean by that that the minutes of the steering
committee and the minutes of the task force are circulated to staff?
Mr Grigson: I am not sure that we are retaining them in minutes, in the terms that you put it. Most of the
papers that come to us have a recommendation on them, and the steering committee either agrees or it does not
agree.
Senator RHIANNON: Do you mean that these meetings are not reporting in terms of minutes? Minutes are
not kept from these meetings?
Mr Smith: Records are kept of the minutes. Whether or not the manner in which those decisions are
communicated to staff is through the release of the minutes themselves-I think in most cases it is in the form of
general guidance and information to staff about the impact of those decisions and how they will be taken forward.
There is a weekly newsletter that is put out by the task force, which provides in written form information on the
issues that are on the agenda and the decisions that have been taken in relation to integration. I want to emphasise
the point that consultation is an ongoing process; it is not something that is done after the fact. The mechanisms
for consultation are there and they are very much an integral part of the work on integration.
Senator RHIANNON: I would like to go on to the working groups, to understand how they are functioning.
My recollection was that you explained that, of the 13 working groups, many of them cover geographic areas and
also thematic areas. In some of the discussions, I have heard that there is an expectation with the geographic areas
of AusAID and DFAT that they will fit together.
Mr Grigson: Yes.
Senator RHIANNON: Thematic areas within AusAID have been built over many years and obviously there
is an expertise within areas like their humanitarian work, the peace and conflict work and the other thematic areas.
What are the plans there, in terms of how that will be picked up under DFAT?
Mr Grigson: That is a good question, and, as everybody in the department will tell you, there has been no
person more forward leaning in terms of looking after particular skill sets out of AusAID than me. The
humanitarian and disaster relief example, I think, is a good one. Australia has a deserved reputation
internationally for being very slick in this area. It is something that we would not want to lose, so we are looking
very carefully at how you maintain that skill set. There are other areas that are similar. I think you will find in the
final integrated structure that there are certain areas that we have gone to great lengths to preserve, and a number
of those that you mentioned then will be among that.
Senator RHIANNON: You said you have gone to great lengths to preserve them. Could you provide details
of what you mean by that?
Mr Grigson: The humanitarian and disaster relief area, for instance, has been untouched.
Senator RHIANNON: Could you nominate the thematic areas. You have said that that one is not touched-
Mr Grigson: Untouched. Thursday, 21 November 2013 Senate Page 27

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Senator RHIANNON: It is untouched. Could you give a summary of the different thematic areas and how
they are being handled?
Mr Grigson: Are you interested in the corporate areas as well as the thematic areas?
Senator RHIANNON: Yes. If it is a long list and you have got a lot of detail you could put it on notice.
Mr Grigson: It is a long list but I do not have a great detail of detail before me. So for financial management,
for instance, the chief financial officers of both organisations are working together. In the end we will have an
integrated financial services structure.
Senator RHIANNON: Because of time, where there is actually information about how you are doing it or
where decisions have already been made-
Mr Grigson: We will take it on notice, Senator, and give you some information.
Senator RHIANNON: With regard to national interest, we hear how central that is to the work of the new
way our aid program will operate. What does national interest mean in determining aid allocation?
Mr Grigson: Senator, I described before the first principle and the principles that were distributed, in terms of
integration, and it was: 'Australia's aid program will promote Australia's national interests through continuing to
an international economic growth'-so that is one national interest-'and poverty reduction', which is the second.
It will be designed to implement and support Australian foreign and trade policy.
Senator RHIANNON: So could you be more specific about what that will mean when aid programs are
actually being determined? Does national interest mean a commercial advantage for Australia?
Mr Grigson: Not necessarily. As I said in the very first sentence, poverty reduction is one of two national
interests outlined.
Senator RHIANNON: Could you explain, in the words of how DFAT is now handling this, how poverty
alleviation assists our national interest?
Mr Grigson: I think all of us would accept that one of the goals-
Senator RHIANNON: I am not questioning that, obviously. Everything is changing enormously. It will be
very useful to hear how you are defining that, because we need to get down to understanding how aid programs
will be decided in terms of national interest. That is why I am asking the question.
Mr Grigson: There will be a number of elements taken into account. The two guiding principles that we have
got before us at the moment are promoting international economic growth and poverty reduction.
Senator RHIANNON: You said a number of elements. What are they, please?
CHAIR: Senator, I wonder if these questions may not be better dealt with-
Senator RHIANNON: No. they are very relevant, they are very big picture, in terms of informing us for the
rest of the-
Senator Brandis: I think, Senator, what the chair is trying to point out to you is that this area is provided for
after 7:30 pm this evening in the program.
CHAIR: In fact, from 7:30 till 11 pm. There is a lot of time.
Senator BRANDIS: So we have three hours and 15 minutes set aside for this topic this evening. It is not for
me, it is for the chair to-
Senator RHIANNON: But, Minister, I think you are aware that from 7:30 we are getting into those country
programs, which become very busy. The aid budget and the aid management has gone through enormous changes
and we are just trying to understand that, so that we are informed.
Senator BRANDIS: Senator Rhiannon, I am not the chair. It is not for me to be making rulings but you rather
did cut Senator Eggleston off when he was trying politely to point out to you that there is time provided for after
7:30 pm-a lot of time-for these questions.
CHAIR: And there is a general section at the beginning where the broad issues can be dealt with.
Senator WONG: Obviously I am new to this committee. But do I understand the acting secretary or the
minister to be suggesting that we can ask these sorts of broader policy questions at the overview at the
commencement of the AusAid program?
CHAIR: Yes there is a section, if you look at-
Senator WONG: Because, to be honest, I do not think there is anything unreasonable about the questions
being asked. Page 28 Senate Thursday, 21 November 2013

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
CHAIR: No, there is not anything unreasonable. But the senator's questions are specifically on AusAid,
international development and aid, and the time allocated for that is 7:30 till 11 tonight and there is at the
beginning a general section.
Senator WONG: Mr Grigson, do you generally attend for the secretary or acting secretary that outcome as
well.
Mr Grigson: Yes. I plan to be hear until close of business.
CHAIR: In that case, Senator Rhiannon, would you care to reconsider asking these questions at this point in
time?
Senator RHIANNON: Thank you for your advice, Chair. If there is going to be time to explore these general
changes, I am happy to defer it till later.
CHAIR: We guarantee you the time to ask these questions tonight, after 7.30pm
Senator RHIANNON: Thank you.
CHAIR: I have couple of general questions then I will go to Senator Lundy. Firstly, the Philippines typhoon.
Could you update the committee on Australia's response to the crisis in the Philippines?
Mr March: Perhaps if I could start at the top and then work down to the detail. The government requires the
department to have the capacity to respond to and deploy Australian teams in response to simultaneous disasters.
We do that through a focus on disaster preparedness, risk reduction and of course disaster response. Our efforts
are always closely integrated with whole-of-government partners, including the Australian Defence Force,
Australian Federal Police, Emergency Management Australia, technical medical teams and the department's
consular area.
I should at the outset reiterate our sympathies to our good friends in the Philippines. The Australian response,
to come to the point of the question, was quick and generous. On 8 November two departmental rapid response
team members deployed to Manila in advance of the typhoon. We did this because we thought there was a risk,
given the size of the typhoon at category 5, that airports would be closed and we wanted tot get disaster response
specialists in there in advance.
The typhoon hit late on 8 November and on 9 November. On the 10th, the day after, a further three disaster
response experts were immediately deployed. We reallocated an Australian civilian core engineer in the
Philippines to the response. The minister, Ms Bishop, announced a $395,000 first consignment and release of
preposition stores that were in Manila at the time. Those stores were released to the Philippines Red Cross and to
the United Nations Population Fund.
On 11 November, Ms Bishop then announced a further package of assistance valued at $10 million. That $10
million comprised an Australian medical team, which was sourced by doctors, nurses and radiologists et cetera
from the Australian states health systems.
There was a further commitment of emergency relief stores up to $1 million. Three million dollars was
provided to Australian NGOs-these are pre-accredited Australian NGOs who have humanitarian bonafides and
we have processes pre-agreed and in place so that, on the basis of a very quick exchange, I can commit, following
ministerial approval, the sums of money and we are confident that accountability processes sit behind it.
We also made available to the Australian Red Cross $1 million for them to work in partnership with the
Philippines Red Cross and we committed $4 million to the United Nations flash appeal, which we knew was
coming out the next day. To support this effort. we committed a further five Australian disaster response
specialists.
On 13 November the Australian medical team landed in Cebu in the Philippines. The day after, on 14
November, the Prime Minister announced a further package of $20 million, taking the total Australian effort to
$30 million. The medical team, on the 14th, made its first visit to Tacloban and commenced first aid
consultations. At this time, on the 14th and 15th, Prime Minster Abbott and Foreign Minister Bishop stated that
we were prepared to provide more humanitarian assistance based on needs and on advice of the Philippines
authorities. On 15 November the light field hospital services began at Tacloban airport and ADF flights to other
centres occurred with Australian officials. On 16 November full surgical services were available at the Australian
field hospital and on 17 November Ms Bishop rang her counterpart, Philippines Foreign Secretary del Rosario, to
offer further support if required. At that time more than 400 people had been evacuated from disaster affected
centres by the Australian Defence Force. At this stage we had a funding effort through Australian NGOs and the
UN, a medical team placement and the engagement of the Australian Defence Force through air assets. On 19
November we deployed a further Australian civilian core disaster specialist to focus on recovery needs. Thursday, 21 November 2013 Senate Page 29

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
While there are clear humanitarian needs at the moment, it is prudent at this stage to be focusing on the recovery
effort and we now have two Australian civilian core experts looking at the recovery needs, with our colleagues at
post and of course with the Philippines authorities. As of 20 November, the medical team has seen 587
outpatients, has performed 72 surgeries, of which 34 are categorised as major, and overnight on the 20th it had
108 inpatients who were held in the facility because of the requirements of their medical condition. Assessments
around Tacloban, where the Australian medical effort is focused, are that about 80 per cent of the medical
facilities and hospitals are functioning, or they are functioning at 80 per cent capacity. I make this point because
not only are the Australian doctors and medical team working very long hours to perform surgical operation, in
the Australian field hospital but they are also working with their Philippines counterparts in looking at the
facilities and trying to stand up the domestic Philippine medical system and re-establish that.
I might make one more quick point on medical, if I may, and then I can touch on more if you wish. We have
incorporated in our medical footprint, six United Kingdom doctors and nurses who arrived from the UK, and
following consultations they have been included into our medical facility and they will stay with the medical
facility until the end of the month. But perhaps more importantly we have included 15 Philippines nurses into our
facility, so we are working very closely with the Philippines authorities to have an integrated humanitarian
response. I think it is worth my noting that the Australian consular effort has been significant at the time but other
colleagues have a stronger view on that and I will leave it to my colleague, Justin Brown, to make comments if
that is helpful to you.
In terms of the Australian Defence Force effort, and I stress that this is an integrated response, we exercise
regularly with the Australian Defence Force, both as department response team members and with our medical,
engineering and urban search and rescue counterparts. So that we can load onto a Defence C130 or a Defence C17
very quickly our emergency relief cache and the staff and we know it is safe for flight on those flights. The ADF
has provided airlift for more than 300 tonnes of humanitarian cargo into and around the Philippines, and this
effort is ongoing. The ADF has evacuated more than 1,100 people from Tacloban, Mactan, Cebu and Guiuan
airfields, and these are of all nationalities. It is worth recording, I think, that Australians have been evacuated out
on Philippine and US military flights, and we have done the same with their nationals. Lastly, the ADF has
transported more than 300 relief specialists from Cebu into Tacloban to conduct the relief effort.
I have one quick point on funding. More than 35 countries have pledged and committed more than $200
million to the overall effort. Within the UN funding appeal, which is at the moment $300 million, around $80
million, or 25 per cent, has been committed at this stage, and the International Committee of the Red Cross has an
appeal for $18 million, which is around 60 per cent committed. As well, many individuals and private people
have made contributions, and the Australian NGO community, as it always does, is making a contribution. Let me
pause there. I can go into more detail if you wish.

Senator FAWCETT: Could you confirm whether the department was consulted over that exclusion and if
there are any reasons as to why they were not included in that program? Could you be able to let me know?
Mr Grigson: Yes.
Senator FAWCETT: Could you also find out if the Israeli government has made any representations to
DFAT over that issue?
Mr Grigson: Yes, we will take that on notice.
Senator FAWCETT: Secondly, could you give us an update on Mr Matt Joyce. You would obviously be
aware of the decision earlier this month by the Dubai Ruler's Court.
Mr Grigson: I will get Mr Brown to do that for you.
Mr Brown: As you no doubt are aware, Mr Joyce and his co-defendant Mr Lee were both acquitted at the
court of appeal hearing on 10 November. That is obviously welcome news. The Dubai prosecutor has a period of
30 days in which to make a decision as to whether to appeal those rulings.
Senator FAWCETT: Sorry, could you just repeat that last part?
Mr Brown: The Dubai prosecutor has a period of 30 days in which to decide whether to lodge an appeal
against those acquittals.
Senator FAWCETT: Assuming no appeal is lodged, is there any barrier then to Mr Joyce and Mr Lee
returning to Australia?
Mr Brown: If the prosecutor decides not to lodge an appeal, then that would be-as we understand it-the
end of any further legal action. We would hope that they would have their passports returned and would be free to
leave the country.
Senator FAWCETT: Thank you.
Mr Grigson: I have got an answer to a question, if that helps, at this point. Senator Faulkner asked this
morning about non-ongoing staff. As of 30 September, DFAT had 132 non-ongoing staff and AusAID had 81
non-ongoing staff. None of those staff have been terminated following the announcement of the integration.
Senator RHIANNON: Could I ask a question? I would be two minutes.
CHAIR: You have two or three minutes.
Senator RHIANNON: With respect to the Prime Minister's trip to Sri Lanka, what advice did DFAT provide
on making the gift of two patrol boats?
Senator Brandis: You cannot ask about advice on that. You could asked whether advice was given, but you
cannot ask what it was.
Senator RHIANNON: Thank you for your assistance, Senator Brandis. With respect to the Prime Minister's
trip to Sri Lanka, was advice given by DFAT on providing a gift of two patrol boats to that country?
Mr Chittick: The disposal of the Bay-class patrol boats has been under consideration for a number of months
now. DFAT has been involved in the discussions within government on that disposal.
Senator RHIANNON: In those discussions, was consideration given to what the needs of the Sri Lankan
navy are and their boats? I am asking that in the context of whether you are aware that the Sri Lankan navy has
started running whale watching cruises out of the southern Sri Lankan city of Galle on 18 October. They continue
every weekend. As they have got boats to run whale watching, did you make the assessment if they needed
additional boats?
Senator Brandis: There are three elements to your question. The first is whether consideration was given to a
particular matter. That goes to the content of advice, which I would submit to the chair is objectionable. The
second element of your question was whether the department was aware of whale watching; there is no objection
to that part of the question. The third part of your question, if I recall it, was whether an analysis was made of
whale watching, which I suppose is also not objectionable-but the first bit is.
Senator RHIANNON: In your summary, what you have failed to include is looking at the whale watching in
the context of making a decision to give them two boats when they have boats to conduct whale watching. But I
would be interesting it in the department's response.
Senator Brandis: If that is the point of your question, the whole question is objectionable because it goes to
the content of advice.
CHAIR: Senator Rhiannon, you have run out of time. So that concludes that.
Senator RHIANNON: So the answer to that has been shut down? Page 58 Senate Thursday, 21 November 2013

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Senator Brandis: No, you asked an improper question. So do not blame anyone other than yourself if you
have not asked a proper question.
Senator RHIANNON: In your summary of the question, you acknowledged that parts of that question were
legitimate and now you have shut it down.
Senator Brandis: And then you have rephrased the question-
Senator RHIANNON: It is unprecedented how you are conducting yourself in this estimates and you are
aware of that.
CHAIR: We are closing this session now for a tea break.

Senator SMITH: When do you expect EFIC to have recovered to its position prior to the extraction of the
$200 million special dividend-
Mr Hunter: Yes, I understand.
Senator SMITH: in the absence of getting an injection from the Commonwealth?
Mr Hunter: EFIC made a profit in the last financial year of $22.6 million. We paid out a special dividend of
$200 million. If I do the maths roughly, I am guessing that to get our capital position back to the same level will
take roughly eight years, assuming the same level of profitability.
Senator SMITH: Eight years, almost 10, assuming that the recent profit outcomes are consistent into the
future as they have been over the last three years?
Mr Hunter: Our capital base is lower now, and we earn income on our capital base, so we would project that
our profits will be lower in the future.
Senator SMITH: This is the last section in my first part of the questioning. Did the responsible minister in the
former government express any concern at the decision and the consequences of the impact on the EFIC balance
sheet? Again, you might just have to ask your colleagues for assistance.
Mr Hunter: I think we had best to take that on notice.
Senator SMITH: Thank you very much. I want to go to the second part of my question.
Senator Wong interjecting-
Senator SMITH: It refers to-
CHAIR: He is asking questions still related to this.
Senator RHIANNON: I have questions on EFIC too, Chair.
CHAIR: Let Senator Smith conclude his questions.
Senator SMITH: My next set of questions goes to the annual report of 2011-12. I will just read from the
annual report of 2011-12.
Senator WONG: You did not like it when the officials read from an annual report. Now you are going to do
it. Is that how it works?
Senator SMITH: 'In the 2012-2013 federal budget'-I am reading from the annual report, signed by the
chairman and the former managing director, at page 9:
In the 2012-13 Federal Budget, the Treasurer announced that EFIC would be required to pay a 'special dividend' of $200
million during 2012-13. The mechanism to direct how this will be paid is yet to be determined; however, legislative changes
to the Export Finance and Insurance Corporation Act 1991 (Cth) will be needed to enable payment. The timing of these
legislative changes is yet to be finalised, but the Budget requires the dividend to be paid to the Federal Government by 30
June 2013.
There are no surprises in that statement.
Despite this-
this is from the annual report signed by the chairman and the managing director-
our capital base is solid and allows us to support many small and medium-sized exporters. However, the level of demand to
support large, long-term transactions continues to be greater than we can prudently meet on the Commercial Account.
Why does the annual report of 2011-12 talk about the special dividend needing to be paid and does not-to replay
your comments, Mr Hunter, you are a risk averse organisation. We go to the composition of the board, whose
photographs are in this annual report, who are well-regarded, risk averse individuals. Why is that we go from this,
not raising any alarms about the need to extract $200 million, and then in one annual report we go to statements
about breaches of adequacy requirements and we go to requests for the new government to provide capital
injections? It seems like a very, very large shift in attitude for a risk averse organisation with many prominent
people on its board. I am just wondering if someone can provide an explanation about why the 2011-12 annual
report did not express more caution, was not more prudent, and did not reflect the risk adverse nature of the
organisation and, I expect, the board members.
Mr Hunter: I obviously cannot comment on an annual report written twelve months ago when I was not on
the board-
Senator SMITH: Agreed.
Mr Hunter: and I do not think it would be appropriate for my colleagues who would not have been sitting at
the boardroom table at that point, so I will take that question on notice and we will give you a response. Thursday, 21 November 2013 Senate Page 89

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Senator SMITH: How are annual reports presented to EFIC? Who drafts them and who prepares them?
Mr Hunter: The executive prepare the annual reports, draft them for discussion and consideration by the
board.
Senator SMITH: Are they heavily edited or not edited at all? Perhaps the legal counsel could provide some
evidence-
Mr Hunter: Could you define 'heavily edited'?
Senator SMITH: I do not mean grammatical or spelling change. I mean material changes to how information
might be represented.
Mr Hunter: I am happy to address the question. I sat through the board audit committee this year and I did
see considerable challenge from the board about disclosure, about the way things were disclosed, and I would say
that there is a sensible and prudent discussion about what stakeholders need to know and how it is represented in
the annual report.
Senator SMITH: That prudent sensible decision-making seems to be absent in the 2011-12 annual report
where it talked about an extraction of $200 million, but did not anywhere that I can see in that annual report-and
I am happy to be pointed to it-have any cautions, disclaimers, discussions about how this might actually affect
the performance of EFIC into the immediate or longer-term future.
Mr Hunter: I do not think that is necessarily correct.
Senator SMITH: Please correct me.
Mr Hunter: As I indicated with your previous question, we will respond to you about the change from one
annual report to the next.
Senator SMITH: If you are able to disclose attitudes or discussions that happened at the audit scrutiny of the
2011-12 annual report, that would be most valuable.
Mr Hunter: I understand.
Senator SMITH: I suspect that the 2012-13 annual report is a more accurate description of EFIC's position. I
am curious to know what the audit committee or audit discussions or audit scrutiny happened around the 2011-12
report. I go back to my point, this is a very big departure in one annual report in a 12-month period for what
should be a highly prudent, risk-adverse organisation.
I have another question, one that goes to the issue around capital adequacy. Is it true that EFIC needs a balance
sheet stronger than a conventional bank because by its nature it is providing riskier loans than conventional banks
and given it is filling a gap that is unmet by the private sector and advancing loans when others might not wish to
advance them. Is that an accurate statement?
Mr Hunter: EFIC adopts a risk framework that we consider appropriate for the risks that we take on,
balanced across countries and industry sectors as well as large exposures.
Senator SMITH: Thank you.
CHAIR: I have an Austrade question that I would like to ask.
Senator WONG: We were going to government to government-
CHAIR: Well, I am going to ask it so I will just proceed.
Senator WONG: Chair-
CHAIR: These are also important questions.
Senator WONG: I am not suggesting that they are not, but Senator Rhiannon has been waiting-
CHAIR: I will proceed to ask them, instead of you interrupting me, if you don't mind, Senator.
Senator WONG: Senator Rhiannon has been waiting and the opposition has some EFIC questions. In the
interests of at least pretending to be fair, it might be useful to have some-
CHAIR: That is what I intend to do, and it will not take very long. First of all, Austrade. I understand the
budget has been reduced from $200 million in 2009-10 to $155 million in 2013-14 and efficiency dividends
announced require another $12.4 million in savings by 2016-17. Is that the case?
Mr Gosper: Our total appropriation for Austrade in 2013-14 is $170.2 million, which includes capital funding
of $11.2 million. Of course, we also have an additional $126.9 million in administered funding for the Export
Marketing and Development Grants Scheme and the Asian Century Business Engagement plan. Because of Page 90 Senate Thursday, 21 November 2013

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decision that have been made, we will need to find savings of some $0.3 million in 2013-14 and $14.5 million
over the forward three years.
CHAIR: As a consequence, I understand Austrade officers around the world have been reduced from 115 to
81 posts. Is that the case?
Mr Gosper: That scale of reduction has occurred over a number of years, not in relation to the specific
scenario that you have just asked. I believe at one stage we had approximately 112 officers, and now we have
some 88 officers in 48 countries. How we achieve further savings is a matter that we are examining, and we will
be consulting the minister in the oncoming months.
CHAIR: I understand that Austrade has redeployed resources more towards China and India and has reduced
representation elsewhere to fit within this constraint of its budget. Is that the case?
Mr Gosper: Generally speaking, over the last few years, in a resource constrained environment, we have
sought to shift resources to where we can make the most difference, the most impact for business. That tends to be
in the Asian region and in developing markets, where having people with the badge of government can be most
helpful. We have withdrawn officers and staff from a number of markets. Generally the more mature developed
markets in places like the US and-
CHAIR: And in particular LA and Houston; is that the case?
Mr Gosper: We do not have anyone in Houston and we do not operate in LA any longer.
CHAIR: I understand you do not operate in the entire south-west of the United States. Is that correct?
Mr Gosper: We cover it from our other posts in the US.
CHAIR: Whereabouts are they?
Mr Gosper: New York, Washington, Chicago and San Francisco.
CHAIR: A long way to the south-west of the United States. What about in Africa?
Senator WONG: Chair, can I just get some indication of when-
CHAIR: Senator Wong, I will just finish the question and then I will speak to you.
Mr Gosper: We have officers in a number of places in Africa-in particular, Johannesburg, Accra, Abuja, I
believe, and Nairobi. In many cases, these are locally engaged people, not Australians-or aid based officers, as
we would call them.
CHAIR: Can you describe how the reductions in Austrade's budget as a result of cuts under the previous
government have impaired-
Senator WONG: Chair, you said that you finished that question.
CHAIR: I have not finished it, Senator Wong.
Senator WONG: That is the second question. One, two.
CHAIR: This is all part of it.
Senator WONG: I am raising a point of order.
CHAIR: You may do that.
Senator WONG: I am raising a point of order. I am asking the chair to indicate when he intends to give the
call to the opposition and the crossbenchers before 6:30.
CHAIR: When I conclude these questions, and you are only delaying that process.
Senator WONG: At what time do you anticipate that to be?
CHAIR: When I conclude.
Senator WONG: At what time do you anticipate that to be? It is a matter of courtesy to indicate that.
CHAIR: As I said, when I conclude. You must really be quite deaf.
Senator RHIANNON: Chair, we have waited for three hours now-three hours.
CHAIR: I am in the process of asking some questions, and I intend to conclude them.
Senator McEWEN: I request that we have a private meeting.
CHAIR: Request denied at this stage because it will mean that we lose the rest of the hearing time.
Senator WONG: You cannot do that. Thursday, 21 November 2013 Senate Page 91

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CHAIR: I have just done it. Describe how the reductions in the Austrade budget as a result of cuts under the
previous government have impaired Australia's ability to promote Australian exports-
Senator WONG: Point of order, Chair. I request that the clerk be asked to provide advice as to whether you
can deny a request to have a private meeting.
CHAIR: I will hold a private meeting at half-past six.
Senator WONG: I note that the chair is now refusing to take the advice of the secretary.
CHAIR: Thank you.
Senator WONG: The extent of the bias on this committee is extraordinary. I did not have to do this, nor did
Labor senators have to do this, with Senator Bernardi or Senator Bushby.
CHAIR: Senator Wong, I am just asking some perfectly reasonable questions.
Senator WONG: And I asked a perfectly reasonable question: when you were going to return to the
opposition-
CHAIR: I just seek your indulgence to conclude the question-
Senator WONG: It is not my indulgence, it is about fairness: opposition and the crossbenchers before 6:30, or
it be our request that this outcome return after the dinner break.
CHAIR: We can do that.
Senator WONG: Okay. Fine. Easy.
CHAIR: So could you describe the reductions in Austrade's budget as a result of cuts under the previous
government, and how they have impaired Austrade's ability to promote Australian exports, to attract inward
investment to Australia or to help build skills and technology capacity through attracting technology transfer to
Australia?
Mr Gosper: As I have said, over a number of years Austrade has had some loss of funding or relatively static
resources at the same time as we have taken on additional functions with investment and education. We
responded to that, of course, by looking more closely at where we can make a difference, so we have made some
changes onshore to step back in the provision of services where others, like state government agencies or industry
associations, provide those services, and to do that in partnership with them. Offshore, we have allocated our
resources where they make the most difference to businesses. I am happy to add to my answer to this question,
and any other questions, on notice, if that would be helpful to you, Chair.
CHAIR: I just have one last question, and then I will put the other question on notice. What would be the
immediate priorities for enhancements to the Austrade post network, given the opportunities in focus areas such
as resources, agribusiness and tourism?
Mr Gosper: That is of course a matter on which we would consult and a seek a decision of the minister as to
where resources could best be allocated, but really we add the most value to business where we are offshore in
particular places where business needs us-and there are a number of examples of that, not just in the Asian
region but further afield.
CHAIR: Thank you. I have another question which I will put on notice.
Senator RHIANNON: I understand the Australian Extractive Industries Transparency Initiative pilot program
started in November 2011 to test the application of extractive industries transparency initiative principles to
Australia's financial reporting regime for the resources sector. Can you provide an update on where the pilot is up
to now, and what sort of recommendations are on the table regarding Australia's commitment to this initiative?
Mr Hunter: My colleague Mr Parsons, are you in a position to answer that, or should we take that on notice?
Mr Parsons: EFIC is not involved in the Australian initiative, so we cannot answer that question.
Senator RHIANNON: I was advised that you were. You are saying that you have no involvement in the
Australian Extractive Industries Transparency Initiative?
Mr Parsons: That is correct.
Senator RHIANNON: Who does?
Mr Gerovich: My understanding is that industry has the lead on that, and I would need to take on notice
where that pilot has got to.
Senator RHIANNON: So when you say industry has the lead, do you mean it is outside government?
Mr Gerovich: The Department of Industry. The former RET. Page 92 Senate Thursday, 21 November 2013

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Senator RHIANNON: Oh, sorry, that is good. So if you could take that on notice, please.
Mr Gerovich: I will take it on notice.
Senator RHIANNON: I would like to put in questions on notice on that, so could we get that response back
by tomorrow? Because I have to get the questions on notice in next week, otherwise I am timed out.
Mr Grigson: We will see what we can do for you.
Senator RHIANNON: Thank you. Back to EFIC, then: I wanted to inquire about the Mongolian mine where
you have assisted Rio Tinto. What was the size of the loan that Rio Tinto gained, please?
Mr Hunter: Mr Parsons or Mr Pacey, are you in a position to-?
Mr Pacey: We have not closed any facility at the present time.
Senator RHIANNON: Do you mean that Rio Tinto has not received any loan or any form of assistance to
date?
Mr Pacey: The transaction has not closed.
Senator RHIANNON: What details can you provide to the committee about the nature of the request from
Rio Tinto and where the negotiations are up to?
Mr Pacey: As you would have seen in the press, there are still discussions between the Mongolian
government and the sponsors of the project, Turquoise Hill, in which Rio Tinto has a major ownership interest.
They are still ongoing at this stage.
Senator RHIANNON: When you say 'ongoing', when do you expect that they will be concluded?
Mr Hunter: I think it would be hard for us to speculate on that.
Senator RHIANNON: How long have they been going on for?
Mr Hunter: Quite some time.
Senator RHIANNON: When did you first start negotiating with Rio Tinto about the Mongolian mine?
Mr Pacey: I will take that on notice for an exact date.
Senator RHIANNON: Why do you need to take that on notice? It is a key part of your work. It is in the
media a great deal. You have turned up at estimates to answer questions. So I would have thought that you would
even have it in your head.
Mr Pacey: If you give me a moment, Senator-
Senator RHIANNON: Thank you.
Mr Pacey: We publicly disclosed our involvement in the transaction in September of last year.
Senator RHIANNON: You publicly disclosed it, but before that how long have you been working with Rio
Tinto on the Mongolian mine? When did they first approach you?
Mr Hunter: I think that to give you an accurate response, as in the month and the year, we should take that on
notice and come back to you, because I would like to give you the right answer.
Senator RHIANNON: Okay. I will have one more try, but I appreciate that you will take it on notice. Can
you give me a ballpark figure? Two years ago? Three years ago? Six months ago?
Mr Pacey: I would be speculating. In emerging markets, some transactions do have a long lead time.
Senator RHIANNON: Thank you. Mr Hunter, I was interested in your opening remarks. You gave a great
deal of emphasis to the SMEs. I also noticed that the Australian Productivity Commission has urged EFIC to
substantially reorient its focus towards small exporters. So to what degree has this happened? Could you quantify
your response. You might have other ways of quantifying it, but I was thinking about the proportion of loans to
SMEs compared with overall loans for the last, let us say, five financial years so we can just see if there is a trend
where you are reorientating towards SMEs.
Mr Hunter: I have been in the role for four months. One of the questions I asked myself when I started was:
where is the market need? Who needs EFIC's support most? Obviously that changes over time. If we go back into
the nineties, during the Asian crisis, we find that there were exporters of all sizes-some very large exporters and
some smaller exporters-that needed our help. We found the same experience during the GFC, when we had to
support some of Australia's largest exporters, who I think were doing some very important things for Australia,
such as creating jobs and contributing to GDP overall for the welfare of ordinary Australians. Where I am today, I
can see that the small to medium enterprises in Australia need EFIC's support for their exports, and I am
encouraging that very much internally. So internally we are looking at our brand. We are looking at the way we Thursday, 21 November 2013 Senate Page 93

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
face the market and the way we encourage small exporters to approach us. We are looking at our distribution
channels, so we are looking at our relationships with banks, with accountants and with lawyers so that we are in a
better position to ensure that the small to medium enterprises in Australia that are exporting know who we are,
know of our capabilities and know that we are in a position to help them. That is a very important and key
initiative that I am very focused on at EFIC.
Senator RHIANNON: Thank you for that response. It was detailed, up to a point. It was really more a
subjective response. In my question I did emphasise a quantitative analysis so we could see if there really has
been a shift, because let us remember we have this shadow here of this loan being negotiated with Rio Tinto. Can
you give us some quantitative data to show what the trend is with regard to the work, and particularly the loans, of
EFIC.
Mr Hunter: In your earlier remarks you asked for data over a five-year period, and we would be very happy
to take that on notice and give you the five-year numbers. What I can tell you is that in the last financial year 80
per cent of EFIC's facilities were provided to small to medium enterprises, and the median of the facilities would
have been in the order of $1 million to $2 million. So you can see that there is a real focus and a real emphasis on
SMEs. Also during the last six months we hired a new head of SME who has considerable experience in that area.
Having worked with him for four months, I am confident that he will make a difference.
Senator RHIANNON: When you say 80 per cent of facilities, what are you actually measuring there? What is
it 80 per cent of?
Mr Hunter: Eighty per cent of the 168 facilities that we provided were to SMEs.
Senator RHIANNON: Can you describe facilities? Do you mean the work that you do?
Mr Hunter: It could be a performance bond. It could be a working capital guarantee. It could be a direct loan.
Senator RHIANNON: Can you also provide us with figures for actual dollar amounts?
Mr Hunter: The aggregate value of those facilities was $513 million. My emphasis in my time at EFIC is on
the number of exporters we help and the number of facilities that we provide, because I come back to what is
EFIC's purpose. Our purpose is to provide financial support to Australia's exporters when they are unable to get
support from the private sector. A real key measure of whether are we helping is the number of exporters and the
number of facilities that we are providing, because one large transaction can distort the percentage of the value of
facilities that you provide. It is the simple 80-20 rule.
Senator RHIANNON: I take your point about distorting, but I still ask you to take on notice, in terms of all
your work, to give that breakdown between SMEs and the big ones.
Mr Hunter: We will do that, and I can assure you that there is a real emphasis on supporting SMEs within
EFIC.
Senator RHIANNON: I certainly acknowledge that, and I have heard it many times now, and you spoke
about the importance of Australian exporters, which does bring us back to the mine. Rio Tinto would have no
shortage of lenders, so maybe it would also be useful for you to share with us the time you are spending
negotiating or helping or whatever you do with Rio Tinto, because you would not call that an Australian exporter,
would you? Or would you? Do you call Rio Tinto an Australian exporter?
Mr Hunter: When we look at export projects, we look at the involvement of Australian companies, whether
they are large companies or whether they are small companies. We look at the benefit to Australia and the
involvement of SMEs. I have not been intimately involved in that transaction. You alluded in your remarks to the
amount of time we spend. We have 90 people at EFIC. Thirty four of them are dedicated to SMEs, whilst the
number of people dedicated to larger transactions is in the order of 8 to 10. So, there again, there is a real
emphasis within the organisation about helping the smaller exporter rather than the larger exporter.
Senator RHIANNON: Do those numbers you have just given include contract staff who may be working on
some of these negotiations?
Mr Hunter: I would have to take that on notice in terms of the breakdown, but the vast majority of staff at
EFIC are full-time staff rather than contract people.
Senator RHIANNON: Okay. So you are happy to take that on notice regarding your contract staff and what
they do. Coming back to that question, is Rio Tinto an Australian exporter?
Mr Hunter: Rio Tinto has a very significant presence in Australia. There are a lot of Australians employed by
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Senator RHIANNON: Maybe you could take it on notice, because I assume you do have a definition of what
an Australian exporter is.
Mr Hunter: We will take that on notice.
Senator RHIANNON: When I spoke to your predecessor-
CHAIR: Senator Rhiannon, we have reached our finishing time I am afraid, and the minister has to leave, so I
think we have to conclude the session.
Senator RHIANNON: Are we back with EFIC at half past seven?
Senator McEWEN: We are about to have a private meeting.
CHAIR: We can seek to bring this group of people back for half an hour after the dinner break.
Senator WONG: I flagged that I wanted Trade as well.
CHAIR: We will have a private meeting about that. I close this session. Thank you, Senator Cormann.

Senator WONG: But not with the unions?
Mr Fisher: No, what I did say was that I am not sure about those discussions.
Senator WONG: Okay, you were taking that on notice. Has the industry minister being involved in those
discussions?
Mr Fisher: In the cabinet, of course, he would have been involved in the discussion about the mandates-and
his department remains carefully consulted on those negotiations. For instance, we have industry department
representatives at various negotiations.
Senator WONG: Has the government indicated its position on whether or not the five per cent tariff is on the
table in that negotiation?
Mr Fisher: I would not want to comment on the details of those negotiations.
Senator WONG: No, that is why I phrased it in the way I have: has Australia publicly indicated whether or
not it is willing to move on the five per cent?
Mr Fisher: No, I think what the government has indicated is that the Koreans and the Japanese in particular
are interested in the five per cent-but my understanding is that it has not publicly indicated its own negotiating
position.
Senator WONG: And what is our current approach, in terms of the TPPs? I don't want the detail of
negotiation, but what is our negotiating approach-that this is our position or this is something we are willing to
discuss?
Mr Fisher: Within the framework of the negotiations it is certainly something the government has indicated it
is willing to discuss.
Senator WONG: Thank you very much. That is all I have.
CHAIR: Thank you, Senator Wong. Senator Rhiannon?
Senator RHIANNON: Thank you, Chair. Mr Hunter, I imagine you have had a look at the Hansard from
the Senate hearing on the EFIC bill.
Mr Hunter: Are you referring to a particular part of that bill or the Hansard?
Senator RHIANNON: I just wondered whether you briefed yourself on some of the current developments
with regard to EFIC, considering that bill nearly went through parliament-it didn't, but there was an inquiry into
it, so I was just interested in whether you had updated yourself on that.
Mr Hunter: I have had a brief consideration of Hansard but I could not say I could recite it all.
Senator RHIANNON: No, I wasn't asking you to do that! At that inquiry it was suggested-by DFAT,
actually-that EFIC's FOI Act exemption was meant to protect commercial-in-confidence, but also 'politically
sensitive information, which EFIC deals with all the time'. I understand that EFIC has nothing in its mandate that
relates to international development-your mandate is to support Australian exporters, and you have given
considerable emphasis to that in this hearing. Could you identify what exactly is the nature of the 'politically
sensitive' material? If you could give an example, it would help us understand.
Senator Brandis: How is he going to tell you about 'politically sensitive' material without revealing the
politically sensitive material?
Senator RHIANNON: Again, let us put it on the record that Senator Brandis is throwing up roadblocks and
signals to people, should they even answer questions. But I hope the people sitting beside you will do that.
Senator Brandis: Senator Rhiannon-
Senator RHIANNON: I am not asking for the details-
Senator Brandis: Mr Chairman-
Senator RHIANNON: of the political material to be revealed, but you can reveal subject matter-and you
know that.
CHAIR: Senator Rhiannon, Senator Brandis wants to raise a point of order.
Senator Brandis: Thank you, Mr Chairman. Could I point out to Senator Rhiannon, with your indulgence, Mr
Chairman, that technically all questions at Senate estimates are directed to the minister at the table. Officials, by
custom, answer those questions. But it is not at all uncommon for the minister to answer all of the questions. So
rather than, as you say, Senator Rhiannon, interfering with the witnesses, I am the principal witness and if a
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Senator RHIANNON: On the point of order, Chair: we are also aware that the culture of estimates are very
wonderful-it is one of the most enhanced parts of our democracy-and Senator Brandis has certainly not been
helping that in the way he has been conducting himself. So it would be interesting to hear the response from the
witness.
Senator Brandis: I am telling you, Senator Rhiannon, that the witness will not be answering a question that
reveals what you yourself concede to be politically sensitive material.
Senator RHIANNON: I was not asking for the details to be revealed. There is obviously considerable
wriggle-room there in identifying what areas we are talking about.
Senator Brandis: I do not want officers of the Commonwealth to engage in 'wriggle-room'. What I expect is
senators to ask proper questions that give officers the opportunity to give a full and candid answer.
Senator RHIANNON: I will come at it another way then. If these materials expose risks for EFIC, which
operates using public money, then how does DFAT-maybe this goes to Mr Grigson-justify withholding
information about those risks from the Australian public?
Mr Grigson: I am not familiar with the Hansard you are referring to. I will check with Mr Gerovich.
Mr Gerovich: Senator, EFIC has a process of assessing risk. It takes numerous considerations into account.
There is a process that involves the Minister for Trade, if the transaction is to be taken on the national account,
which takes into account the national interest. I would not like to comment beyond that.
Senator RHIANNON: Thank you. Mr Hunter, EFIC traditionally answers questions about EFIC's
environmental and social risk assessments with the response that it opposes the public release of such information
for high-risk projects. Could you comment on that-does that position continue under your leadership?
Mr Hunter: Could I just get you to repeat the question, Senator. Sorry, I did not fully understand it.
Senator RHIANNON: On what basis is the public release of EFIC's environmental and social risk
assessments for high-risk projects opposed?
Mr Hunter: If I could refer that question to my colleague, Mr Parsons.
Mr Parsons: There has been no change since Mr Hunter became our managing director. Environmental and
social policy was set by the board in February 2011 and has been updated a couple of times-so our processes are
exactly the same.
Senator RHIANNON: So could you explain how, without mandatory public reporting of environmental and
social risk assessments for high-risk projects, the government can assure the Australian taxpayers that the
environmental and human rights of the communities affected by EFIC-supported projects are protected? I would
like to put that in the context of national interest-because I understand that that is what you sit under. If a project
is damaging in a country, that clearly impacts on Australia's standing and can therefore impact on our national
interest. If you could respond to that, it would be appreciated.
Mr Hunter: We adopt IFC performance standards as our benchmark and we use the OECD common
approaches on environment and officially supported export credits, as well as the Equator Principles, to formulate
our policies and procedures around the environment. So we use that as our benchmark. It is available for people to
see on our website. And we think that is an appropriate standard for EFIC to adopt.
Senator RHIANNON: So could you explain how that has worked in the context of the PNG LNG project,
and how it has worked to ensure the project revenues deliver benefits for PNG people as well as for our own
national interests.
Mr Hunter: I will get my colleague to answer that, but I can confirm that, for the PNG LNG project, we did
apply the IFC performance standards as our benchmarks, we did refer to the Equator Principles and we did refer
to the OECD common approaches on environment and officially supported export credits. But, more specifically,
my colleague Mr Parsons may be able to help you.
Mr Parsons: With the PNG LNG project there has been a series of audits done by an independent
environmental and social consultant, all of which have been made public on the PNG LNG website. I think there
have been nine to date. A tenth one was done just last month, and that report will be made public once it is
finished.
In terms of project revenues, there are several different aspects. Firstly, the project itself has a community
support strategy-which, again, is a public document-which sets out how it will interact with communities and
stakeholders in PNG. The PNG government has its own system of sharing the benefits of the project through a
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stakeholders-local government, regional government and communities. The project itself has no role in telling
the government what it does with its revenues from that project.
Senator RHIANNON: Thank you

 

Senator RHIANNON: With the committee that is overseeing the integration of AusAID and DFAT, how
many staff of the former AusAID section are represented and at what level? Page 106 Senate Thursday, 21 November 2013

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Mr Grigson: This is the steering committee? The top committee?
Senator RHIANNON: Yes-the steering committee, the task force et cetera.
Mr Grigson: The steering committee has on it the secretary; four of the deputy secretaries, two of whom are
from the old DFAT and two of whom are from AusAID-
Senator RHIANNON: So two people on the steering committee are from AusAID?
Mr Grigson: They are now deputy secretaries of DFAT but previously they were deputy directors-general at
AusAID.
Senator RHIANNON: So two out of how many, please?
Mr Grigson: I think that committee has six on it: the secretary, plus two-the deputy secretaries from the
department-plus two from AusAID and there is another officer who comes but I do not recall whether he is ex
officio or not.
Senator RHIANNON: And what is the total number of people on the task force, and how many are AusAID?
Mr Grigson: I will get you the details. The task force is run by two division heads, one from the old DFAT
and one from the old AusAID.
Senator RHIANNON: And also for the, I think you said 13 working groups?
Mr Grigson: The working groups are headed up jointly by the relevant officers from each of the agencies as
they were.
Senator RHIANNON: Right. With regard to this merger, which obviously would have its complexities, has it
been necessary to bring in an additional public sector staff or contract staff to manage the merger or to train
people in how you are conducting the merger?
Mr Grigson: Let me check for you. My answer is 'no', but just let me check that there is not someone who has
been brought in that I am not aware of. But I think my answer is no.
Senator RHIANNON: You can take it on notice. And the expenses for the merger, are they coming out of the
what is seen as the aid budget of the-
Mr Grigson: We had this discussion earlier today. One of the issues around integration will be the way we
think about resources. It is difficult for us to do that until we have a final structure in place.
Senator RHIANNON: What has happened to the AusAID business task force?
Mr Grigson: I might ask Mr Batley to see if we can help you about that.
Mr Batley: Could I just clarify about the business task force?
Senator RHIANNON: I thought that there was a body called the AusAID business task force?
Mr Batley: AusAID had a body called the Business Engagement Steering Committee. Is that the one you are
thinking of?
Senator RHIANNON: If you could tell us what has happened to it, I must have got the name wrong. That is
what I had it down as, but if you do not have one I am happy to accept that. Could you tell me what has happened
to the one that you did have?
Mr Batley: The Business Engagement Steering Committee met a couple of times earlier this year. It has not
met since the election. We are waiting for the integration to work its way through before reassembling that
committee.
Senator RHIANNON: So when you say 'reassemble' you are confident that it is going to be reassembled, or
is this waiting on a decision of a working group, the steering committee or-
Mr Batley: That will be subject to decisions by the steering committee and/or the minister.
Senator RHIANNON: Mr Grigson, are there discussions going on in Australia or with our OECD partners
about changing the official ODA definition?
Mr Grigson: Changing the definition?
Senator RHIANNON: Yes, it was changed in the 1970s.
Mr Grigson: No.
Senator RHIANNON: And you are not aware of any going on internationally?
Mr Grigson: No. You asked about the steering committee earlier?
Senator RHIANNON: Yes. Thursday, 21 November 2013 Senate Page 107

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Mr Grigson: Just to confirm, there are five members: the secretary-let us be old school-two deputy
secretaries from DFAT and two deputy secretaries from AusAID.
Senator RHIANNON: Thank you. This may be one for the Attorney-General: does the government believe
that helping developing countries mitigate and adapt to the impacts of climate change is a legitimate use of
official development assistance?
Senator Brandis: I will take that on notice, because I am not aware of whether Ms Bishop or Senator Mason
have addressed themselves to that issue on behalf of the government.
Senator RHIANNON: Thank you. Mr Grigson, will the government retain the Independent Evaluation
Committee established by the previous government?
Mr Grigson: There are a number of committees that look at effectiveness and evaluation. I am not sure which
one you are referring to, but in the integrated department we will certainly be looking very carefully at that. I
mentioned to you earlier that one of the areas we were very keen to maintain was humanitarian disaster relief.
Another is around effectiveness and efficiency.
Senator RHIANNON: Maybe we need to take them on notice. So you have-well, you had-an Independent
Evaluation Committee and an Office of Development Effectiveness. The latter was established under the former
coalition government.
Mr Grigson: Yes, the ODE.
Senator RHIANNON: Do you still have these? What has happened to them?
Mr Grigson: Yes, we still have those.
Senator RHIANNON: Are they operating?
Mr Grigson: Yes. The final form and what they might be called are yet to be determined, but I can guarantee
that there will be a core of evaluation and effectiveness retained in the department.
Senator RHIANNON: Will the findings of independent evaluations and management responses to these
evaluations continue to be published on the website?
Mr Grigson: I will have to take that on notice.
Senator RHIANNON: Does that mean that that is part of the reassessment in this merger? Is that why you are
taking it on notice-because it is in abeyance?
Mr Grigson: Without wishing to appear rude, it is because I actually do not know the answer.
Senator RHIANNON: Okay, fair enough-quite understandable.
Mr Grigson: Senator Rhiannon, just while you look through your notes, I think Senator McEwen asked me
for the date of response of VRs. Did you ask me that question, Senator McEwen?
Senator McEWEN: Yes, I did-29 November.
Mr Grigson: You are ahead of me.
Senator McEWEN: I have just read it. Thank you, Mr Grigson.
Senator RHIANNON: Chair, could I just seek your advice. I have questions on the former AusAID graduate
program. Can I ask them in this section now? I could not see where they fitted in the more detailed sections that
we are going into, so can I just continue with that?
CHAIR: I think so.
Senator RHIANNON: Thank you.
CHAIR: I cannot see anywhere else either, so yes. Continue.
Senator RHIANNON: Mr Grigson, how many AusAID graduate program jobs have been cut?
Mr Grigson: Are you talking about the offers that were made earlier this year?
Senator RHIANNON: Yes.
Mr Grigson: Thirty-five.
Senator RHIANNON: Were they cut because of reductions in the aid budget or as a result of public sector
cuts.
Mr Grigson: When we talked about this earlier this morning, I said that there were a number of variables at
play in that decision-the first was that the aid program was reducing from $8 billion to $5 billion; the second
was that the agency that was recruiting them had been abolished and was being integrated into the department-Page 108 Senate Thursday, 21 November 2013

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and that there was no doubt that those two factors, plus other pressures, meant that there would be staff reductions
and we had existing staff in place already.
Senator RHIANNON: When were they first offered the jobs? I had August, but I have heard it might have
been earlier.
Mr Grigson: On 22 August.
Senator RHIANNON: So they are offered the job, and that is when many of them take the job. Then they are
told they lose their job sometime after the election. When was that?
Mr Grigson: The phone calls were made on 7 November and letters were sent on the eighth.
Senator RHIANNON: What was the reason you gave to the graduates for the withdrawal of the offers?
Mr Grigson: 'The Australian government has announced significant reductions to the aid budget and
increased efficiency savings measures. On 17 October 2013 the Australian government decided to abolish
AusAID as an executive agency.'
Senator RHIANNON: So it coincides with the big announcement.
Mr Grigson: Yes. The letter was on 8 November, so it followed the announcement.
Senator RHIANNON: Right, thank you. So are you aware that there have been difficulties for many of the
people who have had that job withdrawn? They had stopped study programs and had left jobs because they
understood that they had this new job to move to? Have you seen some of those?
Mr Grigson: In our letter we said to candidates that 'before making a final decision concerning the
termination of your employment, you are invited to provide the department with any information you consider
may be relevant to the decision to terminate your employment contract,' and we set a time for response of 22
November.
Senator RHIANNON: And they heard that they no longer had the job on 8 November and they could get
back to you by 22 November?
Mr Grigson: That is right.
Senator RHIANNON: Why was it such a tight time frame?
Mr Grigson: I would not agree that that is a tight time frame. I think that is a reasonable amount of time, two
weeks.
Senator RHIANNON: But if people are on holidays, or there are stress issues within the family, care issues et
cetera. I mean, all sorts of things happen in life; it seems an incredibly tight time frame. So, the question was, are
you offering any compensation to the graduates who have been offered a place in the program?
Mr Grigson: At this point we have gone no further than ask graduates to put to us any issues they want us to
consider before we proceed to a final determination.
Senator RHIANNON: And does 'final determination' mean compensation? Does it mean another job offer?
What does 'final determination' mean, please?
Mr Grigson: It means a decision on their employment. They have been notified of a preliminary decision and
we will make a final decision after we receive responses on the 22nd.
Senator RHIANNON: I do think you need to clarify that, because it is people's very future-we know how
important work is, and job security is a major concern to people. So, could you clarify: do you mean that there
may still be some jobs in this program?
Mr Grigson: Not this year. We will run an integrated recruitment round next year and, as I said before to
other senators who asked these questions, all Australians are welcome to apply, including those graduates who
this year we did not recruit.
Senator RHIANNON: Right. So you recruited them, you then told them that they do not have the job?
Mr Grigson: Yes.
Senator RHIANNON: Then they have about two weeks to let you know their circumstances?
Mr Grigson: Yes.
Senator RHIANNON: But you are saying that they are letting you know their circumstances, but that is not
in the context of reconsidering them keeping a job?
Mr Grigson: All I can tell you is what we have put to them, and that is, 'We have made a preliminary decision
on the basis of what I outlined to you in the letter that before making a final decision concerning the termination Thursday, 21 November 2013 Senate Page 109

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of your employment, you are invited to provide the department with any information you consider may be
relevant to the decision to terminate your employment contract.' I am not going to put parameters around that. It is
up to individuals to write to us by the 22nd or to contact us by the 22nd if they have issues they wish us to
consider.
Senator RHIANNON: And how many contacted you by the 22nd?
Mr Grigson: I note that I asked the same question. We have a very limited number of responses at this point,
but of course it is not the 22nd yet, so-
Senator RHIANNON: Right, fair enough.. Would you extend it past the 22nd?
Mr Grigson: If someone came to me and said that they had, as you said, had a death in the family or some
other issue, I am sure we would be very open minded about that. But it is a matter around which we need to make
a decision, so 22 November is the response date.
Senator RHIANNON: The Mining for Development Initiative is now coming to the end of its second year. Is
that program continuing?
Mr Grigson: Let me ask someone to help you out on that issue. Mr Exell will help you.
Mr Exell: Yes, the Mining for Development Initiative is in its second year, and continues.
Senator RHIANNON: What is its funding for the current financial year, please?
Mr Exell: I will take that on notice-the current financial year. As per earlier discussions with the minister, I
cannot comment on the forward priorities and budget implications.
Senator RHIANNON: I had noticed a previous statement that 20 per cent of the MDI funding for the last
financial year was allocated to community-building projects. Could you provide examples of what those
community-building projects are within the context of aid going to mining?
Mr Exell: Senator, I am not exactly sure what community building projects you are referring to. But you are
right that there are elements of Mining for Development that are supporting the work that communities have and
the role they play in Mining for Development initiatives. The areas that we have been working in and supporting
include training through the International Mining for Development Centre, which is looking at research programs
and courses that target commuting engagement. Funds have been provided to the Revenue Watch Institute which
promote transparency and accountability in the minerals sector, including through the delivery of targeted training
for Civil Society Organisations, and there has been some work in some communities in areas in PNG.
Senator RHIANNON: Thank you. It was actually from the last estimates, in June. I do not have the reference
in the Hansard, but that is where my notes came from; my notes say that is when you gave the figure that 20 per
cent of MDI funding was allocated to community building projects. Could you take that on notice, please. If I
have got it wrong, obviously I-
Mr Exell: Senator, there were previous targets that were committed to some of these areas, but they are
currently under consideration.
Senator RHIANNON: My question was, considering I was talking about the past financial year, what those
community building projects were.
Mr Exell: I will take that on notice.
Senator RHIANNON: Are any mining study tours planned?
Mr Exell: Yes. In fact the Revenue Watch Institute, which I mentioned earlier, also has study tours.
Senator RHIANNON: What are the mining study tours that you have planned?
Mr Exell: I will take on notice those specific details, Senator.
Senator RHIANNON: Does the bulk of the MDI money still go to Murdoch University and Griffith
University for their involvement?
Mr Exell: That is correct.
Senator RHIANNON: When we say 'the bulk of the money', what proportion are we talking about?
Mr Exell: Can I take on notice the specific amount, Senator?
Senator RHIANNON: Yes. Thank you, Chair.
CHAIR: We will stay on general questions, then we will go to the programs for specific countries.
Senator DASTYARI: In beginning, I would like to thank you, Mr Grigson and your team. I note that this is
now your 12th straight hour which, I believe, in your world is referred to as 'enhanced interrogation techniques'. Page 110 Senate Thursday, 21 November 2013

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Maybe the minister can enlighten me on this. Very broadly, when we are talking about the aid budget, there are
really two parts to it. You are talking about quantity, which is really what their envelope is, and that is a matter for
government. We had a brief discussion about that earlier, about what is the envelope that is available for
administering the Australian aid budget. Effectively, in part, obviously it impacts you directly, but it is really a
government and Treasury decision, and a cabinet and budget decision, about how much money you deal with. The
second part of that is: you have a pool of money; what you do with that pool of money? I am making this as
simple as I can, but is that a fair, very simplistic analysis of what we are talking about here?
Senator Brandis: I think you are too hard on yourself, Senator Dastyari, when you say it is simplistic. I think
that is a perfectly fair analysis. There is a quantity of funds appropriated to the aid budget, and then there are
decisions, which I suppose you could say are policy choices, as to where those funds are concentrated for both the
best effect and also of course in the service of Australia's national interests.
Senator DASTYARI: With that, the evidence we have been getting from this morning to now is that there is a
period of transition and that a decision has been made to merge what was formerly AusAID into the Department
of Foreign Affairs and Trade. Without traversing old ground, obviously it is not a view that is shared by my side
of politics. But that is a decision that has been made, so the question now is: where to from here? I do not want to
traverse some of the ground that got covered this morning, but it comes down to: how are we going to spend this
money and what priorities are we going to use to spend this money?
There is something that I want a bit of clarification on. I understand that individual programs will be looked at,
a process will be gone through and the government will outline its priorities, but something that the minister
touched on and that is true is that Minister Bishop in many ways has been fairly open in some of the areas or
some of the things that she thinks need to happen. There have been speeches and there has been talk. You can go
back to two different kinds of policy documents. The big thing that I cannot get my head around is that Minister
Bishop has been using this term economic diplomacy as kind the foundation, and really using it as what would be
the point of differentiation largely between the last government's aid objectives and DFAT objects and this
government's objectives. I know this is fairly broad question: it is a term that you have obviously come across, but
can you define it for me?
Mr Grigson: I might get Mr McDonald to come to the table and talk to you about the interplay between
economic diplomacy and the structure of the aid budget. Senator Rhiannon was earlier talking too about poverty
reduction and how we would go about setting priorities.
Senator Brandis: I think, in fairness to Senator Dastyari, you might begin your answer by offering the
department's definition of the term economic diplomacy.
Mr McDonald: Good evening. I think, in terms of economic diplomacy, the minister has defined this in one
of her speeches. I think the speech that she made on 30 October did a good job of that. The economic diplomacy
is about aligning the foreign trade and aid policy with a view to creating economic growth. The reason for that is
that, in terms of poverty alleviation, economic growth is what is required to ensure that in communities there is
lasting impacts in relation to removing people from poverty. We have seen that in a couple of countries in our
region. So economic diplomacy is about aligning those things and, as Senator Rhiannon talked about earlier, it is
around our national interests. The focus of that economic diplomacy is within our region.
Senator DASTYARI: Sure. I am aware of many of her comments about this. So many of our aid dollars have
been going to projects that have a flow on effect, but the effects have also been broader than just that. I just want
to give you an example for context. Mr Wood would know more about the numbers than me on this. Take
something like the Global Fund. We have invested, and I am using the word invest, something around $400
million in about a decade for projects for the Global Fund. I know that you are looking it up, Mr Wood, you do
not need to take it on notice. It is something in that vicinity.
Mr Wood: That is correct.
Senator DASTYARI: It is about $400 million. Now, I understand that they were here actually about a month
and a half ago and there was talk on that. You look at these projects which we have funded, and I think we
probably going to continue to find at some level, and I think they are fantastic projects that deserve to be funded.
You are telling me that our priority was things like AIDS, tuberculosis, malaria and alleviating poverty-which is
what Senator Rhiannon talked about. It is poverty in the strictest sense or with some of these medical ailments,
but no. We say that it is not that; it is economic diplomacy.
It is not that unless you are defining economic diplomacy in such a broad term that it means nothing, which I
do not think is the case because Senator Brandis made this point that there are some things that we are all going to
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organisations-and in particular the Global Fund is the one I am using as an example here-that have previously
been outside the partisan of politics and are they beyond that definition or is there this new definition. Should I be
concerned that this new definition means groups like the Global Fund may actually be affected because they do
not meet that strict definition, as I read it, of economic diplomacy. There is an honours thesis in answering that, so
I apologise.
Mr McDonald: I think the other part of the economic diplomacy that has been clearly put forward by the
government is around what is termed 'benchmarks and hurdles' or the effectiveness, if you like, of what is being
delivered. In the example you gave, whether the Global Fund continues to be funded in the future and how the
government decides that-
Senator DASTYARI: And no decision has been made about the Global Fund, is that correct?
Mr McDonald: As the minister and Mr Grigson have said, there has been no decision made on that. What I
am trying to get to is that, in a lot of the work we do in the aid program, there is a lot of things that are planned
out and a lot of expectations about the impact of our funding. It is important that the effectiveness of that funding
is measured at a later point. That informs where the funding goes into the future. I think the government has
already given some signals on areas of its priorities and they were talked about earlier. The other bit that will
determine the funding in the future will be around the effectiveness. The minister has made very clear public
statements around benchmarks and hurdles, and what will happen over the next period of time in doing that.
Senator DASTYARI: I am sure I will be covering in this part of the question something that got covered
earlier, so my apologies if I do. At this stage, and I appreciate what the minister has said and what the acting
secretary has said, there have not been any decisions made yet on things like the Global Fund. Is there actually a
public timetable yet when the decisions will be made?
Mr McDonald: No.
Senator DASTYARI: Correct me if I am wrong about this, in terms of the budget cycle, a decision on your
budget is now set until 31 June. Is that right?
Mr Grigson: No. The government is considering the shape of our budget in this financial year.
Senator DASTYARI: I maybe covering ground that got covered by Senator Faulkner, so I apologise if I do.
How does that work then? Because my understanding was that you had this year's allocation done and then it was
all about the next budget and your next allocation. You are saying at the moment that your midcycle budget may
be changing some priorities, but you cannot say when-even though we are pretty much Christmas or getting
close to Christmas-some of those cycles will occur. What do you say to these groups? Let us say I am group X,
which had previously been told I was getting Y amount of money. You have not frozen payments, have you?
Mr McDonald: As Mr Grigson has said, the government has not yet made decisions in relation to this
financial year, but there will be impacts. That has happened in the past, where the budget has been adjusted during
the financial year. When those decisions are taken, then we communicate with the partners and we talk with them
about the implementation.
Senator DASTYARI: You are talking about an overall aid budget of around $5.7 billion; I am sure it is more
detailed than that. Let us say that its $5.7 billion. Right now, I assume-I am going to pick an arbitrary figure-
that half of it has been spent. Maybe, maybe not, it is just the sake of the example; I do not want to get quoted on
that number. Right now, are you continuing to spend money-as you go, on a daily basis-in aid or is everything
frozen in time until a decision is made? Or is it on a case-by-case basis?
Mr Grigson: It is case-by-case. A good example is humanitarian and disaster relief, so the Philippines is the
perfect example. The government is considering the shape of our program and the quantum in this financial year.
There are issues that I think this government or any government would respond to in the Philippines, which is the
perfect example.

CHAIR: We will resume with output 1.1-PNG and the Pacific.
Senator DASTYARI: I have quite a bit of fairly detailed stuff, which I would love to put on notice to give
you a proper opportunity to answer. The one thing that I do want to raise is regarding the RAMSI program-and I
know that is not specifically an aid initiative, so I will explain to you where I am coming from.
With all the funding that was provided for RAMSI-and I appreciate that was over the period of two different
governments, or in the case of Labor, three governments with one party-it just looked to me that at different
points there were times where there was actually aid funding being counted within the RAMSI calculations. I
might be completely wrong about that, but is that something you can take on notice or have a look at?
Effectively, what I am asking for-if it is not too much of an ask-is whether we can create a summary report
of all the programs and the funding that came from the Department of Foreign Affairs and Trade over the 10-year
life of RAMSI, and also have a look and do that with the different aid initiatives that were specific to PNG that
were funded during that same period.
Mr Batley: You just said PNG-do you mean the Solomon Islands?
Senator DASTYARI: Sorry, Solomon Islands.
Mr Batley: The short answer to your question is that there were special appropriations-multi-year
appropriations-in the budget. That included development programs, but also a lot of the police work was
counted as aid, as ODA-eligible. But we can provide you with that information in a fuller form if you like.
Senator RHIANNON: Does the government now endorse the aid agreement that was struck between the
Australian and PNG governments in July 2013, including the additional assistance that was in that agreement?
Mr Batley: Yes.
Senator RHIANNON: Over the last year, with AusAID's support, the autonomous Bougainville government
has drafted new mining legislation to pave the way for Rio Tinto's return to Bougainville. How much has been
paid to the ABG adviser, Anthony Regan, to draft and redraft the new mining legislation for Bougainville?
Mr Batley: I will have to take that one on notice.
Senator RHIANNON: How much has been paid to Professor Ciaran O'Faircheallaigh to advise the ABG and
landowners on mining policy practice?
Mr Batley: Likewise, I will take that one on notice. Thursday, 21 November 2013 Senate Page 115

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Senator RHIANNON: Has AusAID met with Rio Tinto or its subsidiaries in order to discuss the future of the
Panguna mine?
Mr Batley: I imagine there would have been meetings, yes, in that Bougainville Copper Ltd remains a
potentially significant player on Bougainville. So the answer to that is 'yes'.
Senator RHIANNON: Could you take on notice to provide details of what meetings have occurred this year
between AusAID and Rio Tinto, and who was present at those meetings?
Mr Batley: Yes.
Senator RHIANNON: Is AusAID aware that some of its subcontractors and advises on Bougainville have
direct links to Rio Tinto? For example, Coffey International, which is subcontracted to run the aid program on
Bougainville, calls Rio Tinto 'one of its major clients', while Professor Ciaran O'Faircheallaigh has obtained
significant research funding from Rio Tinto? Are you aware of that?
Mr Batley: No, Senator.
Senator RHIANNON: I think that at a previous estimates you gave a different answer for the professor. Did
you want to check that?
Mr Batley: I am sorry if I did that. Can you be more specific about the-
Senator RHIANNON: The question was: are you aware that some of your subcontractors and advisors on
Bougainville have direct links to Rio Tinto? I thought you had set it out for me previously about Professor Ciaran.
Mr Batley: I am not sure what you mean by 'direct links', Senator.
Senator RHIANNON: Well, direct links as in, as I set it out, receiving funding from Rio Tinto.
Senator Brandis: Senator Rhiannon, the officer has said he would take your earlier question on notice.
Senator RHIANNON: No, he actually answered that one. That is why I was just asking, Minister.
Senator Brandis: I am sorry; I came in a little late.
Senator RHIANNON: That is why I was just asking. I am happy to settle for that answer and we can both
check or you could take it on notice.
Mr Grigson: We will take it on notice, Senator. We will have a look at the Hansard from the previous
estimates and have a look at the linkages.
Senator RHIANNON: Thank you.
Senator Brandis: I am sure this will have occurred to you, Senator Rhiannon, but in relation to the questions
concerning Rio Tinto being taken on notice, it is possible-I am not saying it is necessarily the case, but it is
possible-there may be some commercial and confidence issues as well.
Senator RHIANNON: Thank you for that explanation. Has AusAID considered that the funding of
individuals and organisations with strong links to Rio Tinto could generate misunderstandings towards Australia's
aid program on Bougainville and, considering past history, possible hostility?
Mr Batley: We are confident that there is no conflict of interest in relation to the work of either of the two
individuals that you have identified in relation to their work in Bougainville.
Senator RHIANNON: How many advisors is AusAID currently funding on Bougainville, what are their roles
and what is the annual cost, please?
Mr Batley: We might have to come back to you on that specific response. The total of our aid expenditure on
Bougainville this financial year is going to be in the vicinity of $34 million. There are a number of advisors, but
we can give you specific information of that on notice.
Senator RHIANNON: Thank you. I have one question on the Pacific. There was a Pacific Women's
Initiative, is that continuing?
Mr Batley: The government has sought advice on that, so we are providing advice to government on that.
Senator RHIANNON: So that is one of the ones that could be reassessed?
Mr Batley: We are providing advice. The minister has made, as we have already heard, a number of
statements in support of women's economic empowerment and about violence against women. We are providing
advice to the minister on that.
Senator RHIANNON: Thank you. Thank you, Chair.
Senator FAWCETT: The website-it stood out as AusAID's website-talks about your assistance to PNG,
and one of the achievements it lists is assisting the government of PNG to maintain more than 2,000 kilometres of Page 116 Senate Thursday, 21 November 2013

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the National Highway, which is a great achievement. I have raised in previous estimates the question about how
much signposting there is of the fact that this is aid is actually delivered by the people of Australia, and the
answers have been somewhat variable in the past. With this recent achievement of 2,000 thousand kilometres,
how many signposts are actually educating the people of Papua New Guinea that Australia has paid for this, as
opposed to, for example, some of the bridges that are paid for by China-and everyone loves the Chinese because
they build bridges for them?
Mr Batley: I could not tell you how many specific signposts there are with Australian identification on them,
but it is a requirement of the aid program to have those identifiers. I drove down the roads that we are maintaining
on Bougainville earlier this year, and I can testify that I saw half a dozen signs in that trip from Buka down to
Arawa. I have personally spoken to our program team in Port Moresby to emphasise the importance of this.
Senator FAWCETT: That is good news. Thank you for the feedback.
CHAIR: We will move to 1.2-East Asia.
Senator RHIANNON: Could we just check, because I am not fully sure what our geography is tonight. We
have got East Asia and Central Asia, but no South-East Asia.
CHAIR: East Asia is Japan and Taiwan and perhaps the Philippines.
Senator DASTYARI: It has not moved.
CHAIR: Does it include Indonesia?
Senator DASTYARI: No, that is South Asia or South-East Asia.
Senator RHIANNON: But we have no South-East Asia on our list.
Mr Grigson: East Asia will include the South-East Asian programs.
Senator RHIANNON: What are you putting Indonesia under?
Mr Grigson: East Asia.
Senator RHIANNON: East Asia. Okay, great.
Senator FAWCETT: And Burma, or Myanmar, is that in East Asia?
Senator RHIANNON: It is East Asia as well.
Senator FAWCETT: I have asked questions before about the Karen people on the Thai-Burma border. There
is a clinic called the Mae Tao Clinic. Could you confirm that a decision has been taken to no longer fund the
clinic.
Mr Brazier: There has been discussion of this, and I would like to take the opportunity to clarify some
misunderstandings about this decision. There are around 130,000 refugees, or displaced people, from Burma
inside Thailand along that border. Australia has been a longstanding provider of humanitarian assistance to those
people. Australia's support for them is, in fact, increasing. The Foreign Minister made a decision recently to
increase the annual budget for humanitarian support in that area to $4 million a year. The Mae Tao Clinic-
Senator FAWCETT: Just to clarify, that is the current Foreign Minister, and she made that decision in her
current term.
Mr Brazier: Yes, she did. That is right. The Mae Tao Clinic is just one element of that support. The Mae Tao
Clinic was not suddenly defunded. That word has been used. The funding is ending at the end of the current
agreement between the Australian government and the Australian Union Aid Abroad-APHEDA organisation that
channels the money to the Mae Tao Clinic. So it is not a sudden or unexpected decision. It is coming to a natural
end.
Senator FAWCETT: How long has that contract been running for?
Mr Brazier: Three years. It will be three years when it ends next month.
Senator FAWCETT: Okay. Is that an extension of a previous contract, or was that three years the full period?
Mr Brazier: That is three years of support for this set of activities. There are things that we do to support the
work of the Mae Tao Clinic. We have provided volunteers in the past. An important addition, though, is that
earlier this year what was then AusAID conducted an open tender to seek partners for the provision of this
continuing and increasing support for the refugees in that area. Five organisations were selected to provide that
support. The Mae Tao Clinic, in partnership with Union Aid Abroad, submitted a proposal which, although it
complied with the selection criteria, just was not as good. It did not provide the quality, value for money or
effectiveness of the other five proposals that we finally decided to fund.
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Mr Brazier: That was an internal panel of then AusAID staff.
Senator FAWCETT: What were the qualifications to be on that panel?
Mr Brazier: I would have to take on notice the specific qualifications of each of those members, but I know
that people working in the Myanmar section in the then AusAID were members of that panel.
Senator FAWCETT: In those sort of assessments do you also seek and consider the advice of people
working on the ground in a region?
Mr Brazier: We always seek advice from experts in the field.
Senator FAWCETT: Was the advice of experts in the field consistent with the deliberations of the panel?
Mr Brazier: Yes, it was.
Senator FAWCETT: When was the decision communicated to Dr Cynthia Maung?
Mr Brazier: The decision was communicated to the Mae Tao Clinic in July. A letter was sent to APHEDA on
16 July this year. On 17 July, an Australian aid official visited the Mae Tao Clinic in person to discuss the
outcome of the competitive tender and on 22 July this year, Australian aid officials provided a verbal debrief to
APHEDA in Canberra.
Senator DASTYARI: My questions are about the same thing that Senator Fawcett has asked about more
eloquently than I would have asked. Mr Brazier, you have outlined quite a few answers related to the Mae Tao
Clinic based on the questions that Senator Fawcett has asked. I do not want to put too much of an administrative
burden on you, but it would be helpful if you could on notice produce a detailed breakdown on the history of the
support that we have provided for the clinic and-Senator Fawcett may want to add to this-effectively what
Senator Fawcett has been asking in terms of dates, times, decisions and correspondence. I would add to that what
steps are possible moving forward and the possibility for future support and future funding. If we can get that in
some kind of report format that would be appreciated, if it is not too much of an administrative burden.
Mr Brazier: We can provide that information to you.
Senator FAWCETT: There is one thing that I would ask there. You said there was a panel and there were a
number of applications received and that this one just was not as good as the others. Were there any specific areas
where this one was deficient compared to the others?
Mr Brazier: We can give a complete answer on notice, but I think one key question is that the Mae Tao Clinic
is actually not located inside refugee camps. The services that will be supported through the new program will be
located in the refugee camps.
Senator DASTYARI: A few hours earlier, I asked for a series of questions on Myanmar and I was given a
pretty detailed assessment-this was more in the political realm-about some commitments and that, while there
is a growing diplomatic relationship with the government, that was not going to come at the expense of the
support that we have given to minority groups. I just want to ask a question specifically in the aid area, because
that is where the support has really been. As far as the department understands, has there been any kind of
condition that has been placed on the growing political relationship that we in any way, shape or form cut off any
of the support at an aid level to the minority groups outside the country?
Mr Brazier: No.
Senator DASTYARI: Good. I just wanted to clarify that.
Mr Grigson: Before we move on, I would like to an undertaking to Senator Rhiannon on a question I gave
earlier. Senator Rhiannon, you asked me about discussions around DAC and the definition of ODA. I will just
take on notice and check one aspect of my answer to you. I think my answer is right, but I just want to check one
answer and come back to you on notice.
Senator RHIANNON: Okay; thank you. I do have questions for this section about Burma. Does the current
government endorse the previous government's commitment to increase annual aid to Myanmar to $100 million
by 2015/16?
Senator Brandis: As I have explained several times, the current aid budget is under review and specific
decisions will be announced in due course.
Senator RHIANNON: I appreciate that but you did agree on the PNG one that you were endorsing the
current aid agreements, so I was just checking because there is a few that is out there. PNG was, yes,
endorsement, but Myanmar is-
Senator Brandis: I was not here when the official said that, but I am not going to go through, whether
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Senator RHIANNON: Okay.
Senator Brandis: The answer to every question you have in relation to specific programs is that the current
aid budget is under review and decisions will be announced in due course.
Senator RHIANNON: Thank you.
CHAIR: Next is 1.3, then: Africa, South and Central Asia, Middle East and other-whatever 'other' is.
Senator RHIANNON: Apart from the Children of Uruzgan project, which I understand is being funded
through Save the Children, what other projects are currently being implemented in Uruzgan?
Mr Dawson: Currently, my understanding is that we have three projects under implementation in Uruzgan
province in addition to the Children of Uruzgan project. One is a road infrastructure project and the other two are
small local infrastructure projects. One, I think, is water supply and the other local economic infrastructure.
Senator RHIANNON: What does 'local economic infrastructure' mean?
Mr Dawson: I think it is small markets or small roadworks. Those sorts of things.
Senator RHIANNON: Could you take on notice to provide details, please?
Mr Dawson: Certainly.
Senator RHIANNON: Have they been completed?
Mr Dawson: No. As you asked, those are four current projects and those projects will be continuing for some
time.
Senator RHIANNON: I think you just said four. I thought you said originally it was three?
Mr Dawson: You asked about the Children of Uruzgan, and in addition that makes four.
Senator RHIANNON: So, the four altogether-I apologise. Apart from Uruzgan, are there other projects that
are in progress or which have been planned?
Mr Dawson: In Afghanistan generally, or in-
Senator RHIANNON: Yes, in Afghanistan.
Mr Dawson: There is a large number of development activities to which Australia contributes in Afghanistan
more broadly.
Senator RHIANNON: I meant in terms of bilateral projects.
Mr Dawson: They are all bilateral in the sense that there is money that comes from a country program fund to
those activities. Some are conducted through non-government organisation partners and some are conducted
through international organisation partners.
Senator RHIANNON: Sorry, I didn't spell it out. I will start elsewhere: how many AusAID people are
working in Afghanistan and are they still all just based in Kabul? What programs are they involved in?
Mr Dawson: We have 11 A-based staff in the embassy in Kabul who are working on development activities
and four locally engaged staff.
Senator RHIANNON: So you have 11 staff in Kabul, and four-
Mr Dawson: That is correct-A-based staff.
Senator RHIANNON: A-based staff?
Mr Dawson: And four locally engaged staff.
Senator RHIANNON: Does 'locally engaged' mean Afghani people?
Mr Dawson: That is correct.
Senator RHIANNON: Are they able to go out of Kabul, or is it judged as too much of a security risk?
Mr Dawson: I think it is certainly fair to say that travel outside of the confines of Kabul is quite difficult. It is
not impossible, though, and it is occasionally possible to undertake travel with other partners. But, obviously, the
security arrangements around such travel need to be very carefully checked and we need to be sure of that before
any such trips are undertaken.
Senator RHIANNON: Is that quite an additional cost, providing security to ensure their safety?
Mr Dawson: That is one of the costs of doing business in Afghanistan across the board. The security
requirements certainly add a cost element to all activities.
Senator RHIANNON: Thank you. What is the current stage of the implementation of the Development
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Mr Dawson: That facility is under implementation.
Senator RHIANNON: Can you provide details about where it is up to, how much of the budget has been
spent and any evaluation that has been undertaken.
Mr Dawson: There have been no evaluations undertaken for the third phase of that activity, because the third
phase only commenced in, I think, September 2012, so it would be much too early for any evaluation work. But
the activity is proceeding as planned, and that activity is undertaking a number of functions, including the support
for logistics work up until recently in Uruzgan itself, support for technical assistance to a number of ministries
and the implementation of a teacher education project that we are conducting with the Malaysian government.
Senator RHIANNON: Is there any publicly available information on that that you could provide?
Mr Dawson: I believe there is information on the website, but we will find the information and I am happy to
get it to you.
Senator RHIANNON: Thank you; I could not find it. Who investigated the irregularities in the Australia
Awards program?
Mr Dawson: I think you are referring to an investigation of fraud allegations in the Australia Awards program
to Afghanistan. That has been discussed in this committee some time ago. There have been several investigations,
but the current and most recent investigation is by an international investigation firm; Protiviti is their name.
Senator RHIANNON: Is that complete?
Mr Dawson: No, it is not yet complete, but it is very close to being finalised.
Senator RHIANNON: Why has it taken so long? As you have identified, we spoke in the committee a long
time ago. I think the Afghani inquiry was when a lot of it came out. So why has it taken such a long time.
Mr Dawson: That is correct. I think that the last time I spoke to the committee about it I said that I expected
that by this stage it would have been complete or close to complete. I think there are a number of reasons. It was a
quite complicated investigation. There were quite a number of people that needed to be spoken to and quite a deal
of evidence that the investigator needed to go through. But I think the significant factors in the delay have
particularly been the need to contact and interview a number of people who were involved with the project, some
of whom were not easily contactable-for example, they were working in difficult parts of the world and it was
hard to get to them to conduct interviews. But there was also some delay associated with the need to examine
material which was on computer hard drives that took a little bit of time to get properly revealed and decrypted, or
whatever the word is.
Senator RHIANNON: Thank you. When do you expect the report to be released?
Mr Dawson: We expect the report to be completed very shortly-we would hope by the end of this month.
Then it will be a matter for looking at the findings of the investigation and taking action against them. Whether
the report is released or not will be a matter for government.
Senator RHIANNON: Thank you. Will the Australia Awards program be reinstated, or is that something you
are waiting on the report to determine?
Mr Dawson: The report will certainly be an element in the consideration of that, but again the future of that
program will be a matter for government.
Senator RHIANNON: Thank you. This may be for the minister. The Senate had the committee report on aid
to Afghanistan. When will the government response on that be released?
Senator Brandis: I do not know. I will take it on notice.
Senator RHIANNON: Thank you, Minister. There is a very important organisation in Afghanistan which will
take on even greater significance with the withdrawal of troops. Will the funding for the Afghanistan Independent
Human Rights Commission be continued? I appreciate what you have said before, Minister, but considering the
special case of Afghanistan any response would be useful.
Senator Brandis: Indeed. However, the fact is that I am sure all programs have their own particular
characteristics but the same principle applies to all: that the issue is a matter for consideration of the aid budget,
and any decisions will be announced in due course.
Senator RHIANNON: Thank you. Mr Dawson, there have been a range of projects in Afghanistan. Are there
evaluation reports on the overall aid program and the specific aspects of it? Has any of that been completed or is it
underway?
Mr Dawson: Yes. If you would just bear with me for a moment, I will be able to give you quite a lot of detail
about that. As you would appreciate, the program in Afghanistan only started to reach a critical level in dollar Page 120 Senate Thursday, 21 November 2013

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terms in relatively recent years, so it is only recently that there has come a body of work that it was possible to
evaluate. But over the last three years I think we have completed nine reviews and evaluations and they cover
projects conducted by ACIAR, electoral support projects, local government projects and a review of the large
Afghanistan Reconstruction Trust Fund through the World Bank, which is a very important vehicle for the
provision of support for the operations of government and the funding of basic services in Afghanistan. A review
has been done of a relief and recovery operation conducted by the World Food Program, and also the peace and
integration activity managed by UNDP and an education project through an Australian NGO, plus other activities.
So, as I said, there have been nine evaluations over the period 2011 to 2013. There are three current reviews and
evaluations underway and there are at least another five which are planned to begin in 2014.
Senator RHIANNON: Thank you. Is that material also available on the website?
Mr Dawson: Some of the material is on the website, but I would have to check exactly which is-
Senator RHIANNON: Okay, I will check if I need any of them and come back to you. Thank you very much.
Chair, I had further questions in this section but on different countries. Will I keep going or do you want to go to
other people?
CHAIR: There is no one else but you, Senator.
Senator RHIANNON: Okay, thank you.
CHAIR: But what other countries do you wish to deal with?
Senator RHIANNON: I have countries in the Mekong and Palestine and then some for 1.7. Should I keep
going?
CHAIR: Yes, I suppose so. But does anyone else have questions on 1.3? There is only me and Senator
McEwen. What about 1.4, 1.5 and 1.6?
Senator RHIANNON: Yes, I have those. My system is working.
Mr Grigson: Senator, could you just say again which areas you have questions in. Did you just say the
Palestinian Authority was one of them?
Senator RHIANNON: Mekong, Palestine, humanitarian, refugees and climate change.
Mr Grigson: Can I suggest you do Palestinians now, because Mr Dawson looks after Palestinians.
Senator RHIANNON: Certainly. The Bedouin community in the Jordan Valley benefit from Australian aid,
but some of them since August have had their camps demolished by Israelis on the West Bank and adjacent to the
Jerusalem municipality. I understand that occurred around August. Did the Australian diplomats in Palestine or
Israel look at this and give advice on what to do when Australian aid projects are destroyed or damaged?
Mr Dawson: I am sorry-give advice to whom?
Senator RHIANNON: If Australian public money goes to Australian aid projects in low-income countries,
and if those projects are then destroyed, I understand often the local Australian diplomats will investigate that and
I am just trying to understand. I have given the example in this case of the Bedouins in the Jordan who have had
some of their camps destroyed. What happens when Australian aid projects are destroyed, in this case in the
Jordan Valley? Is a report made? Is more aid money issued to rebuild what has been destroyed or is it written off?
What happens?
Mr Dawson: I think you may be referring to two very small projects which we have discussed in this
committee previously, Australian funded projects in area C, where demolition orders for those structures had been
made.
Senator RHIANNON: I think you are referring there to Susiya?
Mr Dawson: Yes.
Senator RHIANNON: I would be interested in that one. That is a Palestinian village. The ones I was actually
asking about are Bedouin camps in the Jordan Valley that was destroyed or damaged just recently.
Mr Dawson: I am not aware of Australian government funding for such camps in the Jordan Valley. I am
aware of an incident involving a European Union and UN attempt to deliver humanitarian assistance to the Jordan
Valley in September, but maybe that is a different issue.
Senator RHIANNON: I think that is the one. Do you have any information on that one and Australia's
involvement with that, and also the Susiya one.
Mr Dawson: In that incident on 20 September, Australian Embassy staff and staff from a number of other
missions, at the invitation of the EU and the UN, visited the village of Makool in the West Bank to observe the Thursday, 21 November 2013 Senate Page 121

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delivery of humanitarian assistance. During the delivery, the Israeli defence forces arrived and they declared the
area a closed military zone. There was a discussion and, ultimately, the confiscation of a truck from the UN
Office for the Coordination of Humanitarian Affairs which was carrying tents for the villagers.
Senator RHIANNON: It was confiscated and that aid did not go to the people?
Mr Dawson: That is my understanding.
Senator RHIANNON: That is where it ended?
Mr Dawson: Yes.
Senator RHIANNON: Okay, thank you. Just sticking with Palestine, does the government position on Israeli
settlements remain consistent with the previous government's adherence to the United Nation's Security Council
Resolution 446, that states that 'the policy and practices of Israel in establishing settlements in the Palestinian and
other Arab territories occupied since 1967 have no legal validity and constitute a serious obstruction to achieving
a comprehensive, just and lasting peace in the Middle East'? I just want to check if that remains the government's
position.
Mr Dawson: I will need to take that on notice because our expert on that has left for the day.
Senator RHIANNON: Okay, thank you very much.
Mr Grigson: Just before you move on, I wonder if I can allow the Pacific staff to go home? Are we finished
with the Pacific?
Senator RHIANNON: Yes, I have.
Mr Grigson: Can the Africa staff go?
Senator RHIANNON: I have a question for them.
Mr Grigson: Are we done on Middle East, South Asia, Latin America and the Caribbean?
Senator RHIANNON: I just have a question on the Mekong.
Mr Grigson: We can help you with that.
Senator RHIANNON: I want to ask about the Mekong River Commission's PNPCA process. I understand
that in 2012 AusAID commissioned a review of this process. Can you provide an update on the status of that
review, considering AusAID money went into it? I am interested in where it is up to, when it will be finished and
if it will be made public.
Mr Brazier: Are you referring to the studies about the impact of dams on the Mekong mainstream?
Senator RHIANNON: Yes.
Mr Brazier: The study that is being led by the government of Vietnam is due to be completed in 2015, and a
study by the MRC, the Mekong River Commission, on sustainable development of the Mekong River is expected
to be completed by the end of 2013. Those are both studies being conducted not by the Australian government but
by those institutions. In the case of the government of Vietnam led study, we are contributing funds towards that.
Senator RHIANNON: I was not saying that we were doing it, but I thought that AusAID did commission the
review of the Mekong River Commission's process.
Mr Brazier: I am not familiar with the review you refer to. There may be a review of the support that we have
provided to the Mekong River Commission for that PNPCA process, but I am not sure of the timing of that.
Senator RHIANNON: Do you need to take it on notice, because I thought that it was sent out in 2012. I know
there are so many reviews going on in that area for the Mekong, and it does get complicated, but I thought that
AusAID had been very hands on in kicking off that one in 2012.
Mr Brazier: I will have to look into it further. I am aware of these studies but not of the review that you are
referring to.
Senator RHIANNON: Are you happy to take it on notice?
Mr Brazier: I can.
Senator RHIANNON: Maybe this has to be taken on notice as well. I was interested in what measures will be
taken to help ensure that the review findings will be used by the Mekong River Commission and its member
countries to improve the process before other hydropower projects undergo its process of prior consultation. I
imagine you are aware of the controversy that is coming with prior consultation, and how it is being interpreted
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Mr Brazier: I think you may be referring to the study that the Mekong River Commission is leading on,
which is attempting to achieve a common understanding of what these definitions in the PNPCA agreement mean
and when the requirement for notification and consultation is triggered. As you say, there are various
interpretations and disagreements about that.
Senator RHIANNON: What is the Australian government's understanding of the current status of the PNPCA
for the Xayaburi dam?
Mr Brazier: As you know, the Lao government has gone ahead with construction of the Xayaburi dam. Other
member countries of the MRC have expressed the view that the full PNPCA process has not yet run its course.
The government of Laos disagrees with that though, and is continuing with the construction of the dam at
Xayaburi.
Senator RHIANNON: How does the Australian government plan to address the conflict with the Mekong
River Commission over the status of this dam and over this dam's prior consultation process?
Mr Brazier: The Australian government does not have a view on whether a dam should be built or not. We
want to see the PNPCA process work well, and we would support any evaluation review agreement that would
achieve that.
Senator RHIANNON: That is precisely what I am asking. I recognise that it is not about whether the dam is
going to be built or not going to be built. It is about the process at the moment. But we have Australian officials
there, they are a key part of the Mekong River Commission, and there is Australian public money going into that.
How does the Australian government plan to address this conflict, which is quite real?
Mr Brazier: I will have to check. I do not think there are Australian officials at the Mekong River
Commission. The Australian government may be supporting a small number of positions there. I do not think
there are government officials there, though. Again, it is not the role of the Australian government to mediate
between the governments that have a disagreement on these definitions. We would obviously be pleased to see the
governments achieve a common understanding of those definitions, though; and we would, if invited, support that
outcome.
Senator RHIANNON: From what I understand, there are attempts to have the Lao government disclose the
project design for Xayaburi Dam. I think some of our people may have been involved in that, as part of trying to
take this forward. Following the request to the Lao government to disclose the project design for the Xayaburi
Dam, have the designs now been disclosed?
Mr Brazier: I will have to take that on notice. But I would say that is a matter for the Lao government. They
are obviously Lao government documents.
Senator RHIANNON: I know there is an incredible difference of opinion but it is still part of the Mekong
River Commission work; Australia is part of the Mekong River Commission. That is why I am asking the
question.
Mr Brazier: I agree with those things but it is important to be clear that we are not a party to any of these
disagreements. We are, like a number of other governments, simply supporting a process.
Senator RHIANNON: Has the Australian government considered requesting that the Mekong River
Commission should develop an impact monitoring mechanism to monitor the trans boundary impacts of the
Xayaburi Dam?
Mr Brazier: I am not aware of any such request.
Senator RHIANNON: Do we have any plans at all, considering Laos is pushing ahead and our other partners
there are not happy with what Laos is doing. It is a trans boundary dam with enormously significant impacts for
the Mekong and the food security of that whole region. So are we being proactive and, if so, what are we doing?
Mr Brazier: We have been the single largest donor to the Mekong River Commission, and that is I think a
very strong statement in itself to seeing the Mekong River Commission resolve this.
Senator RHIANNON: That is why I am asking the question. We are the biggest donor, as you have just
identified but we are not hearing what we are actually driving to help solve, with what is becoming quite a serious
division within that region.
Mr Brazier: I think there is a difference between supporting an important intergovernmental institution and
driving a solution which is essentially a matter for the member countries of the Mekong River Commission.
Senator RHIANNON: Thank you. I will move on to the Don Sahong Dam and the process there. Again, we
have seen the Lao government sidestepping the PNPCA process. What is the Australian government doing in this Thursday, 21 November 2013 Senate Page 123

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case to assist the Mekong River Commission in determining whether the Lao government has met its obligations
under the 1995 Mekong Agreement and its PNPCA process with respect to this dam?
Mr Brazier: As with the dam at Xayaburi, we have been encouraging open and transparent consultation
through our support to the Mekong River Commission, and we have encouraged Laos to work through the
established processes under the Mekong River Commission agreement.
Senator RHIANNON: So when you say 'encouraged Lao to work through the process', what does that mean?
Because, with this one it is not just that we put all the money into the Mekong River Commission; we are putting
a lot of money into the whole region. And the case with this one is that it really could undermine AusAID's past
development work in Cambodia, Laos, Thailand and Vietnam. The impact here-because it is where you have
dry season fish migration-is massive in terms of the millions of people who are fed. So you say 'encourage', but
could you spell that out more please?
Mr Brazier: Most recently, at the Friends of the Lower Mekong Ministerial Meeting in Brunei in July 2013,
we encouraged all parties to engage in an open and transparent manner. Following that, the government of Laos
agreed to make the Don Sahong project documents publically available.
Senator RHIANNON: Has our government requested that the Lao government carry out a trans-boundary
impact assessment of the project?
Mr Brazier: I am not aware of any such request.
Senator RHIANNON: Has our government considered carrying out its own assessment in considering that
we are putting millions of dollars of Australian aid money into these countries and it could be jeopardised by this
dam, so don't we look at the impacts one project will have where we are spending money on other projects?
Mr Brazier: We have not. The answer is no, but I would not want to give you the impression that we were
blind to the impact of large dams on the lower mainstream of the Mekong.
Senator RHIANNON: What steps is the Australian government taking to monitor the development status of
other Mekong mainstream dams?
Mr Brazier: I am not aware of any.
Senator RHIANNON: So just those two?
Mr Brazier: Yes.
Senator RHIANNON: I have some in humanitarian. It is late but it is public money and we have a job to do. I
have this portfolio so I have to ask the questions. I do apologise that it is very late. Were the announcements for
the Philippines and Syria humanitarian assistance funded out of the humanitarian emergency and refugee global
program budget?
Mr McDonald: Yes.
Senator RHIANNON: What is the total funding figure for all of Australia's humanitarian funding to date this
financial year? I appreciate what the minister has explained to us on how it is being reassessed, but terrible
emergencies can happen, and I am trying to understand what the allocation is that has been spent and what the
allocation is there if there are other emergencies.
Mr Grigson: Just before the officers answer, we can give you global spend figure to date, and then the budget
consideration comes into play.
Mr March: The spend this financial year, 2013-14, to date is $57.6 million. The breakup of that is half a
million in Africa for Guinea Bissau, $22 million for the Syrian conflict, in east Asia it is $34.1 million comprised
of $300,000 for a dengue outbreak in Laos, $220,000 for Philippines Typhoon Trami, and the $30 million I
mentioned this morning for the Philippines Typhoon Haiyan. In addition there has recently been $100,000 for
Typhoon Haiyan, which passed over the Pacific country of Palau. That is $57.6 million, and I can give the
division between NGOs, UN, and Red Cross and others I can give that too if helpful.
Senator RHIANNON: If you could give it to us on notice that would be useful.
Mr March: Certainly.
Senator RHIANNON: What is the pool of money that is available if there is another terrible typhoon or a
disease outbreak?
Mr Grigson: We are looking at the shape of the aid budget. It is before government. We will adjust that pool
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Senator RHIANNON: Can you please outline the total humanitarian emergency and refugee program
funding that has been allocated to each country to reach the total expenditure for this financial year? Could you
take that on notice?
Mr Grigson: Yes.
Senator RHIANNON: Thank you. And within that, could you include what amount of funding has been
allocated to NGOs, UN agencies and the Red Cross?
Mr Grigson: We can do that, Senator.
Senator RHIANNON: Thank you. I just wanted to ask about the $375 million: will the funds allocated to the
agency for 2013-14 with the ceiling of $375 million be utilised for the same purpose that the last tranche of $375
million was used for?
Mr McDonald: Senator, can we just clarify the funding that you are referring to: are you referring to the
funding that goes to DIAC?
Senator RHIANNON: Yes.
Mr McDonald: And your question-
Senator RHIANNON: I will start my question elsewhere. What input does DFAT have into money spent
from the aid budget by the Department of Immigration and Border Protection?
Mr McDonald: Senator, that money is appropriated to the DIAC budget, so they have responsibility for that
expenditure.
Senator RHIANNON: Considering that it is ODA-classified, do you have any input at all? Or do you just
leave it up to them, that they follow the rules?
Mr Grigson: Senator, as you know, spending is considered through a whole-of-government budget process,
and the department has an opportunity to express a view as part of that process.
Senator RHIANNON: So are you saying that you do not have any input into it? It goes to them, it is
classified as ODA, but you do not have any responsibility for determining that it follows the rules?
Mr McDonald: Senator, there are guidelines that agencies follow in relation to ODA expenditure, and all
agencies that are appropriated funding are required to report against those guidelines.
Senator RHIANNON: And is that separate from DFAT? That is what I am trying to check.
Mr McDonald: Yes, the money is appropriated directly to DIAC.
Senator RHIANNON: Thanks. Minister, prior to the election your now Foreign Minister stated in an
interview on Sky News with David Lipson:
David, the overseas development budget is for overseas development. We will not be using the foreign aid budget to prop up
the detention network budget. There is a budget for that and we intend to stick to it.
David Lipson asks: 'Is that from the first year?' Julie Bishop responds, 'We will not be raiding the overseas
development assistance to do onshore processing.' Does that remain your position?
Senator Brandis: That is what the minister said at the time.
Senator RHIANNON: So does that mean that the policy of the current government is that the aid budget
should not be used to assist the work of what is now called the Department of Immigration and Border
Protection?
Senator Brandis: Senator, I will take the question on notice. I am certainly not aware of any change in that
position.
Senator RHIANNON: But money is currently going to the Department of Immigration and Border Protection
that is classified as ODA funding?
Senator Brandis: As I say, I will take the question on notice, Senator.
Senator RHIANNON: How much climate finance for climate change adaption and low-carbon development
overseas comes from our aid budget?
Ms Walsh: Senator, I do not mean to be unhelpful but we will have to take that question on notice. It is
actually my colleague who has that information and he has left for the night.
Senator RHIANNON: Okay. I was specifically interested in the REDD scheme. Do you need to take that on
notice as well?
Ms Walsh: That is correct. Thursday, 21 November 2013 Senate Page 125

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Senator RHIANNON: I was going to ask if there was any ODA funding involved in the REDD scheme, and I
was interested in the International Forest Carbon Initiative. Can you help us there?
Ms Walsh: Similarly, it is with my colleague.
Senator RHIANNON: I will put those questions in on notice. And the Kalimantan Forests and Climate
Partnership? That is a way to clear the room!
Ms Walsh: Again, we will take it on notice.
Senator RHIANNON: Thank you, Chair.
Mr Grigson: Chair, just before we conclude can I read very quickly one answer to the record, which may help
save us all a lot of work later. You asked me a question earlier about ODA definitions. Rather than have a debate
about what you might have meant and what I might have meant, I have some advice here which I will read
quickly into the record for you to have a look at: 'Following the DAC High Level Meeting in 2012, there have
been some discussions on modernising the concept of ODA. They centre around considering whether or not the
definition of ODA needs to be revised in light of new global and development challenges and methods of
delivering development finance and whether the DAC should also attempt to capture other financial flows outside
of ODA.' We are handling that through our delegation in the OECD.
Senator RHIANNON: Thanks, that is what I was after.
CHAIR: With that, I thank the minister for being here, I thank the various witnesses and other people who
have assisted with the estimates, and our secretary and Hansard. I close this estimates hearing, thank you.
Committee adjourned at 10:25

 

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