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

Thursday, 20 October 2016

Senator RHIANNON: My questions are about Bougainville and PNG.

Mr Sloper: I apologise that I was not here before.

Senator RHIANNON: No worries. Thank you very much. In an address to the Bougainville government in December last year, the Autonomous Bougainville Government President acknowledged it is unlikely that the mine at Panguna will reopen. The president has made public his concern that the Australian company Rio Tinto is selling its 53 per cent stake in Bougainville Copper Limited without remedying the significant environmental and social damage inflicted on local communities by the company. Can you outline what steps the Australian government is taking to ensure Rio Tinto adequately addresses the significant human and environmental damage caused by its mine on Bougainville?

Mr Sloper: Thank you. I think, as you know from our previous discussions, we do follow mining issues within Bougainville. On the specific issue of the redistribution of the shares in Bougainville Copper Limited and the ownership of the Panguna mine, these are both issues for the Autonomous Bougainville Government. It deals with consultation with the Papua New Guinean government and the companies concerned. We do not have a formal position in regard to that. So we are monitoring developments and recognise the clear sensitivities about the future of the Panguna mine, but we are not participating in that discussion at this stage.

Senator RHIANNON: But the question was what the Australian government is doing to ensure that Rio Tinto adequately addresses the problems that it has left behind, environmental and social.

Mr Sloper: We are not taking any steps with regard to that at this stage.

Senator RHIANNON: So, even though the Australian government gives aid, and a lot of the aid is addressing problems that have arisen because of Rio Tinto's decades of damage, that is not being taken up in any context at all?

Mr Sloper: I will respond with a few points. Firstly, I would not characterise our Bougainville ODA as dependent on what actions are taken by BCL in the past. We are responding to the situation that followed after the tensions and the breakdown there and as an observer to the peace agreement. As has been discussed before, we support the foundations of peace and stability. Of course we had discussions with BCL, Rio Tinto and others, as we do with the national government and the Autonomous Bougainville Government. There was a deal struck between Rio Tinto and then, through that, really BCL and, directly behind, with the Papua New Guinean national government at the point of its exit. They have had discussions in regard to that, but we have not intervened directly in that.

Senator RHIANNON: So it was not an intervention; it was just about engagement? That is what I am trying to assess. From the way you have responded and, considering other examples, it seems that Australian companies cause damage in these countries and then the Australian government, to some extent, picks up the pieces without holding Australian companies to account.

Mr Sloper: The Australian company concerned operated under the legislation set by the Papua New Guinean government at the time. I am fully aware of the sensitivity around Panguna and how that led to the conflict.

Senator RHIANNON: And the Australian government was giving a great deal of advice to the PNG government at the time. Surely you can see that there is a connection between these issues?

Mr Sloper: I do not think the Australian government is responsible for the actions of independent Australian companies operating in overseas environments when they are consistent with the local legislation. I appreciate the concerns around the Panguna mine. I would say we are dealing directly with the Bougainville government in providing a whole range of support across their society—and I think we have discussed this before—in terms of trying to build stability. I can outline some of that. In the past, we have spoken about advice we have provided in regard to mining legislation. We are not working on that at present. But we are not directly engaged in the issues you have raised.

Senator RHIANNON: I will just take up the issue of support that you have mentioned. It was revealed in a number of documents obtained through freedom of information in Britain and the US that DFAT actively opposed a Bougainville class action against Rio Tinto which was taking place in America through the alien tort statute. If Bougainvilleans again elect to obtain remediation for damages associated with the mine through litigation against Rio Tinto, will the department continue to apply its financial resources to block those efforts?

Mr Sloper: I cannot comment on the previous situation. I think it is hypothetical about what we might do in the future. But we are obviously in consultation with the Bougainville government on a regular basis on the challenges they face.

Senator RHIANNON: Why is that a hypothetical situation? Is not part of your job to be monitoring what has happened, what could happen and give advice on that? All I am trying to understand—

Mr Sloper: Certainly we monitor—

Senator RHIANNON: is how you do your job.

Mr Sloper: We certainly do monitor. I am sorry. I beg your pardon.

Senator RHIANNON: That is all right. I am just understanding how you do your job on something that is so critical to a near neighbour.

Mr Sloper: It is critical. It is part of the peace process within Bougainville and essential to their future prosperity that they resolve how mining can occur on the island. We do engage the Bougainville government, as we do with the PNG national government. It is hypothetical because you posited a possible case in the future should it come forward, and that issue has not arisen. It could arise and, at that time, the government will make a decision on our policy position at that time based on advice we provide them.

Senator RHIANNON: DFAT has previously acknowledged it has not read the PNG Auditor-General's report on the Autonomous Bougainville Government. This report was raised before. It issues a number of sobering warnings over significant gaps in governments, transparency and auditing procedure that expose ABG resources to the threat of corruption and mismanagement. The Auditor-General's concerns are broadly echoed by Bougainville's own public accounts committee. Given that promoting effective governance is now the number one priority underpinning Australia's aid program in PNG, the concerns raised by the Auditor-General would appear especially important. Has the department now read the report of the Auditor-General's office and any other reporting, such as the public accounts committee findings? What is its response?

Mr Sloper: Senator, I personally have not read the report, but we do monitor the situation across PNG in terms of corruption and fraud risks. We have zero tolerance in the aid program toward that. We investigate any allegations made and refer to local authorities as appropriate. With regard to both Bougainville and the national government, as you identify, governance is a priority. In Bougainville's case directly, through aid earmarked particularly for that government, the Autonomous Bougainville Government, we have a program both in governance civil society and peace building. Law and justice is another area. They are all directed towards strengthening the governance and the issues that are identified by you. I am not saying it is perfect. There are real challenges; I appreciate that. We are working with both the Autonomous Bougainville Government and independent bodies to strengthen adherence to governance principles across Papua New Guinea.

Senator RHIANNON: Is the department judging that corruption is a significant challenge for Bougainville at present, particularly with regard to the ABG? It is a simple question.

Mr Sloper: Sure. I understand. I was not making a specific comment on the ABG itself. What I was trying to do was note the context was not inconsistent with broader issues across PNG in terms of governance and, in fact, other areas of the Pacific. That is why it is a priority within our aid program. We want to make sure that moneys—ours and those of our partner governments—are used as effectively as possible.

Senator RHIANNON: So you would agree that it is a significant challenge for that region?

Mr Sloper: To give you an example, Transparency International, for example, have a corruption perceptions index. PNG ranks 139 out of 168 countries, with a score of 25 out of 100, so I think that paints a clear picture of the challenge within Papua New Guinea.

Senator RHIANNON: Can you specifically outline what types of corruption pose the most risk in Bougainville.

Mr Sloper: I would have to take that on notice if there were specific issues relating to Bougainville as opposed to other provinces.

Senator RHIANNON: Thank you. Will aid be invested in organisations that can inquire into, monitor and prosecute corruption on Bougainville? Is that something that you are addressing through the aid program? Will where you targeted our aid to address these issues of corruption?

Mr Sloper: I do not know within Bougainville itself whether we have a specific funding arrangement with those sort of organisations. But certainly more broadly we do. We fund NGOs as well as working with companies.

Senator RHIANNON: When you say 'more broadly', do you mean PNG or do you mean more broadly in Bougainville?

Mr Sloper: I mean in PNG and the South Pacific. In Bougainville, I do not know whether we have a specific funding arrangement with, say, an NGO or a group advocating for greater transparency, if you like. I am confident that within Papua New Guinea we are funding those sort of organisations. We also work with the government on that.

Senator RHIANNON: So are some of the bilateral programs, leaving NGOs alone for a moment, with Bougainville addressing corruption through ways to monitor and prosecute corruption?

Mr Sloper: Based on the briefing, I cannot answer that question, but I can take it on notice. Our governance program includes advisory support. It covers project management, HR, legislation drafting and financial management. Projects outside of government include support for community radio. Then it goes into general recruitment and others for the government. But I can take it on notice.

Senator RHIANNON: Take it on notice, thank you. In the Aid investment plan Papua New Guinea: 2015-16 to 2017-18, the department states: We will expand our economic assistance for Bougainville to support private sector engagement in agriculture. As part of a new program of research for development on transformative agriculture and enterprise development in PNG, we will support the strengthening of rural communities through the restoration of profitable cocoa production on Bougainville. Could you elaborate on the particular approach to private sector engagement the department will be using to help build agricultural production in Bougainville.

Mr Sloper: I might take that on notice. I do know we have a project relating to cocoa on the island. It is reinvigorating or rehabilitating, if you like, some previous plantations and working with local owners to improve that. But I can take on notice and come back to you with more details.

Senator RHIANNON: Thank you. Take this on notice too. I am trying to understand if your assistance will be directed towards small-scale, smallholder production led by local people using customary land tenure systems and rural management structures, or do you plan greater emphasis on foreign investments and larger plantations, or a mix?

Mr Sloper: I think it is a mix.

Senator RHIANNON: If it is a mix—take it on notice—could you provide the details. If it is a mix, what is the proportion between small and big?

Mr Sloper: I can do that. Senator, you asked earlier about corruption. Just to give you examples of some of the projects we do support across Papua New Guinea, we have the Justice Services and Stability for Development Program. That works with both agencies I mentioned and at provincial levels directly to work against corruption. It builds a capability to detect, investigate and prosecute it. We also support Transparency International and its operations within PNG.

Senator RHIANNON: Thank you. In the department's aid investment plan 2015-18, it is noted: "We will also support PNG’s preparations to host the Asia-Pacific Economic Cooperation (APEC) forum in 2018." I was after details—maybe take this on notice, because I have a few questions—of the specific projects, infrastructure, facilities and personnel we will be funding for APEC in PNG, including both monetary support and in-kind support.

Mr Sloper: I can answer now that there is no decision by government yet on those particular aspects. We are in regular consultation at the officials level about what PNG may require in terms of support for the events. Once we have a clear understanding of that, we will put recommendations to government on how we may assist. The focus to date in terms of the requests from Papua New Guinea have focussed on security assistance. They are not with regard to infrastructure, logistics and the broader event. If we were to invest in infrastructure, it would not be directly related to APEC.

Senator RHIANNON: When do you anticipate making the decisions about the additional APEC assistance?

Mr Sloper: In the next few months I would expect that would occur.

Senator RHIANNON: Next few months? 'Few' means two or three?

Mr Sloper: Before the end of this year.

Senator RHIANNON: Before the end of the year. Thank you.

Mr Sloper: Subject to government considerations. It may slip, but that is the case.

Senator RHIANNON: Thank you. At the 23rd Papua New Guinea Australian ministerial forum, the ministers agreed to establish a bilateral task force to coordinate Australia's assistance. Could you provide information on the terms of reference of the task force and its membership?

Mr Sloper: Can I confirm that, with regard to APEC 2018, you are referring to the task force?

Senator RHIANNON: Yes, please.

Mr Sloper: That is actually a Papua New Guinea task force. It is part of their own planning and operations to host APEC 2018. They have invited Australia to participate in that. It is called a security policy working group. Within that forum we deal with a range of PNG agencies. On our side, I think in addition to DFAT, we have representatives from the Australian Federal Police and the Australian Defence Force, both of which have programs running in Papua New Guinea. Our Attorney-General's Department from time to time is involved. But they are the three key agencies.

Senator RHIANNON: Can you supply the terms of reference and the membership of the task force, please?

Mr Sloper: It is not an Australian government task force. We would need to seek the permission of the Papua New Guinean government to do so because they constitute the task force chair and determine who they wish to invite.

Senator RHIANNON: I understood the key reason for the bilateral task force is to coordinate work with Australia.

Mr Sloper: I understand that the statement referred to a bilateral task force. Subsequently, the Papua New Guinea government decided that the structure they would prefer to proceed with was part of their overall APEC planning authority. So there is, if you like, a security policy working group to which we have been invited. We are not involved in the—

Senator RHIANNON: Okay. Take that on notice, please.

Mr Sloper: I will need to consult with the Papua New Guinea government.

Senator RHIANNON: I understand that has to happen. Has any Australian aid money or any Australian money gone towards any part of the Paga Hill estate development for APEC, including associated infrastructure such as roads?

Mr Sloper: Not to my knowledge. I do not think, as I outlined earlier, we have contributed directly to any APEC preparations at this stage.

Senator RHIANNON: Is the Australian government aware of any contributions it has made to the Asian Development Bank or the World Bank that has gone to the Paga Hill estate development that is going to be central to the APEC operations in PNG? I understand that is where the whole event will possibly be held.

Mr Sloper: Can I take that on notice? We fund a range of activities from the ADB and World Bank throughout the region, including Port Moresby. I just need to determine whether that is one of them.

Senator RHIANNON: Thank you. Has the Australian government engaged Curtain Bros or Curtain Bros Pty Limited or its subsidiaries in an Australian aid program?

Mr Sloper: I will need to take that on notice. Curtain Bros is a well-known business operation within Papua New Guinea. I do not think we are directly engaged with them on the aid program, but I can confirm that and come back to you.

Senator RHIANNON: I will say the aid program or the APEC program.

Mr Sloper: I understand. On APEC we have not. My understanding is that the Papua New Guinea government is in discussion with Curtain Bros, but we have not engaged them at all on APEC related matters.

Senator RHIANNON: With regard to that, if they are, could you give details, including the project contract amounts, contract details, timeframes and financial amount?

Mr Sloper: I will answer that now. We are not now dealing with Curtain Bros in regard to APEC 2018, so there will not be any of those details available.

Senator RHIANNON: Thank you very much.

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