Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

On behalf of the Joint Standing Committee on Treaties I present the committee's report entitled Report 118: Treaties tabled on 23 March and 11 May 2011, incorporating a dissenting report and additional comments. I ask leave of the House to make a short statement in connection with the report.

Leave granted.

I thank the House. Report 118 contains the committee's views on two treaties: the Protocol on Investment to the Australia-New Zealand Closer Economic Relations Trade Agreement and the Resolution MPEC.189(60) Amendments to the Annex of the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships, 1973 (MARPOL).

Australia's economic relationship with New Zealand is conducted within the framework of the Australia-New Zealand Closer Economic Relations Trade Agreement, colloquially known as ANZCERTA. It covers all trans-Tasman trade in goods and services and is the principal instrument for the elimination of trade barriers between the two nations. The protocol on investment will raise the threshold below which New Zealand investors in Australia require investigation by the Foreign Investment Review Board from a 15 per cent or more share of an Australian entity worth at least $231 million to an investment of $1.005 billion. For Australian investors in New Zealand, the threshold below which they will not be subject to investigation has increased from NZ$100 million to NZ$477 million. Both countries have retained the entitlement to review foreign investment originating in the other signatory and sensitive areas, such as urban residential and commercial property investment; media, telecommunications, transport; defence related industries; uranium investments in Australia; and farming, waterfront or sensitive land investment in New Zealand.

The Department of Foreign Affairs and Trade says that the protocol on investment is in the national interest because it will remove or reduce investment barriers; bring the treatment of New Zealand investors under Australia's foreign investment regime, in line with that granted to United States investors under the Australia-United States Free Trade Agreement; and maintain Australia's capacity to screen New Zealand investment proposals that are large or involve sensitive sectors that raise national interest concerns.

While the majority of the committee supported ratification of the protocol on investment, the report contains a dissent in relation to this treaty. The dissenting report from the members for Murray and Mallee is thoughtful, and I hope the government gives it proper consideration in thinking about future foreign investment policy. The truth is that many Australians are concerned about foreign investment, and the evidence to the committee about the Foreign Investment Review Board's handling of foreign investment does not do much to allay those concerns. In 10 years, the FIRB has knocked back just two foreign investment proposals: the Shell bid for Woodside and the Singapore stock exchange bid for the Australian Stock Exchange. The FIRB says that it will reject proposals that are not in the national interest. But, when you ask Treasury whether foreign investment is in the national interest, you are told that it is. If you ask, 'Are there any circumstances in which it might not be in the national interest?' all you get is a shrug of the shoulders. The second treaty considered in this report is the Resolution MEPC 189(60) amendments to MARPOL. This treaty is a multilateral treaty regulating marine pollution. The amendments add a new chapter 9 to MARPOL dealing with the use and transport of heavy fuel oil in Antarctic seas. The new chapter will prohibit the bulk transportation and use as fuel of heavy oils, bitumen and tar and their emulsions unless they are aboard vessels securing the safety of ships or in a search and rescue operation, and ships owned and operated by governments such as naval vessels, auxiliaries and research vessels.

The Australian Antarctic Division administers the Australian Antarctic Territory and is the major Australian presence in the Antarctic. The division strongly supports the measures introduced under the resolution. Nevertheless, implementation of the resolution will have some operational and budgetary implications for its work. Given Australia's leadership in marine environment protection, it is worth noting that the research vessel chartered by the division, the RSV Aurora Australis, already uses light fuel and is therefore compliant with the treaty. Australia's stations in the Antarctic are also compliant.

The division also contracts Russian flagged vessels to provide logistic support for its Australian Arctic program. These vessels are large, specialised, ice-strengthened cargo vessels, which, unfortunately, operate on intermediate fuel oil which will be banned under the treaty. However, the division has advised the committee that the fleet of ice-strengthened cargo vessels is nearing 30 years old, which is the usual end of a ship's life. The division expects to see a changeover in this fleet to modern, compliant vessels in the next five years.

The committee is concerned that a large proportion of vessels operating in Antarctic waters will be exempt from the prohibition on the basis that they are operated by governments. We believe the Australian Maritime Safety Authority should monitor the number of exempt ships carrying heavy oils in the region to see whether the provisions of the exemption need tightening. I commend the report to the House.

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