Teresa Gambaro (Brisbane, Liberal Party, Shadow Parliamentary Secretary for Citizenship and Settlement) Share this | Hansard source

This bill, the International Fund for Agricultural Development Amendment Bill 2012, will allow Australia to accede to the agreement establishing the International Fund for Agricultural Development under Australian law. Coalition members well understand and appreciate the need for an enhanced international response to the issue of food insecurity in developing countries. Despite the worthy objectives of IFAD, concerns remain regarding its organisational capacities. These concerns were first raised by the coalition under the Howard government in 2004. Disturbingly little has been done since that time to properly address the concerns that were raised some eight years ago. On that basis, the coalition is recommending that the bill be delayed until such time as these concerns are addressed and the impact of that reform program is commenced by IFAD's new management and is properly assessed.

In order to properly understand why the coalition is recommending that the bill be delayed, one needs to trace the chronology of IFAD's deficiencies which led to the Howard government's withdrawal of Australia from the fund. In 2004, the Howard government was concerned about the following deficiencies in the fund: the fund's limited relevance to the Australia's aid program priorities, particularly in the South-East Asia and Pacific region; the lack of comparative advantage and focus, with other organisations being much more strongly involved in rural development in the region; and shortcomings in the management and failure to respond to concerns that the Australian government had raised with IFAD senior management.

The Howard government's decision to withdraw from IFAD was supported by Mr Charles Tapp, the then Deputy Director-General of AusAID, in evidence presented to the Joint Standing Committee on Treaties. The committee's report said:

AusAID has had concerns regarding IFAD's performance in relation to the Australian aid program and its priorities for a 'substantial period of time'.

Seven years later, in April 2011, a review of Australia's engagement with IFAD backed the committee's assessment, stating:

In 2004, these were clearly valid and important enough reasons for Australia to take the significant (and protracted) step of withdrawing from a UN organisation.

While coalition members note the reforms and note that they have been undertaken since Australia's withdrawal in 2004, it is really clear from the evidence presented to the committee that a lot more work needs to be done, and a lot more work is needed if the concerns of the Howard government then are to be fully addressed.

More recently, at a public hearing into the bill on 25 October 2012, AusAID officials were unable to assure members of the committee that IFAD had addressed all of the issues, and admitted that the progress that had been made could not be quantified. In March 2011, AusAID's 'Desktop Analysis of the International Fund for Agricultural Development' identified some ongoing challenges for the organisation in the areas of human resources and financial management. The analysis found:

… IFAD is benchmarked worse than peers for some aspects of financial management and administration.

The analysis also referred to the Multilateral Development Banks' Common Performance Assessment System, which is called COMPAS, 2008 report, which:

… found that IFAD had the lowest disbursement ratio and one of the less satisfactory variances between planned and actual project duration.

It is also important to note that, since Australia's withdrawal from IFAD, the number of allegations of fraud and corruption received by the IFAD Office of Audit and Oversight has increased from five in 2004 to 41 in 2011. That is hardly a good thing.

According to IFAD's 2011 Annual report on investigation and anticorruption activities, there were 25 allegations made against external parties, 13 related to IFAD staff members and three involving both staff members and external parties. These are not just trivial matters. They are internal allegations about staff misconduct cases involving harassment, breaches of confidentiality, recruitment irregularities and conflicts of interest, while the external cases involved collusion in procurement activities and other fraud on the part of companies and project staff. The ability of IFAD to investigate these allegations was not assisted by a reduction in staff numbers in its own Office of Audit and Oversight Investigation Section. While a number of contributing factors may be behind this increase, the broad negative trend since 2004 is deeply disturbing.

But what is even more alarming than this worsening trend in IFAD is the response that AusAID made during committee hearings that it was not aware of allegations about corruption within the fund. The actual response provided by the AusAID representative, Mr Wojciechowski, is worth noting in demonstrating just how out of touch AusAID is with these very serious issues of allegations of fraud and corruption relating to the fund. In response to a question from the member for Berowra, the Hon. Philip Ruddock, as to whether there were any allegations of corruption with the fund, Mr Wojciechowski had this to say:

Not that we are aware of. We understand that there are reporting mechanisms for corruption, but we are not aware of any making it to the executive council discussions. I think the report that we have commissioned, the 2011 report, looked at that issue and also did not identify any allegations of corruption. I am using the word 'allegations' here; there were certainly no cases.

AusAID's lack of knowledge as communicated to the committee is clearly disputed by IFAD's 2011 Annual report on investigation and anticorruption activities, which stated:

The increased volume of allegations … with reduced staffing … led to a very high investigation caseload of 59 active cases in 2011 (compared to 49 active cases in 2010 and 33 active cases in 2009).

AusAID's lack of knowledge regarding these allegations of fraud and corruption in the management of the fund is particularly worrying given the government's very public commitment to greater transparency and greater accountability in the management of foreign aid following the Independent Review of Aid Effectiveness in April last year.

The concerns held by the coalition regarding the fund's administration were also reflected in the United Kingdom's 2011 Multilateral Aid Review, which concluded that the likelihood of positive change within IFAD was 'uncertain'. According to that assessment:

IFAD has a relatively new top management team and although commitment is clear, it is too early to judge impact.

At a public hearing into the bill on 25 October 2012, AusAID was unable to satisfactorily explain why Australia should rejoin IFAD at the present time and why we should not wait until the impact of the recent reforms is fully known.

The government has also failed to adequately explain the reasoning behind its decision to contribute $126 million over four years to support Australia's re-engagement with the fund. According to the 2012-13 budget papers, this includes a $120 million payment to IFAD in 2013-14, as 'the total replenishment commitment is expected to be made in that year'. Given the government's $120 billion black hole—growing every day—in the budget and its supposed commitment to greater accountability and transparency in the management of Australia's aid budget, it is beyond bewildering as to why this $126 million commitment has been made at all, let alone now. It is worth noting here that Australia's commitment to the fund is far larger than what was committed by larger economies in 2011. For instance, it is $49.6 million more than that of Canada, which pledged $76.8 million; $37.2 million more than that of the United Kingdom, which pledged $89.2 million; $56.4 million more than that of Germany, which pledged $70 million; and $36.4 million more than that of the United States, which pledged $90 million.

This bill was referred by the House of Representatives Selection Committee on 13 September 2012 to the Joint Standing Committee on Foreign Affairs, Defence and Trade for inquiry. Specifically, the committee was asked to determine:

Whether the International Fund for Agricultural Development (IFAD) has fully addressed the concerns that were raised by the former Howard Government and which prompted Australia to withdraw from the organisation in 2004 …

In a dissenting report, coalition committee members recommended that the bill be delayed until concerns legitimately raised by the Howard government some eight years ago are fully addressed.

The key question to be answered here is: why is the government so desperate to give away $126.4 million of Australian taxpayers' money, despite such obvious deficiencies in the fund's management? Is this yet another example of one of the recent secret deals done by the government to secure a Security Council seat? It is an even more cynical attempt by the government to irresponsibly shovel money out the door in a desperate attempt to meet its commitment to contribute 0.5 per cent of GNI to the foreign aid budget by 2015. We already know that this government's inspired spending of taxpayers' money in the name of foreign aid includes such notable items as $150,000 for a statue to commemorate antislavery to be built in the UN Plaza in New York. And, of course, who could ever forget the $65 million for a giant telescope project in Chile's Atacama Desert?

Madam Deputy Speaker, when you consider that this government will only allocate $134 million in direct government expenditure on agricultural programs in Australia, you have to wonder why there is such unholy haste to give Australian taxpayers' money away. But then, again, the Labor government have never had any problem with spending other people's money; it is just balancing budgets that they struggle with. This question takes on even more significance when you look at other expenditure that Australia has already committed to global food security: the $464 million four-year global food security initiative announced on 12 May 2009; the announcement in this year's budget of $101 million to the Australian Centre for International Agricultural Research, ACIAR, with an additional $34.6 million to come from AusAID; and $30 million in donor commitment this year to the Consultative Group on International Agricultural Research, CGIAR, network. That is almost $639 million. These expenditure commitments do not include the contributions and allocations made to the work done by the Commonwealth Scientific and Industrial Research Organisation, CSIRO, and other centres of Australian expertise on work relating to food security, including the International Agricultural Research Centres, IARCs, which are also supported by the Australian government.

Australia is well positioned to offer support to countries suffering from systemic food security issues and it already does this in the significant number of ways that I have just described. ACIAR, in particular, does some fantastic work. I had the pleasure to work with ACIAR when I was in the Howard government. I want to commend them on the tremendous work that they do in international development assistance programs and their contribution to our aid program's objective of assisting developing countries to reduce poverty and to achieve sustainable development, particularly in the agricultural area. I want to give some brief examples of notable achievements by ACIAR: in Papua New Guinea, they provide support for women engaged in vegetable and floriculture production, including teaching business skills and supporting efforts to open up new markets; in the Philippines, they provide support for projects improving fruit and vegetable production, supply chains and land management, increasing productivity and incomes of small-holder farmers; and, in Pakistan, improved horticulture management techniques are being introduced, helping lift crop yields and fruit quality in the Punjab region, the primary production district.

As you can see, Madam Deputy Speaker, Australia is already heavily involved in tackling the problem of global food security. What is difficult to understand is why the government is seeking to extend this commitment further through a multilateral fund with known, serious deficiencies in its governance processes—and this is the question that the we need to ask. I call on the government to support the coalition's recommendation that the bill be delayed until such time as these concerns are addressed. (Time expired)

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