Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

I rise to speak on the International Fund for Agricultural Development Bill 2012. This bill was introduced into the House on 13 September 2012 and if passed will allow Australia to accede to the agreement establishing the International Fund for Agricultural Development, IFAD, under Australian law. There are many concerning aspects of this bill: issues which have been addressed in the report by the Joint Standing Committee on Foreign Affairs, Defence and Trade, including in a dissenting report by members of the coalition. The bill comes in the context of Australia's contribution to our region and in the context that this bill was introduced just a month prior to the vote for Australia's non-permanent two-year seat on the United Nations Security Council.

First, I wish to speak broadly about Australia's commitment to the Asia-Pacific region. I have spoken many times before in this House on the significant challenges that our closest neighbours face, and Australia's very crucial role in delivering results. Eighteen of our 20 nearest neighbours are developing countries. In terms of their progress under the Millennium Development Goals, many are falling behind. Tuberculosis—a disease completely eradicated in our country—affects millions in the Asia-Pacific region, which has more than half of total global cases of tuberculosis. Other serious medical and development problems remain, including maternal and infant mortality, access to clean drinking water, violence against women and corruption.

While Australia's gross domestic product on average is $55,000 per person, in Papua New Guinea that figure stands at about $1,400—and that is only talking about the average. Figures are even lower in Solomon Islands, East Timor and several other Asia-Pacific countries. With a developed economy, Australia not only has the capacity but should also have the will to help the most disadvantaged in our region.

With respect to today's bill, there is significant background to both the International Fund for Agricultural Development, and more generally with Australia's aid contribution to areas outside our region. The fund was established in 1977 as a specialised agency of the United Nations to finance agricultural development projects in developing countries. The primary aim of the fund is to reduce rural hunger and poverty across the globe. Australia joined that effort in 1977 as a founding member in response to the food crisis of the early 1970s which affected millions across the globe. Over the course of the next 27 years until 2004, successive Australian governments contributed approximately $50.3 million to IFAD. In 2004, a rigorous analysis was undertaken by the Howard government to assess whether it was appropriate that Australia continue to be a member of the fund. The analysis was brought about as a result of significant concerns that IFAD had very low relevance to the general aims of Australia's aid program.

Broadly, AusAID's national interest analysis concluded that:

IFAD's programs are not consistent with Australia's national interest in delivering a focused, coherent aid program directed to Australia's priority development partners in South-East Asia and the Pacific.

It noted specific concerns that contravened Australia's national interest, including its limited geographic relevance, a lack of comparative advantage and focus in assisting the rural poor compared to other programs and its shortcomings in management and donor relations. On the last point, the Australian government spent a significant amount of time discussing with senior management of IFAD their role in our region. The joint standing committee in 2004 supported the decision to remove Australia from IFAD and reported on evidence that there was a lack of focus by IFAD on the Asia-Pacific region and, more importantly, any new Pacific strategy implemented would involve very small sums of money, according to one of AusAID's deputy director-generals, Mr Charles Tapp. I note that the decision to withdraw was not taken lightly. It meant Australia would be the only country in the OECD and one of only two countries in the G20 not to be involved with IFAD. Fundamentally, the committee said that contributing to IFAD did not constitute 'the best use of our aid dollar'.

Since that time the government, and the then Minister for Foreign Affairs, the Hon. Stephen Smith, decided to undertake an assessment of IFAD's operations to inform a decision on Australia's future participation. That review noted the:

… valid and important … reasons for Australia to take the significant (and protracted) step of withdrawing from a UN organisation.

In April 2011, after consultation with government and engagement in IFAD's 34th governing council and its senior management, AusAID offered what I would call a tentative endorsement for re-engaging with IFAD—although it did note the challenges that would remain in human resources and financial management.

During the committee process coalition senators and members of the Foreign Affairs Sub-Committee provided a dissenting report, outlining the coalition's concerns that the issues raised in 2004 had not been adequately addressed by IFAD since our departure. The report recommended:

… the Bill be delayed until the concerns of the Howard Government are fully addressed and the impact of the reform program commenced by the organisation's new management is known and properly assessed.

The coalition raised two very significant issues during that committee process: firstly, IFAD's ongoing issues with increasing corruption investigations into its programs; and, secondly, the fact that Australia will be contributing record highs in terms of appropriations to the fund.

Firstly, since our departure, the allegations of fraud and corruption received by IFAD's Office of Audit and Oversight increased from five in 2004 to 41 in 2011—25 allegations were made against external parties, 13 related to IFAD's own staff members and three involved both staff members and external organisations. I am very concerned that some of these staff misconduct cases, according to IFAD's 2011 Annual report on investigation and anticorruption activities, involved 'harassment, recruitment irregularities, and conflicts of interest, while the external cases involved collusion in procurement activities and other fraud'. At the same time, the number of staff in the Office of Oversight and Audit has been reduced, further hampering their ability to adequately address charges of corruption. When my colleague the member for Berowra asked AusAID officials about allegations of corruption within the fund, they responded that AusAID was not aware of any allegations. This certainly raises concerns with the coalition, given IFAD's own admissions, about the ongoing ability of AusAID in collaboration with IFAD to ensure that the fund is managed in an open and transparent manner.

Secondly, the decisions behind the recommended size of Australia's proposed contribution to the fund over the next years have not been adequately explained. As I have noted, the Australian federal government contributed $50.3 million over 27 years to IFAD. According to the 2012-13 budget papers, there will be $126.4 million over four years to 'support Australia's re-engagement with the Fund.' I do appreciate that any withdrawal and subsequent re-engagement with a United Nations body would require transitional funds to support that move; however, I am not sure why this 'replenishment' is considerably more than the contribution of any other member. Canada has pledged $76.8 million; the United Kingdom, $82.9 million; Germany, $70 million; and the United States of America has pledged $90 million. The coalition's dissenting report notes that the government must explain why, based on these figures, it will contribute more than the United States, the United Kingdom, Canada and Germany. This is particularly important, given Australia's long-held concerns about the fund. It must demonstrate that the government's significant financial commitment is based on a careful analysis of Australia's national interest and not motivated by its need to reach its spending targets for overseas development assistance.

On that last point, this bill was introduced just one month prior to the United Nations vote on whether Australia would become a temporary member of the Security Council for two years. The coalition still has concerns that the government has not come to this decision on the merits of the case but rather has taken an opportunistic and easy way to distribute money to help win a place on the United Nations Security Council. If the government proposed to spend this money to attract some of Africa's 54 votes in that successful United Nations vote then it should own up and say so. However, ultimately, in light of our commitment to our nearest neighbours, we should not be giving them the benefit of the doubt when concerns still exist about IFAD's operations. Continuing to be a participating member with IFAD was not in Australia's national interest in 2004 and our stance on that remains today. As such, I do not support this bill in its current form.

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