Lee Rhiannon (NSW, Australian Greens) Share this | Hansard source

Last year at CHOGM the Prime Minister launched the government's Mining for Development Initiative. The stated aim of this initiative is to help developing countries find sustainable ways to exploit their natural resources for economic development. The program could bring benefits to low-income countries, but right now it has the potential to set back development in these countries and bring Australia into disrepute. This is an issue the Minister for Foreign Affairs, Mr Bob Carr, needs to give close attention to.

A total of $127 million has been earmarked from the aid budget for the fund, which will target over 30 developing countries in Africa, the Asia-Pacific and Latin America. It will provide up to $31 million for practical advisory, education and training services to developing countries; up to $29 million for mining scholarships; $20 million over four years to improve public sector capacity in mining regulation in developing countries; and $22 million to support select mining NGOs. This money is additional to other aid money going to mining related initiatives.

AusAID already operates in the mining sphere, but this is a big shift in its aid priorities. In the recent estimates, AusAID reported contributing last year to an IMF natural resource wealth trust fund which seeks to improve macroeconomic management in resource rich developing countries. It also funded numerous study tours to Australia for representatives from 18 African countries to visit Australian mining operations, at a cost of $1.4 million. I was advised that most of the major Australian mining companies were involved, with BHP Billiton and Rio Tinto singled out. AusAID indicated that over the next two years that activity will come under the Mining for Development Initiative. I am still awaiting advice from AusAID on notice about its spending on other mining programs over the past five years.

AusAID is at pains to stress that it does not give money directly to the mining industry but, rather, gives money to countries that are trying to develop a mining industry. However, the way the mining aid program is structured with generous government funding means the mining development initiative will bring enormous benefits to the mining companies operating in Australia who are gaining access to representatives from resource rich developing countries. We know the mining companies that our government aid officials are taking these visitors to meet with are vying with their global competitors to enter the developing markets in low-income countries. So this mining aid program makes me question who stands to benefit more from spending Australian aid dollars this way—the developing countries whose representatives visit here on study tours or the multinational mining company executives they meet with?

In the last estimates I questioned AusAID to better understand what steps it is taking to ensure this huge shift towards mining related aid in the aid budget does not benefit mining companies over low-income countries. The response from AusAID is that representatives of developing countries will be brought to Australia to learn about social and environmental safeguards from the likes of BHP Billiton and Rio Tinto. The environmental and occupational health and safety of record of these companies, however, is tarnished in Australia and pales into insignificance compared with their record in developing nations such as Papua New Guinea, with numerous large-scale mining disasters, most notably BHP's Ok Tedi mine. If the Mining for Development Initiative is not run under strict guidelines to ensure the benefits go to low-income countries, this aid assistance will most certainly flow to big mining companies as well as boosting the workload of AusAID's consultants.

Another stated aim is to teach developing countries to leverage off mining developments to provide local economic opportunities for men and women in the communities where mining is taking place. But how is this apparent opportunity balanced with the environmental problems that mining developments will inevitably bring? Our government is committed to aid spending that reduces global poverty and provides sufficient resources to meet the Millennium Development Goals: to eradicate hunger and poverty, reduce childhood mortality, improve health care and education, promote gender equality and empower women, combat HIV-AIDS, ensure environmental sustainability and develop a global partnership for development.

It is problematic that our aid program is offering mining related assistance to improve resource governance, sustainability and development, promoting mining as a sustainable industry for economic development in poor countries. There is no doubt that low-income countries with rich mineral resources can gain economic benefit from mining, but there are serious credibility issues with the Mining for Development Initiative. The detail has not been provided on how the Australian government plans to ensure this is not more corporate welfare for the mining sector. The Prime Minister's announcement on the MDI stated:

Australia is an expert in developing mineral commodities using environmentally responsible practices.

Clearly the Prime Minister has not toured the same mining operations that I have. I have met with traditional owners of the Lake Cowal goldmine in West Wyalong, New South Wales, who have struggled for so many years against the Barrick Gold Corporation, the world's largest goldmining company, which has carried out nothing short of environmental vandalism on their land. I have flown over the miles and miles of open-cut coalmines in the Upper Hunter Valley of New South Wales that have forever eradicated the soil structure and underground water connectivity of that land—land mined by companies like Rio Tinto and BHP Billiton that has been obliterated and can never be rehabilitated to its original state. I have attended huge anti coal seam gas rallies and inspected huge cracks in the riverbeds of our precious drinking water catchment areas in southern Sydney where toxic gases now bubble up in these once pristine creeks through cracks caused by subsidence from BHP Billiton's longwall coalmining operations.

The environmental record in Australia of many mining companies is far from excellent, by every reasonable measure except their own. If we cannot get it right with mining companies in Australia, what makes us think we can teach governments in low-income countries how to control mining companies? I think many Australians would join me in questioning the government's aid-spending priorities by investing in mining related initiatives in this way. In Matthew Benns's excellent book, Dirty Money, chapter 9, titled 'Horn of Plenty', tells the story of an Australian goldminer, Mineral Deposits Ltd, which began operations in Senegal a few years ago, moving into Sabodala in the Kedougou region, where agricultural business had been transacted successfully without paperwork for generations. The farmers quickly found themselves without any land and struggling to survive, whilst the miner boasted to the shareholders its plans to remove 180,000 ounces of gold per year from its 640 square miles of mining lease. I will quote directly from Dirty Money:

Oxfam visited Sabodala in late 2010 and found that local people were not opposed to the mine but were frustrated that they could not get any work there. Chief Cissokho told the aid workers, 'If you come to my house, take my land and then I send my son to you for a job and you say "No he has no qualifications" then you are no use to me.'

When those same villagers protested against the lack of jobs for locals, police clashed with demonstrators resulting in two deaths and 26 arrests. African human rights groups found that people were stripped, beaten, tortured and humiliated. Some farmers were lucky enough to be paid for their land. One farmer received $1,600 for his farm, a tiny amount from an Australian company that reported revenue in 2009 of $160 million. The President of Senegal told a mining conference in 2010:

We've been mining since independence but we're still poor. Where has all that money gone?

Mineral Deposits Ltd was financed by the British government's Commonwealth Development Corporation to the tune of $16 million, with the stated aim to foster growth in sustainable business to help raise living standards in developing countries. Yet the company paid virtually no taxes in Senegal. It records no profits there, instead redirecting its profits to the tax haven of Mauritius.

Matthew Benns goes on to quote the Australia High Commissioner to South Africa, Ann Harrap, as saying last year:

… the growth in Australia's commercial presence in Africa has been extraordinary with 48 companies and 143 projects added in 2010 alone.

This is where we need to be very careful how our aid money is being spent.

We know from our own experience that mining does not create huge numbers of jobs and the jobs it will create in developing countries will often be very dangerous. The proceeds of mining will largely flow overseas to the shareholders of these international mining companies. Mining operations can cause more social and environmental problems than they solve. I really question if this program is the most effective use of aid resources. Yes, low-income countries need assistance to ensure their mineral resources are only exploited if the wealth stays with local communities and environmental damage is minimal.