Scott Ludlam (WA, Australian Greens) Share this | Hansard source

I think the chamber should have reconsidered that one. However, I will move to Greens amendment (2) on sheet 7084:

(2) Schedule 1, item 1, page 3 (after line 29), after subsection 72.38(2), insert:

(2A)   An entity regulated by the Australian Securities and Investments Commission or by the Australian Prudential Regulation Authority commits an offence if it directly or indirectly:

  (a)   provides funds to a person or an entity; or

  (b)   invests funds in an entity;

involved in the development or production of cluster munitions or explosive submunitions.

This is not an issue we have canvassed at length, so I will just briefly speak to it. This amendment relates to the ban on investment. I presume Senator Feeney will shortly jump up in response and assure me that I am misreading the bill, but in fact we have taken advice from the people who actually manage and run the funds and they have said that this is a flaw. This is not, I think, something we are doing at the behest of the United States government, unlike the other, clear faults we have introduced in the bill. Again, I would be inclined to place this in terms of a drafting error, but maybe I am just naive.

The bill should explicitly ban investment because it assists with a prohibited act. I struggle to see how that could be a controversial statement. Many other countries specifically ban direct and indirect investment in cluster munitions in their legislation. By 'indirect' we mean an investment in a parent company that may, through a company that it has a holding in, in fact be manufacturing components or manufacturing cluster weapons themselves. There are not a large number of companies in the world who manufacture these weapons. Most of them, indeed, are subsidiaries of the big arms manufacturers. Perhaps those are the entities in whom this amendment should be dedicated to.

The Treaties Committee recommended at recommendation (2) that the legislation should prevent investment. It is fairly clear. It is supported by the Australian Council of Superannuation Investors who proposed this in its submission to the Senate inquiry. I would encourage all senators to go back and have a look at what the financial community thinks of this bill. Their evidence was compelling. They said that in order to comply with the spirit of the CCM and the recommendation of the Parliamentary Joint Standing Committee on Treaties that the bill must restrict the ability of cluster bomb producers to secure any capital from Australian investors by 'making it illegal for Australian investors to provide financing to such companies'.

We propose that the restriction applies to all Australian institutions regulated by ASIC or APRA. Under our proposal these institutions will be prohibited from lending to companies that produce cluster bombs. In addition, the institutions will be prohibited in trading in securities or investing moneys—their own or on behalf of clients—in companies that produce cluster bombs. Finally, under our proposal the bill will contain a schedule with a list of such companies that will be updated by the Commonwealth as required.

A number of countries have legislation which directly prohibits the manufacture and financing of cluster munitions. I will go through a list of those briefly, but let me just test first of all whether there have been any second thoughts, either on behalf of the government or the coalition, that in fact this is the easiest of the loopholes to close. Senators would be aware through the length of the debate thus far that perhaps the other issues are complex; this one is pretty simple: we do not want to be enabling the financing, direct or indirect, to companies producing cluster weapons. I hope that is an uncontroversial statement. Could I get an indication, please, from the minister if the government intends to support this Greens amendment that would simply tighten up the investment criteria, as the Australian Council of Superannuation Investors have advised. If Senator Humphries wants to indicate a position on behalf of the coalition, I would be grateful as well.