Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Treaties and the deputy chair thereof, Senator McGauran, I present the committee’s report entitled Report 107: Treaties tabled on 20 August (2) and 15 September 2009. I seek leave to move a motion in relation to the report and to have the tabling statement incorporated in Hansard.

Leave granted.

I move:

That the Senate take note of the report.

The statement read as follows—

Mr President, I present Report 107 of the Joint Standing Committee on Treaties. The report reviews ten treaty actions:

• one taxation agreement with New Zealand;
• two taxation agreements with Jersey;
• one taxation agreement with Belgium;
• three agreements for the reform of the IMF and the World Bank;
• a recasting of the Chapeau Defence Agreement with the United States;
• an agreement with the Republic of Singapore concerning the use of Shoalwater Bay Training Area; and
• a minor treaty action amending the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade.

The Committee recommended that binding treaty action be taken for the three IMF and World Bank Agreements in Report 104, which was tabled on 9 September this year.  In this report, the Committee expresses support for the remaining agreements and recommends that binding treaty action be taken in each case.

The Committee has made additional recommendations on the three agreements to reform of the IMF and World Bank and the recasting of the Chapeau Defence Agreement. 

The three treaties for the reform of the IMF and World Bank are the:

• Proposed Amendment of the Articles of Agreement of the International Monetary Fund to Enhance Voice and Participation in the International Monetary Fund;
• Proposed Amendment of the Articles of Agreement of the International Monetary Fund to Expand the Investment Authority of the International Monetary Fund; and
• Proposed Amendment of the Articles of Agreement of the International Bank for Reconstruction and Development (the World Bank) to Enhance Voice and Participation in the International Bank for Reconstruction and Development.

Mr President, participation in the IMF and World Bank is based on a voting system that provides a guaranteed minimum number of votes for each member nation, and additional votes based on relative economic weight of each member country. 

These additional votes are called ‘quotas’.  Quotas are allocated using a formula that incorporates the GDP, openness, economic variability and the international reserves of each member nation.

The number of quota votes has increased significantly since the establishment of the IMF and the World Bank, while the basic vote allocation for each member nation has remained the same.  Consequently, there has been a shift in the balance of power within these institutions towards the countries with greater economic weight. 

The two Voice and Participation Amendments aim to redress this imbalance by increasing the number of basic votes allocated, and then fixing the proportion of basic votes to quota votes in perpetuity.  The change will result in a decline in the voting power of the countries with larger economies.

Mr President, I will now turn to the IMF Investment Authority Amendment, which will permit the IMF to diversify its income base.

The IMF’s income can, at present, only be derived from the marketable obligations of member nations.  In other words, the IMF relies on interest payments from loans made to member countries for its income.

The new funding model combines income from lending activities with new sources of income, including a mandate to invest funds.

The IMF Board of Governors indicated that the investment policies will reflect the public nature of the funds to be invested and include safeguards to ensure that the broadened investment authority does not lead to actual or perceived conflicts of interest.

Mr President, I will now discuss the recast Chapeau Defense Agreement, amending the Agreement, which came into effect on 1 December 1995.

The original Chapeau Defense Agreement clarified the legal status of liability claims between the Australian Department of Defence and the United States Department of Defense as a result of death, injury or damage to property that occurred as a consequence of cooperative research, development, test evaluation or production programs and the provision of logistic support.

The amended Agreement’s origins are in advice from the United States Department of Defense that, contrary to a previous understanding, United States law requires the United States Department of Defense to have agreements binding in international law covering all personnel programs.  

In other words Mr President, a treaty would be required for each personnel program involving an Australian citizen placed with a United States defence organisation or a United States citizen placed with an Australian defence organisation.

Mr President, there are currently 28 bilateral arrangements, relating to 400 Australian personnel placed with the United States defence organisation and 102 United States defence personnel placed with the Australian defence organisation. None of these 28 documents are legally binding under international law.  As a consequence, they do not meet the requirements for cooperation under United States law.

The Australian Department of Defence determined that the most efficient way to accommodate the United States’ requirement was to amend the existing Chapeau Defense Agreement to incorporate terms and conditions covering the exchange, secondment and liaison of personnel between the two nations’ defence organisations.

The amended Chapeau Agreement will extend the application of the Chapeau Defense Agreement’s terms and conditions to cover personnel loans, secondments, exchanges and liaison officer activities.

Mr President, I will now say a few words about the agreement with the Republic of Singapore concerning the use of Shoalwater Bay Training Area.

The Agreement provides the Singapore Armed Forces with access to the Shoalwater Bay training area to conduct unilateral training activities, in particular Singapore’s major annual exercise, Exercise Wallaby. 

The Agreement being considered here is the latest in a series of agreements with the Singapore Defence Force concerning the use of Shoalwater Bay, the first of which was negotiated in 1995.  The previous version of the Agreement was reviewed by the Committee in 2005. 

The Agreement requires Australia to provide access to the Shoalwater Bay facility for not more than 45 days between August and December each year to allow the Singapore Defence Force to conduct Exercise Wallaby.

Singapore is permitted to deploy up to 6600 troops, 150 armoured vehicles, 150 soft skinned vehicles, 250 special purpose engineering vehicles, 70 motorcycles and 30 other vehicles as part of the exercises.

Finally Mr President, I might turn briefly to the various tax treaties included in this Report.

The Committee considered a taxation agreement with:

• New Zealand in relation to reducing the barriers to bilateral trade and investment;
• Jersey in relation to offshore tax evasion and the exchange of information relating to taxes; and
• Belgium to bring our agreement into line with the OECD tax standards.

Mr President, these agreement will encourage international economic relationships and increase transparency and fairness in the tax system.  The Committee supports all these tax treaties.

I thank the numerous agencies, individuals and organisations who assisted in the Committee’s inquiries.

I commend the report to the Senate.

Question agreed to.