Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I ask the minister to confirm whether the bank itself would be investing in Australian infrastructure projects or whether it can invest in Australian infrastructure projects.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I understand that it will not initially but it can.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Could you state whether it is likely to invest in Australian projects? I noted in my speech to the second reading debate that, during the consultation process, the state governments and premiers expressed considerable interest in having investment in infrastructure projects in Australia through this. I just want to get this very clear because it is unclear to me whether it is likely to be investing in Australia.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

It is unlikely after the early establishment of the bank.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Would the minister clarify the interface between trade and aid, not specifically the aid-for-trade program that the government has embarked on but whether with the commercial activities of this bank, or, let's say, its quasi-commercial activities given it is going to have a broader investment mandate—there will be social capital and other things involved, no doubt—there is a risk that the aims of this bank and the actual on-ground activities and financing will be a replacement for direct foreign aid to these regions.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I am advised that, no, it is not. The purpose is, of course, to unlock the investment in the commercial and private sector.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Minister, as you are aware, Labor supports this bill. However, there are some issues that were raised during the second reading debate and an amendment was moved, which went to the issue of secure standards for labour rights, environmental preservation and protection of local communities that face displacement from large projects. These are, in my view and Labor's view, legitimate issues for concern. We did not support the second reading amendment because of the linkage back into a very low trigger for withdrawal from the bank. I ask whether these issues of labour rights, environmental preservation and protection of local communities have been discussed by government and what the government's position is on these very important issues.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I understand that all of the issues that you have raised are being discussed and will be covered.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

'Are being discussed and will be covered' is a bit broad. I think the question I am asking is not whether they will be covered but whether, if we sign off on the bank—because my view is that, if Labor were in government and we signed off on this, these are issues that we would be concerned with—the government will deal with these issues when the government becomes a member of the bank.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I can advise the senator that, of course, there are policy statements on all of these issues, but I am happy to take that on notice for the senator and come back with some further information.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

On a similar line of questioning, you obviously saw the amendment to the second reading motion that we moved. When will those investment guidelines be in place? Will they be mandatory and how will they be audited and assessed?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I understand the board will be established by the end of the year, so that will be the time line for that. That then needs to be considered in that process.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I think that is a slightly different question, but I am interested in that anyway. Regarding us having a leadership role to play apart from providing the capital, obviously we expect or would hope to have a spot on the board as a major shareholder. What confidence do you have that that will happen? I understand it has not been determined yet. Is it a sure thing or is it not?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I am advised that we definitely have a seat on the board.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The full national interest analysis suggests very strongly that we will, but the report that I was given as a member of JSCOT said it was not certain that it would be finalised. So that is good to know.

In relation to having to having a seat on the board and having a leadership role to play in the bank, I ask again about environmental and social and ethical safeguards to investment and when those will be finalised. What process will we go through in having input into those? Do we have any triggers in place to raise concerns around particular investments?

Today I gave the example of investing in dams in Sarawak, and the problems of displacement of local people and environmental damage. These kinds of things are very important to my party. So before we support the Australian taxpayer putting money into this I would like to know that there will be safeguards in place.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

My understanding is that, early next year, there will definitely be policy around the issue that you have raised, and we are contributing to that in the chief negotiator's process.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I suppose the Scrutiny of Bills Committee accepted the clauses around immunity because it is commonplace in other multilateral investment organisations. Do you have concerns over the immunity provided to employees of these banks? If there is immunity—I do not understand how this works in other organisations—who audits these organisations, who holds them to account if there are breaches? I mentioned in my speech today that corruption is rife in a lot of countries in South-East Asia. So I would like to know what protections would be put in place and what avenues of prosecution, auditing et cetera there will be for the bank.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

It is necessary to provide these privileges and immunities to ratify the AIIB articles of agreement. The privileges and immunities form part of the articles. Accepting the amendment would prevent Australia from ratifying the articles and mean Australia would not become a member of the AIIB. The privileges and immunities for the AIIB are modelled on those provided to the World Bank and the Asian Development Bank, and they are necessary for the AIIB and its staff to carry out duties of the bank such as freedom of movement across borders and protection of bank documents.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Minister, as you are aware, Labor has cooperated with the government in relation to this bill. However, I just want to place it on record that that cooperation has not been reciprocated by the government. A number of questions were placed on notice when the Senate committee was looking at this bill. We asked a number of questions on notice. I think the cut-off for that was five o'clock today. It would have been easy for Labor to delay the passage of this bill by not agreeing to the exemption from the cut-off. Have these responses been tabled today? If not, why not? And if they have not been tabled, why should we cooperate if we do not get reciprocal cooperation from the government?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

My understanding is that the hearing happened only yesterday and Treasury is working as quickly as possible to provide the information.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Do you have any idea when those responses will be available?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

My understanding is that they will be available by tomorrow.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would like to have been at the JSCOT briefing yesterday—I might not be asking these questions if I had been—but, unfortunately, I was away on other business. The Greens certainly like the concept of what is being proposed here, but it seems as though there is blind faith here—that we are suspending belief and saying we assume it is all going to be fine. It would be very good to have further guidance on a number of issues. Can you give us an idea of whether the immunity provisions relate to, for example, the conduct of employees in relation to bribery? And how are standards in the bank set if no individual country can pursue action against, for example, individual employees who might be acting in a corrupt way?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

My understanding is that they provide no immunity for improper or corrupt conduct.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Article 50(1) basically says that governors, directors, alternates, the President, the Vice-President and other officers and employees of the bank, including experts and consultants, shall be immune from legal process with respect to the acts performed by them in their official capacity, except when the bank waives immunity, and shall enjoy the inviolability of all their official papers, documents and records. That is not clear to me. In fact, it looks like they will be immune. That is the reason we put this amendment up, which I will get to in a minute. And with the Scrutiny of Bills Committee report, I would have thought there was room for the government to include provisions in the bill relating to some of these issues. I suppose that is not a question; it is more of a statement. I have just a couple of very direct questions and we can get through this fairly quickly. Would the government consider the establishment of any triggers for withdrawal from the bank? The reason I ask this question is that we do not have the information with us to make the decisions on some of these very important factors. Would you put in place a trigger or a clause for withdrawal from the bank should certain preconditions not be met around ethical investing, environmental and labour safeguards or other issues in relation to impropriety, illegal or fraudulent conduct et cetera by employees?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

In relation to the immunity if there is improper conduct, the bank will waive its immunity. In relation to the second part of the question, we can withdraw if we need to. But we would rather remedy the situation.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That answered my second question—whether you would withdraw if certain policy guidelines et cetera were breached. But we do not have those, so I cannot ask you even that question. In relation to strategy, Senator Sinodinos was talking about how it was not purely an aid agency and it was not purely a commercial bank; it had a catalytic role. Do you expect that most of the projects would be greenfield projects or would they be brownfield projects? Do we have any idea of the kind of pipeline projects we are looking at?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I understand we will not know until the board meets next year.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

You must have an idea. Some of the numbers I heard were of backlogs of projects worth trillions of dollars waiting to happen. Can you give us an idea? There was a bridge in Burma, I think; that was one that was mentioned. I am just trying to get an idea of the expected rate of return that the Australian taxpayer would be pursuing, or whether that is not even an issue and, instead, it is more of a social capital proposition.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

We do not have a bias toward either the greenfield or brownfield. It is difficult to indicate at this stage. As I have said, the board is not formed as yet. We will very much be looking at those projects on merit: their capability and what they can deliver.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I want to ask you just to clarify again—if you have not done so already: under article 46.1 of the bank's Articles of Agreement:

The Bank shall enjoy immunity from every form of legal process, except in cases arising out of or in connection with the exercise of its powers to raise funds, through borrowings or other means, to guarantee obligations, or to buy and sell or underwrite the sale of securities …

So I understand there are certain immunities relating to the operation of the bank. What is the issue of general criminal law in relation to officers of the bank?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I understand that there are no immunities or privileges for things related to that criminal conduct.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

So when you say that you 'understand', are you saying they have no immunity from criminal activity?

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I am advised that that is the case.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

On that note, Chairman Marshall, I think Senator Cameron summed up our position very well with that last statement. I move Greens amendment (1) on sheet 7764:

(1) Clause 3, page 3 (lines 5 to 9), omit:

Regulations may confer privileges and immunities on:

  (a) the Bank; and

  (b) officers and employees of the Bank; and

     (c) experts and consultants performing missions or services for the Bank.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Labor will be opposing this amendment on sheet 7764 on the basis that these privileges and immunities are consistent with those conferred to other institutions such as the World Bank and the Asian Development Bank. These privileges and immunities allow the bank and its officers to operate consistent with the articles of the bank and notwithstanding they may be undertaking work in areas of uncertainty, including in weak states or where rule of law is not consistently upheld.

Clause 8 of the bill states that regulations may confer privileges and immunities on the Asian Infrastructure Investment Bank, officers and employees of the bank and consultants performing services for the bank. Clause 8(1) specifies that privileges and immunities necessary or desirable to give effect to chapter 9 of the bank's Articles of Agreement may be conferred on the Asian Infrastructure Investment Bank by the regulations. In chapter 9, articles 44 to 52 of the Asian Infrastructure Investment Bank's Articles of Agreement set out the status, immunities, privileges and exemptions that must be given to the bank by each Asian Infrastructure Investment Bank member state. This means, for example, that the bank is recognised as having international legal personality, which means that this organisation possesses international rights and duties. That is article 45. It also means that the bank will enjoy immunity from every form of the legal process except in cases arising out of, or in conjunction with, the exercise of its powers to raise funds through borrowings or other means to guarantee obligations or to buy and sell or underwrite the sale of securities. That is article 46.1, which I spoke about earlier.

I note again the commitment given that the bank's officers or employees will still be subject to the general laws of the country. I note that this matter was addressed in the report of the Senate Economics Legislation Committee, which identified that the Senate Standing Committee for the Scrutiny of Bills in its Alert Digest sought clarification on two matters: the nature of the proposed immunities and privileges as set out in clause 8 of the bill, and why these immunities and privileges are set out in regulation and not in the bill.

These are matters that were also canvassed at the hearing of the Senate Economics Legislation Committee last night, where interested senators had the opportunity to explore this matter further. I note that the Greens did not participate in the hearing. The officials present at the hearing last night advised the Economics Committee that conferring immunities and privileges is similar to that for comparable institutions. The Treasurer also advised the Senate Scrutiny of Bills Committee that the immunities and privileges conferred by the bill were consistent with those of other multilateral development banks, stating:

The nature of the proposed privileges and immunities are consistent with privileges and immunities afforded to the Asian Development Bank and the European Bank for Reconstruction and Development. Australia is a member of both of these multilateral development banks.

The opposition is satisfied with this explanation, although it would be useful if the minister could explain to the Committee of the Whole why these immunities and privileges are set out in regulations and not in the bill.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I understand that it is the same way that they are done for the World Bank and the Asian Development Bank.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I asked a similar question earlier. I just wanted to note—and this will be my last comment for the two amendments—that regarding the Scrutiny of Bills Committee report their comments were that they remained concerned about the proposed approach and the limited information readily available as to the detail of the intended immunities and privileges. The committee drew its concern to the attention of the senators and left the question of whether the proposed modifications to the normal operation of the law, which may have an adverse impact on the personal rights or liberties of individuals, is appropriate to the consideration of the Senate as a whole. We felt that that should be taken out, and that is why we have moved this amendment.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I can indicate to the chamber that the government will not be supporting the amendment.

The CHAIRMAN: The question is that amendment (1) on sheet 7764 be agreed to.

Question negatived.

The CHAIRMAN: Senator Whish-Wilson, given that that amendment was defeated, that probably makes the second amendment redundant, so, unless you want to move it—

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

No, I am happy to take your advice on that.

The CHAIRMAN: If there are no more questions, the question is that the bill stand as printed.

Question agreed to.

Bill agreed to.

Bill reported without amendments; report adopted.