SENATE Official Committee Hansard - Parliament of Australia · SENATE Official Committee Hansard...

COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY DEBATES

SENATE

Official Committee Hansard

FOREIGN AFFAIRS, DEFENCE AND TRADELEGISLATION COMMITTEE

(Consideration of Estimates)

MONDAY, 16 JUNE 1997

BY AUTHORITY OF THE SENATECANBERRA 1997

CONTENTS

MONDAY, 16 JUNE

Department of Foreign Affairs, Defence and Trade—Program 1—International relations, trade and business liaison—

Subprogram 1.4—Interests in South Pacific, Africa and Middle East 535Subprogram 1.5—Multilateral trade policy and negotiations. . . . . . 549Subprogram 1.6—Trade strategy development and business liaison . 551Subprogram 1.7—Global issues. . . . . . . . . . . . . . . . . . . . . . . . . 558

Program 2—Passport and consular services—Subprogram 2.1—Passport services. . . . . . . . . . . . . . . . . . . . . . . 559Subprogram 2.2—Consular services. . . . . . . . . . . . . . . . . . . . . . 562Subprogram 3.3—Services to Australian government agencies

overseas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565Program 4—Secure government communications and security

services—Subprogram 4.2—Security services. . . . . . . . . . . . . . . . 565Program 5—Executive and DFAT corporate services—

Subprogram 5.1—Executive direction. . . . . . . . . . . . . . . . . . . . . 568Subprogram 5.2—DFAT corporate services. . . . . . . . . . . . . . . . . 568

Monday, 16 June 1997 SENATE—Legislation FAD&T 529

SENATE

Monday, 16 June 1997

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE

Portfolios: Foreign Affairs and Trade; Defence (including Veterans’ Affairs)

Members: Senator Troeth(Chair), Senators Bourne, Cook, Eggleston, Ferris and Hogg

Participating members: Senators Abetz, Bolkus, Brown, Brownhill, Calvert, Colston,Faulkner, Forshaw, Harradine, Margetts, Murphy, Neal, Ray, Schacht and West

The committee met at 9.05 a.m.

DEPARTMENT OF FOREIGN AFFAIRS, DEFENCE AND TRADEProposed expenditure, $2,107,821,000 (Document A).Proposed expenditure, $6,450,000 (Document B).Consideration resumed from 11 June.

In AttendanceSenator Hill, Minister for the EnvironmentExecutive

Ms Joanna Hewitt, Deputy SecretarySubprogram 1.4—Interests in South Pacific, Africa and Middle East

Mr Rob Laurie, First Assistant Secretary, South Pacific, Africa and Middle East DivisionMr Bruce Soar, New Zealand Section

Subprogram 1.5—Multilateral Trade Policy and NegotiationsDr Geoff Raby, First Assistant Secretary, Trade Negotiations and Organisations DivisionMr Graeme Thomson, Trade Negotiations and Organisations DivisionMr Doug Chester, Assistant Secretary, Multilateral Trade Organisations branchMr Paul Tighe, Assistant Secretary, Agriculture and Resources BranchDr Walter Goode, Director, New Trade Issues SectionMr John Woods, Director, OECD Resources and Coordination SectionMs Joan Hird, Director, GATT Projects Section

Subprogram 1.6—Trade Strategy Development and Business LiaisonMr Tony Hely, First Assistant Secretary, Economic and Trade Development DivisionMs Pam Fayle, Assistant Secretary, Trade and Economic Analysis BranchMs Michelle Marginson, Assistant Secretary, Trade Development BranchMr Philip Sparkes, Assistant Secretary, APEC Branch

Subprogram 1.7—Global IssuesMr Peter Varghese, First Assistant Secretary, International Security DivisionMs Gillian Bird, First Assistant Secretary, International Organisations and Legal Division

FOREIGN AFFAIRS, DEFENCE AND TRADE

FAD&T 530 SENATE—Legislation Monday, 16 June 1997

Mr Les Luck, A/g First Assistant Secretary, International Security DivisionMr David O’Leary, Assistant Secretary, International Organisations BranchMr Ian Forsyth, Assistant Secretary, Environment and Antarctic BranchMr John Carlson, Director, Australian Safeguards Office

Subprogram 1.8—International Legal InterestsMs Gillian Bird, First Assistant Secretary, International Organisations and Legal DivisionMr Christopher Lamb, Assistant Secretary, Legal Adviser A

Subprogram 1.9—Information and Cultural RelationsMr Bill Fisher, First Assistant Secretary, Public Affairs and Consular DivisionMr John Quinn, Assistant Secretary, International Cultural Relations BranchMr Jim Meszes, Director, Management Administrative Coordination SectionMs Liz Nathan, Director, Historical Documents BranchMr Billy Williams, Director, Olympic Sports UnitMs Suzanne Stein, MACS

Subprogram 2.1—Passport ServicesMr Peter Hussin, First Assistant Secretary, Passports, Services and Security DivisionMr Bob Tyson, Assistant Secretary, Passports BranchMr Doug Woodhouse, Assistant Secretary, Information Technology BranchMr Keith Baker, Assistant Secretary, Diplomatic Security and Countermeasures BranchMr Howard Debenham, Assistant Secretary, Services and Property Branch

Subprogram 2.2—Consular ServicesMr Bill Fisher, First Assistant Secretary, Public Affairs and Consular DivisionMr Ian Russell, A/g Assistant Secretary, Consular BranchMr Steve Ross, Director, Consular Operations SectionMr Paul Smith, Director, Consular Policy SectionMr Peter McFarlane, Director, Consular Response Group

Subprogram 3.1—Services to the Parliament, the Media and the PublicMr Nick Warner, Assistant Secretary, Parliamentary and Media BranchMr Martin Walker, Parliamentary and Media Branch

Subprogram 3.2—Services to Foreign Representatives in AustraliaMs Tonia Shand, Assistant Secretary, Protocol BranchMr Brian Goodwin, Director, Protocol Services and Protection Section

Subprogram 3.3—Services to Australian Government Agencies OverseasSubprogram 4.1—Australian Diplomatic Communications Network

Mr Peter Hussin, First Assistant Secretary, Passports, Services and Security DivisionMr Doug Woodhouse, Assistant Secretary, Information Technology Branch

Subprogram 4.2—Security ServicesMr Keith Baker, Assistant Secretary, Diplomatic Security and Countermeasures Branch



Subprogram 5.1—Executive DirectionSubprogram 5.2—DFAT Corporate Services

Ms Ruth Pearce, First Assistant Secretary, Corporate Management DivisionDr Alan Thomas, Assistant Secretary, Staffing Branch (SFB) and Public Sector Reform

IssuesMr Joe Thwaites, Assistant Secretary, Corporate Evaluation BranchMr John Buckley, Assistant Secretary, Trade Policy Issues and Industrial Branch (TIB) and

workplace relations issuesDr Malcolm Leader, Assistant Secretary, Resources BranchMr John Monfries, A/g Assistant Secretary, Staff Planning and Development BranchMr Robert Newton, A/g Assistant Secretary, Resources BranchMr Peter Bootes, Director, Paedophile Investigation Liaison UnitMr John Courtney, Director, Paedophile Investigation Liaison UnitMr David Peirce, Director, Financial Management and Accounting SectionMr Paul Foley, Director, Evaluation and Audit SectionMr Robert Nash, Director, Locally Engaged Staff SectionMr Rod Chidgey, Executive Officer, BMSMr John Page, Executive Officer, BMSMs Estelle Stauffer, BMSMs Louise Holgate, BMSMr Andrew Macksey, BMS

Department of Finance—Mr Phil DavisMs Nicole FeijenCHAIR —I declare open this meeting of the Senate Foreign Affairs, Defence and Trade

Legislation Committee. I welcome the minister and officers of the Department of ForeignAffairs and Trade. On Wednesday 11 June 1997, the committee completed programs 6 and7 and subprograms 1.1, 1.2 and 1.3 of the Foreign Affairs and Trade portfolio. This morningwe will continue considering subprogram 1.4 and then consider the remaining subprogramsand programs in sequential order.

I remind colleagues that the Finance and Public Administration Legislation Committee hasbeen tasked by the Senate to inquire into and report on the format of the portfolio budgetstatements. As we go through the documents, you may wish to put on theHansardrecord yourthoughts on the PBS, where they are clear and helpful, or where they are confusing and hardto follow. The committee agrees that the questions from Senator Bourne relating to subprogram1.7 be made part of the record. I understand that there is to be an opening statement from theminister or Ms Hewitt regarding matters discussed last week.

Senator Hill—Ms Hewitt wants to clarify some matters from last week.Ms Hewitt—If I could clarify the department’s position in relation to one or two important

issues that were raised last Wednesday by Senator Cook that might get us off to a clearer startthis morning. The first of these issues relates to an apparent discrepancy Senator Cook referred



to in the budget outlay figures for 1996-97, as indicated in the 1997-98 portfolio budgetstatements, compared with the figures for the same item which appeared in last year’s PBS.As a result of Senator Cook’s question, we have re-examined all the tables in our PBS for1997-98. I can advise you, Senator, that the revised corrigendum which, with your permissionMadam Chair, we would like to table this morning, is an internally consistent set of figuressubject to some remarks I am going to make about the proposed International DevelopmentAssociation Special Contribution Act 1996. The figures are now consistent with otherpublished budget related documents covering both the 1996-97 budget and the current budget.We are now satisfied that these are an accurate reflection of the portfolio’s 1997-98 budgetsituation.

I now turn to Senator Cook’s specific query about the budget outlay figures for 1996-97.The difference in the two sets of figures contained in the portfolio budget statements resultedfrom an unusual situation in which an amount of $6 million for the proposed InternationalDevelopment Association Special Contribution Act 1996 was included in the 1996-97 budgetpapers subject to the act being passed by parliament. As a result of change in governmentpolicy on special appropriations, the act was not passed by parliament and technically,therefore, funds were not appropriated to AusAID in the 1996-97 budget. The funds wereoriginally included in that set of budget bills so that the public account would reflect moreaccurately the Commonwealth’s anticipated liabilities.

The revised outlays figure for the 1996-97 budget outlays, as it now appears in the correctedPBS document, reflects the $6 million difference. Explanations for this and other smallvariations in the original figures are included in footnotes in the revised corrigendum pageswhich we would, with your permission, table this morning. Our review of the PBS document,while clarifying the point raised by Senator Cook, also revealed some smaller problems withthe figures. These have been rectified and the corrected figures are shown in the revisedcorrigendum. Explanations for the revisions are also provided and we are ready to answer anyfurther questions the committee may have about the variations.

I should add that adjustments will need to be made to the tables in the PBS in the futureas regards consular costs. This is an area we have been looking at in relation to costattribution, and we believe that the figures currently understate considerably the running costsand the overseas property element attributed to consular service. This is a question of correctlyallocating costs within the portfolio between the various programs, and it is now apparent tous that the relevant weighting of program 2 costs has been underestimated in relation toprogram 1. So that is a matter we are continuing to work on.

In their current form though, as mandated by the Department of Finance, the PBS arecomplicated documents to compile. They are drawn up on a program basis, so that most ofthe tables are based on programs, whilst the appropriation acts are not drawn up to correspondwith programs. The disaggregation of the figures in the appropriation bills into programs isa very complex task—and much more complicated for our department than for many otheragencies, because of our wide spread of programs and the challenges of our overseas operatingenvironment.

Delivery of a particular program can draw on resources used by a number of differentdivisions in the department here in Canberra, by our state offices and by our 81 posts, as wellas resources from centrally controlled elements of the corporate budget. Estimates of financialand human resource use for delivery of a particular program are drawn together from thesesources to produce the consolidated program resource tables in the PBS. In the case of thecorporate budget, this involves an informed judgment as to the level of resource usage to be



attributed to the relevant programs. Inevitably, in our case, this information from 101 costcentres scattered around the world results in a matrix of aggregated estimates influenced bya range of cause and effect relationships which are difficult to identify and distil into simpleexplanations where there is a resource usage variation in a program from one year to the next.The picture is further complicated by the effects of multiple foreign currency exchange rateand overseas inflation indexes which affect both budget and expenditure levels in the 80 postsmanaged by the department.

The attempt this year to include more information concerning the disaggregation ofappropriations into programs reflects the links between appropriations and programs in table1, but some problems have remained. For example, we do not yet appear to have achievedoptimum transparency in presenting the link between annotated appropriations—that is section35 moneys—and programs in table 1. We intend to take up these and related issues with theSenate Finance and Public Administration Legislation Committee later this week, and we willbe providing the committee with a submission outlining our concerns and advancing someproposals to make the PBS less susceptible to error and more informative for senators.

The second and final matter I wish to raise is a point raised last Wednesday by SenatorCook—again—when he asked a series of questions about an expected $9 million carryoverin the department’s budget for 1996-1997. I do want to correct an impression which may havebeen left by some of those questions that, despite reductions in its running costs, thedepartment is somehow comfortably placed with unspent funds and indifferent about whetheror not they could be put to better use. As my departmental colleague said on Wednesday,under running cost arrangements it is quite normal for agencies to carry over or borrow upto 10 per cent of their gross running cost budgets. These arrangements obviate the problems—now thankfully behind us—of agencies entering into frenzied end of the year unplannedspending, in order to avoid having to relinquish unspent funds. In other words, they are usedby agencies as a tool of good budget management practice.

I do want to emphasise that the department is in a difficult budget situation. We face theprospect of a continuing departmental deficit on a cumulative basis until the year 2000-2001,although on an annual basis there is the possibility of returning to a positive balance—perhapsas soon as 1998-1999. In this light, it is entirely understandable that some divisions and postmanagers have sought to carry over funds where they might be able—as an insurance againstpossible reductions—to put those funds to use at a later date. Other unit managers have soughtto carry over funds as part of planned long-term programs—for the acquisition of major capitalitems, for example. Last week we mentioned examples such as telephone exchange equipmentor IT purchases.

We will be giving consideration in our annual review of resource allocations to possible usesat the corporate level of carried over funds once their full measure is known and in the lightof developments affecting the department’s budget situation and departmental priorities. Itremains an option for the department to gather in from divisions and state offices, as well asfrom overseas posts, at least some of the funds that have been carried over. Meanwhile, thosefunds will remain devolved to the spending units—that is, the divisions, state offices andposts—as part of their budget allocation for the coming year, 1997-98. Thank you very much,Senator, for allowing me to spend a little time clarifying, I hope, some of those matters fromlast week.

CHAIR —Thank you very much. I now call for further questions under subprogram 1.4.



Senator COOK—Before we turn to subprogram 1.4, can I just ask some supplementaryquestions about the answers now provided by the department to my questions of lastWednesday? I do not intend to spend much time on this because I think this is a matter moreappropriately dealt with in supplementary estimates, but I do not think I can let the opportunityof the answer pass without at least one or two comments and questions.

CHAIR —Please proceed.

Senator COOK—Firstly, can I say with appreciation that the AusAID—I forget the nameof the actual person—budgetary control person rang me last Friday to explain to me what thecircumstances were with what I had called the missing $5 million—but it is now actually amissing $6 million—in the budget figures for 1996-97 to 1997-98 and how that had occurred.I am appreciative of that and I would like to record that.

Secondly, though, I will reserve further questions on this matter until after I have studiedthe answer that you have given. It seems to me that there are still a number of matters thatought to be explained for the public record. I do appreciate the complexity of the task incompiling figures in the manner that the department has explained in the answer given thismorning.

I do appreciate that, but it is odd that, in reporting expenditures to the parliament, thedocuments setting out the actual outlays for the budget in 1996-97 and 1997-98 have adiscrepancy between them—that is, the outlays as provided for have a discrepancy of $6million between them—and that that was not picked up and noted in any way, and that asecond corrigendum is now being issued in order to explain what happened to those funds.That is enough from me on that matter.

On the matter of the carryover of $9 million, again I note the answer and again I will pursuethis matter further in supplementary estimates and not delay our processes now. I understandthe arrangements with the Department of Finance that this department and other departmentshave, but I note again for the record that last year the budget cut $287.7 million out of theportfolio. At the end of the year, there is $9 million to be carried over as funds unspent.

I do not make this as a final statement, but I make it from my experience with theDepartment of Finance: when it comes down to negotiating or arguing at cabinet level at least,or Expenditure Review Committee level at least, the fact that you have carried over $9 million,irrespective of the approvals that you have had to do that and the arrangements that are inplace with the Department of Finance to recognise that, the effort will be to argue that youwere, nonetheless, overestimating your needs, despite the harsh climate. I think it puts thedepartment on the back foot in negotiating reasonable funding for future years if the fundingis unable to be spent.

If it is unable to be spent, given all the other pressures on the department, where there issuch a major cut—$287.7 million—it seems to me that it is reasonable for ministers—I donot put this at the door of the department—to consider, given the cost difficulties faced bythe department in a very stringent climate, whether the functions that that $9 million wasearmarked for initially are still the priority and whether it can be better spent somewhere elseand you can obtain approval in order to spend it in a more rational way.

I think that is a reasonable exercise of ministerial discretion where there are spare funds aftersuch a huge cut as this department has had, given the stringent circumstances this departmentfaces. But, for the moment, I am happy to put that aside, study the further corrigendum thatis being issued and pursue these matters in supplementary estimates.



Ms Hewitt—Thank you very much. If I could add, as a final word perhaps for today onthe subject, we do take a strongly different view in relation to that $9 million. I wouldemphasise the need to bear very much in mind the knowledge our program managers havethat the decisions taken in last year’s budget led to, or were known to be going to lead to,further fairly significant cuts into the department’s appropriations in the budget we are nowmoving into. So it was the longstanding knowledge that further significant cuts were goingto be imposed, as well as the items from the current budget, that I think has sensibly led ourbudget managers in our devolved operations to take a rather cautious approach to theirexpenditures this year.

I would simply note again, and underline, that the $9 million we are talking about is indeed$9 million of funds borrowed from the forthcoming year’s appropriation. We borrowed $12million because of the severity of the circumstances we faced this current year. So I think whatyou see is prudent budget management and I would expect that that would be fully understoodin the Department of Finance.

Senator COOK—I hope you are right, Ms Hewitt. But if you do not spend $9 million andyou shunt it on to the next year, I think you have got Buckley’s of getting the actual realamount that you wanted, given that you have made those savings. But, anyway, that is a matterof debate.

CHAIR —We will move to subprogram 1.4.

Program 1—International relations, trade and business liaisonSubprogram 1.4—Interests in South Pacific, Africa and Middle East

Senator COOK—When we concluded at 11.00 on Wednesday night, I was asking questionsabout Papua New Guinea and Sandline—the mercenary issue. I think I had got to the pointof referring to a report in theAustraliannewspaper of 20 February in which, following thereturn of Mr Downer from Port Moresby on 19 February, they captured the mood of his upbeatattitude to Bougainville and also reported that he was ‘now very confident the ChanGovernment was committed to a non-military solution in Bougainville.’ He is quoted as saying,‘We have said that we don’t believe a military solution can work, and the message has comeback that they are now committed to the peace process.’ I think we got answers on that matterand I am appreciative, Mr Laurie, of your candid replies.

I will take up my line of questioning from that point. I think it is fair to say that anyonereading the Foreign Minister’s comments could have been forgiven for concluding that eventson Bougainville were finally moving in a very positive direction—this is back on 20 February.I think that is not an unreasonable proposition at that point.

We now know, however, that Prime Minister Chan, Deputy Prime Minister Haiveta andForeign Minister Genia were anything but committed to the peace process. In fact, some threeweeks earlier they had signed the deal with the Sandline mercenaries to conduct a militarystrike against the BRA. Can you tell me when that contract was signed?

Mr Laurie —On 31 January 1997.Senator COOK—Thank you. Mr Downer had many contacts and conversations with PNG

ministers prior to his visit to Port Moresby on 19 February. In all those contacts andexchanges, did Mr Downer on any occasion prior to his meetings on 19 February specificallywarn against the employment of foreign mercenaries?

Mr Laurie —Senator, I am not going to get into the business of disclosing privatediscussions between the Foreign Minister and his Papua New Guinea counterparts.



Senator COOK—He had discussions pushing, obviously rightly, a peaceful and negotiatedsolution to Papua New Guinea.

Mr Laurie —Indeed.

Senator COOK—You are saying you are unable to say whether specifically he warnedagainst the employment of foreign mercenaries.

Mr Laurie —In the time frame you mentioned, I am not going to comment on privatediscussions between the Foreign Minister and his counterpart.

Senator COOK—If I asked you a further question, not just in general terms against arenewed military offensive in Bougainville, but specifically and directly against the use offoreign mercenaries, how would you answer that question?

Senator Hill—With respect, Senator Cook, to try to examine the intricacies of discussionsbetween Mr Downer and his counterpart in PNG is not a normal function of an inquiry intoexpenditure such as this. It may be a question that could be asked of Mr Downer in anotherplace—

CHAIR —That is true, Senator Cook.

Senator Hill—And beyond that, you would agree that it is under the usual exclusion ofwanting to maintain the confidence of contacts at that level. Such detail is not normallydisclosed.

Senator COOK—On the first part, if you are saying, Minister, that the line of questioningI am now engaged in is not related to the estimates, I am happy to demonstrate how they maybe related to the estimates. That would be the first point I would make. It might take me amoment or two to do it, but I am happy to do it.

The second point that I would make is that the tradition of estimates committees, certainlywhen I was in your place and you were in mine, and since then, has been to questiondepartments about what their activities are and ministers about what their policy positions aretoo, in relation to these sorts of affairs. It would be a departure from precedent to not nowat least provide an opportunity for the Senate to scrutinise some of those things.

Senator Hill—I certainly agree that we interpret the rules relatively liberally in order thatthere is put on the public record as full an explanation of government conduct as possible forall the advantages of, hopefully, confidence in the system through transparency. But in relationto pursuing the country’s foreign policies, there is also a restraint upon that in that there isthe counterbalancing argument of needing to maintain a confidence in a relationship betweenour minister and his counterparts.

It is difficult to put myself in the position of Mr Downer because I cannot judge which ofthose conversations he had that he would feel happy to detail or which parts of thoseconversations. That is all. I am not trying to be unduly restrictive. I prefer to have more ratherthan less on the record, but I can see how getting into the intricacies of these discussions withcounterparts really is a somewhat delicate area. If you have such specific questions aboutmatters Mr Downer raised, then I think they are more appropriately put on notice and he candecide whether it is in the best interest of the nation to respond to them.

Senator COOK—We have the situation here where the contract with Sandline, as we havejust had in evidence, was signed on 31 January. On 20 February, after a meeting on19 February at which Mr Downer was up-beat about the chances of a peaceful resolution, thereis a report also echoing that. Obviously, if the contract was signed on the 13th, yet Mr Downer



was reasonably of a view that PNG is committed to the peace process, there is, if you like,a series of questions which logically flow from that in the public interest.

Mr Laurie —I could make a couple of comments on that, Minister, if I may. Mr Downer’spositive comments about the peace process, both before and during the time of his visit to PortMoresby and Papua New Guinea on about 19 February to 21 February, were based onessentially two things. First, on 2 February, Sir Julius Chan called for a comprehensive reviewof PNG’s overall policy towards Bougainville. Subsequently, as we discussed the other night,the Bougainville transitional government’s term was extended. Those were two positivedevelopments in the policy situation.

Mr Downer issued, as you know, the press release on 13 February where he welcomed theextension of the mandate of the BTG. While he was in Port Moresby, he again welcomed thatparticular development. At the same time—and one can look at, for example, his pressconference of 20 February—he made it very plain that any policy other than the pursuit ofa peaceful negotiated strategy would be harmful, detrimental and negative, and he was opposedto following the military option, which was a consistent position which he had adopted sincecoming to office, and one which the previous government had had. I do not know whetheryou would describe his comments on being encouraging about the peace process as beingoverly optimistic: that is a matter of judgment. But Mr Downer was expressing a positive viewon two positive developments.

I might add that, on 20 February in his press conference, he alluded to the difficult situationabout negative things happening on Bougainville. He made the point that people are dyingon Bougainville. He was not prepared to turn a blind eye to the issue. He has been workingvery hard over the past 11 months, but there were some positive developments which hadhappened with this comprehensive review and the extension of the mandate of the BTG. Toacknowledge that does not, if I might comment, seem to be overly roseate. It was justsomething to be encouraging to a process that was heading in the direction that the governmenthad persistently advocated, and which the previous government had consistently advocated.

Senator COOK—I acknowledge that, Mr Laurie. Minister, prior to 19 February, did MrDowner specifically warn against the employment of foreign mercenaries? You have said thatis a matter for the minister. Will you take that on notice and ask the minister?

Senator Hill—I think we should refer that to him to answer.

Senator COOK—Has our High Commissioner in Port Moresby been monitoring the recentproceedings of the Sandline inquiry? Have we had officers attend those hearings?

Mr Laurie —We certainly monitored it closely; as to whether we have had officers actuallyat the proceedings, I do not think so, Senator.

Senator COOK—We have not had anyone in the room listening to what has been goingon?

Mr Laurie —I do not believe so, Senator.

Senator COOK—I am not being critical here, but that is a less than yes or no answer. Canit be checked to see if we did?

Mr Laurie —Yes, it can be checked.

Senator COOK—Has Canberra, nonetheless, been getting reports as to the developmentsin that inquiry?

Mr Laurie —We have the report of the inquiry, if you would like it, Senator.



Senator COOK—Thank you, yes.Mr Laurie —And it is also on the Internet.Senator COOK—Is it? That is a great deal of use for someone like me who is computer

illiterate, Mr Laurie.Mr Laurie —And we have had regular cable reports throughout the proceedings of

developments on a day-by-day basis, as particular witnesses testified to the proceedings. Therewas a good deal of media coverage, and we had regular reporting from the mission.

Senator COOK—Therefore, as a consequence, I presume that we now have a goodunderstanding of the events leading to the engagement of the Sandline mercenaries by the PNGgovernment.

Mr Laurie —We have the record of the Sandline inquiry, Senator.Senator COOK—When was the possible employment of Sandline first discussed with the

PNG government?Mr Laurie —By whom?Senator COOK—By this government.Mr Laurie —I am not going to go into any specific details because of the discussion we

had earlier, but I think I mentioned the other night, during Mr Downer’s visit to Port Moresby,Port Moresby was rife with rumour about the presence of mercenaries and others whosepurposes were not altogether plain—although, as Mary Louise Callaghan’s piece on 22February made clear, there were some possibilities in place. During that visit, as these rumourswere pretty current around Port Moresby, the issue of the possibility of mercenaries wascertainly discussed by Mr Downer.

Senator COOK—Was this the occasion when there was a strange military aircraft at theairport?

Mr Laurie —Yes, it was a strange military aircraft. It was a very large one. It was in civilianconfiguration, but it was a large Antonov.

Senator COOK—Yes. Not a common bird in our skies?Mr Laurie —No, I do not think so.Senator COOK—One press report in theAge on 27 February, says that, ‘The PNG

government considered a British proposal for a mercenary strike force on Bougainville morethan two years ago, but that was not Sandline.’ Can you confirm that?

Mr Laurie —No, I cannot confirm that. One thing I can say that came out of the Sandlineinquiry is that during 1996, which is a bit later than the period you are talking about, severalpropositions about the employment of possible firms and outfits were considered and rejectedby Sir Julius Chan.

Senator COOK—When did Sandline first appear in the picture?Mr Laurie —Appear where?Senator COOK—When did it come into the picture? When did we first get to know about

Sandline?Mr Laurie —According to the Sandline report, April 1996. I think there was a meeting,

certainly, in Cairns according to this document, between some representatives of Sandline andrepresentatives of the PNG government, the Minister for Defence, the Secretary of theDepartment of Defence and General Singirok.



Senator COOK—That was what month?Mr Laurie —April 1996, according to this Sandline report.Senator COOK—I must say that my understanding was that in January 1996 Brigadier

General Singirok and Defence Minister Ijape first raised the subject. But I take your advicethat it was April, not January.

Mr Laurie —Sorry, let me just check on this. I am just trying to check for you precisely.The first meeting between Sandline representatives and PNG was 7 April in Cairns. There wasanother British firm called Defence Systems Ltd, which is not Sandline, who the defenceminister met, according to this, in March 1996 in the UK, but the first recorded meeting thatI have in the Sandline inquiry report was April 1996 in Cairns.

Senator COOK—That is the Cairns Hilton Hotel meeting?Mr Laurie —Correct.Senator COOK—Who was present at the meeting?Mr Laurie —According to this report Mr Ijape, that is the defence minister; Mr Melegepa,

that is the PNG Secretary of Defence, and Commander of the Defence Force Singirok, withSpicer and Anthony Buckingham of Sandline.

Senator COOK—Was the Australian government aware of the presence of the PNG defenceminister and the secretary of his department in Australia at the time?

Mr Laurie —I do not know the answer to that. It may be that through the visa system theymay have shown up, but PNG ministers and officials travel to Australia, as you know, veryfrequently. They come and go, particularly to Cairns, but also Brisbane and other ports, and,unless it is an official visit which we are hosting or whatever, we do not necessarily knowor monitor every movement by PNG ministers or officials. It is part of the relationship thatthis very free movement of people takes place.

Senator COOK—Did they have any official business in Australia on that trip?Mr Laurie —Not that I am aware of. To the best of my knowledge there were no minister

to minister dealings involved for this purpose.Senator COOK—When did the Australian government first become aware of the Cairns

Hilton Hotel meeting?Mr Laurie —I do not know the answer to that, and it may be that it is difficult to comment

on because it may be an intelligence issue.Senator COOK—Would it be true that we did not know of that meeting until it was

reported in the Australian press nearly a year later, on 3 April 1997?Mr Laurie —Again, I would stick to the answer I just gave: I really cannot give a clear

answer on it and it may be an intelligence matter.Senator COOK—After the meeting at Cairns in April, there were further negotiations

between Sandline and the PNG government, weren’t there? There were extensive exchanges,numerous faxes and telephone calls over a number of months, including discussions betweenBrigadier General Singirok and Tim Spicer in London in May, just a few days after MrDowner’s first visit as foreign minister to Port Moresby. When did the Australian governmentfirst become aware of Brigadier General Singirok’s visit to London?

Mr Laurie —Again, I cannot give you a precise answer on that, and it may be a matterunder intelligence considerations as well.



Senator COOK—General Singirok also visited Germany in search of military equipment.Do you know when that particular trip took place and when the Australian government becameaware of it?

Mr Laurie —No, I do not specifically. I could check to see if there is anything on the publicrecord about Singirok’s visit to Germany and take that on notice. But if it is not on the publicrecord, I find it difficult to comment.

Senator Hill—Such visits of generals looking at military equipment are not unusual. Itseems to me they do it all the time.

Mr Laurie —PNG certainly was looking for equipment from a number of sources, and thecommander of the defence force was the appropriate person to be doing that particular exercise.But on that specific German one, I can check that one out.

Senator COOK—It is also the case, isn’t it, that the proposal to engage Sandline was thesubject of significant debate within the PNG government itself? In September, I understand,the secretary of the PNG Prime Minister’s department wrote to Sir Julius Chan recommendingthat the Sandline proposal be rejected.

Mr Laurie —That features in the Sandline inquiry. I could read you what Noel Levi said,from the inquiry. This is his minute. He said:Based on the foregoing and my conversation with my contact, I would suggest that the Government shouldconsider this matter carefully with a view to rejecting it.

He then says:Our aim on Bougainville is not to completely alienate the people and therefore engaging this organisationwould be contrary to our long term political and constitution interest.

That was signed by Noel Levi and on that, Prime Minister Chan wrote the word ‘REJECT’.Senator COOK—Did our High Commission in Port Moresby, with its extensive political,

military and bureaucratic contacts, pick up any hint, or better than just a hint, of thosedevelopments?

Mr Laurie —I cannot comment on that, Senator. It was not in the public domain and thatwould be a matter of intelligence.

Senator COOK—One would expect that they would have.Mr Laurie —Not necessarily. If one reads further into the Sandline inquiry, it becomes

extremely plain that very few people in the Papua New Guinea government were privy to thiswhole process of the Sandline engagement and contract. It shines through in this Sandlineinquiry that the matter was kept very tight and to a very few people. This document that I amquoting from—from Levi—is a recommendation or a minute to the Prime Minister and it hasappeared in the Sandline inquiry. But, in the normal course of events, it would not appear inpublic.

Senator COOK—But is it not the case that our diplomats and military advisers remainedlocked in their security compounds, and did not get around Port Moresby well enough to pickup rudimentary intelligence on this matter?

Senator Hill—That is a determination that you might make for your purposes, Senator, butthat is really a value judgment you are asking Mr Laurie to make. You can ask him for factsbut not interpretations of them in that way.

Senator COOK—I take it you are directing the officer not to answer, Minister?Senator Hill—I am guiding him to answer it very discreetly.



Mr Laurie —Thank you, Minister, I appreciate your guidance!Senator COOK—I thought he was doing that very well. Precisely when did the Australian

government first learn of the PNG government’s plan to engage Sandline? Was it before theSandline contract was signed on 30 January?

Mr Laurie —I really cannot answer that. It touches on the intelligence area and you knowthe constraints on me in that regard.

Senator COOK—When was Foreign Minister Downer first informed of the possibleemployment of foreign mercenaries by the Papua New Guinea government?

Senator Hill—By the government?Mr Laurie —By the government of Papua New Guinea?Senator COOK—Yes.Mr Laurie —Could I have the question precisely again please.Senator COOK—Certainly. When was Foreign Minister Downer first informed of the

possible employment of foreign mercenaries by the PNG government?Mr Laurie —During the visit to Port Moresby that we have spoken of, from 19 to 21. I

mentioned these rumours that were rife. I have also mentioned—and you mentioned—thesestrange birds that were sitting on airports.

Mr Downer did raise the rumours with the Papua New Guinea government and sought adviceas to whether there was anything in them and, if there was anything in them, what purposewas being served. He was informed that some instructors—they were called instructorsconsistently by the PNG government rather than mercenaries—were being engaged to trainthe PNGDF.

Senator COOK—And that would be regarded as the first official communication?Mr Laurie —Correct, and there was no public statement by the PNG government on this

matter until the week following.Senator COOK—It has been reported in the press that the Office of National Assessments

gave a written briefing to the Prime Minister and to Mr Downer and other ministers on13 February, two weeks after the Sandline contract was signed and before Mr Downer sawthe Antonov plane on the tarmac at Port Moresby. Is that correct?

Senator Hill—We cannot comment on ONA assessments.Senator COOK—Is that a direction not to answer?Senator Hill—In that instance, yes.Senator COOK—Did DFAT warn Mr Downer about the mercenaries prior to 13 February,

the day he issued his press release congratulating Sir Julius Chan for his efforts to move theBougainville peace process on?

Senator Hill—That is an unfair question, too. You are asking for internal communicationsbetween Mr Downer and his departmental officers, which is well outside the normal provinceof questions in estimates committees.

Senator COOK—So you are ruling it out, Minister?Senator Hill—In this forum, yes. If you want to ask him that, you can ask and I will refer

it to him but I do not think you can ask the officers to talk about their internal communicationswith their minister.



Senator COOK—All right, I will ask it and you can refer it. When did the Australiangovernment learn that the Sandline mercenaries had actually arrived in Papua New Guinea?

Mr Laurie —That comes under the intelligence situation again. There was no publicstatement from the Papua New Guinea government or Sandline of their arrival in Papua NewGuinea and I would rather not comment on that.

Senator Hill—Yes.

Senator COOK—Let me put it another way. Was it the case, as was reported in the press,that their arrival was not confirmed until Mr Downer’s aircraft taxied up alongside the Russiantransport aircraft at Jackson Airport?

Senator Hill—I take it that is the occasion you have been talking about when Mr Downerraised the issue, is it?

Mr Laurie —It came up during the visit. He taxied up on the 19th.

Senator Hill—That question has, in effect, been answered.

Senator COOK—When Sir Julius Chan stepped down as Prime Minister on 25 March, hesaid the recruitment of Sandline had done:. . . irrevocable damage to relations between Australia and PNG.

He said:The decision created tension of a nature that I had not anticipated . . . There was an onslaught on PNGunimagined and unanticipated.

In retrospect, would it not have been preferable if the Australian government had specificallywarned Sir Julius Chan against the mercenary option before the Sandline contract was signedand if we had moved to nip the scheme in the bud right from the beginning?

Senator Hill—It sounds to me that Mr Downer expressed the appropriate reaction, in effect,in that discussion you have been referring to.

Mr Laurie —Yes.

Senator Hill—I am not quite sure what else you would have preferred.

Senator COOK—When you say ‘the discussion I was referring to’, are you instancing thediscussion on 19 February when Mr Downer was in PNG and met the Prime Minister?

Senator Hill—That is the one I am referring to.

Senator COOK—Because the evidence is that at that time he was told that these weretrainees, not mercenaries, albeit I have asked a number of questions—

Mr Laurie —They were instructors to train the PNGDF. And that line that they wereinstructors for training the PNGDF was one that was consistently pursued by PNG governmentspokesmen over a period. The question of their deployment and engagement and real purpose,as far as Bougainville was concerned, came out very much later. It was not until the Sandlinecontract became public—and it also is on the Internet—that the contract states explicitly, interalia, that:. . . Sandline is contracted to provide personnel and related services and equipment to:—

and then several things are listed, including—- Conduct offensive operations in Bougainville in conjunction with the PNG defence forces to render

the BRA militarily ineffective and repossess the Panguna mine; . . .



When this document became public knowledge that became explicit. The earlier comment byPNG leaders, publicly and privately, was that these were instructors for training for thePNGDF.

Senator COOK—I understand that, but from time to time, in discussions of this sort, givenrumours being rife of the Antonov on the tarmac and all of that background, it would not havebeen inappropriate for the minister to have lent across the table and said, ‘I hear what you say,Prime Minister, about them being instructors, however, be aware that if their jobs or dutiestake them into anything else, then these are our reactions, and this is our reaction to—

Mr Laurie —Senator, if I might say so—and again I do not want to go into detail—thereis absolutely no question that the seriousness of the Australian government’s view on thepossible deployment of these mercenaries, or even their presence in Papua New Guinea, wasmade very plain by the foreign minister and the Prime Minister in a direct phone call to SirJulius Chan on 20 February. It could not have been plainer.

Senator COOK—Do you consider that, in the light of the information that has beendisclosed by the Sandline inquiry in Port Moresby, Australia’s diplomatic and intelligencereporting in the lead-up to the crisis in February could have been better, could have been moretimely?

Mr Laurie —I am not going to comment on intelligence matters.Senator COOK—Without going into the details, have any significant deficiencies or failures

come to light which would explain the very late warning apparently given to Australianministers?

Mr Laurie —I am not going to comment on that, Senator.Senator COOK—On what grounds?Mr Laurie —It is intelligence.Senator COOK—Has DFAT conducted any review of the performance of the High

Commission in Port Moresby and its own analyses in the period prior to the public disclosureof the Sandline scheme in February?

Mr Laurie —We have a process of continuing review of our posts’ activities and operations.Senator COOK—That applies everywhere; this is a notorious incident in our immediate

region in which this post was directly involved. Have we conducted such a review of itsactivities in relation to this incident?

Mr Laurie —We have an ongoing process of review of the Port Moresby HighCommission’s performance.

Senator COOK—We treated it routinely?Mr Laurie —It is part of the regular process and, indeed, for the post’s performance during

the events that emerged, it has been complimented on an outstanding performance in termsof its activities.

Senator COOK—Are you satisfied with the performance of our diplomats in ferreting outwhat the PNG government was really thinking about Bougainville during the 12 months inwhich the Sandline conspiracy was being hatched?

Mr Laurie —I think I can comment that, in the period that you allude to, our post followedthe ups and downs and intricacies of the Bougainville situation as closely as one could.Senator, you will be aware that it is not always easy. Access and the question of the situationon Bougainville itself are complex. It is not always easy to make visits there, because of the



security situation. In terms of PNG government policy and in terms of the timeliness of postreporting on aspects on that, we think we were well served by the broad thrust of postreporting on the situation on the ground and in terms of overall PNG policy.

Senator COOK—Is that what your routine review found, that we were well served?Mr Laurie —I think we would say we were well served, on the whole, by the post in terms

of reporting the situation on the ground in Bougainville and the general approach of the PNGgovernment towards it.

Senator COOK—Section 5(1)(d) of the Office of National Assessment Act requires theDirector-General of the ONA:to keep under review the activities connected with international intelligence that are engaged in byAustralia and to bring to the notice of relevant Departments and Commonwealth authorities anyinadequacies in the nature, the extent, or the arrangements for coordination, of those activities that becomeapparent from time to time and suggest any improvements that should be made to remedy thoseinadequacies.

Is DFAT aware of any review conducted by ONA, in accordance with its statutoryresponsibility, of the performance of Australia’s diplomatic and intelligence reporting and theassessments prior to the crisis of February-March this year?

Senator Hill—Again, even if they were, I do not think that is an appropriate question toanswer.

Senator COOK—Why not?Senator Hill—These are always difficult issues to explore, as you know; and you are now

questioning the efficiency and capability of an intelligence assessment organisation. You areentitled to draw conclusions on the basis of what is on the public record regarding thesevarious matters; but, in terms of their internal capabilities and what reassessment they mightmake of those capabilities, that is not normally a matter that is made public.

Senator COOK—I am just asking if they did a review?Senator Hill—I do not think that we can answer.Senator COOK—Let me put it another way. Has ONA suggested any improvements in

practice or procedure that should be made to remedy any inadequacies they might perceivein their performance?

Senator Hill—Of their own performance?Senator COOK—Yes.Senator Hill—Again, I do not think we can answer that.Senator COOK—For the same reason, I assume?Senator Hill—Yes.Senator COOK—I have no further questions.CHAIR —Any further questions on subprogram 1.4?Senator HOGG—Yes. Just on that same Sandline issue, when did the government become

aware of the materiel that is stored at Tindal for the Sandline organisation?Senator Hill—When did it become aware of what?Senator HOGG—Of its nature, of its existence.Senator Hill—As it arrived in PNG? It got diverted.



Mr Laurie —It got diverted, yes.Senator HOGG—This is at Tindal, in northern Australia.Senator Hill—Again, I suspect that you are probably asking a question regarding

intelligence matters.Mr Laurie —I could get the facts of it. When the contract was put on the Internet, that list

of equipment was attached to it. It is here, and I will be giving this back when I have finishedwith it. The nature of the equipment is listed. I cannot tell, but the first time it was on thepublic record may have been when it went on the Internet, because it was an attachment tothe contract. When the contract became public knowledge, that material became publicknowledge as well. I do not know the date of that. I can check it out for you.

Senator Hill—What I interpret you to be asking is were we aware of the detail of themateriel before it landed at Tindal, and that is what I think we cannot answer.

Senator HOGG—I was going—Mr Laurie —Minister, could I take that on notice because I think we had a bit of an idea,

both from the PNG side and from others, just what might be involved. Could I come back toyou on that?

Senator HOGG—Yes, because I would like to find out a bit about the materiel, what weknew about the materiel before it got here, who has a claim on the materiel now, and is therea claim by the Papua New Guinea government on the materiel?

Senator Hill—We should be able to answer that question.Mr Laurie —The answer to that question is it is a matter for resolution between Sandline

and the Papua New Guinea government, and it has not, to the best of my knowledge, beenresolved. Part of it was part of the contract. The contract was for something like $38 million—sorry, $36 million, of which $18 million was paid by the PNG government. The other $18million to the best of my knowledge has not been paid. I am not sure whether that outstanding$18 million covered the equipment or the instructors or whatever. But it is a matter forresolution between Sandline and the PNG government.

Senator HOGG—Right. So, there are no other outside sources who have a claim over thosegoods that are currently in northern Australia?

Mr Laurie —No, not that we know of.Senator COOK—How come we are storing it—Mr Laurie —We were asked to by the PNG government.Senator COOK—We were asked to?Mr Laurie —Yes.Senator COOK—Are we charging them for storing it?Mr Laurie —I do not believe so, no.CHAIR —No further questions? Thank you, Mr Laurie.Senator COOK—I have some questions on Iran which is under subprogram 1.4.CHAIR —Right, please proceed.

Senator COOK—Is this still you, Mr Laurie?Mr Laurie —It is, Senator, for my sins.



Senator COOK—I am sure they are very insubstantial, your sins, if they exist at all, MrLaurie.

Mr Laurie —Thank you, Senator.

Senator COOK—On 11 April, two months ago, Mr Downer issued a short press releaseon the verdict brought down in the Mykonos case in Germany. In his statement, Mr Downernoted that the verdict in the case implicated ‘the highest level of the Iranian state in terroristkillings’. He went on to say that this part of the verdict would be studied, in his words,‘especially carefully’, and that Australia’s response would be determined after study of theverdict and in consultation with members of the EU and other countries including the UnitedStates, Canada, Japan and New Zealand. I think the Mykonos case was the first occasion thata western court has directly implicated the Iranian leadership in terrorist acts abroad. That istrue, isn’t it?

Mr Laurie —To the best of my knowledge, yes.

Senator COOK—It is now two months on. Has Mr Downer issued any further press releaseon this issue?

Mr Laurie —No, I do not think he has.

Senator COOK—Leaving aside the question of Australia’s response, what is the outcomeof the government’s review of the Mykonos verdict?

Mr Laurie —It is an ongoing process. We have not actually received, to the best of myknowledge, the full verdict in the translated form. So it is an ongoing process, as is the processof consultation that was alluded to in the original statement.

Senator COOK—When would we hope to receive the full verdict in its translated form?

Mr Laurie —I cannot tell you exactly that. It may be that we have received something inGerman and it is a question of interpretation or whether there is going to be an interpretedversion provided. I can come back to you on that if you wish.

Senator COOK—There must have been some reporting, though, in summary, what theverdict was about and its main points.

Mr Laurie —Sure.

Senator COOK—And you have that?

Mr Laurie —I think we have an outline of it, yes.

Senator COOK—I can appreciate caution, wanting to see the whole text.

Mr Laurie —Sure.

Senator COOK—But these facts—the facts of what the verdict was and the grounds uponwhich it was made—are fairly well known, are they not?

Mr Laurie —Yes.

Senator COOK—Thank you. Does the government accept the verdict as proof of the directinvolvement of the Iranian government in terrorist activities?

Mr Laurie —I think the government has taken the position, as did the previous government,of condemning terrorism no matter where, why and who has done it. And I think it made itsposition very plain on the terrorist aspect of this matter.



Senator COOK—Yes, there is strong bipartisanship, and may it always endure on that point,but do we accept that the verdict is proof of the direct involvement of the Iranian governmentin terrorism?

Mr Laurie —I think we take the view that this is the first public demonstration by a courtof law that implicates the then leadership of the Iranian government. Of course, some of thatleadership has changed somewhat as a consequence of the last election.

Senator COOK—Is that proof then, in our minds?Mr Laurie —It is the judgment of a German court.Senator Hill—What do you mean by proof? If you go back to Mr Downer’s statement, what

did he say? Have you got that one?Mr Laurie —I do not have the statement, actually, with me, Minister. I do not have it with

me, I am afraid, in precise language.Senator Hill—Don’t the words stand as he has stated them? I do not quite see where you

go with your next question. I do not see that it adds significantly to what Mr Downer has said.Senator COOK—Perhaps we should get a copy of the statement before us.Mr Laurie —Yes, but I do not have it here, I am afraid, Senator.Senator COOK—And I will reserve on this point for the supplementary estimates if I need

to.Mr Laurie —Fine.Senator COOK—But the question is plain. Here is a court, that I think we would recognise

is a properly constituted judicial authority, that has made a decision.Mr Laurie —It delivered a verdict where it implicated what it called the highest levels of

the Iranian government in the 1992 assassination of Kurdish leaders in Berlin.Senator COOK—Does the government intend to take any further action in respect of this

matter?Mr Laurie —As I say, we have continued to be in touch with our partners, other countries

such as Canada, New Zealand, Japan, the EU and so on, and we are continuing thatconsultation process. As you may know, our ambassador was recalled, he went back; the EUambassadors were recalled, they have not gone back, largely because there is a complicationover the return of the German ambassador. The Iranian authorities have made it plain that theydo not want him there for a little while. He has not been declared persona non grata, and outof solidarity the EU have not sent their ambassadors back. It is a matter we are keeping undersome careful review because, as I said, we do have a new president in Iran following thepresidential elections, and it is early days in that presidency and it may be that there may besome forward movement on that particular issue.

Senator COOK—We are just going back to Mr Downer’s press release of 11 April. Theimplication of that release was, and I do not have the actual terms in front of me, that Australiawas studying the verdict and would comment further. You say the matter is under review. Wehave not got the interpreted text in full yet, but we have had consultations with all the relevantcountries that I have mentioned—the US, Canada, Japan and New Zealand.

Mr Laurie —Sure.Senator COOK—What is the next move here? What is going to happen next from a public

point of view with the Australian government? Are we going to say anything else?



Mr Laurie —I do not want to anticipate what the minister may decide to do on that, Senator.It would be unwise for me to do so.

Senator COOK—Minister, can you indicate whether there will be a further governmentresponse?

Senator Hill—No. We can ask him if you like.

Senator COOK—Okay, thanks. On page 1 of theWeekend Australianof 31 May there wasa detailed article by Mr Don Greenlees which contained details of a highly classified briefinggiven in August 1995 to the then foreign minister, Gareth Evans, by United States intelligenceofficials on alleged Iranian government involvement in international terrorism. Is it acommonplace thing for the newspapers to report this sort of highly classified intelligencebriefing?

Senator Hill—It should not be a commonplace thing for them to have that material. Wecannot, of course, comment on the accuracy of the report.

Senator COOK—The article by Mr Greenlees reported that present at the briefing byofficials from the CIA, the FBI, the National Security Council and the State Department werethen Senator Evans and the then heads of DFAT, Michael Costello, and the Office of NationalAssessments, Philip Flood. Was this public disclosure of a highly secret intelligence briefingby the United States authorised by the Minister for Foreign Affairs, his department or anyagency?

Senator Hill—No.

Senator COOK—What explanation would there be for such a disclosure of a secretintelligence briefing to a member of the press?

Senator Hill—No; but, as I said, do not read within that that we are in some way verifyingthe contents of the material.

Senator COOK—I appreciate that addendum. What explanation could there be, though, forthis disclosure in those circumstances?

Senator Hill—We do not know.

Senator COOK—If the disclosure of this secret intelligence was officially sanctioned, wasthe United States consulted before the information was given to Mr Greenlees? I think youhave answered that question.

Senator Hill—We have said it was not sanctioned by us.

Senator COOK—If I asked you: did the United States approve?—I think you have answeredthat as well.

Senator Hill—I think you would have to ask the United States. I am sure you would geta similar answer, too.

Senator COOK—Given that this was not an authorised disclosure—with the addendum thatyou have made, I might add, Minister—what steps have been taken to investigate the leak?Has the matter been referred to the Australian Federal Police?

Senator Hill—Mr Laurie, is that being pursued?

Mr Laurie —I think it is being pursued. I would have to take that on notice, but certainlythere was an intention to do so. I will have to come back to you on that.



Senator COOK—What is the government’s view then? Does it consider this as anacceptable state of affairs, that the contents of what may be classified intelligence briefingsshould appear in the media?

Senator Hill—Obviously we would be concerned at any intelligence briefing appearing inthe media. It is not in our national interests.

Senator COOK—Thank you. I have no further questions.

CHAIR —As there are no further questions on subprogram 1.4, thank you, Mr Laurie.

Subprogram 1.5—Multilateral trade policy and negotiations

Senator COOK—I have seen it reported that Sir Leon Brittan recently proposed the conceptof a millennium round—a further round of international trade liberalisation. Is that true andwhat is Australia’s attitude to it, if it is?

Mr Raby —Yes, Senator. Since April last year Sir Leon Brittan, on his own authority, notwith the full support of the member states at this stage, has advocated the need for a newmultilateral trade round, to be launched at the turn of the century, which he has dubbed themillennium round. The Australia government has supported the need eventually for a newmultilateral trade round. At the OECD ministerial meeting last month in Paris, the Ministerfor Trade, Mr Fischer, publicly and firmly supported Sir Leon Brittan’s call for a newmultilateral round to begin at the turn of the century.

Senator COOK—Have there been any expressions of view about agriculture and the roleof agriculture in such a round? Admittedly, it is early days.

Mr Raby —Yes. A large part of the reasoning behind our support for a new multilateralround is precisely the dilemma of how to address agriculture in any further negotiations. Asyou will recall, agriculture is part of the built-in agenda which was agreed at Marrakesh whenthe Uruguay Round was concluded in April 1994. Agricultural negotiations are mandated tobegin in 1999. They will be multilateral negotiations on agriculture. The strategic issue forus though is what progress could we realistically expect on agriculture if agriculture is the onlyitem on the table, and if other items are not in play to provide the opportunity for trade-offswith those, particularly for the inefficient agricultural producers. So very much at the centreof our thinking about a new multilateral round is the issue of how to handle agriculture.

Senator COOK—Some of the highest tariff walls in the world on manufactured goods arewithin our region. Is it the intention to encompass those countries maintaining very high tariffbarriers against manufactured exports in the region and to draw them into the round toparticipate?

Mr Raby— Absolutely. And in many ways we would see much of any new round as beingdirected at bringing developing countries in our region to much higher levels of discipline,both in terms of domestic support arrangements and bound levels of tariffs, and improvedmarket access. Again, you may recall that one of the omissions from Marrakesh was acontinuation clause on industrial tariffs. We pursued this in the run-up to the Singaporeministerial last year with only limited success, unfortunately. Industrial tariffs are still on theagenda, and in recent months it is fair to say that there is a growing recognition that industrialtariffs will need to be renegotiated. If you were to have a continuation clause for industrialtariffs towards the end of the century—and that would be in a sense the only element missingat present—that element would be filled in to give you a new round by the turn of the century.



Senator COOK—These levels of tariff protection within our region are under the APECBogor declaration and are bound to be removed by 2020. How would a millennium roundbalance against those objectives?

Mr Raby —It would speed up and reinforce those objectives.

Senator COOK—What potential is there in the assessment of the department for amillennium round to get off the ground?

Mr Raby —None of these things are easy, of course. The department’s assessment iscautiously optimistic, partly because the built-in agenda itself provides almost all the issuesthat you would need for a new round. There is a bunching over the years 1999 to 2001 ofmandated new negotiations—I mentioned agriculture, services, and the TRIPS agreement thatwill need to be revisited, and so on—and in developing internationally, in terms ofmanagement of the system, a new round would be the most sensible way to proceed. Butobviously in all of this you have to fund the package of the balance of interests in order todraw a critical mass of countries into a new negotiation.

Senator COOK—How have the Americans and the Japanese responded to the Sir LeonBrittan kite-flying episode?

Mr Raby —Both very cautiously. The Japanese are reluctant to discuss a round at this stage.We believe that that has got more to do with internal concerns over agriculture than anyphilosophical or other principled objection to a new comprehensive round.

The US is somewhat different. For a start, the United States administration does not havea fast-track authority, so that the US has been focusing more in recent times on what they calla sectoral approach and part of the sectoral approach has been mandated in Marrakesh—theongoing negotiations in telecommunications, financial services and so on. Also the UnitedStates very successfully launched and managed the initiative last year for a multilateralliberalisation effort on information technology, the so-called ITA agreement. In a sense, theUS’s position I think is to see what can be exhausted through the sectoral approach beforeturning to look at a new round. But the US position itself is evolving.

Senator COOK—What is your assessment of the likelihood of the millennium round gettingoff the ground?

Mr Raby —The assessment is, as I said before, cautiously optimistic.

Senator COOK—Is Australia happy with the progress being made in APEC on individualaction plans for countries?

Mr Raby —I regret, Senator, that is under the next subprogram.

Senator COOK—Is it? Are bilateral trade negotiations under the next subprogram, too?

Mr Raby —Bilateral trade negotiations are principally handled by the relevant geographicareas.

Senator COOK—But there is a central bilateral trade negotiation unit?

Mr Raby —There is a new market access development committee. That is under the nextsubprogram.

Senator COOK—Okay. I have got no further questions under this program.

CHAIR —Thank you, Mr Raby.



Subprogram 1.6—Trade strategy development and business liaison

Senator COOK—Mr Hely, is Australia satisfied with the progress being made on theindividual action plans under the APEC agenda?

Mr Hely —As I think I might have mentioned the other night, we are satisfied within thecontext of a reasonably modest expectation about the beginning of the process—1996 was thefirst year of tabling individual action plans. They were, I would say, a modest but reasonablycredible advance on regional trade liberalisation. At the Subic Bay leaders’ meeting inNovember last year, leaders reaffirmed their commitment to Bogor, so there was no sense ofbacksliding.

Earlier this year, frankly, we were a little bit worried about the way that some membereconomies were looking at their individual action plans. The sense we had was that they werelooking more at implementing what had been tabled rather than improving individual actionplans, which is our interest.

I think, as I mentioned the other night, as a result of the APEC trade ministers’ meeting inMontreal in May, there at least is now a growing sense that there does need to be im-provements this year. We have got an agreement to table revised individual action plans byAugust to give the chance for some collective peer review pressure. I think at least 10 to adozen APEC member economies at the Montreal meetings suggested that they were workingactively on improving their individual action plans. We expect that there will be improvedplans by November, but, frankly, they will be more of a modest incremental process ratherthan any major big-bang breakthroughs in market access. In summary, I think we are satisfiedbut there is still a fair bit to do.

Senator COOK—Does that mean that Australia will be reviewing its individual action planat all?

Mr Hely —We will be tabling an improved individual action plan. We have indicated thatto our APEC member economy colleagues.

Senator COOK—When will the details of those changes be known?Mr Hely —I am not too certain, Senator. It depends. We will probably table a paper that

foreshadows the revised changes and then we will need to have those approved subsequentlyby cabinet probably later in the year, so I guess they will become public roughly in the periodof October to November. It would be up to the minister whether he wants to table theimproved plans prior to or at the same time as the leaders’ meeting in November in Vancouver.

Senator COOK—Will the areas of automotive, textile clothing and footwear, and sugar beincluded in the review?

Mr Hely —At this point of time, we already have in our individual action plans the outcomesof all of those reviews. Whatever is decided in relation to those will go into our individualaction plans for 1997 which, presumably, will include PMV and sugar, but not necessarilyTCF: it depends on the timing of the government’s consideration of the review in that process.

Senator COOK—Thank you, Mr Hely. I have some questions on bilateral trade negotiationsin this section now.

CHAIR —Right. Do they apply to this section?Senator COOK—Yes, I think they do.Mr Hely —On bilateral trade?Senator COOK—On bilateral trade negotiations.



Mr Hely —It depends on whether it is in relation to individual bilateral negotiations whichfall to the responsibility of the individual geographical divisions, or whether it is in relationto the Market Development Task Force, which is a coordinating body which resides in ourdivision.

Senator COOK—It is the Market Development Task Force that I am interested in.CHAIR —Please proceed, in that case.Senator COOK—When was the Market Development Task Force first formally put in

place?Mr Hely —It was established in 1996.Senator COOK—But when?Mr Hely —August.Senator COOK—August 1996.Ms Hewitt—If I could just add a word there, Senator, I think we introduced the subject at

our estimates sessions last year. It was a very newly completed initiative at that point, and weoutlined its origins and objectives to you last year.

Senator COOK—Thank you. I am sorry if this is running over the target again then, a yearon, but can you briefly describe the structure and functions of the Market Development TaskForce?

Mr Hely —The Market Development Task Force is chaired by the Secretary of theDepartment of Foreign Affairs and Trade, and it includes representatives at senior executivelevel of Austrade, Department of Primary Industries and Energy, and DIST. Its main purposeis to give a better sense of coordination and prioritisation to some of our bilateral marketdevelopment efforts, in a sense by focusing on areas where there are realisable outcomes inprospect and on areas where the government really can make a difference.

It works on the basis of reviewing a range of priority markets, and currently there are 25of those. It then sets objectives for those markets, including picking out a very small numberof objectives for some concentrated action in the next six months. It then has a system ofestablishing case officers who go out and implement those objectives with other agencies andindustry and posts; and they are then required to report back to the Market Development TaskForce on what they have achieved.

This is the way it works. If some success had been achieved on a particular objective at thesix-monthly review, that that might go off the agenda and something else might come on. Ifit still had not been achieved, but it were felt that some more focused activity in the next sixmonths might make progress, then it would stay on the agenda. If it were felt to be a moreintractable and longer-term issue, it might well go off the short-term agenda but remain partof the bilateral processes.

So far, there have been two meetings of the Market Development Task Force to review andset objectives for the 25 markets, and there have been two case officer feedbacks reportingon progress, and there has been some adjustment to the program as a result of that. So, itbecomes in a sense a six-month rolling program of objectives.

Senator COOK—If individual Australian firms wish to apply to have an area of marketdifficulty focused on by the task force, what do they do?

Mr Hely —In some respects, the objectives that have already been set reflect businesspriorities that are either registered with us here in Canberra or at overseas posts. We have a



process of involving industry quite closely in the development of the process through someof our major coordinating mechanisms: the Trade Policy Advisory Council and the nationaltrade consultations.

We also have regular briefings of some of the major central industry associations, who canthen feed out to their members. We receive quite a deal of communication from individualcompanies, who can feed into the process through the market development task forcesecretariat located in our division.

Senator COOK—If, in a review, for example, you have had two meetings to do a reviewof the 25 priority markets and you wish not to pursue a particular bilateral issue, what appealagainst that decision does an Australian company have with DFAT?

Mr Hely —It has not really happened so far, to be perfectly honest. I do not think it is thekind of process where we would suddenly pull down the shutter on an item of particularinterest to an Australian company. It is a question of the focus and the time frame that we puton an issue. As I say, if we have made progress and the issue is resolved, it goes off theagenda, for good reasons. If we think that we can make some progress by more focusedactivity, it stays on. We would only remove it if it became very apparent that this was a majorhurdle and a very intractable, difficult issue. We would talk to the companies involved. Wewould still keep it on the agenda, but not in the context of this short-term, focused activity.

Senator COOK—That is for issues that have already made it to the agenda. What aboutcompanies that wish an item to be included on the agenda?

Mr Hely —Again, there is an opportunity, either through registering that with the marketdevelopment task force secretariat or through the day-to-day contact that companies have withindividual geographical divisions, with the overseas posts, with Austrade or with the otheragencies involved. So there is quite close contact with industry and there is quite a deal ofopportunity to have your issue—

Senator COOK—So is it fair to say that all issues, virtually, that Australian companies wishto raise with the task force are then farmed out to posts for those posts to pursue?

Mr Hely —They are farmed out to individual case officers—mainly located in thegeographical divisions of DFAT—who then work with the other agencies and with businessand with the posts in prosecuting them.

Senator COOK—How then do you choose the priority by which you pursue particularissues?

Mr Hely —Priority markets or objectives? As I say, for each market we only pick two orthree priorities to pursue in the next six months. For a particular market we may well havethree individual case officers who will then work with business and with posts. It is not somuch a question of delineating priorities there, because we have narrowed down the priorities,and we have the resources and the focus to put effort into them.

Senator COOK—But, if virtually anyone that comes along can have their matters includedin the task force’s list of items to be pursued—that is, the ambit bilateral claims, if you like,that are there—the real progress that is made is to what effort is put into particular claims toget those claims up or across the line. How is that decided? How is the priority decided?

Mr Hely —The priority as to the market or the objective?

Senator COOK—From what you have said, you have a broad list of claims which arefarmed out to posts. That list is virtually all those claims notified to the department. In order



to succeed, taking up a broad list of claims is unlikely to be the best way of proceeding. Theyare the ambit list of claims that you have in that particular market?

Mr Hely —Yes.Senator COOK—Sometime, somewhere, a decision must be made to say, ‘These items have

a chance of success; we will put our effort into winning on those fronts.’ How is that chosen?How is that decision made?

Mr Hely —The real judgment is how to narrow down that ambit claim to the two or threeobjectives. That is the essential issue. There is an element of judgment involved here whichthe market development task force carries out. It mainly looks at it on the basis of what thepotential is for this item to have progress made on it in the next six months, how importantit might be to business to make progress and whether this is an issue in which governmentaction—as distinct from some other form of action—might make the difference. Those are thethree issues they look at, but there is a degree of judgment involved in that.

Senator COOK—Who looks at them and who makes the decision?Mr Hely —That judgement is made by the market development task force.Senator COOK—At its regular review meetings?Mr Hely —Yes.Senator COOK—If individual firms wish to argue that the priority assigned is not a fair

priority in the case of their issue, what chance of appeal or argument do they have?Mr Hely —Again, they can do that with their regular contacts with the geographical

divisions, with the market development task force secretariat or with posts. Those views willbe brought in to the market development task force by the geographical divisions, by the caseofficers or by our own division, which provides a secretariat.

Senator COOK—So there is no formal structure.Mr Hely —There is no formal mechanism where a company can front up to the market

development task force and plead to the jury. The situation just has not developed like that.Senator COOK—Yes.Mr Hely —But there is plenty of scope for a company to make its views known to the task

force.Senator COOK—How will they know what priority has been assigned?Mr Hely —They are involved in the consultation process and so we cannot—Senator COOK—They are told in that process, are they?Mr Hely —Yes, we involve them in that process. We cannot deal with every company in

Australia. There is a limitation there, but we try and make it as broad a process as possible.Senator COOK—What exactly are they told? Are they told, ‘Your issue is taken on, we

accept that, that is part of our bilateral trade negotiation agenda now, but the priorities arethese’? Is that the sort of information they are given?

Mr Hely —That is the sort of information they are given.Senator COOK—And they can dispute the priorities if they choose?Mr Hely —They can if they believe they are inappropriate. That has not happened so far,

I must say.Senator COOK—Do you have a schedule of issues that are being taken up?



Mr Hely —We do, it obviously changes all the time. It is not publicly made available. Itis a rolling schedule. It changes all the time.

Senator COOK—What is the reason for it not being publicly available? Can it be madeavailable to this committee?

Mr Hely —I cannot see any reason why it could not be made available to this committee.Senator COOK—Thank you. Are we taking up the issue of access for automobiles with

Malaysia, Indonesia, Thailand and the Philippines?Mr Hely —The answer I think is yes, we are certainly taking up a number of automobile

issues and I think that the countries that you mentioned are those. But just let me check. Atthis point in time, only Taiwan and Thailand are currently on the agenda, but I think we willbe giving more priority to automotives in the market development task force and I am quitecertain that Indonesia and Malaysia will be added to that list. We will be giving high priorityto automotives as part of the new automotive trade strategy that the government hasannounced.

Senator COOK—When do you think that might be?Mr Hely —As the process is developed, that would happen very quickly. I cannot give you

a precise time frame—I would think within the next month or so the details of that strategy—which will operate at a bilateral, regional, multilateral and company level—will be developed.

Senator COOK—But up until this point, no aggressive bilateral negotiations have beenconducted by the department to the ASEAN partners in this region?

Mr Hely —Could you repeat that question?Senator COOK—This is a deduction from your earlier answer—I am just seeking

confirmation of my conclusion. Up until this time, no aggressive bilateral negotiations havebeen entered into by the department on behalf of cars with ASEAN?

Ms Fayle—There are two tracks of activity going on in the bilateral arena. There is ageneral set of objectives that is pursued by posts and by the department from time to time,and a number of automotive issues are involved in that. Then there is the more targeted effortthat is part of the market development task force activity where prioritisation is given to a verysmall number of things that we think can be achieved over the next six to 12 months timeframe with a targeted effort.

Obviously, a lot of the automotive issues that we pursue aggressively are going to take amuch longer time frame than six to 12 months. They go on anyway by the department andat posts, but there are very few of them that we can bring onto the market development taskforce agenda because there are very few of them that are achievable in that very shortturnaround. There are, however, things on the agenda at the moment to do with Taiwan,Thailand and Italy.

Senator COOK—That is to do with automobiles?Ms Fayle—Yes.Senator COOK—Can I ask my question again: is it true that, up until this point, we have

not pursued in an aggressive bilateral way negotiations for market access for automobiles inASEAN?

Senator Hill—I would take out the word ‘aggressive’.Senator COOK—Sorry, Minister, I did not hear you.



Senator Hill—‘Aggressive’ sounds very qualitative.Senator COOK—That is the policy of your government, Minister. I am just quoting your

policy, that is all.Senator Hill—I see. We would have been doing it.Senator COOK—That is what I am trying to establish.Senator Hill—A core promise, I am sure.Senator COOK—I am a little surprised you would baulk at the use of the word ‘aggressive’.Senator Hill—I withdraw my objection.Mr Hely —Just a couple of points there, Senator. We have taken up automobile access issues

bilaterally in the sense that we work closely with the industry to try and identify access barriersof concern to the ASEAN markets, which we have tried to take up in the APEC context.

Senator COOK—That is multilateral negotiations?Mr Hely —It is multilateral, but we really deal with it on a bilateral consultation process,

so it is part of the same thing in some respects. On our request list, I guess we would call it,in relation to APEC we do have automotive access issues with a range of ASEAN countries.I am reminded as well that we are pursuing automotive access issues in a range of the WTOaccession negotiations, which in a sense are bilateral—

Senator COOK—With China and Taiwan?Mr Hely —China and Taiwan, balance of payments with India, possible future accession

negotiations with Vietnam—there is a range of activities there.Senator COOK—They are all multilateral pursuits of the worthy objective of greater

liberalisation in the region, but I ask my question a third time: is it true that we have notpursued, on the aggressive bilateral agenda, trade negotiations with any of the ASEANcountries on cars?

Mr Hely —I would have to defer to the bilateral geographical division.Senator COOK—Does the market development task force, which farms out these tasks to

the posts, not know whether we have pursued market access for cars with ASEAN?Ms Hewitt—Could I perhaps make a small clarifying statement here. As Pam Fayle was

anxious to point out a few minutes ago, the focus of the task force work is very definitelythose issues which we believe are amenable to some progress in a very short time frame—thesix- to 12-month time frame—and it is that work which the Economic and Trade DevelopmentDivision coordinates and feeds through to the market development task force.

The continuing longer term and, in many respects, high priority matters which remain onthe bilateral agenda and are pursued in a continuing way—depending on opportunities andappropriateness and so on—are often very much the things that are substantial and matter tous. The task force is a slice of the agenda but not the complete agenda, of course, for thebilateral work. As Tony Hely has just pointed out, it is the geographic divisions which havethe responsibility for the coordinating work on that broader bilateral trade agenda.

On a second point, when comment was made a few minutes ago about the WTO accessionarrangements and the Indian balance of payments agreement negotiations through the WTO,I think you commented, Senator, that that was multilateral work. I would make the observationthat it is often very difficult—as I am sure you would appreciate with your experience—todistinguish as to whether a matter is multilateral or bilateral.



One of the things that can be very effectively done through the WTO processes is to pursuelongstanding and important issues on a bilateral trade agenda we have with an individualcountry. It is simply a matter of using the WTO or the Geneva processes to make progressin that bilateral set of issues. While you do not always have an opportunity to do that,selectively in the case of new accessions or where we have got something like the Indiasituation, we can feed in and make progress on the bilateral agenda. I think in some respects,the distinction there between multilateral and bilateral is a bit artificial.

Senator COOK—Thank you. I understand that answer, but my question is: is it true thatwe have not pursued access in ASEAN for cars on the aggressive bilateral agenda?

Ms Hewitt—I do not believe that is true, but because we do not have the relevant officialshere from the South and South-East Asia Division to respond to your question, that havingalready been covered on Wednesday, could we take that question on notice and provide youwith a written reply or, if you would like, a briefing in follow-up?

Senator COOK—I would certainly like it. Firstly, I am somewhat surprised that the marketdevelopment task force, which oversees the prosecution of the government’s policy ofaggressive bilateralism, is not able to answer that question. I would also have thought that thisis a matter of high public interest, given the debate on automotive tariffs in Australia and thedifficulty of market access within this region for these products. But, with those remarks, allI can say is that I am interested—

Ms Hewitt—It is precisely for that reason that I want to make sure we give you the fullestpossible answer. I just do not believe we have the right people here to do it at the moment.

Senator COOK—I appreciate that. I am not contending with you, Ms Hewitt; I am justsaying, observationally, that I find it remarkable that we cannot get a direct answer to thatquestion. While that is being done, you might also answer my next question which is in thefield of textiles, clothing and footwear where the government, I understand, has under reviewcurrently what the domestic levels of protection might be, but where the world market isheavily protected in this field. What, under the rubric ‘aggressive bilateralism’, have we doneon the textiles, clothing and footwear issue?

Mr Hely —I am happy to provide that.Senator COOK—No doubt, knowing you, Mr Hely, you will provide it to me in

excruciatingly professional detail.Mr Hely —Absolutely.Senator COOK—Can you tell me however, in overview, what that will look like when I

see it, without me holding you to the letter of the law? Will it look like you have done a lot,or will it look like you have done a little?

Mr Hely —We will have to wait and see, Senator. It will obviously show that theoverwhelming focus of activity has been on wool; that is where the big barriers have been andthat is where the big export figures are concerned. Obviously, with textiles, clothing andfootwear we have—

Senator COOK—That is access of the wool clip—Mr Hely —I am just saying that, in the overall TCF industry, the story that I present to you

will show that most of the activity has been in relation to wool, given the size of its exportfigure and given some of the barriers that are involved. In textiles, clothing and footwear,obviously we have different subsets of industry that we have to work with and we also havea situation in which we have bilateral quotas applying, to be phased out under WTO



agreements by 2004. The picture will show, I think, that the major activity has been on wool.But we will be working and we are working with industry to develop an integrated strategycovering the whole of the industry.

Senator COOK—A moment ago I was talking about cars. I meant to go on and talk aboutautomotive component parts, which I regard as a very important part of the same industry.Is the answer that you have given me on cars the same answer for automotive componentparts?

Mr Hely —I will cover that in the piece of paper we give you.

Ms Hewitt—I think I could say, Senator, from my own knowledge of some of the earlywork of the market development task force, that you would have some priority entries forcomponents.

Senator COOK—I am aware of some market access issues that were being taken updirectly, but that was over two years ago. I am not sure if they have been pursued. Some ofthem have succeeded, I know, but not all of them. I would not mind getting that report. I haveno further questions on this matter.

CHAIR —In that case, thank you. As there are no further questions on that subprogram, wewill move to subprogram 1.7.

Subprogram 1.7—Global issues

Senator HOGG—On the issue of the pursuit of a global ban on antipersonnel landmines,what are we doing and how effective are we in that area at this stage?

Mr Varghese—You will be aware that the government indicated in an important statementin April last year that it was committed to a global and effective treaty on antipersonnellandmines and committed the government to an interim suspension of the use of landmines.Our efforts are very much focused on trying to develop an effective regime, and those effortsare focused on the conference on disarmament in Geneva, which we think is the most effectivevehicle for delivering a regime which is both comprehensive and effective. At the momentwe are very active, as the western group coordinator on landmines in Geneva, in seeking todevelop a mandate for negotiations, which will be comprehensive.

In addition to our efforts in Geneva, we have also been participating in the so-called Ottawaprocess—a separate but hopefully complementary process aimed at developing support for aninternational ban. A third and very important element of our efforts is the practical supportthat we are giving on the ground to the process of demining. Since March 1996, thegovernment has committed a sum of $18 million to demining activities. That puts Australiavery much among the leaders of countries contributing to demining. There are three elementsto our strategy.

Senator HOGG—In respect of the Geneva meeting, who will represent us there?

Mr Varghese—Do you mean at the disarmament conference? We have standingrepresentation in Geneva through our mission and a separate ambassador for disarmament.There is a meeting in Brussels at the end of this month, under the Ottawa process.

Senator HOGG—So, apart from those, we are taking no individual initiatives withindividual nations in our region?

Mr Varghese—In Geneva, in our bilateral discussions and through representations incapitals, we are seeking to garner support for the Geneva process to begin negotiations on anactual convention. We have been doing that very actively in capitals, as well as in our regional



bilateral security dialogues. We are also setting up a group in Geneva that brings together like-minded countries that have an interest in trying to break the current log jam on a negotiatingmandate in Geneva. So the action is taking place in a number of places.

Senator HOGG—You said we adopted an interim suspension last year. I presume thatinterim suspension is still in place.

Mr Varghese—That is right.

Senator HOGG—Why has it not become a total suspension?

Mr Varghese—The purpose of the suspension was to say that our objective is to achievean effective international regime against landmines, and we will be putting efforts into that,which I have just described. And, until we reach that point, Australia will not use landmines.That was the purpose for the suspension. It is interim to the extent that it only has meaningwhile you do not have a global treaty.

Senator HOGG—Right. I have nothing further for 1.7.

CHAIR —As there are no questions on subprogram 1.8, international legal interests, orsubprogram 1.9, information and cultural relations, we will move on to subprogram 2.1.

Program 2—Passport and consular services

Subprogram 2.1—Passport services

Senator COOK—On what basis was the decision to increase the cost of Australian passportsmade? Mr Hussin—The increase in the cost of passports can be seen against two factors:one, the decision back in 1987 to increase the charge for the passport according to the CPIeach year; and, two, we have had a review by consultants of passport services and they haverecommended that an additional sum of some $4.95 million should be spent on technologyto improve the issue of passports. So the increase can be seen against those factors.

Senator COOK—If the passports went up by the CPI increase, how much would they haveincreased?

Mr Hussin—The CPI increase would have been around $1.60, $1.70, based on a CPI figurefrom March to March of about 1.3 per cent.

Senator COOK—So that would have been $1.60, $1.70?

Mr Hussin—That is right.

Senator COOK—How much did they go up again?

Mr Hussin—They went up $6.

Senator COOK—The remaining $4.30, $4.40, is all that to cover the cost of new technologyarising from your consultant’s investigation?

Mr Hussin—It is not quite as simple as that because DFAT does not receive the revenuefrom passports. That goes to consolidated revenue. We are funded directly by the Departmentof Finance. But we will have to find, within DFAT, the monies for the investment in furthertechnology. So, in that overall sense, the increase in the passport fees can be seen against thosetwo factors I mentioned: the CPI and the need for further investment.

Senator COOK—So there is nothing hypothecated back to you from the increase inpassports that will cover your extra costs under the CPI or which will necessarily be dedicatedto covering the costs of new technology?



Mr Hussin—No, as I said, it is a broad offset, it is not a direct hypothecation, as you putit, because the proceeds of passport sales do not go to this department.

Senator COOK—How much do you expect to raise by the extra $6?Mr Hussin—The estimate of increased revenue would be about $5.1 million.Senator COOK—What will the cost of the new technology that you propose to introduce

into the passport’s division be?Mr Hussin—We expect that that will be about $4.94 million. We are still looking at that.

It relates to new scanning technology that will make the whole process of preparing a passportmore efficient.

Senator COOK—That is a one-off capital cost, is it?Mr Hussin—How quickly it will be spent remains to be seen, but it is an up-front cost. But

it is part of a broader series of recommendations from the consultants on improving the system.Senator COOK—It is a one-off capital cost but not necessarily incurred in just one year?Mr Hussin—We would expect the majority of it to be incurred in this financial year.Senator COOK—In this financial year?Mr Hussin—Yes, Senator.Senator COOK—I imagine the increase in passports, once you have incurred this capital

cost, is not going to be reversed and go down now that you have paid for this new technology,it is going to continue on? The $6 is for the out-years as well?

Mr Hussin—Yes, that would be right.Senator COOK—We have lost our minister, but, clearly, after you have cleared your cost,

it is simply a tax on passport holders or applicants by the government. How does the priceof an Australian passport compare to that of a European, New Zealand, Canadian or Americanpassport? Do we know?

Mr Hussin—I do not have that direct figure. It is hard to compare them because differentcountries use a different basis—a different period of time, for example. I do know that France,for example, has a five-year passport which costs $102; Japan’s costs $150 for five years. Itdoes vary. I do not have New Zealand figures. The United States passport, I believe, costs $94for 10 years.

Senator COOK—For 10 years?Mr Hussin—Yes.Senator COOK—Have we increased at all the price of granting visas?Mr Hussin—I am not aware of that.Senator COOK—So the cost each year—Mr Hussin—That is a matter for—Ms Hewitt—It would be the responsibility of the Department of Immigration and

Multicultural Affairs.Senator COOK—These are approvals?Ms Hewitt—Yes. Perhaps while we are on that subject I could make the point that, in

relation to the costs of passports and passport associated services, there would be costs in theDIMA system if you look at the issue from a whole-of-government perspective. In other words,it is not just our own DFAT costs involved in producing and delivering and providing services



to passport holders but also the whole system of administration—checking at borders and soon—that we would need to look at in terms of costs and so on, to go back to the earlierdiscussion.

Senator COOK—But there is a $5.1 million windfall after this year, effectively, to thegovernment.

Ms Hewitt—Depending on what the range of costs would be for the whole of governmentin terms of providing the services, including consular services, associated with the issue ofpassport.

Senator COOK—If the $6 increase is not being put forward as cost recovery but as CPIadjustment and nationalised—

Ms Hewitt—Anticipated costs.Senator COOK—A one-off technology capital cost, if we are taxing Australians aren’t we

taxing foreigners, too, in terms of visas? But that is an immigration issue as you have said.Ms Hewitt—That is right.Senator Hill—This is not a tax.Senator COOK—What is it then? A surcharge?Senator Hill—Very expensive these things.Senator COOK—Mr Hussin, when your consultants looked at the technology, did anyone

look at what the actual cost to Australia is of a passport? Do we know what a passport coststo issue?

Mr Hussin—How do you mean?Senator COOK—This is not a cost recovery item. What I think is that when the

Commonwealth is not recovering the costs of a particular service or good it invokes the majorphrase ‘cost recovery’ and then moves to recover that full cost. That is not being said here.What is being said here is ‘CPI and technology’. My suspicion is that we are recovering muchmore than the actual cost of issuing and administering a passport. Do we know what the costof a passport is compared to its price?

Mr Hussin—I think the points that were made by Ms Hewitt are relevant here. We arelooking here at recovering the costs to the whole of government of passport and consularservices. That is much greater than, obviously, the cost of production of the passport. It alsoinvolves the other agencies who are involved in the passport operation once it is produced andissued. So we are looking at the whole range of those costs.

Senator COOK—Do we know how much a passport costs as compared to how much weare charging for it? I just want to take the minister up on his question that this is not a tax.

Mr Hussin—I do not have the precise figures on the costs, but I would think the actualproduction costs would be somewhere in the region of half of the fee.

Ms Hewitt—Perhaps I should mention here, too, that it was agreed under the previousgovernment that the fee ought be regarded as being related also to the provision of consularservices—in other words, not just the physical cost of producing and issuing the passport. Itis a longstanding practice of government to regard both areas as being relevant in the contextof the charge for the passport.

Senator COOK—If passport holders knew that, they might demand more expeditiousservice from consuls.



Ms Hewitt—I think we have given a lot of information on that subject recently through theSenate inquiry.

Senator COOK—That was my next section of questions: on consular services.

Senator HOGG—Just before we do that, could you identify for me the item at page 59 inthe PBS which refers to additional passport funding of $1.940 million? What is that relatedto? Does it dovetail into this discussion that you have just been having with Senator Cook?

Mr Hussin—Not directly, Senator. The $1.9 million that is referred to relates to an increasein a resource agreement we have with the Department of Finance, which relates to the directcosts of production and staffing for the passport offices. We have an agreement with Financefor additional supplementation. Last year it was about $4.3 million and this year it will be $6.2million. It relates to existing demand for passports, not for new technology. The $1.9 millionis the difference between the additional funding we received last year from the Departmentof Finance for the ongoing passport service and what we will receive in this coming financialyear.

Subprogram 2.2—Consular services

Senator COOK—The Senate Foreign Affairs, Defence and Trade References Committeereported on a major study on consular services recently. I might add in parenthesis that I neverserved on that inquiry as a committee member. It was a substantial investigation and a weightyreport. When is the government expected to respond to it?

Mr Fisher —My understanding is that the minister intends to make a statement to parliamentas soon as he has been able to digest the report and we have considered some of the recom-mendations. That will be in the relatively near future. I could not give you an exact date.

Senator COOK—Relatively near future will do. If we need to, we might ask you about thisat supplementary estimates.

Senator Hill—Overall, we are making a real effort to speed up response to parliamentaryreports. As you will recall, there are a whole series going back many years to which theprevious government did not respond at all. We are trying to wrap up some that are manyyears of age in my own portfolio.

Senator COOK—I look forward to an expeditious turnaround in responses to reports,Minister.

Senator HOGG—I have just a few simple questions on consular services. When was theconsular response group established?

Mr Fisher —It was established, if I recall correctly, in May 1996. If it is not May, I willget back to you.

Senator HOGG—It is around that time. When was it first proposed to establish that group?

Mr Fisher —It was one of those questions which had been around for a while. I think it firstcame up in some of the wash-up that the department did following the Wilson case inCambodia. The idea was around in various forms for quite a few months. It was then takenup in the review which the consultant we employed to have a look at consular servicesconducted of consulates in a rather different format. It was really given impetus when the newgovernment came in and it was a decision of the new government to set up the group.

Senator HOGG—Was it a recommendation by the former consultant that you just referredto?



Mr Fisher —He recommended a form of group which was not exactly the group that wasset up. It is a bit difficult to say that it was his recommendation because the thing that wasset up was really not exactly what he recommended. But it was a version of that, you mightsay.

Senator HOGG—How many cases has the consular response group directly handled sinceit was established?

Mr Fisher —I would not want to say that certain cases are done exclusively by the groupand other cases are not done by the group. The group is there to be brought in when casesbecome difficult, complex and time consuming. It is brought in when necessary. It is not acase that certain things are done exclusively by the group and certain things are not doneexclusively by the group. But one which was done more or less exclusively by the group aftera certain period was the Fraser case in Somalia. The group was then very heavily involvedin the two cases in south Sudan. It has been involved recently in a case in Vanuatu.

I should say that this is not the limit of the group’s work. It does a tremendous amount ofwork on policy matters, for example, on the ideas and the basis that we should bear in mindwhen we are dealing with things like hostages or difficult issues. I would not want to givethe impression that the group’s work was specifically on this and that case, rather than on thebroad range of consular activities.

Senator HOGG—Moving on to another area, has the honorary consul system beenupgraded?

Mr Fisher —It has been extended quite actively. We have been in touch. I wrote to all ofour heads of mission quite some time ago seeking their nominations for honorary consuls inrelevant places. It is not a quick process finding and nominating a honorary consul. It takesquite a long time to get through the process of nomination. There has been a great deal ofeffort over recent months in finding new places where honorary consuls could usefully beappointed.

Senator HOGG—Have we actually appointed any in the last 12 months?

Mr Fisher —Yes, Senator, indeed we have.

Senator HOGG—Could I have a list of those on notice?

Mr Fisher —Sure.

Senator HOGG—Could you give us some idea of how many more appointments you areseeking to make in the next 12 months?

Mr Fisher —I do not have a target because it is really a case of matching a person in aplace. As you know, it does not ever seem to be very easy, so we do not have a target whichis in any respect numerical. What we have done, as I said, is to ask heads of mission to comeup with ideas of places and names. We have really put the issue out to study in every countryand asked our posts to come up with recommendations.

Senator HOGG—Can you explain what is the role of the consular information unit inCanberra and when it was established?

Mr Fisher —The consular information unit was established quite recently to provideinformation to Australian travellers before they leave the country. It became clear to us, aspart of the discussions which we had with you in the Senate inquiry, that there was a gap inthe information which we were able to provide to Australian travellers previously, even if wehad the general system of travel advices which, as you know, are formal advices on a country



basis. We used to encourage people, and we still do, to call in at our embassies when theyget to their destinations.

There was a need to provide a much more extensive and practical set of advice to peoplein Australia before they left, so we established this group, whose role was to get as much localinformation as they could from any variety of sources that you can think of and to be availablefor Australians who telephone in and say, ‘What is the situation in north Sierra Leone and canI travel there by road?’ Obviously, we cannot answer all those questions. To the extent thatwe can answer, we can provide that sort of information now to people before they leave thecountry.

Senator HOGG—That only operates within Australia. On what basis does it operate? Sevendays a week?

Mr Fisher —It operates during working hours at the moment, but very shortly we will beextending it on a trial basis to a 24-hour-a-day, seven-day-a-week system. That has not beenbrought into operation yet, but I hope it soon will be.

Senator HOGG—When would you expect that trial to begin?Mr Fisher —We hope to begin on the 26th of this month.Senator HOGG—That is the 24-hour-a-day service?Mr Fisher —Yes.Senator HOGG—Last but not least, I want to find out what is being done to encourage

other countries to sign the Hague Convention on Child Abduction issues.Mr Fisher —We have launched quite a major diplomatic initiative on this exercise. We had

two separate strands for this, if you like. The first strand was to raise the issue with everycountry in the Asia-Pacific region, and we sent in our heads of mission in all countries—firstly,in many cases, to make the countries aware of the convention and then to get them to signon to it where possible. The second strand was to target those countries which have largeimmigrant communities in Australia, because these obviously are the places to which abductedchildren may be taken, and to target those to get them to sign on to the agreement. We haverecently sent a second round of representations to all those countries and, in fact, we are inthe process of beginning a third round in the next week or so.

Senator HOGG—With what sort of response?Mr Fisher —Pretty mixed, Senator. In some countries, our actions have served to stimulate

interest in the convention where there was frankly ignorance before; and, in one or two cases,we have actually been responsible for some movement. In other countries, I would have tosay that they feel that this is not so high on their list of priorities; and, in other countries still—and, frankly, particularly in Islamic countries—there is a feeling that the Hague Conventionis not an area where the convention’s provisions sit easily with Islamic law, which is aninterpretation which we debate. I would have to say that so far there has not been a great dealof success in dealing with Islamic countries. I myself visited Beirut quite recently as part ofanother mission to take this up with the Lebanese government, which obviously has a majorcommunity in Australia. Also, the American and Canadian governments have equally beenvery active in some countries in raising the same set of issues. So we have been very activeon this front.

CHAIR —As there are no further questions on consular services, we will move on tosubprogram 3.1, services to parliament, the media and the public. As there are no questionson 3.1 or on subprogram 3.2, we will move on to 3.3.



Subprogram 3.3—Services to Australian government agencies overseas

Senator HOGG—The bottom of page 70 talks about the ‘successful introduction and reviewof user pays to administrative support services and the overseas property estate.’ Is that reviewproceeding? What stage is it at, and when can we expect some outcomes?

Ms Hewitt—I will ask Mr Hussin to respond to that question.

Mr Hussin—Excuse me, Senator, could you repeat the question.

Senator HOGG—Yes. At the bottom of page 70, the last dot point talks about thesuccessful introduction and review of user pays to administrative support services and theoverseas property estate. Is there a review proceeding and, if so, at what stage is it and whencan we expect some results from that review?

Mr Hussin—Senator, we do have an arrangement whereby DFAT provides administrativesupport services to other agencies at posts, and we are looking at that particular process. I thinkthere would be a response to that in the coming year.

In relation to the second element, the overseas property estate, the user pays system is beingintroduced this financial year. For the first time, the Department of Finance is devolving fundsfor the two agencies for the rental of property, both leased property overseas and the ownedestate, and the agencies themselves will have the responsibility for managing their own leasesand their own property holdings. We are looking at that at the moment.

We have a task force working on that as far as DFAT is concerned, but it will also affectother agencies obviously who have had property funds devolved to them. So it is a new areafor us, Senator, and we can report on that at a future time. But we do not have a particularreview report expected on that issue.

Senator HOGG—So there is no review mechanism in place; there is no particular reviewcommittee—this is an ongoing internal process?

Mr Hussin—That is correct.

Ms Hewitt—Senator, in relation to the administrative support services, we do have formalagreements with the other agencies for whom we, DFAT, deliver services through our overseasmissions, and that is due to expire during the next calendar year. So, for example, with theDepartment of Immigration and Multicultural Affairs, Defence and the other agencies withwhom we have such agreements, we will over the coming months be going through a processof review and renegotiation of the terms. It is essentially covering matters such as the levelof recovery charges, if you like, for services provided, and that is really an internal transferof funding between agencies.

Senator COOK—Subject to guidance, I want to ask some questions about departmentalleaks. Is this the right area to do so?

CHAIR —Yes. I would say so.

Senator Hill—Departmental leaks—I used to ask those questions.

Senator COOK—Would you like to come and ask them for me, Minister?

Senator Hill—I can tell you what the answers will be. I got them year after year.

[11.22 a.m.]

Program 4—Secure government communications and security servicesCHAIR —Please proceed, Senator Cook.



Senator COOK—At hearings in September last year and February this year, I think therewas some discussion about measures taken by DFAT to prevent unauthorised disclosures. InSeptember last year, the department confirmed that in response to recent leaks—that was thenI think about DIFF—it conducted a review of the distribution of classified cables and tightenedthe control of information within the department. I think there was also some discussion ofinvestigations by the AFP, and senior officers explained that the first step in any investigationwas to determine whether a leak was in fact a real leak.

Then in February DFAT confirmed the secondment of an AFP officer to assist the diplomaticsecurity section to investigate cases of leaking. Is it right that, as of February 1997, four casesof alleged leaks had been referred to the AFP officer out of 12 cases since June 1996?

Mr Hussin—Can I just have those figures again, please, Senator?Senator COOK—Is it right that, as of February 1997, four cases of alleged leaks had been

referred to the Australian Federal Police officer out of 12 cases since June 1996?Mr Hussin—Senator, I do not have the figures as at February. The figures that I do have

mention the referral to the AFP officer outposted with us of 17 cases of alleged informationfraud, five of which are ongoing.

Senator COOK—That is 17 cases have been referred to the AFP resident officer in DFAT?Mr Hussin—Yes, that is correct.Senator COOK—And four are ongoing?Mr Hussin—Five are ongoing.Senator COOK—Five, sorry. Does that mean 12 have been settled or simply discontinued?Mr Hussin—Twelve would have been settled in the sense that they would have been

investigated, but no action has been taken.Senator COOK—Right.Mr Hussin—I might add we also have the figures for this financial year in relation to total

cases where information fraud has been alleged. We have some 21 cases during this financialyear compared with 27 for the last financial year.

Senator COOK—Is that 21 cases that are still current or is that 21 cases that you have dealtwith?

Mr Hussin—That includes the ones that I referred to earlier that have been referred to—Senator COOK—So there are another four in addition to the 17?Mr Hussin—That is correct.Senator COOK—I was going to refer to a couple of them, or several of them that have

appeared since February. The most notable have been published in stories by Craig Skehanof the Sydney Morning Herald. On 11 February the SMH published details of a confidentialcable concerning New Zealand policy in relation to East Timor in which DFAT expressed theview that New Zealand had created a foreign policy headache for Australia by revealing it didnot believe Indonesia’s incorporation of East Timor to be irreversible. The cable instructedour High Commission in New Zealand to register Australia’s displeasure at New Zealand’sapparent failure to consult on the issue. Has that report, without going into the accuracy ofit, been investigated?

Mr Hussin—I believe that would have been one of the reports that would have beeninvestigated.



Senator COOK—Has the investigation of that report been concluded?

Mr Hussin—I do not have that information so I cannot answer that question.

Senator COOK—But you can obtain the information?

Mr Hussin—I can see. One of the elements, of course, of investigation of fraud or allegedfraud is that it is by nature a matter that one does not want to talk greatly about, obviously,while investigations are going on or, indeed, after investigations have taken place.

Senator Hill—You are wanting to know what the outcome is, aren’t you?

Senator COOK—My question is, has the inquiry been concluded? That is my question.And, if it has, then obviously the next question will be what happened?

Ms Hewitt—I think, for the reasons Mr Hussin outlined, we would be happy to take thosequestions on notice, but we would need to reflect carefully on the detail and information whichwas subsequently then provided to the committee.

Senator Hill—I think the public have a right to know what action flows from theseinquiries, so if we take that on notice we will see what we can tell you.

Senator COOK—All right.

Senator Hill—Unfortunately, most of them result in a failure to find sufficient evidence totake further action but, if that is the outcome, let it be the outcome. But certainly I think theSenate has got a right to know what the conclusions were if it is at that stage that conclusionscan be reached.

Senator COOK—All right. I have got a couple of others that I will cite now. I expect theanswer is the same. On 11 March 1997, the SMH published details of sensitive reporting bythe Secretary, Mr Flood, on China’s approach to the human rights dialogue with Australia,reporting which followed senior officials’ talks in Beijing on 20 February. So that is the secondinstance that I ask the series of questions about. I assume the answers are the same, and youwill take it on.

On 14 March the SMH also published a cable from Ambassador McCarthy in Jakartareporting on discussions with Foreign Minister Alatas on Australia’s participation in ASEAN.A cable was sent from Jakarta on 11 March and appeared in theSydney Morning Heraldonlythree days later. I assume the answers to that—

Senator Hill—We will get you a report on each of those.

Senator COOK—On 14 March theSydney Morning Heraldalso published information froma cable sent by our ambassador in Moscow concerning President Yeltsin’s health. That is verynice. On 1 June theSun-Heraldalso published information from confidential cables concerningcontingency planning for the possibility of civil disturbances in Hong Kong. My question isabout all of those.

Senator Hill—I will see if we can get you a report on progress.

Senator COOK—Thank you.

Senator HOGG—The AFP officer, I understood, was on a secondment for 12 months. Isthat going to be extended?

Mr Hussin—That is correct. It was 12 months from November last year and no decisionhas been taken at this time as to whether it would be extended.

CHAIR —As there are no questions on subprogram 4.1 we will go to subprogram 4.2.



Subprogram 4.2—Security services

Senator HOGG—The PBS on page 75 says:. . . develop and implement a comprehensive policy on IT security.

Has that policy been developed or is it something that is a fluid sort of situation?

Mr Hussin—Again, it is part of an overall package of measures to increase our securityand is an ongoing process. But I might refer to my colleague, Mr Baker, to comment.

Mr Baker —As Mr Hussin mentioned, that review of IT security policy is an ongoingprocess. We expect that it will continue for some time. It is a process that does not stop inthe sense that IT is something that is evolving continually and it is important that our securitypolicies keep pace with the changes in technology.

Senator HOGG—Where does this security policy sit with the government’s desire tooutsource many of the functions of IT? Are there certain risks that have been identified forDFAT that are not obvious in other areas of government?

Mr Woodhouse—In terms of the DFAT security arrangements, under the IT outsourcinginitiative being administered by the Office of Government Information Technology, our securecommunications systems, both in Australia and overseas, are not part of that outsourcingexercise.

Senator HOGG—Right.

[11.33 a.m.]

Program 5—Executive and DFAT corporate services

Subprogram 5.1—Executive direction

Subprogram 5.2—DFAT corporate services

Senator HOGG—On page 78, table 6, down the bottom where it refers to staff years weare looking at a 13 per cent reduction over the estimated actuals last year. Where are the cutsbeing made?

Ms Hewitt—I can give you some answer and if this is not the sort of thing you are lookingfor, please let me know. There has been a reduction of 167 officers overall in our operationsin Australia, in Canberra and our state offices, and 51 officers in our A-based staff overseas.

Senator HOGG—No, I was looking specifically at the bottom of that table for the next 12months. It seems to indicate that there will be a 13 per cent reduction, or 32 heads as I countthem. Whilst I understanding you cannot exactly say it is 32 heads, where are they comingfrom within the executive and DFAT corporate services area?

Ms Hewitt—It is just a broad projection at this stage, I would say, Senator. We have anactive and continuing program of voluntary redundancies, along with many other agencies inthe service. We intend to continue that in the coming year because of the need to meet therunning cost reductions that we are required to do as a result of the budgets of the last twoyears. We expect to continue at least the same sort of level of reduction in staff numbersthrough that program. We are looking in a little more depth also at the department’s futurestaffing needs into the medium term. We have at the moment a task force operating whichis looking at that and a number of related matters—systems and processes—that we have forour portfolio work, with a view to providing some advice to the department on whether weare likely to meet the required staff reductions through a voluntary program. That task force



is still working and we expect to have some preliminary options for the department’s executiveto consider during July.

CHAIR —Thank you.

Senator HOGG—Subprogram 5.2 talks about the implementation of the workplace relationsreform agenda and the negotiation of workplace agreements for all staff by 30 June. Are welooking there at the implementation of AWAs and, if so, to what level of personnel will theAWAs apply?

Ms Hewitt—Again, Senator, we have got an active program of work under way in that areaat the moment. John Buckley has just joined us at the table and he is heading a small groupof staff helping to prepare our arrangements for a new workplace agreement. Our tentativethinking—and this has been communicated to staff; there has been an active program ofconsultation and information with all our staff—is that we would lean towards negotiating acertified agreement to replace the existing arrangements, including our existing enterpriseagreement, but we are also keeping open the possibility of at least a small number of AWAs,for example, with our senior executive staff members.

Senator HOGG—They would be at a more senior level?

Ms Hewitt—That is one obvious area that we think lends itself well to an AWA kind ofnegotiation. There may be, and there does seem to be, interest on the part of some pocketsof staff who have particular specialist orientation or for whom particular conditions might bethought appropriate. Whether or not they are met through an AWA in the end or throughrelevant clauses in a certified agreement we still have under discussion. In fact, we are notone of the lead agencies. You would be aware that there are seven agencies or departmentsin the Commonwealth who have moved at a faster pace on this area of negotiation. We arewell advanced and are putting quite a lot of effort into it because we think it is enormouslyimportant. We are going as quickly as we can, but we are not at breakneck speed. We arewanting to make sure that the issues are aired and debated thoroughly before we conclude.

Senator HOGG—On the same page—and this is an issue that has been raised on previousoccasions—is the indigenous recruitment and career development strategy. What progress arewe making there?

Ms Pearce—I can give you some information. We have currently 31 indigenous officersat the moment in the department, representing 1.36 per cent of our total staff. The current APSaverage is 2.6. But the level of our indigenous representation does compare very favourablywith other policy delivery agencies, including A-G’s, DPIE, DIST, Finance and PM&C.

We have four identified indigenous positions in the department and we have just finishednegotiations for a fifth identified position on Thursday Island. We have two candidates selectedfor the indigenous cadet intake for 1997-98 and one of the 1997 graduate recruits is ofindigenous descent.

Senator HOGG—So where are those people placed?

Ms Pearce—I do not have the details of exactly the positions they have in the departmentbut I can get that. I have the levels, if you are interested.

Senator HOGG—Yes, I am interested in the levels.

Ms Pearce—I can give them to you now. For 1995-96, we had one GAR, five cadets, eightASO2s, 11 ASO4s, one ASO6 and five SOGCs.

Senator HOGG—Thank you.



CHAIR —There are no questions for Program 8, the Australian Secret Intelligence Service.I thank the minister and the officers of the department. I also thankHansardand Sound andVision for their cooperation.

Committee adjourned at 11.42 a.m.


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