Senator LUDLAM-I have a couple of questions that I would like to put to the Export Finance and Insurance Corporation, if they are in the room? Alternatively, people who could speak to the ACTA negotiations?

Mr Tighe-I am not from EFIC but I will do my best to respond to questions about EFIC if you wish.

Senator LUDLAM-Some of this may have to go on notice if you are not intimately involved in the workings of EFIC. Are you aware of an Oxfam report published recently which contained some criticism of EFIC for not adequately incorporating environmental, social and human rights considerations into its funding decisions?

Mr Tighe-I was not aware of an Oxfam report; I was aware of one by Jubilee.

Senator LUDLAM-I am not sure that is the same one, but I will provide a reference for you after the hearing, if you like, so you can track it down. There are two case studies in that report, including a very large LNG project in PNG, which has received backing from the Australian government to the tune of about ½ billion dollars via an EFIC loan-actually, the URL here does indicate that it is a Jubilee report, so we are talking about the same one. What steps have the minister or EFIC taken since the publication of that report to address any of the concerns that were raised there?

Mr Tighe-EFIC is also aware of the report, obviously. It would dispute some of the findings in the claims made in the report, and I think it would argue that it does have quite well-developed environmental and social policies which include public disclosure arrangements. As I understand it, that was the main sense of the criticisms in the Jubilee report.

Senator LUDLAM-They certainly were part of the concerns that they raised. They have also advised us that freedom of information applications have been denied to EFIC's national interest account loans to ensure that degree of transparency and accountability which you are referring to. How is the denial of those reports in keeping with those principles of good governance that I presume you are eager to uphold?

Mr Tighe-EFIC had complied with FOI requirements in accordance with the act and in accordance with its own act. You may or may not be aware that there is a secrecy provision within the EFIC act which relates to the fact that EFIC deals with a considerable amount of commercial-in-confidence information. Please forgive me, I am not a legal expert or an expert on EFIC. As I understand it, that provision is designed to protect the board of EFIC, which is an independent board, from the sorts of provisions that it has to meet to handle the confidential information that is provided to it by the partners with which EFIC deals in the commercial world.

Senator LUDLAM-If those agreements are shrouded behind commercial-in-confidence considerations, the Jubilee report has made some serious claims and criticisms of that project we are discussing at the moment. EFIC has said, ‘We disagree.' How is the public to evaluate who is right in this case?

Mr Tighe-The points I make to you, and they will be on the public record, is that EFIC has a good record. It uses the accepted international standards when it looks at assessing environmental and social impacts. These are standards set by bodies such as the Organisation for Economic Cooperation and Development and the International Financial Corporation. It has also voluntarily joined other standards which are not mandatory for it to belong to such as the Equator Principles and the United Nations Environmental Program Finance Initiative. EFIC would argue that it complies with the accepted and authoritative international standards for assessing environmental and social impacts, and on public disclosure.

Senator LUDLAM-Has EFIC published any human rights impact assessments, social impact assessments or environmental impact assessments undertaken with regard to that project? Is there anything in the public domain that shows what the thinking was behind the funding of that project in particular?

Mr Tighe-The PNG project?

Senator LUDLAM-Yes.

Mr Tighe-My understanding is that they do comply with the disclosure requirements in the OECD and IFC standards, and that includes making publicly available the information they receive by the project participants on environmental and social impacts.

Senator LUDLAM-Okay, that is published. Does EFIC undertake any of its own assessments or does it rely on the proponent or the host government to undertake those for us?

Mr Tighe-My understanding is that it relies primarily on the information it receives from project proponents. But also, if it is dissatisfied with that, it will seek its own information or perhaps undertake its own analysis.

Senator LUDLAM-Have you done so or has EFIC done so in this case? The project sparked very serious tension and conflict in the region regarding, primarily, land access and benefit sharing agreements. In the last couple of days, I understand that five people have died in shooting incidents in project land related conflicts. What does EFIC do when a project of this scale starts to go bad?

Mr Tighe-My understanding of the deaths in Papua New Guinea is that the PNG police force have said that they are not related to the project. I am not sure that that is necessarily a relevant factor. In the government's assessment of these projects, it makes a requirement of EFIC that EFIC is satisfied that the environmental and social standards have been met, and it is satisfied.

Senator LUDLAM-Do we have any diplomatic staff on the ground to conduct our own evaluations or do we have to take the word of the PNG police force?

Mr Tighe-Its own assessment of the deaths in Papua New Guinea?

Senator LUDLAM-For example, the shooting deaths that are allegedly project related.

Mr Tighe-No, we would not second-guess the PNG police on that issue. It is a matter for the PNG police to investigate.

Senator LUDLAM-Are you aware of allegations that they are project related?

Mr Tighe-I have seen media reports of such, yes.

Senator LUDLAM-So there was a phone call to the PNG police and the agency was satisfied at that time that there was no further cause for investigation?

Mr Tighe-I think there was a public statement from the PNG police.

Senator LUDLAM-So there was no formal contact by the Australian government?

Mr Tighe-Not that I am aware of, no.

Senator LUDLAM-Really. Are there specific conditions in addition to the Australia-PNG joint understanding and the sovereign wealth fund agreement that was attached to the loan? If so, what are they and will they be made public?

Mr Tighe-The conditions of the loan are commercial-in-confidence. The joint understanding has been made publicly available. It refers also to other activities that the government has been running in Papua New Guinea related to our development cooperation program and our ongoing cooperation with the PNG government on a range of issue related to governance in Papua New Guinea.

Senator LUDLAM-Can you respond to the alleged harassment of local communities by police and security forces engaged to protect the LNG PNG project assets? What safeguards are in place, if any, to ensure that Australian loans are not contributing to conflict? You would be aware, obviously, the PNG police department is protecting this investment-it is a huge development-and they are, I suppose, alleged to be directly involved in some of the conflicts that are occurring. You do not seem to do much more than take a press release from the police department on face value, or is there more behind the scenes that we are not aware of?

Mr Tighe-I am sorry, Senator, but you are putting to me unsubstantiated allegations, again.

Senator LUDLAM-Have you done anything to substantiate them? These are fairly serious allegations.

Mr Tighe-To substantiate them?

Senator LUDLAM-Yes.

Mr Tighe-No, I have not done anything to substantiate them.

Senator LUDLAM-Not you, personally. I realise you are here in a representative capacity. Has the agency or anybody involved with the half-billion-dollar loan done anything to substantiate these very serious allegations?

Mr Tighe-There have been substantial assessments done of the environmental and social impacts of the project, including the impacts on landowners and they have been done-

Senator LUDLAM-Was that prior to start-up or since then?

Mr Tighe-They are ongoing.

Senator LUDLAM-When was the last time they were assessed?

Mr Tighe-I do not know. I do not have that particular piece of information with me.

Senator LUDLAM-The violence that I am referring to I believe has occurred within the last week or so- or not long ago; perhaps a fortnight-would you be able to undertake to find out for us, on notice if you will, when was the last time any officer or agent of the Australian government made any inquiries as to whether our half-billion-dollar loan is contributing to these sorts of impacts on the ground or whether you are completely satisfied-

CHAIR-Senator Ludlam, EFIC is a financing agency-

Senator LUDLAM-Yes.

CHAIR-engaged in commercial negotiations and the like, as we are all aware. You are asking now questions of things that occurred in a foreign country where the police of that country have released statements. You have asked Mr Tighe a very difficult question. I think it would be appropriate for Mr Tighe to refer that question on notice for consideration by the minister, as it clearly involves agencies other than EFIC or the department of trade. I suggest that is how we handle that.

Senator LUDLAM-That is all right. I am more than happy to concede that. I agree that they are very difficult questions. What I am trying to find out-and then I will close on this subject-is: what has occurred, in relation to this project specifically, by way of validation of the claims and the allegations that are being made, if any? If there is none, then that will be the answer. I am also asking about the policy-and whether that policy is under review-about what we do when significant investments on this scale run into the sorts of difficulties that this project appears to have hit.

Mr Tighe-As I mentioned before, there was a very substantial and comprehensive process of assessment of the environmental and social impacts of the project. That was a factor going into the government's consideration of the provision of EFIC support.

Senator LUDLAM-Yes. I do not see that that has any relevance whatsoever to the question that I just put to you about what happens-what validation we do post fact. I understand that the assessments took place originally and now we have shooting deaths involving security forces and what appears to be quite serious land access issues around that project. What happens when the assessments that EFIC conducts originally do not, perhaps, catch the contingencies or predict the sorts of outcomes that occur? What do you do when that starts to occur?

Mr Tighe-You seem to be assuming that the deaths are associated with the project.

Senator LUDLAM-I am acknowledging that these are allegations. I have no proof either way. I am asking whether the Australian government has done anything to validate them, either way. It appears, apart from the reading of a press release, that that has not occurred. As the chair has suggested I will ask you to take that on notice and return any information you can to us.

CHAIR-No; I was not suggesting that. I was suggesting that the issues of the question be referred to the minister to see if it is appropriate for the department to answer.

Senator LUDLAM-All right. Understood. Okay, that is a distinction that I had not made. Minister, can I put that to you? I hope that we will not get back, in a couple of weeks time, the answer that, no, it was not appropriate. If this is not the right minister to put this question to then I am hoping for a reference to the right person. I will leave it there.

Senator FERGUSON-I want to ask a couple of questions about our current state of play with bilateral trade agreements, if we have the right people at the desk. I particularly want to ask about our state of play with Japan trade agreements and the attitude of the new Japanese government. I do not expect to get long fragmented answers; I just want to see where we are up to because I am getting tired too.

Mr Yuile-Those questions are obviously appropriate for this hearing and for our colleagues at Departmentof Foreign Affairs and Trade. Are there other questions for Austrade?

Senator FERGUSON-No, the only questions I have left are to do with the FTAs.

CHAIR-So non-FTA staff may leave?

Senator FERGUSON-Non-FTA staff can go.

Senator LUDLAM-I have a couple of questions relating to Anti-Counterfeiting Trade Agreement-ACTA.

Senator FERGUSON-ACTA is under the free trade agreements.

Senator LUDLAM-It is, but I want to be sure we do not send those staff home.

Mr Yuile-I will stay in case something comes up.

CHAIR-Staff who are dealing with free trade agreements and the AFTA should remain and other staff can
go.