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Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Department of Foreign Affairs and Trade :: 2001-2002 Annual Report
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Secretary's Review

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Dr Ashton Calvert
Photo by Michael Jensen

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The International Year in Review

Corporate Management and Accountability


The international environment is fluid and uncertain, but Australia's footing in the world is firm and its standing high. The department will seek to build on this…to protect and advance Australia's interests internationally.


2001-02 brought new opportunities and challenges for the Department of Foreign Affairs and Trade in seeking to protect and advance the interests of Australia and Australians internationally. We pursued these core objectives-security and prosperity-through provision of high-quality advice to the Government across the spectrum of foreign and trade policy issues, and strong support for portfolio and other ministers in advocating Australia's interests. We remained committed to delivering the best services possible, particularly consular and passports services, to the Australian community.

The department gave high priority during the year to meeting political and security challenges, and pursuing Australia's abiding interests, in the Asia-Pacific region. We helped to strengthen further our centrally important relationship with the United States. We made a major contribution to the Government's response to the 11 September 2001 terrorist attacks, and to Australia's participation in the war against terrorism. We were at the forefront of efforts to promote cooperation to address the threat of terrorism in our region-a threat brought home with devastating force by the October 2002 Bali bombing attacks. We also played an important part in whole-of-government efforts to combat people smuggling and illegal migration.

The department worked effectively in international trade forums to help develop globally based rules and disciplines to maximise prospects for Australian exporters and investors. We made a successful contribution to getting a new round of multilateral trade negotiations launched. We also pressed for new bilateral market access opportunities-including through a proposed free trade agreement (FTA) with the United States, and free trade and other trade and economic agreements with important Asian trading partners. As well as a range of market access wins in various markets, our efforts during the period under review helped to deliver a major contract in August 2002 for Australia LNG to supply liquefied natural gas to China.

Work commenced on a new White Paper to update and explain Australia's foreign and trade agenda and policy settings.

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Regional issues

Australia continued to build a mature and realistic relationship with Indonesia across a wide-ranging, practical common agenda. The department, including through the embassy in Jakarta, supported two visits to Indonesia by the Prime Minister, Mr Howard, and other productive contacts at ministerial level. These helped further to consolidate the political relationship. In our bilateral discussions, we reaffirmed Australia's strong support for Indonesia's political and other reform programs and its territorial integrity. We also facilitated the inaugural trilateral ministerial meeting between Indonesia, East Timor and Australia.

The department made a major contribution to East Timor's transition to independence in May 2002. Our work in Canberra and advocacy overseas, notably in the United Nations (UN) Security Council, was instrumental in securing a post-independence UN mission to assist East Timor, and continued attention by international donors. We coordinated Australia's efforts bilaterally and through the UN to help East Timor address key security, governance and development challenges. We also concluded the Timor Sea Treaty, which provides an equitable basis for developing oil and gas resources in the Timor Sea.

During 2001-02, the department worked to enhance stability and security in the South Pacific. We provided substantial assistance for national elections in Solomon Islands in December 2001, and managed deployment of the International Peace Monitoring Team supporting the local peace process. We encouraged Fiji's return to democracy, and assisted in normalising bilateral relations following Fiji's national elections in August-September 2001. We also contributed to Mr Downer's successful efforts to lift Fiji's suspension from the Commonwealth.

We continued to play a leading role in managing and advancing Australia's extensive interests in Papua New Guinea (PNG). We supported PNG defence force reform. We also assisted PNG's structural adjustment program, in consultation with international financial institutions and donors, to improve PNG's poor medium-term economic outlook. Through Australia's leadership of the Peace Monitoring Group in Bougainville, we provided crucial support to implementation of the Bougainville peace agreement signed in August 2001.

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International trade and economic issues

The department actively supported the Government's efforts to advance Australia's trade interests - particularly improved market access for Australian exporters and investors - across a challenging multilateral, regional and bilateral agenda.

With our Geneva mission to the World Trade Organization (WTO), we were instrumental in supporting Mr Vaile in securing agreement at the Ministerial Conference in Doha in November 2001 for a new broad-based round of WTO negotiations. Our efforts were informed by extensive consultations with government, industry and the wider community. As Cairns Group chair, Australia built on affinities with agricultural exporting countries to achieve an ambitious negotiating mandate for agriculture. We pushed successfully for the Doha mandate also to cover industrial products, and to ensure trade negotiations in services received new impetus.

The department worked to advance the Government's proposal for an FTA with the United States. Negotiations on an FTA with Singapore progressed well. Our efforts prepared the way for negotiations on an FTA with Thailand. We helped secure China's agreement to negotiate a framework agreement on trade and economic relations, and played a major part in reaching agreement with Japan to explore options for deeper economic linkages-including a possible bilateral agreement.

We supported Mr Vaile in achieving ministerial endorsement of a closer economic partnership framework between Australia, New Zealand and ASEAN. We also contributed to the agreement by Asia-Pacific Economic Cooperation (APEC) leaders in Shanghai in October 2001 to reinvigorate APEC's trade and investment liberalisation agenda, including through the approach of allowing those economies ready to do so to move faster towards free trade and investment.

The department used the WTO dispute settlement system to increase access opportunities for Australian beef exports to Korea and lamb meat exports to the United States. We campaigned successfully for a senior Australian to be appointed to the WTO dispute settlement Appellate Body-the first such appointment. We were actively involved in negotiations on the terms under which China and Taiwan (as Chinese Taipei) joined the WTO, to protect and enhance trade and investment opportunities for Australian business.

Australian exports continued to grow despite the global economic downturn and modest economic performance in our region. The department assisted Australian business to take advantage of openings in regional and other markets and changes in the international economy. We successfully supported the development of an alliance between a private insurer and the Export Finance and Insurance Corporation to increase the range of export credit services available to exporters.

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Bilateral relationships

The department continued to engage intensively with the United States to advance a wide range of Australian interests and to pursue important common concerns. Australia invoked the ANZUS Treaty for the first time following the 11 September 2001 terrorist attacks. The department, including through the embassy in Washington, kept in close contact with the United States on the range of issues that emerged after the attacks. We supported ministers in reaffirming Australia's commitment to the security alliance and our interest in US engagement in the Asia-Pacific region, including through strong relationships with key regional countries.

Trade issues remained central to the department's engagement with the US Administration and with Congress. We supported Mr Vaile in obtaining exclusions for most Australian steel exports to the United States following the introduction of US safeguard action on steel, and in lobbying strongly against trade-distorting measures in the 2002 US Farm Bill.

In 2001-02, we continued our efforts to re-invigorate Australia's relationship with Japan. We supported a visit to Japan by the Prime Minister, Mr Howard, and a visit to Australia by the Prime Minister of Japan-during which we were able to advance prospects for a new bilateral trade and economic agreement. We acted to protect the interests of Australian beef exporters following the discovery of Bovine Spongiform Encephalopathy (BSE) disease in Japan. We maintained close dialogue with Japan on regional developments and the broader regional security environment, reflecting shared interests in issues such as East Timor and terrorism.

We worked to intensify Australia's relationship with China, including to mark the thirtieth anniversary of diplomatic relations. We supported two visits to China by the Prime Minister (one for APEC) and other ministerial interaction, as well as the first visit to Australia for some years by a Chinese Foreign Minister. These exchanges-particularly the Prime Minister's visit to China in May 2002-were instrumental in moving forward the proposal for a bilateral trade and economic agreement, and the Australia LNG energy supply bid. We continued to use ministerial and other meetings, including formal dialogue processes, to take up human rights concerns and regional security issues.

The department pursued closer engagement with the European Union and major European partners on key strategic issues, including security and illegal migration and asylum, and worked also to advance Australia's substantial trade and investment interests in Europe. We continued to press the European Union on agricultural trade liberalisation.

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Security, legal and environmental issues

The department contributed substantially to Australia's response to the 11 September 2001 terrorist attacks and to the broader threat of international terrorism. We helped facilitate the deployment of Australian defence forces to assist in the anti-terrorism military campaign in Afghanistan. We also concluded arrangements with Indonesia and Malaysia to cooperate against terrorism and build institutional counter-terrorism capacities. A similar arrangement was negotiated with Thailand. We encouraged regional organisations such as APEC and the ASEAN Regional Forum (ARF) to strengthen counter-terrorism cooperation.

We contributed to managing the Government's response to the MV Tampa maritime incident, and to the development of strategies for dealing with unauthorised arrivals. We advised on the establishment of offshore processing centres in Nauru and PNG. We also played a major role in galvanising international and regional cooperation on these issues, particularly by organising a Regional Ministerial Conference in Bali in February 2002, and assisting Mr Downer as co-chair with his Indonesian counterpart. Our public information programs promoted a more accurate understanding internationally of Australia's policies on asylum seekers and immigration.

The department continued to advocate UN reform to deliver increased efficiencies, and encourage greater responsiveness by the UN system to the concerns of member states. We secured Australia's election to the UN Commission on Human Rights. We were closely involved in negotiations on an International Criminal Court, and supported Mr Downer and the Government in the lead-up to ratification of the instrument under which the court was established.

We made an important contribution to the success of the Commonwealth Heads of Government meeting hosted by Australia in March 2002-and assisted the Prime Minister, Mr Howard, in participating in the Commonwealth Troika that subsequently suspended Zimbabwe from the councils of the Commonwealth. We also supported Mr Downer in his role as vice-chair of the Commonwealth Ministerial Action Group.

Leading a whole-of-government approach, the department continued to pursue Australia's interest in an effective global regime on climate change. Despite progress in some areas, the Conference of the Parties to the UN Framework Convention on Climate Change in Marrakech in November 2001 failed to deal satisfactorily with the key question of emission reduction. Following the Government's decision not to ratify the Kyoto Protocol, the department continued to explore practical cooperative ways to address climate change, including with the United States.

An adverse international context limited scope to advance our non-conventional arms control and disarmament agenda, although we made some progress as Australia Group chair and on other fronts in strengthening measures against proliferation of weapons of mass destruction. We continued to promote Australia's international security interests through bilateral security dialogues, and maintained close contact with the United States on missile and other strategic issues. Regional security cooperation through the ARF continued to move ahead slowly.

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Consular and passport services

The department continued to deliver high-quality consular and passport services to the Australian public. Our work in these areas was affected directly by the 11 September 2001 terrorist attacks. Demand for passports and other travel documents diminished, as many Australians chose to defer travel, while demand for consular services and information on travel abroad showed a marked increase.

Despite the fall from the year before, the department issued almost one million passports and other travel documents in 2001-02. We received a government service charters award for excellence for the effective integration of our Passport Client Service Charter into core passport service delivery. An output pricing review of passport services recommended changes in charging for and resourcing of the department's passport function, which will take effect from 2002-03. Work commenced on a new series of Australian travel documents incorporating the latest technologies and security features, and on the use of biometrics to improve identity checking processes.

In 2001-02, the department provided consular assistance to some 24 000 Australians in difficulty, an increase on the previous year, and notarial services to almost 75 000 others. We increased to 164 our points of consular service overseas, and introduced new systems-an online Consular Management Information System and an emergency call unit-to support the 24-hour Consular Operations Centre and posts in their consular work. We continued to expand our consular public information program, including through publications and materials online. We issued 705 consular travel advice notices, a large increase on 2000-01, and reviewed all consular contingency plans.

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Public diplomacy

The department worked during the year to project a positive image of Australia internationally, emphasising Australia's strong economic and trade performance, record of innovation and cultural sophistication and diversity. We ran international media and other visitor programs to foster informed and positive understanding of Australia, and worked where necessary to counter misconceptions. In addition, we pursued an effective cultural diplomacy program. We managed the Government's contract with ABC Asia Pacific, an Australian satellite television service targeted at the Asia-Pacific region.

We continued efforts to increase public awareness of Australia's trade policies. We produced the annual Trade Outcomes and Objectives Statement in several formats, to permit wider dissemination, and two short publications on why trade matters. Another report explored the economic importance to Australia of large commercial enterprises. We contributed to an APEC publication on globalisation, which was distributed in a study kit to Australian schools, and prepared two other reports on APEC trade issues. We produced three analytical reports on Asian economic issues. Survey work conducted for the department revealed greater public understanding of the benefits of trade and globalisation.

Our public diplomacy program also provided timely and helpful information to the Australian public and media on issues such as Australia's involvement in the international coalition against terrorism, people smuggling and border protection, and major regional and international events of foreign and trade policy interest. We issued publications on consular matters; international security issues; and human rights; as well as several volumes of historical documents on foreign and trade policy matters. We launched an online photographic library, and developed our website further as a key information platform.

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The department worked hard in 2001-02 to ensure continued high standards of corporate governance and accountability. Our efforts were underpinned by innovative and efficient resource management, and set against a significantly tightened budget. Despite further modest reductions in staff, more flexible and targeted deployment ensured that priority areas of the department-including those dealing with trade policy-were properly resourced and that we were able to respond quickly and appropriately to emerging policy and other challenges.

We continued to promote a strong performance culture, including by directly linking staff performance with remuneration. A staff survey on the department's award-winning 'Working Smarter' initiative demonstrated considerable improvement in work practices and attitudes, and staff productivity. Our performance management system, revised under the Certified Agreement 2000-2003, was further strengthened through variations to the Certified Agreement adopted by staff ballot in June 2002. This variation also delivers a 4.5 per cent pay increase to staff in the final year of the Agreement, in recognition of productivity gains.

2001-02 saw the department continue with an active internal review and reform program, and the bedding down of several key workplace changes initiated the previous year. A new and improved Overseas Conditions of Service package was approved. The first phase of a locally engaged staff (LES) management review was implemented, ensuring the development of a smaller, more professional LES workforce in our missions abroad. Staff had access to a suite of training and development opportunities, including better resourced and more sharply focused language training programs.

The department's financial management system and the quality of our budget forecasting continued to improve. The Australian National Audit Office rated highly the financial control structures underpinning the preparation of our financial statements for 2001-02. These statements were unqualified, with no audit observations. We won two major awards for financial management at the CPA Australia ACT Public Sector Awards in November 2001. We will work further to strengthen our financial management system through continued integration of accrual based financial information into our management and decision-making processes.

We continued to enhance internal audit and evaluation processes, in order to strengthen the performance of our overseas posts, Canberra-based divisions and state and territory offices. Our busy program of internal audit addressed both compliance and performance, and identified management practice improvements in the areas covered. Feedback on performance from key clients, including other government agencies, was generally very positive.

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Security and information technology

The department continued to attach high priority to managing effectively the Government's secure global communications network and ensuring the security of Australia's missions abroad. We consolidated our information technology (IT) governance structure and developed a five-year IT plan. The new Secure Australian Telecommunications and Information Network (SATIN) was deployed successfully in our offices in Australia, with minimal disruption. SATIN's overseas rollout also commenced.

Following the 11 September 2001 terrorist attacks, the department conducted an extensive review of physical security arrangements at our overseas missions, and implemented upgrades in several locations. Security was also improved at our headquarters in Canberra. We continued to ensure high levels of security awareness in Australia and overseas, including through staff training, and maintained stringent controls on access to and handling of classified materials.

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Overseas property management

The department assumed responsibility in November 2001 for management of Australia's owned overseas estate, valued at around $1.2 billion. We adopted a rigorous commercial approach to this task, although stagnant international markets meant return on investment for 2001-02 fell short of the target, as did returned equity from divestment activity. We worked with PricewaterhouseCoopers further to improve delivery of contracted property services, taking into account the outcomes of two client surveys we conducted.

We will strive…to maintain our high standards, to encourage and reward strong performance by staff, and to continue building a foreign and trade service that delivers the best possible results and services for the Australian Government and people.


The department is well placed to meet the foreign and trade policy and corporate management challenges that lie ahead. The international environment is fluid and uncertain, but Australia's footing in the world is firm and its standing high. The department will seek to build on this, including through close cooperation with other agencies on a whole-of-government basis and though our network of diplomatic posts, to protect and advance Australia's interests internationally.

In the year ahead, the department will continue to work with the United States and others in the fight against terrorism-an imperative reinforced by the horrific Bali bombing attacks in October 2002. We will again contribute to broader government strategies on border protection issues. We will look to influence the Doha Round of multilateral trade negotiations to improve market access for Australian business, and to ensure that trade and investment rules support our interests. Work towards an FTA with the United States will remain a priority. So too will development of an effective and equitable global regime on climate change. In these and other areas, we will actively seek out and build on affinities with like-minded countries to advance our interests.

The department will remain a strong advocate for Australian interests in the Asia-Pacific region through bilateral dialogues and regional forums, notably APEC and the ARF. We will continue to engage constructively with Indonesia across a broad agenda, including people smuggling, and look to deal ourselves where possible into the broader dynamic of regional cooperation. We will seek to conclude an FTA with Singapore, and move towards an FTA with Thailand and bilateral trade and economic framework agreements with Japan and China. East Timor will again demand our attention, as will PNG, Solomon Islands and other Pacific nations.

We will remain responsive to the Australian community, and continue to consult and provide information on international issues important to Australians. Australians are travelling, working and living abroad in ever increasing numbers-more than one million people at any given time-and the department as a result will continue to accord high priority to providing first-class passport and consular services.

The department's ability to deliver high-quality foreign and trade policy outcomes for the Government and for Australians depends on the quality of its staff and corporate management. We will strive over the year ahead to maintain our high standards, to encourage and reward strong performance by staff, and to continue building a foreign and trade service that delivers the best possible results and services for the Australian Government and people.

Ashton Calvert

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