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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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Output 1.1:

Protection and advocacy of Australia's international interests through the provision of policy advice to ministers and overseas diplomatic activity

1.1.4 South Pacific, Middle East and Africa

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The South Pacific, Middle East and African regions cover a diverse range of nations, most of which are developing countries. These regions encompass countries with significant economic links to Australia as well as close partnerships founded on geographic proximity.

The department remained at the centre of the Government's efforts to advance Australia's extensive security, economic and consular interests in Papua New Guinea (PNG) and to help consolidate the wide-ranging economic and political reforms of the PNG Government. These included the completion of a $193 million assistance package to support PNG's structural adjustment reforms and practical measures to help restructure the PNG defence forces. In keeping with Australia's leadership of the Peace Monitoring Group, the department provided crucial support to the implementation of the historic Bougainville peace agreement signed on 31 August 2001. We prepared a strategy for early Australian engagement with the new government formed after the PNG elections in June 2002.

The department's strong engagement with New Zealand continued. We supported the Government's comprehensive dialogue with New Zealand on trade and economic issues and intensified our cooperation in regional peacekeeping and combating people smuggling. New Zealand is one of Australia's most important security and economic partners. Annual merchandise trade exceeds $12 billion and total Australian investment in New Zealand is more than $21 billion.

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The department's main priority in the crisis-prone South Pacific during the year was to encourage a return to democracy in Fiji and Solomon Islands. We provided assistance to elections in both countries and quickly established effective working relations with the newly elected governments. The department continued to encourage good governance and sound economic policies, bilaterally and through our support for regional organisations, in all Pacific island countries. The results were mixed because there are natural limits on Australia's capacity to influence these sovereign countries.

Australian exports to the Middle East continued to grow strongly, with merchandise exports increasing by nearly 14 per cent in 2001-02 to reach $7.7 billion. This growth was sustained notwithstanding adverse political developments affecting the region, notably in the aftermath of the 11 September 2001 terrorist attacks and in aggravated Israeli-Palestinian conflict. The department facilitated increased Australian Defence Force deployments to the Persian Gulf as part of Australia's contribution to the war on terrorism.

The Commonwealth Heads of Government (CHOGM) meeting in Australia in March 2002 was the focus for our diplomatic efforts in Africa, including on the Commonwealth's response to the situation in Zimbabwe. The Mugabe Government was unresponsive to these efforts and to our bilateral representations. Pursuit of our trade interests in Africa reflected our substantial commercial relations with South Africa as well as prominent Australian mining and energy sector interests elsewhere in Africa.

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Papua New Guinea Click to view related information - opens in new window

The department remained at the forefront of the Government's efforts to advance Australian interests in PNG. We gave a high priority to supporting the PNG Government's attempts to restructure the PNG defence forces. Despite continuing opposition and further unrest within the defence forces, we encouraged PNG authorities to persevere with this essential reform. We reached agreement with the PNG Government on the disbursement of a $20 million Australian package to support the restructuring program. By year's end some progress had been made but considerable further work will be required to entrench these reforms.

The department continued its high-level dialogue with PNG authorities, other donor governments and the international financial institutions on ways to support the wide-ranging political and economic reforms of (then) Prime Minister Sir Mekere Morauta. These efforts helped PNG to conclude, for the first time, IMF and World Bank structural adjustment programs and to take forward its privatisation program. Because PNG's medium-term economic outlook remains poor, we continued to advocate public sector reform, sound economic management and the early restoration of investor confidence. In high-level consultations and through the aid program, the department sought to focus Australia's assistance on law and order, good governance and the delivery of basic health, education and communications services.

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In response to heightened challenges from people smugglers, in October 2001 we helped to secure the PNG Government's agreement to establish an asylum seeker processing centre at the Lombrum naval base in Manus Province. Departmental officers supported the work of other Australian agencies at the facility. The agreement was revised in December 2001 to allow for the expansion and extension of the facility until October 2002. We continued to support the Government's efforts to conclude a memorandum of understanding with PNG to enhance bilateral cooperation on border security and illegal migration.

The department, including through its prominent participation in the four-nation Peace Monitoring Group (PMG), remained very closely involved in efforts to conclude the Bougainville Click to view related information - opens in new window peace process. Several more important milestones were achieved during the year. In August 2001 a peace agreement paved the way for Bougainvillean autonomy, perhaps by mid 2003. In March 2002 the PNG Parliament passed crucial legislation giving effect to the agreement. Since early this year, ex-combatants have begun to hand in their guns, with over 1300 weapons in containers by 30 June 2002, but progress slowed as the year went on. Through the aid program we continued to contribute to reconstruction of the island and its economy. During the year, 40 departmental officers served as civilian monitors and four more served as Chief Negotiator for the group. The department helped to plan a further downsizing of the group from 195 to 75. We also contributed to the publication of a monograph by Mr Downer on the Bougainville issue.

The growing challenge of illegal migration further strengthened our focus on developments in the Torres Strait. Through the department's Torres Strait Liaison Office on Thursday Island, we helped coordinate wider Commonwealth Government and Queensland Government efforts to strengthen border protection and boost the social and economic development of the people of the Torres Strait.

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Helping disarm Bougainville

In the weeks leading up to the second reading by the PNG Parliament of the Bougainville constitutional amendments in March 2002-a key step for the establishment of an autonomous government in Bougainville-the Peace Monitoring Group (PMG) was engaged in frenetic activity.

To demonstrate that weapons disposal was working and to help encourage PNG members of parliament to support the amendment, the group members, including five officers from the department, completed an exhausting patrol program reaching almost all corners of the province. They embarked on 238 patrols in helicopters, landing craft and 4-wheel drive vehicles; produced and distributed 50 000 copies of the group's newsletter Nuis Bilong Peace; delivered all the trunks and shipping containers used to store weapons; witnessed 51 weapons containment events; destroyed unsafe munitions; and briefed PNG ministers and the media on progress in the weapons disposal program.

One of the department's PMG members, Shane Flanagan (a 2001 graduate recruit), led a small team that helped organise one of the first and largest weapons containment events in Buin village, in southern Bougainville, dominated by the Bougainville Revolutionary Army. Extensive discussions-often over a shared army ration pack-between monitors temporarily based in Buin, and the local Bougainville Revolutionary Army commander led to an agreement on the timing and terms of the hand-over ceremony.

Image - see caption below

Shane Flanagan (standing), a graduate trainee in the department, works with a New Zealand Army officer to record Bougainville Revolutionary Army weapons at a peace ceremony in Southern Bougainville.

Hundreds of members of the local community gathered for the half-day ceremony that saw over 60 weapons, including semi-automatic weapons and mortars, surrendered by the ex-combatants. After the ceremony, Shane Flanagan was quickly on his army radio relaying news to the group's headquarters. The department's public affairs officer, Liz O'Neill, at the headquarters then ensured the historic occasion received coverage in the Port Moresby press.

On 27 March 2002, the PNG Parliament voted unanimously to support the constitutional amendments. Shane Flanagan is now preparing for a long-term posting as Third Secretary to a post in Asia.

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New Zealand Click to view related information - opens in new window

The visit of the Prime Minister, Mr Howard, to New Zealand in March 2002, and meetings between Mr Downer and Mr Vaile and their counterparts during the year, all closely supported by the department, saw further trans-Tasman cooperation in trade liberalisation, regional security and the battle against people smuggling. They also underlined the depth and breadth of this very important relationship. The visit in May 2002 of New Zealand Prime Minister Helen Clark, with a high level ICT trade delegation, helped reinforce commercial links. Our close cooperation with New Zealand in peacekeeping efforts in East Timor, Bougainville and Solomon Islands helped strengthen regional security and development.

The department worked closely with the New Zealand authorities to respond effectively to illegal immigration. We encouraged and welcomed New Zealand's readiness to accept asylum seekers from the MV Tampa and from the processing facilities on Manus and Nauru (see below). Australian and New Zealand officials also worked closely, including at the Regional Ministerial Conference on People Smuggling, Trafficking in Persons and Related Transnational Crime held in Bali in February 2002, in devising regional responses to illegal people movements (see sub-output 1.1.7 at page 82 for further detail on this conference). We enhanced our dialogue with New Zealand on global trade liberalisation issues, especially the negotiation of free trade agreements, and expanded our cooperation in the WTO, the Cairns Group of agricultural exporting countries, and other regional and multilateral trade forums.

The department supported bilateral discussions involving the Ministers for Defence, Finance, Agriculture and Transport and the Treasurer as well as the visit to New Zealand of the Governor-General. We worked with other government agencies to streamline the trans-Tasman regulatory environment.

Important results were: the establishment of a system of joint food standards; the implementation of a new social security agreement; significant progress towards establishing a trans-Tasman agency to regulate therapeutic goods; and the completion of long-running negotiations to harmonise compliance arrangements for electrical products and motor vehicle standards under the Trans-Tasman Mutual Recognition Agreement.

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Figure 12. Australia's merchandise trade with New Zealand

Image - see caption above - click for larger version
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South Pacific Click to view related information - opens in new window

The department played a leading role in advancing the Government's objective of better stability and security for countries in the South Pacific, particularly Solomon Islands, Vanuatu and Fiji. These countries continue to face serious economic, social, and political problems. Flexibility in Australia's policy approach has been essential. Each island country is sovereign and unique, and each crisis different. Australia's national interests and ability to make a difference also vary from country to country.

The department provided significant financial and technical assistance, including to an international observer mission, to ensure national elections were held in Solomon Islands Click to view related information - opens in new window in December 2001, following the overthrow of the elected government in June 2000. We supported Mr Downer's leadership of the international donor community's response to events in Solomon Islands, particularly through registering that serious law and order problems must be addressed and prudent economic policies followed.

We managed the deployment of the International Peace Monitoring Team (IPMT) that provided valuable support to the indigenous peace process, culminating in the destruction of some 2000 weapons in June 2002. Safeguarding Australian citizens and their interests remained a high priority in the department's response to instability in Solomon Islands.

See administered items for Outcome 1 at page 127 for further details on the IPMT.

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We encouraged Fiji's Click to view related information - opens in new window return to democracy and contributed international observers to its elections in August-September 2001. We provided support for the Government's decision to lift bilateral sanctions against Fiji and to normalise relations in October 2001, following the formation of the Qarase Government. We assisted Mr Downer's successful efforts to lift the Commonwealth's suspension of Fiji.

The department established an office in Click to view related information - opens in new window Nauru-known as the Australian Administrative Centre-to liaise with the local authorities and facilitate the establishment of an asylum seeker processing facility.

We continued to encourage good governance and sound economic policies, bilaterally and through our support for regional meetings such as the Forum Economic Ministers' Meeting and the Forum Presiding Officers' Conference. We worked to strengthen regional security cooperation in the wake of 11 September 2001 terrorist attacks, including by encouraging Pacific Island Forum members to implement a comprehensive legal framework to combat transnational crime. We supported Pacific island countries' efforts to complete legislative requirements of the 1992 Honiara Declaration on Law Enforcement Cooperation and to comply with UN counter-terrorism conventions. We co-hosted, with the United States, New Zealand and the Pacific Islands Forum Secretariat, a counter-terrorism workshop for Forum countries in Honolulu in March 2002 (see sub-output 1.1.8 at page 89 and sub-output 1.1.7 at page 82 for further detail on Australia's response to terrorism).

We supported a productive visit by Mr Vaile to Fiji and New Caledonia Click to view related information - opens in new window in March 2002, which included the signing of a bilateral trade and investment arrangement with New Caledonia negotiated by the department. We encouraged island countries to sign and ratify the Pacific Agreement on Closer Economic Relations (PACER), which includes Australia and New Zealand. Australia ratified the agreement in June 2002. As a member of the Forum Fisheries Agency, we also encouraged early implementation of a multilateral fisheries treaty for the western and central Pacific.

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Middle East

The department's promotional activity, policy dialogue and representations on specific market access and trade facilitation issues supported strong growth in exports to Middle East markets. We completed negotiations for an investment promotion and protection agreement with the United Arab Emirates Click to view related information - opens in new window. We undertook substantial consultations with Iran Click to view related information - opens in new window and Saudi Arabia Click to view related information - opens in new window in preparation for Joint Ministerial Council meetings later in 2002.

Following the 11 September 2001 terrorist attacks, we intensified contact with the Australian private sector in response to increased demand for advice on political risk considerations. We worked hard to ensure that our policies on terrorism and asylum seekers were presented in ways that minimised harm to trade links.

Through policy advice, diplomatic representations and support for high-level defence visits to the region, we facilitated deployment of Australian Defence Force elements to the Gulf. These deployments were critical to Australian participation in the United States-led war against terrorism, and substantially augmented Australia's regular contributions to the Multinational Maritime Interception Force mandated to enforce UN sanctions on Iraq. At the same time, we continued to assist Australian companies trading with Iraq Click to view related information - opens in new window through the UN oil-for-food program.

In response to aggravated  Israeli-Palestinian Click to view related information - opens in new window conflict, we provided up-to-date policy advice on fast-moving developments. We ensured the Government's approach and the limits of Australia's capacities to influence events were well understood within Australia and internationally. We monitored closely security factors affecting the operation of the representative office in Ramallah established to maintain liaison with the Palestinian Authority.

In June 2002 Mr Downer hosted the first visit of an Iranian Foreign Minister to Australia in over a decade. The visit led to the announcement of agreement to institute a bilateral human rights dialogue, which had been a longstanding Australian policy objective.

We coordinated detailed advice for the Government's response to a report on Australia's relations with the Middle East tabled in September 2001 by Parliament's Joint Standing Committee on Foreign Affairs, Defence and Trade.

Image - see caption below

Australia's Ambassador to Jordan, John Tilemann, meets a participant in an agricultural project aimed at alleviating poverty in rural Jordan. The project is funded by the embassy's Direct Aid Program. With its emphasis on water conservation and cooperative farming, the project has provided improved nutrition and sustainable incomes for the poorest inhabitants of the district.

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Africa Click to view related information - opens in new window

We provided regular policy advice on the situation in Zimbabwe Click to view related information - opens in new window. We briefed Australian participants in the Commonwealth Observers Group for the March 2002 presidential election and helped to support the Prime Minister's role in the Commonwealth Troika that later in March suspended Zimbabwe from the councils of the Commonwealth (see sub output 1.1.7 at page 85 for further detail on Commonwealth issues). We also made bilateral representations on the deteriorating political and economic conditions in Zimbabwe. The Mugabe Government chose to ignore these messages. Additional humanitarian assistance was provided to the Zimbabwean people.

We facilitated an 'Australia in Africa' week, including a successful Australia in Sub-Saharan Africa Mining Conference, in South Africa Click to view related information - opens in new window in July 2001.

Taking account of a range of Australian commercial interests in Libya Click to view related information - opens in new window, we provided the Government with advice for a review of policy on Libya leading to a resumption of diplomatic relations, which had been suspended since 1987. Australia also established diplomatic relations with Cameroon and Mauritania.

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Table 9. Australia's regional trade with the South Pacific, Middle East and Africa

  Exports Imports
2000-01 $m 2001-02 $m Trend growth 1996-97 to 2001-02 % 2000-01 $m 2001-02 $m Trend growth 1996-97 to 2001-02 %
New Zealand and Territories 6 889 7 645 5.2 4 569 4 745 5.8
Papua New Guinea 1 051 1 007 -4.3 1 457 1 124 7.8
Other Pacific Islands 1 587 1 394 5.5 407 396 -1.1
Middle East 6 797 7 733 19.6 3 753 2 940 10.9
South Africa 1 301 1 346 6.0 877 870 15.9
Other Africa 1 000 1 146 17.6 151 210 4.2
Total 18 625 20 271 9.4 11 213 10 285 7.7

Source: Compiled by DFAT from ABS data.

Reporting against quality and quantity indicators and administered items begins on page 96.

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