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Annual Report 1994-95

CONTENTS

Copyright / Inquiries

AUSTRALIAN GOVERNMENT PUBLISHING SERVICE

This work is copyright.

Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service.

Requests and inquiries concerning reproduction and rights should be addressed to

The Manager, Commonwealth Information Services,
Australian Government Publishing
Service, GPO Box 84,
Canberra ACT 2601.

Inquiries or comments about this report should be directed to:

Department of Foreign Affairs and Trade
Parkes ACT 2600
Tel (06) 261 1111
Commonwealth of Australia 1995
ISSN 0 644 25361 4

Executive policy: John Piper
Coordinating Editor: Tony Miller
Design: John Simpson and Multi Media
Financial statements: David Peirce
Appendices: Rod Chidgey

Produced by the Australian Government Publishing Service for the International Public Affairs Branch, Department of Foreign Affairs and Trade.

The Department gratefully acknowledges photographs used in this publication from the Australian Agency for International Development (AusAID), the Department of Defence, Australia's overseas missions, and the International Public Affairs Branch.

Secretary's Letter

Department of Foreign Affairs and Trade

Canberra ACT 2600

SECRETARY

Senator the Hon. Gareth Evans QC
Minister for Foreign Affairs
Parliament House
Canberra ACT 2600

Senator the Hon. Bob McMullan
Minister for Trade
Parliament House
Canberra ACT 2600

The Hon. Gordon Bilney MP
Minister for Development Cooperation and Pacific Island Affairs
Parliament House
Canberra ACT 2600

In accordance with the standing requirements for all departments to be accountable to their Ministers and through them publicly to Parliament and to the people of Australia, I am submitting this annual report of the Department of Foreign Affairs and Trade covering the financial year 1994-95.

The main part of the following report aims to describe the activities and outcomes of the programs of the Department. An introductory section gives an account of the international context in which the Department operates, a portfolio and corporate overview and a summary of major management matters.

The Department reviewed its corporate plan and concluded that it remained a valid document to guide activities - including the further development of our resources and management skills - over the remainder of the period 1994-96. Under the overall aim of winning a future for Australia in the world, the first goal thus remains to increase Australia's economic prosperity through trade and investment flows, in particular in the Asia Pacific region. It remains of fundamental importance to Australia's trade and economic interests to seek to strengthen the multilateral trade system, particularly through the World Trade Organisation.

There is encouraging evidence of a growing export culture in Australia, spreading to smaller companies, and an increasing share of elaborately transformed manufactured goods and of services in our overall foreign exchange earnings to complement more traditional exports. However, strengthening Australia's balance of payments circumstances remains a vital and long-term enterprise. It requires the Department to continue to attach high priority to economic issues and to improve support capacity in economic areas.

A second broad priority has been the development of a more far-reaching and complex set of relationships with the key countries in what Senator Evans has termed the East Asian Hemisphere: Japan, China, Korea and Indonesia and the other ASEAN countries, now including Vietnam. The substantial relationships Australia has with these countries, which are major players in the region's overall security and include our most important export markets, have continued to grow over the year, though not without difficulties and setbacks. They have developed alongside other long-standing close ties, including those with the United States, New Zealand, the European Union and Papua New Guinea and other countries of the South Pacific.

The success of Australia's efforts to engage with East Asia was recognised by the Government of Japan during Mr Keating's visit in May when it welcomed Australia's decision to create its future in the region and reaffirmed Australia's role as 'an indispensable partner in regional affairs'. Australia's strategy of integration and partnership came further to realisation at the annual ASEAN Post-Ministerial Conference (PMC) in Brunei in August 1995. The Government attached priority to Australia's inclusion in the proposed Asia-Europe meeting (ASEM), planned for Bangkok in 1996, and was pleased to see a consensus emerge among East Asian nations at the ASEAN PMC to include Australia and New Zealand from the second ASEM as members of the Asian side.

Significant progress in the emergence of an Asia Pacific community was made at two major meetings, the APEC leaders' summit in Bogor and the inaugural meeting of the ASEAN Regional Forum.

For the Asia Pacific Economic Cooperation (APEC) grouping, the year was one of particular achievement, with regional leaders agreeing in the Bogor Declaration of November 1994 to achieve free and open trade and investment in the Asia Pacific by 2020. Much of what Australia had initially sought in the APEC process has thus been set in train. The challenge to economies in the region is now to find innovative ways to implement the Bogor goal effectively and comprehensively, covering all sectors and impediments to trade and investment. This is a task which will call heavily on the skills and resources of the Department in the coming years, as the complexity of APEC's agenda and its implications for domestic industry continue to increase.

The ASEAN Regional Forum (ARF), designed for the discussion of a broad range of security-related issues, made advances in 1994-95 leading to a successful second meeting on 1 August 1995. While its first meeting in July 1994 evinced a degree of caution about progressing too far and too fast, the second meeting revealed confidence in the ARF's viability and value and a mood of wanting to see it show forward movement. Australia's work in the 1994-95 intersessional period contributed much to this change. Australia developed several papers for the ARF process and took the initiative to host the first intersessional ARF seminar, which provided an example of an unofficial or 'second-track' process. Australia also actively contributed to the consensus which emerged at the Senior Officials' Meeting in May on ARF goals, organisation and work program. The ARF over the year has continued to be a high priority for the Department, engaging its most senior levels.

Since the 'Look West' strategy was jointly announced by the Ministers for Foreign Affairs and Trade in August 1994, there has been considerable activity on Indian Ocean issues, with a particular focus on enhancing relations with India. Indian Ocean cooperation involved extensive consultations with regional countries, particularly India, South Africa and Mauritius, and visits to the region by the Ministers for both Foreign Affairs and Trade, including Senator Evans' visit to eight regional countries immediately before the International Forum on the Indian Ocean Region (IFIOR), hosted by the Federal and Western Australian Governments in Perth in June. IFIOR produced broad support for regional cooperation and a range of ideas for taking it forward. In a parallel development, two region-wide networks, covering business and academic communities, were established and are to meet in New Delhi in December 1995. A separate, intergovernmental process for economic cooperation was established by seven 'core countries' including Australia, which also agreed to double the membership of the core group. This constituted progress towards an inclusive inter-government process, though differences remain concerning the most effective approaches to regional cooperation. The principal challenges for Australia will be to work with other regional countries to maintain such progress and to develop a related work program.

Australia's relationship with the countries of the South Pacific evolved in important respects. In July-August 1994, the Prime Minister chaired the 25th South Pacific Forum in Brisbane. Under Mr Bilney's direction, the Department had the lead role in establishing the policy framework for the Forum and in developing the theme 'Managing Our Resources' to reinforce new approaches to the region's long-standing economic and social development problems. In the year since the Forum, the Department sought to make full use of Australia's opportunity as Forum Chair to work closely with island countries and regional organisations to follow through on leaders' decisions. The advances during the year laid the groundwork for implementing sustainable economic development and better governance policies and practices in Pacific Island countries.

Indefinite extension was secured for the Nuclear Non-Proliferation Treaty (NPT) at the Review and Extension Conference in May. The Australian delegation played a prominent role in reconciling divergent interests. The historic extension decision has created an environment which will assist in achieving nuclear disarmament, a permanent end to nuclear testing and universal membership of the Treaty. The Conference added momentum to negotiations on a Comprehensive Test Ban Treaty (CTBT) by designating 1996 as the target for completion of the treaty, but continued testing by China and France has soured the atmosphere of the negotiations. The threat of nuclear proliferation in the Asia Pacific has been reduced, with a consequent strengthening of regional security, by the NPT extension decision, the conclusion in October of the US-DPRK Agreed Framework covering the DPRK's nuclear facilities and programs and the related establishment of the Korean Peninsula Energy Development Organisation (KEDO), to which Australia has contributed $US5 million.

The United Nations celebrated its 50th anniversary in 1995. Work on UN reform intensified during this period, with a marked increase in reform proposals from within and outside the UN. Australia was an active contributor to the reform process, particularly in preventive diplomacy, UN funding and administration and peace keeping reform. Australia's major peace keeping commitment during this period was the deployment in August of more than 300 personnel to provide medical services to the members of the UN Assistance Mission in Rwanda and to use any excess capacity to provide health care to the local population. Australia also contributed military, police and electoral personnel to UN operations in the Middle East, Cyprus, Somalia, Mozambique and Haiti. Campaigning started for Australia's election to the United Nations Security Council for the term 1997-98. The campaign has progressed well over the past year but we will have to maintain this momentum in the lead-up to the election in October 1996.

Increased attention to building coalitions of like-minded countries on international environmental issues saw the formation in March, as the result of an Australian initiative, of the Valdivia Group of temperate southern hemisphere countries (Argentina, Australia, Chile, New Zealand, South Africa and Uruguay). Such coalitions of countries with environmental interests similar to those of Australia are critical to maximising opportunities for achieving outcomes that protect and advance our interests in international forums.

The Department's network of links with the private sector, developed under Senator McMullan's direction and in cooperation with Federal and State government agencies, has become increasingly productive. The Team Australia approach is proving an effective guide to trade-related activity. The National Trade and Investment Outlook Conference (NTIOC) is now an annual event, bringing to Australia key foreign trading and investment representatives and highlighting and materially advancing economic relationships with the targeted countries. The creation of the Australian Trade and Investment Guide (TRAID) as a handbook for government and business, the launching of the Winning Markets program, the continuing flow of relevant and practically oriented studies from the Department's East Asia Analytical Unit and the strengthening of the 'Market Australia' program in the Department also contributed effectively to this objective.

The Department continued to place a high priority on protecting the interests of Australians abroad through its consular services. Two kidnappings, those of Ms Kellie Wilkinson and Mr David Wilson, both by the Khmer Rouge, attracted great public, Parliamentary and media attention. These cases, which ended tragically, were a reason for the establishment in August 1995 of a Senate inquiry into consular matters.

The public diplomacy program was further expanded. The major initiative was the Australia Today Indonesia promotion, a collaborative venture with State governments and the private sector aimed at presenting a snapshot of modern Australian business, culture and society. The year also saw the initiation of the Australia South Pacific 2000 program aimed at strengthening Australia's sporting and cultural links with the countries of that region in the lead-up to the Sydney 2000 Olympics. In these and other ways, the Department sought to update and enhance Australia's international image and to expand the network of people-to-people links with the Asia Pacific region and beyond.

Australia's development cooperation program, administered by AusAID and amounting to $1.5 billion in 1994-95, continued to promote the sustainable economic and social development of the peoples of developing countries.

Of particular note during the year was the substantial increase in support for social sector and environmental activities. Significant new commitments were made to Vietnam, Cambodia and Laos. Relief assistance of more than $13 million was provided in response to the humanitarian crisis in Rwanda. To inform the Australian business community of the opportunities in international aid programs, including those of multilateral development banks and Japan, AusAID and Austrade held seminars in Sydney and Melbourne, which were attended by more than 600 people. Australia's aid agency was renamed in March. In place of the Australian International Development Assistance Bureau (AIDAB), the new name is AusAID - the Australian Agency for International Development - part of a wider strategy to raise public awareness of the aid program.

The Department continued to develop the global network of posts which it operates in conjunction with Austrade. New posts were opened in Ho Chi Minh City, the hub of much economic activity in Vietnam and in Almaty, capital of Kazakhstan, economically the most important central Asian state to have emerged from the former Soviet Union.

Making the Department more efficient, open and accountable, as well as a challenging, satisfying and family-friendly place of employment, remains a key objective. In this context we initiated a series of major internal reviews of operations. These are intended to develop innovative approaches to our personnel, financial and other areas of administrative activity so that officers can reduce the time spent on administration while still meeting the requirements of public accountability. The full impact of these reviews will not take effect until the current financial year but we have already, in pursuit of our commitment to continuous improvement, implemented changes to our internal evaluation systems. Matching our resources as effectively as possible to our priorities is an ongoing task which will continue to demand much hard work, imagination and adjustment. We are conscious that much remains to be done.

I should like to thank Philip Flood AO for his contributions to Australia's aid program as Director-General of AusAID from 1993 to 1995. His leadership saw significant progress in many aspects of Australia's aid program and encouraged a creative and responsive organisational culture.

The year was marked sadly by the death of Dr Peter Wilenski AC, who was Secretary of this Department in 1992-1993, after which he served as Special Government Adviser. He was a very distinguished and humane public servant, who is appropriately commemorated by a series of public lectures and by the name of the Wilenski International Conference Centre in the new Foreign Affairs and Trade building.

The Department of Foreign Affairs and Trade Annual Report 1994-95 is provided in accordance with sub-sections 9B(2), 25(6) and 25(7) of the Public Service Act 1922.

Sub-section 34C of the Acts Interpretation Act 1901 requires the report to be furnished as soon as practicable and in any event by 31 December. Sub-section 25(8) of the Public Service Act requires the report to be placed before each House of Parliament within 15 sitting days after the day on which ministers receive it.

This report includes information about agencies in the Foreign Affairs and Trade portfolio which do not submit separate annual reports to Parliament, including the Australian Agency for International Development (AusAID) and the Australian Secret Intelligence Service (ASIS). It complies with sub-section 8(3) of the Freedom of Information Act 1982, sub-section 22C(10A) of the Public Service Act (on industrial democracy), section 74 of the Occupational Health and Safety (Commonwealth Employment) Act 1990 and section 20 of the Political Broadcasting and Political Disclosures Act 1991, inserted as section 311A into the Commonwealth Electoral Act 1918, as well as the Government's requirements for the preparation of annual reports and section 50 of the Audit Act 1901.

M. J. Costello