Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act to appropriate money out of the Consolidated Revenue Fund for expenditure in relation to Australia’s official development assistance multilateral replenishment obligations, and for related purposes
Administered by: Foreign Affairs and Trade
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Registered 24 Oct 2019
Introduced HR 24 Oct 2019

2019

 

 

THE PARLIAMENT OF THE

COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

official development assistance multilateral replenishment OBLIGATIONS
(special appropriation) bill 2019

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by authority of the Minister for Foreign Affairs and

Minister for Women, Senator the Hon Marise Payne)


official development assistance multilateral replenishment obligations
(special appropriation) bill 2019

OUTLINE

This Explanatory Memorandum accompanies the Official Development Assistance Multilateral Replenishment Obligations
(Special Appropriation) Bill 2019
(the Bill).

The purpose of the Bill is to appropriate money from the Consolidated Revenue Fund (CRF) to meet the following Official Development Assistance Multilateral Replenishment Obligations:

·                     The World Bank’s International Development Association;

·                     The World Bank’s debt relief schemes including the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative;

·                     The Asian Development Bank’s Asian Development Fund;

·                     The Global Environment Facility Trust Fund; and

·                     The Multilateral Fund for the Implementation of the Montreal Protocol.

Consistent with our membership arrangements of the above multilateral organisations, Australia pledges towards a replenishment every three to four years with the cash payments being made over a three to ten year period.

The International Development Association (IDA), implemented through the World Bank Group, is the largest pool of concessional finance in the world. It provides grants, technical expertise and concessional loans to promote growth and reduce poverty in the world's poorest and most vulnerable countries. The IDA is important to Australia as it delivers in ways that are beyond the capacity of any bilateral donor.

The Heavily Indebted Poor Countries Initiative (HIPC Initiative), implemented through the World Bank Group, provides debt relief to eligible HIPCs on debt owed to participating multilaterals.  The HIPC Trust Fund can prepay or purchase a portion of the debt owed to a multilateral creditor and cancel such debt, or pay debt service as it comes due.

The Multilateral Debt Relief Initiative (MDRI) also implemented through the World Bank Group, provides for one-hundred percent relief on eligible debt from three multilateral institutions – the International Monetary Fund, the International Development Association and the African Development Fund – to a group of low-income countries.

The Asian Development Fund (ADF) through the Asian Development Bank (ADB) provides grants to ADB's lower-income developing member countries. Activities supported by the ADF promote poverty reduction and improvements to quality of life in the poorer countries of the Asia and Pacific region.

The Global Environment Facility Trust Fund (GEF) addresses global environmental issues and supports sustainable development activities in developing countries across five international conventions covering climate change, biodiversity, desertification, organic pollutants and mercury. Through our contributions to the GEF, Australia fulfils our obligations under a number of multilateral environmental agreements to which we are a party.

The Multilateral Fund for the Implementation of the Montreal Protocol (MPMF) assists developing countries to phase out ozone depleting substances under the Montreal Protocol on Substances that Deplete the Ozone Layer. Australia supports the MPMF as an integral part of the Montreal Protocol infrastructure to help protect and restore the ozone layer and reduce its effects on the climate system.

FINANCIAL IMPACT

This Bill does not involve any additional underlying cash impacts as the expenditure for existing obligations and estimates for future obligations are funded from the agreed Official Development Assistance envelope.  On average, Australia pays AU$350 million annually for existing obligations.

Human rights implications

 

The Statement of Compatibility with Human Rights appears at the end of this Explanatory Memorandum.

 

 

 

 

NOTES ON CLAUSES

Part 1 – Preliminary

Clause 1 – Short title

Clause 1 is a formal provision specifying the short title of the Bill, which, when enacted, is to be cited as the Official Development Assistance Multilateral Replenishment Obligations (Special Appropriation) Act 2019.

Clause 2 – Commencement

Clause 2 provides that the Act will commence the day after it receives Royal Ascent.

Clause 3 – Definitions

Clause 3 provides definitions of the terms and expressions used in the Bill and lists the various international multilateral organisations that Australia is a member of and the relevant Acts that covers Australia’s membership.

Clause 4 - Payments required to be made

Clause 4 lists the international multilateral organisations and the mechanism through which Australia provides its commitment to provide funding to each replenishment.

Clause 5 - Issue of promissory notes

Clause 5 authorises the Treasurer, as the responsible Minister, to make and issue promissory notes to the international financial institutions identified in Clause 4 in accordance with the approved instrument of commitment or contribution agreement signed at the time of each pledge. 

Promissory notes are financial instruments that are frequently used as part of a process to discharge the Government’s obligations to international financial institutions. 

The promissory notes will be non-negotiable, non-interest bearing and payable at par value on demand.

Promissory notes provide both parties with more control of encashments but can still be considered by the international financial institutions as an asset.

 

The issuance of promissory notes does not authorise an appropriation for discretionary activities such as Australia’s contributions to specific trust funds or a contribution towards a capital subscription increase managed by the international financial institutions.

In the event that the Government determines that Australia should provide funding to a specific trust fund or to contribute towards an increase in capital subscriptions, then an appropriation would need to be made available through the annual budget process.

Clause 6 - Appropriations

Clause 6 authorises the Consolidated Revenue Fund to be appropriated for the purposes of making payments to the international financial institutions listed in Section 4 of the Bill.

 

 

 


 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Official Development Assistance Multilateral Replenishment Obligations (Special Appropriation) Bill 2019

1.      This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

2.      This Bill is to provide a standing (special) appropriation for expenditure in relation to Australia’s official development assistance multilateral replenishment obligations to the following organisations:

·         The World Bank’s International Development Association;

·         The World Bank’s debt relief schemes including the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative;

·         The Asian Development Bank’s Asian Development Fund;

·         The Global Environment Facility Trust Fund; and

·         The Multilateral Fund for the Implementation of the Montreal Protocol.

3.      The broad focus of these multilateral organisations is development and debt relief for the world’s poorest countries and global environmental issues. As part of its membership arrangements to the above multilateral organisations, Australia pledges to a replenishment contribution every three to four years, and generally makes cash payments over a three to ten year period. 

4.      Contributions from member countries, like Australia, enable the multilateral organisations like the International Development Association and Asian Development Fund to fund programs and initiatives that promote governance, capacity building, economic transformation and jobs in the poorest regions of the world, as well as development interventions that tackle conflict, fragility and violence, forced displacement, climate change, and gender inequality.

5.      Whereas, member contributions to the Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief Initiative provide these organisations with funds that enable them to provide debt relief aimed at ensuring that the poorest countries in the world are not overwhelmed by unmanageable or unsustainable debt burdens.

6.      Finally, contributions to the Global Environment Facility and Multilateral Fund for the Implementation of the Montreal Protocol support these multilateral organisations to fund global projects that attempt to address environmental issues, such as climate change, land degradation, biodiversity, sustainability and management of water resources.

Human rights implications

7.      This Bill engages the following human rights:

·                     Right to equality – Article 3, Convention on the Elimination of All Forms of Discrimination against Women (CEDAW);

·                     Right to an adequate standard of living - Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR); Articles 5(e)(iii) of the Convention on the Elimination of All Forms of Racial Discrimination (CERD); Article 14(2) of the CEDAW; and Articles 24(2) and 27 of the Convention on the Rights of the Child (CRC); and Article 28 of the Convention on the Rights of Persons with Disabilities (CRPD).

Right to equality and an adequate standard of living

8.      Article 3 of the CEDAW provides that State Parties shall pursue measures in all fields, in particular in the political, social, economic and cultural fields, to ensure the economic development and empowerment of women.

9.      Article 11(1) of the ICESCR provides that State Parties shall take all appropriate steps to ensure realisation of the right of everyone to an adequate standard of living, including adequate food, clothing and housing, and to the continuous improvement of living conditions.

10.  Article 5(e) (iii) of the CERD provides that State Parties shall undertake to eliminate racial discrimination in all its forms and to guarantee the right of everyone to the enjoyment of rights, including the right to housing.

11.  Article 14(2) of the CEDAW provides that State Parties shall pursue measures to eliminate discrimination against women in rural areas in order to ensure that they participate in and benefit from rural development and, have rights including, to:

·                     participate in development planning at all levels;

·                     have access to adequate health care facilities;

·                     organise self-help groups and co-operatives to obtain equal access to economic opportunities through employment or self-employment;

·                     to have access to agricultural credit and loans, marketing facilities, appropriate technology and equal treatment in land and agrarian reform as well as in land resettlement schemes; and

·                     to enjoy adequate living conditions, particularly in relation to housing, sanitation, electricity and water supply, transport and communications.

12.  Article 24(2) of the CRC provides that State Parties shall take appropriate measures to:

·                     diminish infant and child mortality;

·                     ensure the provision of necessary medical assistance and health care to all children, with emphasis on developing primary health care; and

·                     combat disease and malnutrition, including within the framework of primary health care, including through, the application of readily available technology and the provision of adequate nutritious foods and clean drinking-water.

13.  Article 27 of the CRC provides that State Parties shall take appropriate measures to assist those responsible for the child to ensure that each child has access to a standard of living adequate for the child's physical, mental, spiritual, moral and social development; and provide material assistance and support programmes where needed, particularly with regard to nutrition, clothing and housing.

14.  Article 28 of the CRPD provides that State Parties shall take appropriate measures to ensure persons with disabilities have access to an adequate standard of living for themselves and their families, including adequate food, clean water services, clothing and housing, and to the continuous improvement of living conditions.

15.  Australia’s replenishment contributions to the above multilateral organisations assist in global efforts to reduce poverty, alleviate suffering and promote sustainable development, as well as to take effective action on global environmental issues, like climate change.

Conclusion

16.  This Bill is compatible with human rights because it promotes the protection of human rights, in particular the right to equality and an adequate standard of living.