Senator McEWEN (South Australia—Government Whip in the Senate) (10:01): by leave—At the request of the Chair of the Environment and Communications Legislation Committee, Senator Cameron, I move:

That the Environment and Communications Legislation Committee be authorised to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today, from 10 am.

Question agreed to.

Senator CASH (Western Australia) (10:02): I rise to speak on the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 1) 2012-2013 and the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 2) 2012-2013. In debating these bills it is important that Australians clearly understand the reason the government is introducing these bills; why they have been rushed into the parliament so soon after, and in addition to, the 2012-2013 budget bills; and, more importantly, if these bills are passed, what impact these bills will have on the Australian taxpayer. So what is the government's reasoning and intentions by rushing these bills into the Senate?

These are bills that will appropriate additional money out of the Consolidated Revenue Fund to pay for the costs associated with the implementation of the report of the Expert Panel on Asylum Seekers and related purposes. Appropriation Bill No. 1 provides for an additional injection of just over $1.4 billion and Appropriation Bill No. 2 provides for an additional $267,980,000, giving a total appropriation for these two bills of $1,674,982,000. Let's now put that into plain English so that the Australian people understand exactly what the Senate is being asked to do today by this government. Why does the government need an additional $1,674,982,000? Because of the government's gross incompetence when it comes to managing Australia's borders, the government, consistent with its form since it was voted into power in November 2007, has come back to the Australian taxpayer and is once again asking for the taxpayer to pay more money. The government, because of its ideological hang-ups and incompetence, has destroyed Australia's very strong border protection regime and is now continuing to plunder the pockets of the Australian public so that it can continue to pay for its political ineptitude.

Interestingly, an examination of the reasons set out for introducing these bills shows as follows. There is the need to provide additional funds to open the Nauru detention centre and the Manus Island detention centre. One might recall that these are the same two detention centres that were the substance of a bill introduced in 2006 by the then Prime Minister, John Howard. It was the Migration Amendment (Designated Unauthorised Arrivals) Bill 2006. Who can forget the hysterical comments of the Labor opposition at the time as they embarked on a campaign across Australia to vilify the then Howard government for seeking to process illegal boat arrivals offshore? The Left, the Right and the Centre of the Labor Party united on this point. They travelled across Australia and screamed out their indignation and their total opposition to what they said was a gross injustice and a total breach of human rights: processing illegal boat arrivals offshore. They then swore to the Australian public, to the Australian voters, that they were a party of principles and they could never ever vote for what they said was a disgusting and disgraceful breach of human rights.

Some Labor members even said at that time that the Howard government bill was unconstitutional and if passed by the parliament would result in a massive compensation issue for Australia in the future. Yet here we are today, debating appropriation bills, with the government asking for an additional $1,674,982,000 to pay for offshore processing on Nauru and Manus Island.

There is no doubt that the left wing of the Labor Party in particular, in voting for this legislation today, are complete, total and utter hypocrites. They say one thing to the Australian public, but when Ms Gillard pronounces that they will now support offshore processing what do they do? They roll over in caucus—the Prime Minister scratches their little stomachs and they betray their so-called principles. They do this because they never had any principles in the first place. For those on the Labor side of politics let us now remind you of some of the previous hysterical claims of some of the Labor members who are now urging the parliament to pass these bills today. And these bills, remember, are intended to establish the very acts that Labor so passionately and vehemently opposed when they were introduced by a coalition government in 2006. In 2006 Chris Bowen, now the minister responsible for immigration issues and Australia's border security, said this about the Migration Amendment (Designated Unauthorised Arrivals) Bill 2006:

This is a bad bill with no redeeming features. It is a hypocritical and illogical bill . If it is passed today, it will be a stain on our national character. The people who will be disadvantaged by this bill are in fear of their lives, and we should never turn our back on them.

He went on to say:

The Howard government changing our system to suit the concerns of another nation is nothing short of a disgrace. The Prime Minister is selling out our national sovereignty. This tragic and discriminatory policy does not come cheap. … offshore detention centres … are much more expensive than detention centres in Australia. We have the worst of all worlds—an expensive, discriminatory and tragic policy.

But then came the cruncher about repealing the Howard government bill if it were passed. What did Mr Bowen say on that point? He said:

We will oppose this bill, and I call on members opposite to join us. If it is passed, it will be repealed by an incoming Labor government. Decency and self-respect as a nation would demand nothing less.

Well, what do we have today? Mr Bowen is now actually pleading with the opposition to ensure that this bill passes the Senate today—the bill which he said in 2006 the Labor government would repeal if it were passed. And what about Simon Crean? Mr Crean, as we know, is a minister and was previously a Labor Leader of the Opposition. What did Mr Crean say in 2006 when speaking on the Howard government bill? He said:

It does nothing to secure our borders and returns to the government’s old policy of deterrence and punishment based on fear. It is a bill that should be opposed.

Well, Mr Crean, I understand, will vote for it. Dick Adams, the member for Lyons, said this:

The bill means that if in future people fleeing persecution arrive on Australia’s mainland in a canoe, they will be sent to Nauru to be processed and Australia will act as though it has no obligations. Under this proposal, children will be in detention again. We will see indefinite detention come back.

And then, of course, there were the comments of well-known left-wing faction leader Anthony Albanese, who is now a senior Labor minister. Back in 2006 he had this to say:

I wish to speak in the strongest possible terms in opposition to the Migration Amendment (Designated Unauthorised Arrivals) Bill 2006. This government has a policy that is built on sand. It shifts with the wind, it shifts on the basis of what is in the political interest of the government in terms of its preparedness to promote fear, to promote hatred and to vilify some of the most vulnerable people in the global community. It is no way for this parliament to provide the leadership that we have been entrusted to provide by our respective communities.

And he concluded his comments with:

We need a government that is prepared to promote hope over fear, and we need a government that is prepared to respect the human rights of all individuals. I urge the House to reject this abhorrent legislation.

Just to remind everybody, in case we think we are actually about to reject this legislation, Minister Bowen has been pleading with the shadow minister for immigration and the coalition to ensure that this 'abhorrent' legislation, as they called it back in 2006, is passed by the Senate today. I wanted these hypocritical comments of Labor members in 2006 to be recorded in Hansard to remind Australian voters that the Labor Party are not a party motivated by principle. The Labor Party would not know what principles are. They wake up in the morning and sniff the public attitude of the day, and their principle is actually determined that morning. They are motivated by sheer power. The left wing of the Labor Party in particular will be voting with the coalition to ensure this legislation goes through. They have forsaken Labor principles on the altar of political hypocrisy and duplicity. That must make those on the left of the Labor Party very, very proud!

Labor's mismanagement of the immigration portfolio and failure to secure Australia's borders has cost the Australian taxpayer dearly over the last five years. That cost is reflected again today and it is a cost that continues to be out of control. To see the failure of the government's border protection policies and the astonishing fiscal ineptitude of successive Labor governments when it comes to this particular portfolio, you need look no further than Labor's 2011-12 billion-dollar budget for asylum seekers. That billion-dollar budget was ironically based on just 750 arrivals for that particular financial year. It was a rather absurd target, one might say, given that this is the evidence.

Since the election of the Labor government in November 2007, and as a direct result of the Labor government reversing the strong and proven border protection policies of the former, Howard government, 29,868 people have arrived on 512 boats. An even more glaring statistic under the current Gillard government is that, notwithstanding the promises that the Labor Party made to the Australian people in the lead-up to the 2010 election, the total number of boat arrivals since polling day on 21 August 2010 is 358 boats carrying 22,519 people. The former Prime Minister, former Minister for Foreign Affairs and now backbencher, Mr Rudd, must choke on his breakfast daily when he gets the updated boat arrival numbers that come through every morning. You have to remember that one of the reasons Ms Gillard politically executed Mr Rudd was her allegation that Mr Rudd's border protection policies were failing. How ironic for Mr Rudd.

In the first five months of this financial year alone—July, August, September, October and we are now into November—9,957 people have arrived on 177 boats. That is in the first five months of this financial year. This just shows how out of touch the Labor Party are with reality. It also shows just how out of touch they are in relation to the cost blow-out of their border protection policies, because the Labor budget for the immigration portfolio for the 2012-13 financial year was based on just 3,000 arrivals. The budget for the entire 12 months was for 3,000 arrivals; in the first five months there were 9,957. If you were to merely double that number to see what might happen over the next six months, you can see an almost sixfold budget increase.

And that is not the only impact that Labor's gross fiscal ineptitude and failures in this policy area is having. Australians are also now paying an extra $1.1 million per day purely because of Labor's failure in this portfolio area alone. Compare what Australians were paying under the Howard government with what they are paying now: under the Howard government they were paying nothing; now Australians are paying $1.1 million per day for the policy failures in this portfolio alone. Australians should ask themselves how many extra hospital beds, how many additional classrooms and how many additional computers could be provided to Australian citizens for the billions of dollars that are now being used to fund Labor's border protection failures.

We saw the poll today in relation to the impact of the carbon tax. Only three per cent of the mums and dads of Australia think they are better off. I think 38 per cent of Australians now say they are worse off as a direct result of the implementation by the Labor Party, and, of course, their friends the Greens, of the carbon tax. What you have is the mums and dads of Australia, who are already struggling under the rising costs of living and who cannot afford to pay their electricity bills because of Labor's carbon tax, being slugged time and time again because of Labor's failures in this particular portfolio area. The Labor Party should have the decency to at least come clean with the Australian people and justify how, in five years of successive Labor governments, we have gone from a situation where, under the former, Howard government, Australia's immigration and citizenship portfolio in this policy area was costing the Australian taxpayer approximately $85 million per year—that is $85 million per year. It has now cost Australian taxpayers, over five years, in excess of $6 billion compared to $85 million per year. Just two years ago, in 2009-10, Treasurer Swan got it so very wrong when he said to the Australian people that the cost of managing asylum seekers going forward would be $455 million over four years. Here we are today—five months after we passed the most recent budget—and the Senate is being asked to appropriate an additional $1.6 billion. Treasurer Swan was so very wrong. He thought it would be $455 million; we are now looking at in excess of $6 billion in this area alone.

The Australian public need to understand: when we say $6 billion in this area alone, this does not include the costs that are absorbed by other departments, it does not include the costs to the Navy for its search and rescue work, it does not include the cost to Customs for its seaborne and airborne surveillance, it does not include the additional costs that Centrelink is now paying out and the drain on our social security budget, and it certainly does not include the additional costs that are now being placed on our health budget. The reality is this: if the Labor Party had just left the former Howard government's policies intact, we would not be having this debate today. The Labor Party would have no less than an additional $6 billion of taxpayers' money that they could apply towards the interests of Australian citizens. Instead, what are we doing? We are standing here today debating a bill that will provide the government with additional money to the tune of $1.6 billion so that they can establish the regional processing centres on Nauru and Manus Island—something that we did under the Howard government and something that the Labor Party said they would never, ever do as a matter of principle.

Minister Bowen will now go down in history as the biggest-spending minister for immigration of all time. That is not something to be proud of. When it comes to the immigration policy around detention centres, you actually want to be spending next to zero. As we move closer to the next federal election, this just shows Labor have no principles. (Time expired)

Senator HANSON-YOUNG (South Australia) (10:22): I rise today to speak on the two bills before us which the government has put forward, the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 1) 2012-2013 and the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 2) 2012-2013, asking for even more Australian taxpayers' money to be spent on inhumane, impractical and failing policies.

During the last few weeks of this parliament's sitting we have debated this issue of offshore processing over and over again. We continue to hear from the government that locking people up indefinitely on Nauru and Manus Island will be the only way to stop people from fleeing war and trying to come to Australia for safety. What a load of bollocks! It has failed. Deterrents do not work when you are forcing people to make a choice between freedom and safety or punishment for seeking protection for their families. These are people who are fleeing war, persecution and torture. Rather than punishing these people and wasting billions of Australian taxpayers' dollars, it would be much better for us to take the support and advice of the experts—which suggests that putting in place safer alternatives would be much better for both the taxpayer's pocket and human rights outcomes.

We have a refugee and humanitarian crisis—a rolling crisis. We have hunger strikes in Nauru. Those who have already been sent there are threatening, very seriously, their own lives. We have one man who has been on a hunger strike for 39 days. He is very ill. Unfortunately, it may be that, without proper intervention from the government, this man will not survive the next few days. This man—and I urge him to end his hunger strike because I do not think it is helpful for him; obviously we do not want to see people taking their lives in their hands like this—is protesting using the only weapon he has, his own body, to make a very pointed observation about how bad the conditions are for refugees on Manus Island. His issues have been raised and conferred on by some of the world's most eminent experts on refugees and those seeking protection around the world. The United Nations has been very clear in condemning Australia's indefinite detention on Nauru and the freezing of the processing of the claims of those kept on Christmas Island and, increasingly, on the Australian mainland.

We have had the United Nations refugee body, the UNHCR, say that this principle of 'no advantage' is ludicrous. It is meaningless. It has no weight. And yet, when we were in this very place only three months ago debating the legislation which allows the government to dump people in Nauru, the then Minister—Senator Lundy, who is in the chamber—representing the Minister for Immigration and Citizenship, Chris Bowen, told us that the government would work with the UNHCR to determine how the no-advantage test would be implemented. The UNHCR has said it cannot be implemented. It is meaningless. It is in breach of the convention and it is not going to work to stop desperate people fleeing danger and seeking safety.

This man, who is risking his own life in such an extreme and desperate manner, is also very concerned about how long he and other refugees will have to remain on Nauru. The government will not give us a time frame for how long people will be there. They cannot put a figure on it despite the fact that we know it is indefinite detention, by its very nature, that drives people to such desperate acts. The two bills before us are going to create a black hole into which taxpayers' money is going to continue to be thrown over and over again because there is no end in sight.

We know that we can assess people's claims quickly. We can ensure that those who have had their health and security tests done to make sure they are not a risk to the community have their claims assessed in much cheaper ways. Community detention, and the assessment of people's claims while they are living in the community, is 90 per cent cheaper and 100 per cent fairer—and yet that is not the path this government is taking. Rather than looking at the practical needs and coming up with a practical response to the issues of people fleeing war and persecution in our region, we have seen this government absolutely kowtow to the wishes and demands of Tony Abbott's coalition. It has not provided any solution to the numbers of people in our region who are seeking safety.

Let's go back to the list of things that are wrong with the current policy. We have hunger strikes in Nauru. We have conditions which have been labelled 'inhumane' by various international and Australian organisations. They have been condemned by the UN and the UNHCR. The Australian Human Rights Commission says that indefinite detention and the conditions on Nauru are extremely worrying. We have seen Amnesty International make statements and demand access because the conditions are so bad. We have locals on Manus Island protesting the building of the new facilities—even blockading the airport last week so the personnel who were being flown in to build the facilities, this new prison, could not get on with their work. The locals on Manus Island do not want this prison there either. We have rooftop protests at Villawood detention centre. We have tents being put up on Christmas Island because the numbers of people being detained there indefinitely is ballooning.

We know what happened last time we constructed tents on Christmas Island: the frustration, tensions and dangerous circumstances that arose meant that riots broke out in the immigration detention centre. It was a combination of inappropriate accommodation and, of course, the freezing of the processing of people's claims for asylum. That is exactly what is happening all over again. This government are absolutely incompetent when it comes to managing the needs of refugees. Rather than taking a practical response to a humanitarian issue, they are far more worried about whether they can win the race to the bottom with Tony Abbott and his coalition, who, frankly, do not give a damn about the human rights of refugees. They do not give two hoots about the conditions that refugees have to face on Nauru, Manus Island, Christmas Island or any of the other detention prisons scattered around the Australian mainland. They do not care how long people have to sit rotting simply because they fled war and persecution. They do not care about the rights, protections and needs of some of the world's most vulnerable children, who are those children who have had to flee war, persecution and the torture of their mothers and fathers.

The coalition do not care, and yet what we see is Julia Gillard locked in a race to try and beat them—beat Tony Abbott at his own game of not caring about refugees and asylum seekers. This not-caring, be-mean beat-up on refugees is costing the Australian taxpayer billions upon billions of dollars. The two bills that we currently have before us are to allow another $1.6 billion to be spent continuing a regime that is inhumane, does not work and is only putting vulnerable refugees in more danger.

I want to go back to some of the conditions that the Houston report identified as needing to be met if indeed the Australian government were to reopen the hellholes of Nauru and Manus Island. Page 48 of the Houston report says that, if we are going to send refugees to Nauru and Manus Island, we need these things in place:

treatment consistent with human rights standards (including no arbitrary detention)

We have not achieved that; in fact, we have achieved the very opposite. The UN has said those conditions are not being met.

appropriate accommodation

Again, wrong; that condition is not being met.

appropriate physical and mental health services

Some of the country's most eminent mental health experts have said it is extremely worrying to see the conditions that are being created on Nauru. Of course, the hunger strikes of the last few weeks, and of one refugee in particular, who is very, very unwell, are a very good example of how poor those physical and mental health services are.

access to educational and vocational training programs

Again, where are they? None of those things were put in place before we started dumping people there indefinitely.

an appeal mechanism against negative decisions on asylum applications that would enable merits review …

Again, we have seen the UNHCR ask what has been put in place. Expecting a small and impoverished country like Nauru to manage that process when they have had no experience of doing it before is simply inappropriate, and we in Australia cannot be washing our hands of our responsibilities in that regard.

monitoring of care and protection arrangements by a representative group drawn from government and civil society in Australia and Nauru

This was another condition that the Houston report said needed to be provided if we were to send refugees to Manus Island and Nauru. Again, the government has failed. They do not have this in place.

They have absolutely failed to uphold the obligations that they said they would meet.

providing case management assistance to individual applicants being processed in Nauru.

I would like to know what case management and appropriate assistance is being given to individuals who feel they are so in harm's way that they have to take their own lives to make a point about how bad the government are at managing the needs of vulnerable people.

This bill asks us to spend an extra $1.6 billion making people's lives even more miserable, putting children in more harm's way, ensuring that billions of Australian taxpayer dollars will be spent on us not fulfilling our international obligations, ensuring that we do not play by the rules we have signed up to, not protecting vulnerable children. This bill is asking us to spend $1.6 billion on doing the complete opposite to what the UNHCR and UN bodies ask us to do. And all for what? So we can stop the boats? The boats have not stopped, have they? They are coming in record numbers.

Deterring people from leaving their homelands that are riddled with war without giving them a safe option does not make any sense. It is illogical to ask a mother and a father and their children to 'just stay put' while the Taliban is chasing them down and murdering their other family members. It is impractical, it is illogical, it is inhumane and it does not do anything to deal with those who are in our region seeking our protection. It is inconsistent with our obligations and inconsistent with the basic value of the Australian fair go.

I will be moving an amendment to this bill which calls for a 12-month limit on the length of time that people should be left on Nauru and Manus Island. I do not want people there at all, but they are there, and the government are so obsessed with competing with Tony Abbott in a race to the bottom of the barrel that they are going to continue to send people to this hellhole. So let's at the very least put some type of time limit on it. You cannot tell me that in 12 months Australian bureaucrats cannot get through the applications of people. They will get 12 months to assess people's claims, and if they are found to be in genuine need of protection then we welcome them. If they are not then we send them home. But let's keep it confined to a time limit. Let's not be back here in 12 months having to fork out even more billions of dollars of Australian taxpayer money just to keep Julia Gillard and Tony Abbott at one in being inhumane to refugees.

The Houston report also said that we needed to spend more money on allowing assessment by the UNHCR in countries like Malaysia and Indonesia. The report recommended that the money be doubled to $140 million. The government has ignored that advice and put up $10 million, so guess what? The boats will keep coming. People come to Australia to get their claims assessed because there is no capacity for it to be done further back along the line. If we want to give people a safer option so they do not have to risk their lives to come to Australia on leaky boats, then we need to give them other assessment options. The Houston report said $140 million, and the government, despite spending billions of dollars on an island prison in Nauru, have only given the UN $10 million. Our amendment calls for that extra $140 million, as recommended by the expert panel. We also want to see an independent health panel established because we know the conditions in Nauru are not right and people should be able to access assessment independent of those facilities.

The bills before us are a shame on this government. The bills before us spend billions of Australian taxpayer dollars, all to keep Julia Gillard in the Lodge. It is disgraceful. I move:

At the end of the motion, add:

but the Senate calls for the appropriation of funds for offshore processing to occur only when:

(a) a 12 month time limit on the detention of an individual in Papua New Guinea or Nauru is established;

(b) funding for a regional co-operation framework, and capacity building initiatives, is doubled to $140 million as recommended by the Expert Panel on Asylum Seekers;

(c) an Independent Health Care Panel to oversee the physical and mental health of asylum seekers sent offshore is established; and

(d) all contracts for services between the Australian Commonwealth and service providers in Papua New Guinea and Nauru, including costs and operational protocols, are tabled in Parliament.

Senator IAN MACDONALD (Queensland) (10:43): This bill will not keep Julia Gillard in office; it is the Greens political party that keeps the current Prime Minister in office. That was another speech from the party representing the loony left of the Australian political spectrum. That speech on behalf of the Greens political party was dysfunctional, inaccurate, lacking fact, certainly lacking logic and impractical. It clearly told untruths about Australia's obligations to the UNHCR and used the emotive words 'basic Australian values' without any understanding of what basic Australian values are.

It was a speech—yet again typical of the Greens political party—that was repetitive on how awful Tony Abbott is notwithstanding this is not Tony Abbott's legislation. But can the Greens see beyond Tony Abbott? Would the Greens ever attack the Labor Party or Julia Gillard? Never.

Anything that this government does that the Greens do not like suddenly is Tony Abbott's fault. That is how illogical and irrational the speeches that you will hear from the Greens political party are. Senator Hanson-Young made an emotive speech about the coalition not caring—she did not mention the Labor Party, mind you—how long people sit in these detention camps. I point out to Senator Hanson-Young what this is all about and why the coalition has been determined to secure our borders and stop people jumping the queue. Why we become involved in this whole purpose of protecting our borders and making sure that all refugees in the world apply by the rules of the UNHCR is this: there are around the world at the current time 10 million people determined, calculated and assessed to be refugees. They are living in squalid camps around the world and have been there for years. They are waiting for their turn to get into Australia, Canada or Europe. They are complying with the rules. They are not 'possible' refugees; they have been determined by the UNHCR to be refugees and yet they sit in squalid camps around the world—10 million of them—waiting for that one chance they will eventually have to get into Australia. But every time someone who is not yet determined to be a refugee jumps the queue and comes into this country then those people who have been determined to be refugees and who have been waiting years—some of those 10 million people—have to wait yet another year for their chance. Those 10 million people, who are determined, calculated and assessed to be refugees, are waiting their turn in accordance with the UNHCR rules.

That is why we in the coalition are determined to play by the UNHCR rules. Unlike Senator Hanson-Young—who, apart from mouthing the words, would not know what the basic Australian fair value is all about—the coalition knows the basic Australian fair value. The basic Australian fair value is that if you have been waiting in a squalid refugee camp somewhere in the world, if you have been determined to be a genuine refugee, then you take your place in the queue, and when a spot becomes available in Australia you come in. But, every time these people are not prepared to play by the rules, those who are wait yet another year.

I would like to hear the next speaker from the Greens address that issue. I would love to hear what the explanation is of that. Don't they care about the other 10 million refugees? I will use Senator Hanson-Young's words: the Greens 'do not care' about the 10 million assessed refugees sitting in squalid camps around the world. They want to give the places in Australia, the places that the Australian government determines we will accept every year, to the queue jumpers. Tell me how that complies with Australia's basic values. Tell me how that complies with the UNHCR. Senator Hanson-Young then goes on and says what squalid conditions there are in Nauru. Can I just tell Senator Hanson-Young that there are people, proud people, who happily live in Nauru. They are called Nauruans. There are people of Papua New Guinea. They live there happily. Senator Hanson-Young would have you believe that Nauru is a place like hell and that nobody but nobody would ever live there. But sorry: there are people who do live in Nauru and Manus Island, and do it happily.

Senator Hanson-Young then says that this proposal today is meant to stop the boats, and it has not stopped the boats. I say to Senator Hanson-Young that, if she were interested in logic and truth and fact, she should have a look at when the boats did stop: there were establishments set up in Nauru, there were other measures put in place, and the boats did stop. This government—the Labor government—after years of saying they would not open Manus and Nauru are now doing it, but unfortunately they are only doing one of three elements of John Howard's policy, which actually did stop the boats coming and did save lives. It did stop those hundreds of people who have been killed trying to get to Australia illegally. John Howard's policies stopped that. The Greens and the Labor Party policies have encouraged people to come into our country illegally and, in so doing, many have regrettably lost their lives.

Senator Hanson-Young, with her typical feigned emotion, again talks about suicide. I for one am distressed by, and would do anything I could to stop, anyone suiciding, and I am distressed to hear from Senator Hanson-Young at least that this is occurring in Nauru and Manus Island at the present time. I mention in passing that Senator Hanson-Young did not seem to have the same concern when people in the cattle industry were considering taking their lives because of the mess they were left in financially as a result of the Greens' and Labor Party's live cattle ban. There are Australians who, because of a government policy, are considering taking their lives—a government policy that is egged on by the Greens. Have we heard one word, just one word, of concern from the Greens political party for those Australians in that same depressed mental state?

Have we heard one word from the Greens political party about those original Australians who are having their human rights taken from them by a combination, yet again, of the Labor Party and the Greens political party in trying to put World Heritage listing over Cape York? The first Australians in Cape York are at last understanding that the welfare mentality of the last five decades has done their people no good. They want to use their land in Cape York to build a better life for themselves and for their children. They are looking at any number of pursuits. I know; I was up there at a meeting 500 kilometres north of Cairns just a couple of weekends ago when about 250 people—about a third of them Indigenous people—came together to complain about the World Heritage listing of Cape York. Mind you, neither they nor I nor anybody else—apart from the Labor government and the Greens—seems to know what the rules are to be for the World Heritage listing. Nobody, apart from the Labor Party and the Greens and a few insiders, seems to know where the boundaries are proposed. That is part of the problem. But 250 people from all over Cape York drove for eight hours or flew for two hours to get to this meeting to express their concern that their rights to their land were about to be taken from them. And where were the Greens? Where were the human rights then? How were we looking after these disadvantaged people in yet more decisions from the Greens and the Labor Party that take away their rights to their land, to self-fulfilment and to their own futures for themselves and for their children?

Mr Deputy President, you may think—and people who are listening to this may think—that I am very critical of the Greens political party. And you are right. I am sick and tired of the feigned emotion, the illogical arguments and saying one side of the story. I challenge Senator Milne, who is speaking next, to tell me why these recent arrivals are more worthy than the 10 million refugees who are already assessed, who are sitting in camps around the world and who would be in Australia now—some of them—if it had not been for these people jumping the queue. Senator Milne will say, 'Oh, that's because the Australian government only takes 13,000 refugees,' or 20,000 refugees as it is about to be increased to. But what about the other 9,980,000, Senator Milne? Would you say, 'Open the borders and let them all come in'? I am sorry: Australia could not cope financially or socially. Australia has to do its part and, as we all know in this chamber, Australia punches well above its weight when it comes to acceptance of assessed refugees around the world.

We have nothing to be ashamed of in Australia. Our policy under many governments has been welcoming and open to those who comply with the UNHCR rules. Senator Hanson-Young says that we do not care—the coalition, not the Labor Party, I might repeat. She says that the coalition does not care about these children in these camps whose mothers and fathers have been tortured. How emotional can you get? We do not care about it, she says. Of course we care about it. That is why we want to look after the 10 million refugees whose parents also were tortured and who have been determined—assessed—to be refugees. But does Senator Hanson-Young mention that? Of course not. It does not suit the political mantra of the Greens at this particular time.

It is no wonder that Australians have at last woken up to what the Greens political party is all about. When you see a territory, a city, like Canberra rejecting the Greens you know that the Greens have lost the plot. I could have told people that years ago, but the rest of Australia now realises that the Greens have lost the plot. They are completely un-Australian in their view of what is Australian and, as I have demonstrated earlier in my speech, some of the comments by the Greens have a very blinkered view about what the Australian 'fair go' is.

This bill is about spending another $1.6 billion of taxpayers' money to try and fix yet another Labor Party failure. We are at a net debt currently—I cannot keep track of it; what is it today?—of $157 billion. In gross debt I think it is about $250 billion. What are we doing? I do not have the figures because they change by day, but we are spending $20 million a day—is it?—in interest payments to the foreign lenders for money that the Labor Party has had to borrow to try and correct its earlier mistakes. And here we are: only another $1.6 billion! Easy to say when it is not your money.

I can guarantee that those on the Labor benches, those on the Greens benches and many of us on this side too will get the same pay at the end of the month. But all those Australians out there breaking their backs to earn money to get a better life for them and their families in Australia are the ones who have to pay the additional taxes that Labor keeps imposing upon Australia to pay for things like this new $1.6 billion blowout to set up an operation that the Howard government had in place. It was there. You did not have to spend anything on it—well, you might have had to scrub up a few things; you might have had to wash the windows or the bathrooms. It was all there.

But what did the Labor Party do? They took it down, they dismantled it, they destroyed it and they let it fall into the ground. It was all there and it was working, and it was working because that was one of the three elements we used to stop the boats: send people offshore for determination and for processing; turn the boats around where it is safe to do so; and issue with temporary protection visas. But the Labor Party could only bring themselves to do one-third of what was needed to be done, and of course the boats have not stopped. The one true thing that Senator Hanson-Young said was that the boats have come with increasing regularity, and this bill spends that extra $1.6 billion to fix up what was already there. This is just part of $2.7 billion to run the various programs that are consequences of boats coming to Australia.

The Labor Party are pretending that they are going to have a surplus. Nobody believes that will happen; in fact we have already shown that it will not happen—they fiddled the books a bit. But here is another $2.7 billion being spent because Labor simply cannot control the borders and are not interested in doing it. Why aren't they interested in doing it? To do that they would have had to adopt John Howard's policies and they, like the Greens, said that anything that John Howard did was bad and anything that the Labor Party does is good. That is why they stopped a policy that was working. There cannot be any argument about that.

You will hear Senator Milne say that there have been new conflicts in Afghanistan and Sri Lanka and that is why there is a huge new increase. Sorry. There have been conflicts everywhere every year, regrettably. It is a sad state of the world's situation and there are always refugees looking for a better place. Australia welcomes them to the extent of our ability to look after them, but we want to take those who are playing by the UNHCR rules. That is fair. That is the Australian way. There is a set of rules. We welcome these people and we understand their torment and their torture and their turmoil and we want to bring them here to a new life. But every one of these failures of the Labor government coming in illegally to our shores is one of those already assessed refugees who has to wait yet another year to try to get to our country.

This is a bill that should not be necessary. If the Labor Party had not shown significant failure in this aspect of governance, as they have with everything else, this bill would not have been necessary. But because, belatedly, they are coming to the table in a partial way, it is something that should be looked at.

Senator MILNE (Tasmania—Leader of the Australian Greens) (11:03): I rise today to comment on the current bill before the Senate and, after Senator Macdonald's rather ugly and mean-spirited contribution, we would be hard-pressed to know what we are actually doing here. But we are debating the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 1) 2012-13 and the appropriation of $1.6 billion. That is where we are having a discussion today, about whether or not it is appropriate to spend that amount of money considering that a substantial amount of this money, $557 million, is going to the operating costs for Manus and Nauru for the rest of this financial year and you have got at least $267 million going for the capital costs. So $557 million of this is going to the construction of those detention centres and their operating costs, whereas the expectation was that the government was going to seriously fund the UNHCR regional capacity to assess asylum seekers regionally, to look at them and assess their status as refugees and move them through quickly and, at the same time, to increase our humanitarian intake.

I am pleased to say that part of the allocation of this money, $93 million, is going to the increase in the humanitarian intake. There is also an extra $8 million for family reunion places. But there is only $10 million for the UNHCR regional capacity. So we are going with $557 million for Nauru and Manus Island and $10 million to boost UNHCR regional capacity in Indonesia. I would suggest that it should be a much better balanced outcome than that, because $10 million is going to go in no small way to actually frustrating asylum seekers even more. They are going to see Australia more willing to pour those millions into keeping people in offshore detention centres indefinitely, contrary to our international obligations.

We sat here in this Senate when these bills went through in June and the Greens said very clearly that it would not stop the boats coming to Australia because deterrence does not work. People are going to continue to try to seek asylum in our country because they are running from appalling circumstances in Afghanistan and in other places around the world. We said that deterrence would not work and that this would not stop the boats. What would work was to increase our humanitarian intake and boost the UNHCR capacity.

Senator Lundy, who is in here today for the government, argued strenuously at the time that what Australia was doing was not contrary to our international obligations even though it is as clear as the nose on your face that in fact it is. The whole point of this legislation in the first place was to get around the High Court, which had said quite clearly that because there was no legally binding obligation to guarantee the rights of asylum seekers offshore—in Malaysia in particular—the legislation was not legal. This legislation that went through. All this hastily gotten together so-called compromise has done is breach Australia's standing internationally. People are looking at us now and saying, 'What is Australia doing, sending people offshore to indefinite detention?' That is what it is: indefinite detention.

I heard Senator Macdonald going on about people in this parliament not caring about others in Australia with mental health issues. Well, he could not be more wrong. I think it is a disgraceful thing to say, because I would say that people right across this parliament of all political persuasions are very concerned to protect mental health. There is no party more concerned about that than the Greens. We have argued strongly for a big injection of funds into mental health. My colleague Senator Penny Wright is currently conducting a survey in rural and regional Australia on mental health provision and how best to achieve that around rural and regional Australia.

We recognise that people need to be assisted in this way. That also extends to people in our care in detention. The government has put these people into detention. Human rights advocates and many very highly regarded health professionals are saying that one of the reasons why there is such a rapid deterioration in the mental health of people who are seeking asylum and sent offshore indefinitely is the fact that there is no hope and they see no end to it. They are stuck on Nauru or Manus Island and they have no end in sight. That is why several hundred of them went on a hunger strike recently and, in fact, at least two of them are seriously ill at this time. That is on the government's record. It is something they will have to take responsibility for.

Why are people left in indefinite detention when it is contrary to what Australia should be offering under human rights law? Because the government argues we want a no-advantage test. Yet where is this no-advantage test? It was an ill-considered concept. There was no meat on the bones when it was raced through this parliament. The Greens said at the time: what does the no-advantage test mean? You cannot apply an average across the region. We still do not know. So, on the basis of no advantage, people are shoved into indefinite detention and that is driving deterioration in their mental health.

I have a press release from the Australian Human Rights Commission. This goes to many of the rather ignorant remarks that we heard from Senator Macdonald a short while ago. The Australian Human Rights Commission's press release on Thursday, 1 November 2012 was entitled 'Migration Act amendments undermine Australia’s international law obligations'. I trust Senator Lundy is listening, because she told the Senate that what Australia was doing did not undermine Australia's international law obligations. You can only assume now that she misled the Senate at that time or believed it to be true at that time and now can no longer believe it to be true. We will see when the minister responds. The press release says:

The proposed amendments to the Migration Act requiring that asylum seekers who arrive anywhere in Australia by boat be taken to a regional processing country undermine Australia’s obligations under the Refugees Convention and other human rights treaties.

That is a fairly emphatic statement, Senator Lundy. It continues:

The Australian Human Rights Commission President, Professor Gillian Triggs says this legislation discriminates against some of the most vulnerable people in our region, based on the way in which they arrive in Australia.

“Australia is obliged to implement the Refugees Convention in good faith. The proposed amendments to the Migration Act undermine the Refugees Convention because they penalise asylum seekers who arrive in Australia by boat,” said President Triggs.

This is a point I made when we debated the legislation at the time. I said that the convention says you cannot discriminate against people on the basis of the manner in which they arrive. That is exactly what Australia is doing. The press release continues:

Professor Triggs said the Commission is concerned that transferring asylum seekers to a third country will lead to breaches of their human rights, including the right to be free from arbitrary detention and the rights of children to have their best interests considered in all actions concerning them, to be detained only as a measure of last resort and for the shortest appropriate period of time and for asylum seeker children to receive appropriate protection and assistance.

“States cannot avoid their international law obligations by transferring asylum seekers to a third country,” said President Triggs.

“Effectively all boat arrivals are already potentially liable to third country processing. However, preventing all maritime arrivals from having their protection claims assessed in Australia sends a message that Australia is not prepared to meet its human rights obligations to asylum seekers,” said President Triggs.

The Commission also holds serious concerns about the more than 5000 people potentially liable for transfer to a third country currently in detention in Australia.

“These people, including children, are currently indefinitely detained and face what is in effect a suspension of the processing of their claims for protection. The Australian Government should release these people from detention and process their claims for asylum as soon as possible,” said Professor Triggs.

There you have the Australian Human Rights Commission coming out so clearly saying we are behaving absolutely contrary to our obligations under the refugee convention and other human rights treaties. When the parliament raced this through only the Greens stood up and said it was contrary to all of our obligations and will not stop the boats. History has shown that that is absolutely what has occurred—it has not stopped the boats.

What interests me is that the whole crisis was brought on in June because a boat containing asylum seekers sank and a lot of people drowned. I said at the time that Australia knew on the Tuesday afternoon that that boat was in trouble but we did not go to their assistance until the Thursday, by which time 90 people had drowned. The question I have asked all along is: why is it that when we knew these people were in trouble we did not send the appropriate rescue at the time given our obligations under the International Convention for the Safety of Life at Sea, which is a fundamental maritime obligation?

I still pose that question because, since then, the Australian community has been oblivious to this—and they are oblivious to it because it has not been reported. Why was it reported then and not reported now? There is a story from a lone survivor who has been returned to Indonesia. His story is that he:

… clung to a rubber tube and drifted helplessly for three days before rescue as the sole survivor of a boat that sank en route to Christmas Island.

Habib Ullah, 22, of Karachi, said he was among 34 Hazara from Afghanistan and Pakistan aboard a rickety boat that left Indonesia on October 26.

Speaking from … detention centre in Jakarta, an emotional Mr Ullah said the engine failed and the boat started taking on water in treacherous conditions after about one-third of the voyage.

He described the horror of watching friends, many of whom could not swim, drown around him as he clung to the tube he took aboard with him.

"One by one they were drowning before my eyes," he said. "I could not do anything but watch. I witnessed about 18 to 20 people drown."

He said he was in despair as his hopes of rescue faded fast.

"I saw very big oil tankers but they were too far from me," he said. "I was at the mercy of the ocean and very scared.

"My face was burnt, my legs were sore and my whole body was in a critical condition."

He was semiconscious when fishermen picked him up and nursed him for five days before handing him to Indonesian officials.

Mr Ullah told his story to send a message to Prime Minister Julia Gillard and Opposition Leader Tony Abbott.

"Please accept asylum seekers because it is too dangerous to go back to our homeland," he said. "We Hazaras are very grateful to the Australian Government and people for their generosity that is willing to accept us into their society."

But he did not see offshore processing as the solution.

Mr Ullah said Hazaras in Pakistan and Afghanistan gambled with their lives just walking into the markets. "I want to complete my education in a safe environment where there is no prejudice or religious violence," he said.

Refugee advocate Victoria Martin-Iverson said it was the second boat lost in the last four months with neither reported in the media.

Shahin Tanin, of Brisbane, has grave fears for his cousin Mohammed Jawad, 40, left Jakarta 13 August.

Mr Tanin said none of the 26 Hazara passengers, including women and children, has been heard from. "I fear he has drowned or why wouldn't one of them contact us?" he said.

He said Mr Jawad was forced to flee Afghanistan after the Taliban threatened to kill him when he refused to join them.

Ms Martin-Iverson said she wondered how many lives were lost at sea without the public knowing.

In June, it was reported a boat with 67 asylum seekers disappeared en route to Christmas Island.

The issue here is: if the concern is about people losing their lives at sea, why is it that, since the legislation has been passed and these boats have now apparently been lost at sea, it has not even been reported in the media? And, if concern is about people being lost at sea, why is it that this policy has not been declared an abject failure because more people have risked their lives at sea since it was brought than before? Doesn't that say that the legislation that went through here did nothing to help people decide whether or not to get on one of those boats?

What will help to stop people getting on one of those boats is to give them hope, in those processing centres in Indonesia, that they can find a safe passage to Australia or to another country and not to be so despairing that this is their only alternative. Contrary to what Senator Macdonald said about queue jumping, there is no such thing as a refugee queue. You have to be realistic here. There are people in refugee camps all over the world. The Australian Greens are keen to see as many of those people as possible, once their countries get out of conflict situations, enabled to go back home or, if they are refugees from political persecution, helped to be placed elsewhere in the world. Of course we want to see that happen. What has been so mean-spirited about this government and, indeed, the Howard government is that, as they accepted people arriving by boat, they reduced the number of people coming from those camps. That is a decision of the Howard government and the Gillard government; that is not something that the Greens have endorsed.

In one day, 9 November this year, 11,000 Syrians crossed the border and were refugees—11,000 in one day. Would Senator Macdonald say that they were queue jumping because they sought to leave Syria in the most appalling circumstances? It is a nonsense idea. When people are in trouble, when they are being persecuted, when they are being set upon, of course they are going to leave. They are going to try to get somewhere safe and, as that young person said, somewhere to get an education and live a safe life. That is what Australia offers. No amount of leaving people on Nauru indefinitely is going to deter people seeking asylum in Australia. That is why deterrence has never worked. That is why this policy is going to get more and more expensive—and not only because of the operating expenses for Nauru and Manus. When I say 'expensive' I mean in terms of human lives, the deterioration in people's physical and mental health and the long-term exposure to the compensation claims that Australia will have to meet.

We need to reassess this policy and say it has not worked. Let's get realistic here and recognise that there are large numbers of people around the world seeking asylum. Let's do what we undertook to do when we signed up to the refugee convention. Let's respect that convention. Let's actually give people their access to natural justice. It is a disgrace in Australia that the legislation takes natural justice away from people. It takes away their ability to access the courts. One of the most disgraceful things that have been done—and this is a stain on the Gillard government, just as it was a stain on governments previously—is that the government brought legislation into this Senate which was passed by the majority of the parliament, with the exception of the Greens, to exempt the minister from his duty of care to children.

The High Court had said that, as the guardian of unaccompanied children, the minister must act in their best interests and therefore that cannot be to send them into offshore detention. So the government moved in this place to exempt the minister from his responsibility as a guardian of unaccompanied children and, as a result, those unaccompanied children do not have to be dealt with in the best interests. Senator Macdonald says the Greens do not know what Australian values are. I think I know what Australian values are when it comes to the protection of children. I do not think I would find a single person walking down the street who thinks it is appropriate that the minister legislates to exempt himself from guardianship and doing the right thing by children in order to send them indefinitely somewhere else, if he chooses to do so. That is not Australian. That is not something a parliament should be proud to have done, nor should we be proud to have taken away people's natural justice.

I want to see the humanitarian intake increased. I want to see more family reunion places. I want to see much more than $10 million going to boosting the UNHCR regional capacity, so that people can be assessed and so that they do not feel like they have no other option but to come on boats.

So let us not have any more pretence here: this has not stopped people risking their lives at sea. More people than ever have done so. And my question to the minister is: why hasn't the government made any statements about the lost boats? If there is such concern in the government about saving lives at sea then get rid of this policy and actually save lives at sea by massively increasing that humanitarian intake and by supporting the UNHCR in Indonesia to assess people and give them hope. Hope is the answer here, not despair, not punitive measures, not punishment and not out of sight, out of mind, indefinitely.

Senator LUNDY (Australian Capital Territory—Minister Assisting for Industry and Innovation, Minister for Multicultural Affairs and Minister for Sport) (11:23): I would like to thank senators who have made a contribution to this second reading debate on the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 1) 2012-2013 and the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 2) 2012-2013. These bills seek urgent appropriation authority from parliament for the additional expenditure of money from the Consolidated Revenue Fund. These bills require immediate passage to provide additional appropriation to the Department of Immigration and Citizenship. These bills address the increased cost of irregular maritime arrivals resulting from higher rates of arrivals, and the implementation of the recommendations of the Expert Panel on Asylum Seekers, including capital works and services for regional processing facilities on Nauru and Manus Island in Papua New Guinea. The total appropriation being sought through these two bills is $1,674,982,000.

Turning to appropriation bill No. 1, the total appropriation being sought is a little over $1.4 billion. This includes $110.6 million for Houston report measures, including $92.043 million to increase the humanitarian program by an additional 6,250 places to 20,000 places per annum from 2012-13. It also includes $8.181 million to increase the family reunion stream of the permanent migration program by 4,000 places, and it contains $10 million to fund capacity building or to add to our expenditure to date on capacity-building initiatives in regional countries. It also includes $1.296 billion to meet expenses arising from the management of higher levels of irregular maritime arrivals and the operational expenses associated with the implementation of the expert panel's recommendations to establish regional processing centres on Nauru and Manus Island. This does include $186 million accrual from 2011-12. Despite claims otherwise by the coalition, the funding sought in these appropriations is consistent with and already budgeted for within MYEFO.

The government will be opposing the Greens second reading amendment. I would like to address the series of four points contained in that amendment. Point (a) relates to the 12-month limit: the Greens, as we have heard from Senator Hanson-Young, are seeking to limit the time of detention. This issue was canvassed quite thoroughly when we originally debated the bills to implement the expert panel recommendations and it certainly would render void the concept of no advantage—people smugglers would be able to point to a limit of 12 months and would therefore again have a product to sell. So this amendment undermines completely the recommendations of the expert panel. As I know my Senate colleagues understand full well, we are committed to the whole package of recommendations by the panel.

In relation to point (b) of the Greens amendment, the bill provides $10 million for regional capacity-building measures. Additional funding for future years will be considered as is appropriate during normal budget processes. It would not be appropriate for any fiscally responsible government to agree to funding of this size in a forum like this. Unlike the Greens, this government has agreed in principle, as I just mentioned, to all of the recommendations of the Expert Panel on Asylum Seekers and we will continue to progress these recommendations. Obviously, future consideration will need to work through the budget processes and our normal consideration.

Point (c) of the Greens amendment calls for an independent healthcare panel. I would like to refer the Greens—I am sure they are already aware of it—to the submission by the Department of Immigration and Citizenship to the inquiry by the Senate Standing Committee on Legal and Constitutional Affairs into the Migration Amendment (Health Care for Asylum Seekers) Bill 2012. The department's submission outlines our approach. We as a government are pursuing an oversight advisory model that would include monitoring of mental health. The details and timing of these considerations are, as you would expect, in the hands of the minister. That submission is available on the committee's website and I refer the Greens senators to it for reference.

Point (d) of the amendment relates to contract services. It is important to note that there are available through the AusTender website some versions of these contracts, albeit redacted; we make no apology for not disclosing operational protocols in relation to these contracts and also the breakdown of the costs. We have provided, and will continue to provide, the overarching costs. Also, I note, in the context of this amendment, that some of those contracts are not yet in their final stage but the heads of agreement are, and we discussed those at length at Senate estimates. We provide information on all that wherever we can and wherever possible, as is the nature of our approach. I should wrap it up by saying that that was responding to the second reading amendment and that the government will be opposing the second reading amendment, for the reasons that I have outlined.

In relation to a couple of points raised by Senator Milne, we have not suspended any processing; it is true there are a large number of asylum seekers to be processed, but we continue to do this. We certainly maintain that our processing offshore on Manus Island and Nauru is in line with the refugee convention. In relation to the facts about lost boats, obviously if we are aware of boats we will make available, as has been the practice of the government right from the start, whatever information there is about tracking and issues related to lost boats so that it can be placed on the public record. So I am at a bit of a loss as to that point.

It is only this government, the Labor government, that is fully committed to delivering a proper and sustainable regional solution through the full implementation of the recommendations of the report of the expert panel led by Angus Houston. No-one should doubt the government's commitment to implementing these 22 recommendations and we will persist with it, including the presentation and passage of this bill in the House and now its debate here in the Senate. The aim is to break the people smugglers' business model and help stop people losing their lives tragically at sea on a very dangerous journey. And this is how responsible governments develop policy: by listening to the advice of experts and then acting on the recommendations, and that has included establishing regional processing on Nauru and in Papua New Guinea as soon as practical. We believe that the measures that we are putting in place will be an effective combination. Having an increased refugee intake from offshore and having no advantage for those who arrive by boat removes the attractiveness of attempting the expensive and dangerous journey to Australia. It undermines completely the people smugglers' business model. I have certainly made this point several times in this chamber and it is made consistently in the public debate—and I think that my colleagues, particularly those opposite, understand this full well. The suite of measures in the recommendations is the only way that we will see a reduction in the rate of boat arrivals, and, of course, the immediate implementation of regional processing will help us do that.

We have almost 400 people on Nauru currently and transfers will begin shortly to Manus Island. Nauru will have a capacity of 1,500 beds; it currently has about 500 places. We expect to see 600 places in Papua New Guinea as works continue on the facilities there. We are providing more opportunities for vulnerable and displaced people to pursue safer resettlement options in Australia and we are telling desperate people that there is a better way than taking a dangerous boat journey, a better way as part of an orderly humanitarian program. I remind my colleagues that we have increased that humanitarian program substantially. In fact, it is the greatest increase ever implemented and we are now proudly saying that, if you look at the number of humanitarian entrants on a per capita basis, you see we are the best-performing nation in the world in this regard.

The message here is that taking a dangerous boat journey will provide no advantage, that there is no visa awaiting people on arrival and that there is no speedy outcome or special treatment. This gives the lie to the people smugglers' spin. It exposes what they are offering as a complete sham. I think in the meantime we understand that, given the costs of processing and accommodating asylum seekers, it is expensive. It always has been. But the only way to reduce these costs is to have fewer people arriving by boat.

If the coalition were really concerned about the costs of processing and accommodating boat arrivals, it would not have for so long stood in the way of offshore processing legislation. We know why those opposite stood in the way of offshore processing, refusing to let the government implement its border protection policies. It was to score what can only be described as cheap political points. They do not want the government to succeed as it is not in their political interests, so I reject completely the accusation that somehow we are acting in an unprincipled way or in an inconsistent way. Yes, we took issue with the coalition government over their implementation of these policies and we understand very clearly that, if we were to play politics with this issue, it would come to a bad end for every party involved and, as we have seen in the past, there would be no solution.

The government have taken the politics out of this issue. We have called on the advice of an independent expert working panel and we stand here putting forward our proposals on that advice and on evidence based advice to the parliament. I find it quite offensive to hear the arguments, particularly from the opposition, that are embedded in some challenge to Labor's principle. Our principle is to have a workable solution. This is in the national interest and it is certainly in the interests of those asylum seekers whose lives are at risk because of what they are being pitched by people smugglers. I think the coalition had one little moment of bipartisanship when they supported the legislation that gave form and life to the expert panel recommendations. They should remember that time and that tiny window of bipartisanship, which, frankly, now seems just like another effort of expediency in giving expression to their view through the course of this debate. Since then they have reverted to type. If you review the comments of Senator Cash earlier on, it is opposition for opposition's sake.

Those opposite are not interested in a durable solution. They choose not to see the merit in having a regional approach. I think they understand that we are well on the way to finding a durable solution with the implementation of the expert panel report, and they are concerned that this will render them completely ineffective in the debate. Indeed, I would suggest that they already are ineffective. Opposition for opposition's sake does not work for anybody, and it certainly does not work on very challenging problems such as the one we are addressing.

We know that the game-playing by the opposition is pretty well entrenched in their outfit. We know this because there is a very firm piece of evidence, and that of course is the Malaysia arrangement, a key recommendation of the panel report. We know that the Malaysia arrangement can indeed break the people smugglers' business model, and it is time to allow it to be implemented to build on what we have already built with offshore processing. No-one can deny that the combination of regional processing in Nauru and PNG, along with returns to Malaysia, would stop the flow of boats and provide that ironclad deterrent. So I call upon the opposition to reconsider their position on Malaysia. They have nowhere to hide on this. They say Malaysia is not a signatory, but in the same breath they clamour for returns to Indonesia, which is not a signatory. So there is inconsistency there. But there is consistency, however, with us because we see it as a regional approach. This is what is required. We cannot manage this international challenge as a single isolated country; we need to work within our region.

These bills support the government's measures to reduce the rate of boat arrivals through a proper and sustainable regional solution. As such, they deserve widespread support, albeit begrudgingly—and I understand that. Finally I refer to comments by Greens senators. We have been criticised in this debate from the far Right and from the far Left. I understand their concerns, but I also believe that our policy, at its heart, is based on good evidence and principles that we have maintained. I commend these bills to the Senate.

The ACTING DEPUTY PRESIDENT ( Senator McKenzie ) (11:40): The question is that the second reading amendment on sheet 7313 be agreed to.

As divisions cannot take place before 12:30 on Mondays, this question will be postponed until a later hour.

Debate adjourned.

Senator COLBECK ( Tasmania ) ( 11:40 ): I rise to make my contribution to the debate on the Illegal Logging Prohibition Bill 2012. I note that this legislation has a reasonable history through this place with two Senate inquiries so far, through which the opposition has played a very constructive role in its development. The government is trotting around the countryside a whole range of allegations about where the opposition is on that, which I am more than happy to refute. But I indicate that we will not be supporting this legislation because the government is not prepared to put in place some sensible modifications which we have suggested over a period of time to actually make this legislation workable and not become a weapon to be used against the forest industry by extreme environmental groups. And we know that that is what will happen because we have experienced it and we have seen it.

The government claims to be negotiating with industry around this legislation, but as late as today the Australian Timber Importers Federation said: 'It is considered that in its present form the bill is inefficient, bureaucratic and probably unworkable.' This comes from the organisation that the government has been negotiating with around the regulations that sit under this piece of legislation. The opposition remains concerned about the way the regulations align with the legislation. But it is not only the opposition that remains concerned; some of our key trading partners also remain concerned.

In what has been a quite unusual circumstance in relation to a piece of legislation, the Rural and Regional Affairs and Transport Committee has received representations from Canada and New Zealand—not countries you would think of as having poor forest management standards or systems, or even associate with illegal logging—expressing their concerns about the impact this legislation will have, the bureaucracy it will impose and the costs it might impose on the industry. Also, Indonesia, Malaysia and Papua New Guinea have expressed concern about the legislation, the level of the government's consultation with them and the mechanisms by which the government proposes to introduce the legislation. And that comes back again to the concerns that the opposition has had.

It is not as if we have not taken this process seriously. We have participated in two Senate inquiries, and I do not think you could accuse us of having been anything but constructive when the government brought forward the exposure draft of this legislation. In fact, I am happy to acknowledge that government senators on the Senate committee were more than happy to take up a number of recommendations made by the opposition. So there have been some changes to improve the bill to align it with what the opposition saw as reasonable to try and make it a systems based system and less bureaucratic than it was—and it was an absolute minefield to start with. So seriously have we taken this legislation that the Leader of the Opposition actually wrote to the Prime Minister to outline our concerns and put them in front of the government. The concerns relate to the implementation of the bill. The regulations are so important and so fundamental to the workability of the bill that we want to see them before the bill comes into effect.

It is important that that is the case. If they do not, we will see a range of allegations made against companies importing timber from overseas as to their legality. Whether they are true or not, those allegations will be made and Australian businesses, being defensive of the perception of them as businesses, will take defensive action as well and, most likely, stop importing the products. That is going to create significant issues for those importing nations.

The opposition wants to work cooperatively with these companies. We recognise that they are working to put processes in place to deal with illegal logging. Like the government, we had a policy at the last election to take measures to prevent illegally logged timber coming into Australia. We acknowledged the problem; we acknowledged the issue. There are currently two processes operating in other parts of the world. The United States has the Lacey Act, which itself has its own problems—which, I think, has been recognised by the moves to modify the Lacey Act at the moment to take out some unintended consequences. The European Union, the EU, are looking at the FLEGT process. That process works on a bilateral system where countries within the EU negotiate country-to-country arrangements with their trading partners to put in place regulations or systems to prevent illegal logging and the sourcing of illegally logged timber—a cooperative process and a process that builds capacity in those countries that are looking to do that.

That is the sort of thing the opposition want to see. We do not want to provide a blunt instrument for rogue environmental groups to attack legitimate business and legitimate industry with allegations that they are importing or exporting from a country and importing into Australia illegally sourced products. That is what will happen; we have already seen that process commence. Greenpeace in evidence to the inquiry alleged that up to 80 per cent of the timber coming out of Papua New Guinea, for example, was illegally sourced. What is the basis for those allegations? The basis for those allegations is that they—that is, Greenpeace—have determined what the definitions around illegally sourced timber will be. The problem is that we do not have any of that sort of work decided yet as part of the process.

Having spoken to industry players just last Friday night, we know that the regulations are nowhere near being ready yet. One of the things the opposition wanted to do in a cooperative way with the government as part of the approval process for this legislation—we have had these conversations with the minister—was to have the regulations pass through a Senate inquiry process so that we could check that the capacity to misrepresent was not there and the regulations were working. Now the minister has indicated to us that the regulations might be available by the end of the year. Indications to me from industry as late as last Friday night were that they have no chance. We are looking to have a process where, because the regulations under this legislation are so important and so fundamental, everybody who is participating in the timber trade industry has a good understanding of those before everything comes into effect.

The government are desperate to get some achievement out of the ag portfolio, given that this is the only policy for agriculture that the government took to the 2010 election. There was nothing else to do with anything else within agriculture; Tony Burke released one policy only and that was the illegal logging policy. We should be very suspicious of anything Minister Burke puts on the table given his performance over the past few months. But this is the only policy they had and they are so desperate to get some achievement on the table that they are prepared to push this through. They are not prepared to be cooperative. They will do a deal with the Greens—there is not much doubt about that—and they will create a weapon to be used against industry by extreme environmental groups. I have no doubt about that. You can see it being lined up right now.

Greenpeace say that 80 per cent of the timber coming out of PNG is illegal—on the basis of their own definitions; they make up their definitions, which is the way these groups often operate—and so what is that going to do to Papua New Guinea's forest industry? It is a $60 million-odd export industry; about one-third of that comes to Australia. So are we going to create through this process a crash in the New Guinea forest industry and are we going to see that impact work back down through the local communities? The Papua New Guineans think that is the case; it is what they are concerned about. They are more than happy to work to stop illegal logging. They do not want an organisation like Greenpeace to come in and define for them what is legal and what is illegal. They would like to understand what our regulations are, they would like to understand what our regulations say and they would like to work cooperatively with Australia to develop mechanisms to prevent illegal logging.

At what point do we recognise what a government says is illegal or not? That is one of the fundamental questions we have been asking through the development of this legislation. If a government says to us something is legal, who are we to say it is not? One of things that has been put into place as part of the development of this legislation is a requirement of due diligence. Industry generally has accepted that that is a reasonable way to go. I know that the PEFC system, a global umbrella group that takes forest certification schemes and aligns them across a global platform, has said that it is developing a due diligence system to incorporate into its forest certification system.

That should be welcomed because, as I said before, it puts in place a systems based mechanism, as part of an industry's general certification process, to ensure that due diligence is taken to ensure that a product has been sourced legally. It can become a verification scheme as a part of that proper due diligence process. That should be welcomed. I would urge other certification systems to do the same.

The Indonesian government is putting in place a timber legality assurance system. My understanding is that there is a lot of work being done between Indonesia and the EU around the recognition of their system. It is called the SVLK. I will not try to pronounce it, because it is difficult and I would probably get it wrong, but let us call it the SVLK because that is how it has been recognised. It is their national timber legality assurance system. One of the things that the opposition wanted as part of this process was adequate, sensible time for these systems to be put into place so that the allegations, which I know will come from these extreme environmental groups against companies importing timber and countries who were exporting timber to us, have some parameters around them—so we know what the rules are. At this stage we do not know which timber products are in and which are out.

The reality is that the more complex a timber product—the more it has been modified—the more likely it is to have illegally sourced timber in it. A medium-density fibreboard, for example, is the sort of product where you are most likely to find illegally sourced product. It is not likely to come in the form of solid timber products. The allegation might very well be made that it will, because that is about stopping forestry—that is the Greens and the extreme environmental groups' agenda of shutting down forestry—but the greater likelihood is that it will be in complex products. It may also, perhaps, enter in things like furniture where the timber is sourced from a number of different places.

Let us not pretend that the issue of illegal logging is not a problem. I am aware of the study out of Laos where the official inputs to a particular sawmill were something in the order of 350,000 cubic metres per year of logs, while the output was something like 650,000 cubic metres—so either they have a fantastic conversion rate or there is something going on. It is quite obvious that something is going on and we need to deal with that. We genuinely need to deal with that, but from my understanding a lot of that timber is going to a neighbouring country to be put into furniture. We do not know whether that is going to be included in the scope of the legislation yet, so, at the moment, what the government proposes is to create an offence. At the moment the proposed date of effect of that is the date of the royal assent to the legislation; then, two years after that, the regulations will come into effect. They will define other elements of the offences, including what particular products are going to be included and whether those highly modified, complex products are included.

Are paper, MDF boards and small batches of furniture that a small business might go to South-East Asian countries to buy going to have to be declared at the border? Are they going to have the capacity to do the due diligence down the supply chain—to actually determine whether the products are legally sourced or not? None of that is yet known. The opposition is saying, 'Let's deal with that once we have put the offence in place; let us deal with that properly once we have decided what is in and what is out—once we know those things.' Let us not create a bureaucratic nightmare that industry is not going to be able to manage properly. Let us let them know what the rules are before we throw them out for the extreme environmental groups to get hold of.

If the government do not believe that that will happen, they only have to look at their complete mismanagement of the IGA process—the Tasmanian Forests Intergovernmental Agreement—where they created the weapon. Again, Tony Burke is involved in this. Tony Burke, Julia Gillard and Lara Giddings signed an agreement around forestry negotiations in Tasmania, and notional reserves, or areas to be considered for inclusion as reserves, were created as part of that process. Those forests immediately became a weapon against a company called Ta Ann in Tasmania. Accusations of them logging in those forests were made in their markets. Industry and business moved away from their products.

Ta Ann are not a logging company. They do not harvest a stick; they take product that is supplied to them by Forestry Tasmania. They are not involved in logging operations. They do not get to choose where their timber comes from. Their markets were told that they were selling old-growth products out of these reserve areas—or areas proposed for reserves; they have not been declared. That company, after making an $80 million investment, is now considering leaving the state. One hundred and sixty jobs may be lost, all based on misinformation and the allegations made against them in their markets. So, if anyone does not believe that the government's mismanagement can create a problem, there is the perfect example and this company is the victim. That is exactly the same thing that will happen as soon as this declaration comes into effect with the passing of this legislation. There will be allegations about illegal sourcing of timber and Australian businesses which are the recipients of that product, particularly at a retail level, will have market campaigns run against them. They will take the only defensive action available to them, which is to stop sourcing the product. That will happen. You can see the environmental groups lining up. Worse—if you look at the amendments proposed by the Greens, they are looking to give another layer of armour to those environmental groups by making it about trade between states. If the government does not believe that that is part of the process, just read the amendments that are being proposed by the Australian Greens to this piece of legislation in this place. That is what will happen.

We have treated this process with respect. We have negotiated or tried to negotiate with the government. Tony Abbott wrote to the Prime Minister suggesting a way forward. Minister Ludwig has written back to Tony Abbott rejecting that way forward. They would prefer to deal with the Greens and they would prefer to give the environment groups a weapon against Australian business, Australian industry and our trading partners, so for five countries to express concern is quite a step. Canada and New Zealand—as I said before, not countries that you would associate with bad logging or forestry practice—have even expressed concern about the issues around that.

In that context, the opposition cannot support this legislation even though we have a similar policy, because we recognise the government's complete failure to be able to manage the process properly. (Time expired)

Senator MILNE (Tasmania—Leader of the Australian Greens) (12:00): I rise to support the Illegal Logging Prohibition Bill 2012, which starts the process of dealing with illegal logging around the world and seeks to stem the trade in illegally logged timber. This is something the Greens have been passionate about for a long time, and I am interested in Senator Colbeck's remarks because the coalition are always standing up at rallies where we are arguing for an end to native forest logging in Australia, saying, 'Why don't you do something about the illegally logged timber elsewhere?' We are doing something about timber illegally logged elsewhere, and it is the coalition now who are worried about the conservation outcomes of stopping illegal logging and do not want to support the bill. So let it be on the record the next time they get up and say, 'What about the people trying to stop native forest logging here not wanting to stop it elsewhere?' I think we have the coalition on record: they are not going to participate in trying to deal with illegally logged timber.

Senator Colbeck says a number of countries have expressed some views about the bill, but in March this year the World Bank put out a report called Justice for forests: Improving criminal justice efforts to combat illegal logging. They said:

Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe. A new World Bank report released today shows how countries can effectively fight illegal logging through the criminal justice system, punish organized crime, and trace and confiscate illegal logging profits.

The report, Justice for Forests: Improving Criminal Justice Efforts to Combat Illegal Logging, affirms that to be effective, law enforcement needs to look past low-level criminals and look at where the profits from illegal logging go. By following the money trail, and using tools developed in more than 170 countries to go after ‘dirty money,’ criminal justice can pursue criminal organizations engaged in large-scale illegal logging and confiscate ill-gotten gains.

The World Bank estimates that illegal logging in some countries accounts for as much as 90 percent of all logging and generates approximately US$10–15 billion annually in criminal proceeds. Mostly controlled by organized crime, this money is untaxed and is used to pay corrupt government officials at all levels. The new report provides policy and operational recommendations for policy makers and forestry and law enforcement actors to integrate illegal logging into criminal justice strategies, foster international and domestic cooperation among policy makers, law enforcement authorities and other key stakeholders, and make better use of financial intelligence.

“We need to fight organized crime in illegal logging the way we go after gangsters selling drugs or racketeering,” said Jean Pesme, Manager of the World Bank Financial Market Integrity team that helps countries implement effective legal and operational frameworks to combat illicit financial flows.

Despite compelling evidence showing that illegal logging is a global epidemic, most forest crimes go undetected, unreported, or are ignored. In addition, estimates of criminal proceeds generated by forest crimes do not capture their enormous environmental, economic and societal costs— biodiversity threats, increased carbon emissions and undermined livelihoods of rural peoples, with organized crime profiting at the expense of the poor.

“Preventive actions against illegal logging are critical. We also know that they are insufficient,” said Magda Lovei, Sector Manager at the World Bank. “When implemented, the recommendations of this publication can have a strong deterrent effect that has been missing in many actions taken against illegal loggers.”

Organized crime networks behind large scale illegal logging have links to corruption at the highest levels of government. The investigation of forest crimes is made even more complex by the international dimension of these operations. Recognizing these challenges, this study calls for law enforcement actions that are focused on the “masterminds” behind these networks—and the corrupt officials who enable and protect them.

That was the World Bank on 20 March 2012. I heard Senator Colbeck's contribution, but I am also very well aware of just what a disaster is going on around the world. Recently in the Jakarta Postthere was an article by a police chief in West Sumatra saying:

Illegal logging is one of the illegal activities on top of our priority list for us to eradicate.

There we have in West Sumatra a local police chief saying, 'We have to do something about it. It is one of our top priorities.' The article noted that the police had uncovered 44 illegal logging cases as of September this year, so it is pretty prolific in Sumatra, for example.

In the Congo, there was a recent report from Reuters saying:

Derelict ports in Congo's riverside capital … are piled high with logs ready to be shipped out to China and Europe as part of the lucrative timber trade.

More than a million cubic metres of illegal wood was ready to be transported and was identified in those ports.

That just gives you some idea of the scale of illegal logging. It is difficult to estimate, but it is believed that more than one-half of all logging activities in the most vulnerable forest regions—South-East Asia, Central Africa, South America and Russia—may be conducted illegally. Worldwide estimates suggest that illegal activities may account for over one-tenth of the global timber trade, representing products worth at least $15 billion a year.

For too long consumer countries including Australia have contributed to these problems by importing timber and wood products without ensuring that they are legally sourced. You only have to go around and look in many of the outdoor-living shops to see furniture that you know has been made from imported timbers and which has no certification to say where the timber has come from for that outdoor setting. There is nothing about it at all, and that is where we need to get serious.

The breaking of laws on harvesting, processing and transporting timber or wood products is widespread in many major timber-producing countries. By logging in protected areas such as national parks, overallocating quotas, processing the logs without acquiring licences and exporting the products without paying export duties, companies may be able to generate much greater profits for themselves than they would by adhering to national laws and regulations.

I have to say the Australian government facilitated logging of Indonesian protected forests. That was under the Howard government, when the Howard government facilitated the mining industry having a lobbying office in our embassy in Jakarta. The idea was that our mining industry was facilitating the overturning of forestry law 41 in Indonesia. That law was to protect the forests. With protected forests, we would not be able to have open-cut mines. But the Australian government, on behalf of the mining industry, went in and threatened to take the Indonesian government to international tribunals asking for compensation for those mining companies which had been given leases under what I would regard as the corrupt years of previous Indonesian administrations. Of course, the result was the Indonesians changed and overturned forestry law 41, allowing Australian mining companies to go in and clear-fell for open-cut mining in massive areas of Indonesia's protected forests. So we do not have a glamorous record ourselves in relation to encouraging logging of protected forests in Indonesia. But we know that the corrupt logging goes on. As I have just said, it often comes down to how the licences were acquired for either logging or mining.

Not only do you have environmental impact in terms of depleting forests, losing habitat for critically endangered species, destroying wildlife habitat generally and impairing the ability of land to absorb carbon dioxide emissions, with the resultant climate change impacts; you also have the ongoing effects. In December 2004, for example, there were flash floods and landslides in the north-east of the Philippines which killed over 1,000 people. The government blamed illegal logging which had denuded the mountain slopes. That is not just a story for the Philippines; it often happens in Asia in particular, but we have also seen it in other parts of the world.

There are budgetary implications because illegal logging means that governments do not get the revenue that they ought to have. A Chatham House briefing paper report estimated that in Indonesia the government is losing more than $1 billion a year from unpaid taxes and charges in relation to illegal logging. Future generations will suffer even more. World Bank studies in Cambodia have suggested that illegal extraction at least 10 times the size of the legal harvest has left a level of forest logging that is completely unsustainable in that country.

In terms of social impacts, when you have illegal logging it undermines the respect for the rule of law and it is frequently associated with forcing local communities out of the forest areas in which they live or on which they depend for their livelihoods. So you get illegal groups moving in or licences issued corruptly. They push the local people out of their forest areas. The local people get nothing from the flattening of their forests. You also get trade related issues because illegally logged timber is cheaper than legitimate products. It distorts global markets and undermines incentives for sustainable forest management. A study published by the American Forest and Paper Association—and I admit it is dated, being from 2004—estimated that world prices were depressed by between seven and 16 per cent by the presence of illegal products in the market. That is why the forest industry in Australia did come out in support of the bill when the government first announced it. I understand they have mixed views about it, but essentially they understand that illegal timber coming into Australia drops the value of forest products and that has a knock-on effect for them.

Politically, revenues from illegal logging have been known to fund national and regional conflict in, for example, Liberia, the Congo and Cambodia, where for several years the Khmer Rouge forces were sustained primarily from the revenue from logging areas under their control. So there are all kinds of reasons why Australia would want to do more to deal with the issue of illegal logging, and that is all bad news.

The better news is that in recent years producer and consumer countries have been paying increasing attention to illegal logging. One of the main initiatives includes measures to exclude illegal timber from international markets, notably the European Union's Forest Law Enforcement, Governance and Trade Action Plan. That initiative centred on the exclusion of illegal products from the EU markets. That is the intent of what we are trying to do here in Australia.

Whilst this bill is a step in the right direction, it does not go far enough. Senator Colbeck is right to say that the Greens have a number of amendments which would strengthen this bill. At the moment, the only regulation that exists in Australia to control importation of illegally logged timber is the Convention on International Trade in Endangered Species of Wild Flora and Fauna, and that convention targets only a limited number of timber products that have been derived from an endangered species; therefore, large amounts of timber continue to be imported without any requirement to verify its legality other than through voluntary industry measures.

When in 2010 at the election the Labor Party committed to encourage the sourcing of timber products from sustainable forest practices and sought to ban the sale of illegally logged timber products, the Greens were very supportive. It is long overdue and we need to get on with it. However, there are some serious shortcomings, and the first is the definition of illegal logging. We are not persuaded by the government's reasoning that if you go to a prescriptive definition then you might through that exclude something by omission. We do not believe that is the case and we retain the view that the Australian definition should be consistent with the European Union definition. If we are going to deal with a global problem, we need globally consistent definitions of what constitutes illegal timber; otherwise you are going to have a situation where what is rejected by the EU will be put into Australia and allowed here under a different definition.

Secondly, in relation to due diligence, we do not believe that the due diligence provisions should remain unclear. The DAFF officials, in a working group meeting in August 2011, indicated that the declaration should include, amongst other things, the following information critical to satisfying due diligence: the name of the importer, the name of the supplier, the botanical name and common name of the timber product, the value of the import, the country of origin, the region and the coupe. The coupe is really important because it is no use saying it is from that region if you do not know which coupe it came from. Knowing the region is not enough because illegal products will almost always be sourced from areas where there is also legal logging. If you just say the region, that is no good at all—you have to be able to trace to the coupe. The reason to trace to the coupe is that then you can trace how that licence was given and how it was secured. That goes to the issue of corruption. It also goes to the issue of tracing the money. We argue that the due diligence requirements must provide for traceability to coupe level and an assessment of the risk of illegality due to corruption. That is a critical thing. The government has not got that there, and I encourage the senator in response to tell me, in the absence of traceability to the coupe, how you are going to deal with knowing whether a timber is sourced from an illegal source and how you are going to deal with corruption.

The other thing we are going to deal with is compliance. We believe that, in order to determine the levels of compliance and assist in assessing the standards used in due diligence, we need to have regular compliance audits and aggregated data reports. That is, I think, essential to where we need to be. We also need to give NGOs and timber industry competitors the ability to initiate action and have standing under the law in relation to the act. I think it is all very well to have a bill like this, but you have to be able to allow a large number of actors to be able to have standing in the courts when it comes to assessing it.

The Greens will be moving a number of amendments in the committee stage to strengthen this piece of legislation. Whilst it is a step in the right direction, I am desperately concerned that, if the amendments are not supported by the government, you are going to end up in a situation where Australia has a weaker definition than the EU. It has no traceability provisions to the coupe level, which is so necessary if you are going to, as the World Bank said, 'get to the Mr Bigs of the operation'. The 'Mr Bigs of the operation' are the people who secure the licences and get the money, and that is going to the issue of corruption in the host country. We know corruption exists and that is a large part of the timber trade, just as it has been a large part of the trade in animals, both live and animal products. We have to get down to actual detail here. When you go into a store to buy an outdoor setting or buy another thing, you should be able to see on in it some certification of where that timber has come from because, as it is now, illegally sourced or logged timber is shipped to China or somewhere else, where it is made into a lounge suite. That lounge suite or whatever is imported and a person would have no idea that the timber was illegally sourced somewhere, moved somewhere else where it was processed and then ended up in Australia. We need to have that on the labelling because it is critical that that is there for the consumer, but also for the importer, because that importer then knows exactly what they are doing. In the absence of that labelling, the importer may well be acting in good faith and they are not going to be able to satisfy the customer that product actually is certified as having come from a legal source. So there are a number of issues with the bill and I look forward to the debate in the committee stage.

Senator BOSWELL (Queensland) (12:20): I rise to speak on the Illegal Logging Prohibition Bill 2012. Amongst the penalties included in the bill are $33,000 for an individual and $165,000 for a corporation for offences that include importing regulated timber products and processing raw logs without complying with the due diligence requirements. Those fines no doubt will act as a strong incentive to comply with the due diligence requirements. But what exactly are the due diligence requirements that must be complied with? We only find out the answer to that question when the regulations are developed at some time in the future. However, the bill in proposed section 14(5) says:

The regulations may provide for due diligence requirements for importing regulated timber products to be satisfied … by compliance with—

amongst other things—

… rules or processes established or accredited by an industry or certifying body …

Similarly, at proposed section 18 (5), referring to processed raw logs, the bill again says that the regulation may provide for due diligence requirements to be satisfied by compliance with rules or processes established or accredited by industry or certifying bodies. These certifying bodies, no doubt, will include the Forest Stewardship Council, the body supported by a number of radical green groups. For example, members of the Forest Stewardship Council ruling general assembly include Greenpeace, the Wilderness Society, the Australian Conservation Foundation, Friends of the Earth, the World Wildlife Fund—the WWF—and other environmental non-government organisations, or ENGOs.

The debate has hardly started, and yet we see the Greens making a big direct play to get these green groups to issue certificates so they get their snouts right in the trough. We see ENGO sustainable certification bodies established or projected in a number of primary production areas: for example, forestry and fishing, and now beef and others, I believe. This raises the fundamentally important issue of how Australia will be governed in the future. It is certainly about how food, fibre and timber products will be harvested. The growth of the certification bodies highlights an apparent abdication of responsibility by the current federal government for making important decisions about primary production. I believe it also represents a direct attack on science and the role of scientists in decision making in primary production and other areas. It also belittles the role of experienced resource managers and potentially sidelines them.

It highlights the growing power of the ENGOs, especially their financial power and their ability to exert influence over government decisions. We are all familiar with references to 'big business' as a general term for wealthy and influential business organisations. Now in Australia we are seeing the rise of 'big environment', a large, wealthy network of environmental activists. How wealthy they are was shown by the Canberra Times article in December 2009 which reported that in that year Australia's four largest environmental groups had spent a total of $70 million, much of it for political lobbying.

Under this Labor government we have seen 'big environment' grow more and more powerful and influential, to the point where environmental activists now seem to be orchestrating much of Labor's policy on primary industry and natural resources. It appears that the Illegal Logging Prohibition Bill 2012 will require both importers and domestic processors of logs to have a due diligence system in place to ensure that to the best of their knowledge they do not import or process products obtained from illegal logging. The exact requirements in relation to due diligence are not yet known and will be specified in regulations at some time in the future.

However, it is absolutely vital that the regulations must not give any form of preference to one certifying organisation over another. Industry people tell me that producers, exporters and importers are possibly faced with having to construct a whole new system to meet the requirements of this legislation and would feel themselves forced to join a sustainable forest management certification scheme. Our importers and domestic processors might also come to the conclusion that it is necessary, at the end of the day, to handle logs certified through such a scheme.

When this is the case, it is vital that they have more than one certifying body to choose from. It would be a nightmare scenario if the only organisation that the market enables to anoint timber products as sustainably produced was something like the Forest Stewardship Council Australia. The way the Forest Stewardship Council Australia, or FSC, operates is to force timber producers to go through an expensive series of steps to have their products accepted by the FSC as sustainable. In the case of the Australian timber industry, those industry groups and businesses that choose to go for a certification scheme for their products at least have a choice.

Apart from the Green-NGO dominated Forest Stewardship Council Australia, there is a body called Australian Forestry Standard Ltd, or AFS. AFS says that it covers the majority of certified forests in Australia, with more than 10 million hectares certified under Australian standard 4708, the Australian Standard for Sustainable Forest Management. However, through the supply chain from the loggers right through to the final end users, businesses are already under constant pressure to use FSC-certified timber.

One company that has experienced this is Ta Ann Tasmania. It uses timber harvested by others and which was previously destined for the woodchippers. Ta Ann value adds by veneering these previous woodchip logs into valuable veneer for plywood production. The timber is sourced from regrowth and plantation. Environmental activists are conducting what my Tasmanian colleague Senator Eric Abetz described in this place earlier this year as a:

… deceptive campaign to cruel the markets of Ta Ann around the world, prejudicing Tasmanian jobs when our unemployment rate in Tasmania is well over seven per cent, and heading north.

Ta Ann's reputation is being defamed, and their markets drying up.

One example is where an activist group called Markets for Change flew to London before the Olympic Games and convinced the local company buying plywood for a basketball court not to use Ta Ann's products that they had previously agreed to purchase. A spokesman for the London contractor was quoted in the media as saying:

The reason we've stopped or we've suspended purchasing from Ta Ann is mainly because of the controversy around the logging in Tasmanian forestry. The NGO's will have to be happy with any changes that they can make to enable the product to be purchased by us again.

The Olympic basketball court represented one contract. Far more serious for Ta Ann has been the persistent lobbying by Markets for Change of the company's overseas customers for flooring products, especially in Japan. I understand that this has directly cost the company a significant percentage of its market there, which must directly affect jobs in Tasmania.

It is no surprise, then, to see media reports that Ta Ann's board of directors could decide as early as the end of this month to close down the operations in Tasmania. This is a company which last year injected $45 million into the Tasmanian economy and provided hundreds of jobs. They are hoping that there still might be a so-called peace deal between environmentalists and industry emerging in coming weeks, despite the recent collapse of negotiations over the Tasmanian Forests Intergovernmental Agreement, or IGA.

As well as conducting an ongoing campaign against Ta Ann, the Markets for Change activists are also targeting retail chain Harvey Norman. Harvey Norman is selling furniture made from sustainable Tasmanian timber, but that is not good enough for Markets for Change.

Both Ta Ann and Harvey Norman products are certified by Australian Forestry Standard, but of course Markets for Change and their fellow activists say that that is not the right certifying body. The Markets for Change website tells businesses like Ta Ann and Harvey Norman what they should do, saying that they should:

… give preference to plantation products with full Forest Stewardship Council certification.

So there we are, trying to force producers and buyers to use Forest Stewardship Council approved material.

It is a familiar pattern. In July last year Greenpeace activists climbed on a construction crane on the Central Park development in Sydney in a protest over the use of plywood that the organisation claimed was sourced illegally. Soon afterwards, Greenpeace trumpeted the news that the developers had promised not to use any timber that was not certified by the Forest Stewardship Council—again, direct action to make sure that other companies use only FSC certified material.

The examples I have drawn here relate to timber and timber products. However, the aims of the ENGOs go far beyond just timber in Australia. In Australia we have already seen the formation of the Forest Stewardship Council for timber products, the Marine Stewardship Council for wild-caught seafood, the Aquaculture Stewardship Council for farmed fish, and now a so-called roundtable for beef production. These are all WWF initiatives. Last year WWF International stated it was focusing on commodities including beef, bioenergy, cotton, dairy, farmed fish, palm oil, pulp and paper, soy, sugar, timber and wild-caught fish. It intended to target companies such as commodity traders, manufacturers, retailers and banks, insisting they deal only with producers endorsed by WWF.

It is by no means far-fetched to say that WWF and other ENGOs fully intend that all food and fibre products harvested in Australia will be forced to go through one of its cash-producing 'sustainability certification' processes. They will want every food and fibre product—every single one—to be certified. Australian primary producers should think about that. These are the schemes that cost individual producers thousands of dollars for the initial certification process and then regular ongoing costs for auditing.

Someone who has studied the impact of such sustainability certification schemes worldwide is Alan Oxley, one of Australia's most influential advisers on international trade. He was previously Australian Ambassador to the General Agreement on Tariffs and Trade, or GATT, which was the predecessor to the World Trade Organization. Mr Oxley said:

WWF has made no secret of its strategy to pressure companies occupying strategic positions in the supply chain, such as dominant consumer goods manufacturers and retailers, to adopt its certification standards. Other NGOs such as Greenpeace and the Rainforest Action Network are aggressively attacking brand names and leading products of major companies to encourage them to join the strategy.

He went on:

ENGOs will also engage a method often referred to as 'greenmail' to force companies into certification. 'Greenmail' involves action to devalue the public perception of a brand name or company reputation of producers and retailers through advocacy campaigns aimed at consumers and processors. Running negative campaigns against brand labels with significant market position is common. The aim is to pressure these businesses to align with or adopt certification systems developed by NGOs. Once the company adopts that system, it has become an agent for delivering the sustainability values of the NGO. By these means, ENGOs are able to influence, and even control, the supply chain.

When they hear that statement, perhaps Australian cattle producers can understand why WWF has been so keen to include McDonald's, the largest single buyer of Australian beef, and JBS, our largest single beef processor, on its Australian Roundtable for Sustainable Beef. WWF sees this roundtable as a first step towards pushing Australian cattle producers into another one of its costly sustainability certification schemes.

A couple of years ago, WWF US Senior Vice President Jason Clay gave an interview explaining how WWF's roundtables work. He said:

… we convene roundtables—meetings of all the members of a commodity’s value chain—everyone from producers, traders and manufacturers to brands and retailers, as well as scientists and non-governmental organizations (NGOs). Together we agree on the key impacts of producing a commodity – deforestation, water us, and so on – then design standards to minimize these impacts, which are ultimately certified by an independent third party. The participants publicly commit to producing, buying and selling within these standards, to be part of the commodity roundtable, forming a chain of sustainability.

Of course, to successfully achieve what Mr Oxley accurately describes as 'greenmail' and devalue the public perception of the brand name or company reputation of producers, the ENGOs first have to convince the Australian public and international buyers that current practices in forestry or fisheries or beef are environmentally unsustainable.

How can they possibly do that? Australia rightly insists that its primary producers maintain production methods and standards that are amongst the very highest in the world from an environmental point of view. I will tell you why ENGOs can portray our primary production methods as 'unsustainable' and in need of their own particular brand of expensive sustainability certification scheme. The ENGOs can do that because, while the current government continues to insist on stringent environmental standards from our primary producers, this Labor government says and does nothing to defend them. Instead, being politically captive to the Greens and radical green policies, it surrenders at the first sign of manufactured outrage. Instead of governing on the basis of good science, sound management principles and good old-fashioned common sense, this government is itself managed by social media. For this government, science can be trumped by emotion. It surrenders fact to opinion and rational management to the 140-character Twitter message.

This is a government had responded to a television program by shutting down Australia's live cattle export trade. That cost the cattle industry millions and millions of dollars and is still hurting cattle producers and related business operators throughout Northern Australia. Then of course later, realising the enormous harm it has done by such an emotional, knee-jerk reaction, the government reversed its decision.

This is the government that encouraged efficient harvesting of fish in southern waters and agreed to the use of a large international trawler but then panicked at some of the reaction to the vessel's arrival and banned its operation. What that did was effectively cast doubt over Australia's fisheries management and fisheries science. Our fisheries science and fisheries management are internationally acknowledged as amongst the very best in the world. This is the government that gave in to the slick, well-funded lobbying campaign of international environmental activists and closed much of the almost one-million-square-kilometre Coral Sea region to most forms of fishing. That was completely unnecessary.

This is the government that allows ENGO activists to use deceitful public campaigns to target timber suppliers operating sustainably in well-managed forests. This government does nothing. This government stands on the sidelines and watches. It does nothing to defend sustainable businesses providing vital Australian jobs. It allows damaging campaigns to be waged against markets for sustainable Australian products here and overseas without lifting a finger or saying a word to help protect the jobs of Australian workers.

Who is running this country? Clearly not the current government. It looks more like mob rule. Scientists and resource managers must be seething with anger and frustration when sound, long-term advice is overruled for expedient short-term politics. What we see from some green groups is in fact antiscience. Science is complex and rational. The ENGO messages are inevitably simple and emotional: 'Save this, save that and save the other; donate now.'

What is to be done? Clearly, the government must speak out on behalf of Australia's primary producers and the sustainability of their farming, forestry and fishing practices. Then they must take action to back up those words. They must support our wealth-creating, job-creating primary industries in the marketplace. In other words, they must refute the lies told about our primary producers by the ENGOs. Then these ENGOs must be made accountable. The government should urgently re-examine the exemption of the ENGOs from the secondary boycott provisions of the Competition and Consumer Act—for example, where the ENGOs encourage the boycott of products not carrying the sustainability certification label they prefer.

The government should also examine what looks to be a free ride for activists who take apparently illegal actions but use the excuse that they were doing it for the environment. Why do these big environmental organisations, which seem to be able to spend millions and millions of dollars lobbying government and running advertising, PR and social media campaigns to influence the public opinion, enjoy tax-free charity status?

The ACTING DEPUTY PRESIDENT ( Senator Moore ): Order! Senator, your time has expired.

Senator BOSWELL: I seek leave to incorporate the last page of my speech.

The ACTING DEPUTY PRESIDENT: This has not been previously agreed. We will return to your request after we go through the next process. We will keep it under consideration. If you can show the remainder of your speech to the whips, that may facilitate it.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.

The ACTING DEPUTY PRESIDENT ( Senator Moore ) (12:46): Pursuant to order, the question is that the second reading amendment moved by Senator Hanson-Young be agreed to.

The ACTING DEPUTY PRESIDENT ( Senator Moore ) (12:49): No amendments to the bills have been circulated. Before I call the minister to move the third reading, does any senator wish to have a committee stage on the bills to ask further questions or clarify further issues? If not, I call the minister.

Senator LUNDY (Australian Capital Territory—Minister Assisting for Industry and Innovation, Minister for Multicultural Affairs and Minister for Sport) (12:49): I move:

That these bills be now read a third time.

Question agreed to.

Bills read a third time.

Senator BOSWELL (Queensland) (12:50): by leave—I have sought permission from the very generous and popular Chief Government Whip in the Senate, Senator Anne McEwen, to incorporate in Hansard the last page of my speech on the Illegal Logging Prohibition Bill 2012 and she has agreed.

Leave granted.

The incorporated page of the speech read as follows—

In most cases, they can massively out-spend the companies they choose to campaign against, companies who must comply with taxation and other rules that simply do not apply to the E.N.G.Os.

I believe the Australian public, and this Parliament, need to be alerted to what is at stake here. Australia’s agricultural, forestry and fisheries industries have a gross value of production of some 50 billion dollars. That is a huge amount of money. It is a very attractive target for E.N.G.O. strategies designed to extort money from primary industries and other businesses in the supply chain to allow them to continue harvesting and marketing their products.

Clearly, environmental non-government organisations like WWF, Greenpeace and others intend to move from one primary industry sector to the next to the next, “green mailing” or otherwise forcing them to comply with their favoured sustainability certification schemes.

Their tactics should alarm all Australians.

I believe their tactics raise important questions. They are questions fundamentally important for the way government operates … for the maintenance of a genuine, informed democracy … and for the role of science in guiding and informing decision-making.

Senator IAN MACDONALD (Queensland) (12:51): I was about to say to Senator Boswell, 'It's amazing what flattery can do for you!'—then I was going to start my speech by flattering both Senator Boswell and Senator Colbeck for their contribution on this bill before the chamber relating to illegal logging. But I am not flattering in the way of seeking any return: it is always good to follow people of the calibre of Senator Colbeck and Senator Boswell in a debate on these quite technical subjects. Senator Colbeck will make a great minister dealing with this area in a new government and I know that Senator Boswell has had a long passion not only for sustainable forestry but for exposing how some of the radical green groups are destroying Australian industry.

I want to speak on this bill and oppose it on several grounds, some of which have been covered by my colleagues. But I will start with a broad historical approach to this. When I was the forestry minister many years ago, trying to stop the importation of illegally logged timber was paramount in the work that my department and I were doing. In fact, the coalition had promised it, as I recall, in the 2001 election and again in the 2004 election—and, I suspect, since then. We have been determined to try to do something about importing timber that has been illegally logged. As I found out at the time, the concept was easy to grasp; putting the rules into place in the form of legislation was exceedingly more difficult. The Labor Party have tried but, as with most things when it comes to governance by the Labor Party, their attempts have been fraught with problems. Hence this bill before us, which we will be opposing for all the reasons mentioned by Senator Colbeck and by Senator Boswell, some of which I will elaborate on now.

The thing that disturbs me most about illegal logging and the importation into other countries including Australia is that there should not be any call for importation of any sort of timber into Australia. Australia has some of the most significant forestry assets in the world, and forestry was an industry that was entirely sustainable. But the Greens political party has succeeded over a period of time in destroying what was a major industry for Australia, a big work creator for Australia and an industry that was fully sustainable.

I remember Richo, then Senator Richardson, as environment minister coming up to Ravenshoe behind Cairns in the early nineties and standing before a forest and saying, 'We are bringing in World Heritage listing to save this pristine forest'. You could just hear him above the boos and hisses from the large crowd gathered there. Unfortunately for Senator Richardson and for the Labor Party at the time —and I think Richo later acknowledged this in his book Whatever It Takes—the pristine forest that he wanted to save had been logged for 100 years, and it had been logged so sustainably that Richo, the Greens, the Wilderness Society and the ACF thought that it was a pristine forest. It had been well managed, it had been harvested sustainably and it had produced some of the most magnificent timbers. Richo said this in his book Whatever It Takes—it is a bit old these days but I still recommend that anyone should have a read of it. It just shows how interested in power the Labor Party is. It is not interested in governance; it is just interested in power, and Richo made that quite clear in his book Whatever It Takes. But he did refer to this. This had nothing to do with saving the pristine forest and nothing to do with environment; it was all about getting Greens second preference votes in Sydney and Melbourne, and Richo was very open about that.

But this is how the Greens work. Here was an industry that employed so many people. I was encouraged back in the days when I was minister to have the CFMEU—well, the ‘F’ part of the CFMEU—work hand in glove with the Howard government to save the Tasmanian timber industry. I thought we had achieved that. Everyone will recall that magnificent rally in the 2004 election when John Howard was mobbed by forestry workers, and I have to say the forestry part of the CFMEU assisted in arranging that function. As a result of that, we won two seats in Tasmania and we had saved the industry.

But the Greens never give up. When other ministers came along and the government changed, they were back in their own old ways of trying to shut down this sustainable industry. They have continued with the fishing industry; they have almost succeeded there. So we import a lot of timber now that we do not have to. We already import most of our fish but, thanks to the Greens, we will import practically all of it. I am told that just today former Senator Brown has been appointed to the board of Markets for Change, the group that is quite open about shutting down the timber industry in Australia. So we will have all imported timber. Of course, the Labor Party fall for this because they need the Greens votes to keep Ms Gillard in power as Prime Minister. It is as simple as that.

I understand this group, Markets for Change, is trying to commercially penalise Harvey Norman, one of the very few Australian retailers that actually supports the Australian manufacturing industry. Most other furniture retailers in Australia import their furniture from China. The one who makes a virtue of using Australian manufacturing is Harvey Norman, because it creates jobs for Australian unionists and workers. But what happens? Ex-Senator Brown and the Greens want to shut him down. Why? Because he is using Australian timber in some of his furniture products.

This bill would not be needed if Australia had continued its vibrant, sustainable native forest industry. Any reasonable observer who gets in a plane in Cairns and flies to Hobart will see magnificent stands of Australian forest, most of which have been logged for 100 years, but you would not know it.

They have been sustainably managed over many years. They have created jobs.

We used to export timber. Now we are in a situation where, thanks to the Greens, Australians are buying timber from countries in South-East Asia and the Pacific, who we all know are illegally logging. So, thanks very much, Greens political party, you have contributed to the raping and pillaging of some very special tropical timbers in countries in South-East Asia and in the Pacific! But it does not matter; the Greens have had their way!—they have shut down yet another Australian industry.

If I could be bothered talking to any of them at close quarters I would like to understand, one day, what the underlying theme of the Greens is. Do they want Australia to be a totally mendicant state, where we just rely on borrowed money and government handouts for our living? Because you would think that the Greens are determined to shut down any industry Australia has. I have mentioned the fishing industry; it is on its knees. I have mentioned the forestry industry; it is on its knees. The Greens are attempting to shut down the manufacturing industry. It is because of the Greens—because Ms Gillard wanted to be Prime Minister and needed their support—that we have this carbon tax that is continuing to send Australian manufacturing jobs offshore. Yet the Labor Party is the great party of the workers! Most of their senators were formerly members of unions. They are supposed to be looking after the jobs of workers, but they have introduced a tax that sends manufacturing jobs offshore.

The one competitive advantage Australia used to have in the manufacturing area and in our cost-of-living area was that we had the greatest supply of cheap energy anywhere in the world. That cheap energy allowed us to compete. But again the Greens, and the Labor Party because they have no courage, have introduced this tax which will effectively, in time, shut down the coal industry.

Some people still believe in the fools' paradise: they think foreign investors are rushing into Australia to invest in our vast mineral products. Well, they should really have a look at the facts. Most of the international investors are now avoiding Australia. You will not see it happen tomorrow or next week or next month, but it is happening. The investment is going into Africa, which investors now find is more secure than Australia. Investment is going into South America, where they have comparable minerals to Australia but do not have taxes like the carbon tax and the minerals resource rent tax. So there is another industry that the Greens have been instrumental in shutting down.

All credit to the Greens. They have these views and they have been enormously successful because there is a party that is weak and lacking courage—the Labor Party—who are not prepared to stand up and look after Australian jobs or do something about the enormous cost-of-living increases we are having in Australia at the moment.

Do you know that in 2001—I think that was when it was—China used to consume, if my memory is accurate, about 1.2 billion tonnes of coal every year. By 2015 China are going to be consuming 7.5 billion tonnes of coal every year. Thanks to the Labor Party and the Greens, Australia's carbon tax is putting up costs of living and sending more jobs overseas. It is supposed to reduce Australia's carbon emissions by five per cent by 2020. Isn't that going to save the world, when China is increasing its coal usage from 1.2 billion tonnes a year to 7.5 billion tonnes a year by 2015! How ridiculous! How could the Labor Party fall for the Greens' line? They know, I guess, that eventually the cycle will change—you will get a Liberal government back, which will reverse these things. The first thing we will do is abolish the carbon tax. It distresses me as an Australian—forget about my politics or the political party I am involved in—that these industries go overseas and that we continue to tax ourselves. Again, with this Illegal Logging Prohibition Bill the sentiment is right, but it should not be necessary. If we had a vibrant industry in Australia this bill would not have been necessary.

I will move to the detail of the bill. As a member of the Senate Standing Committee for the Scrutiny of Bills I alert the Senate to a number of concerns that committee had to this particular bill. There are very substantial penalties imposed by regulation—five years imprisonment. The Committee for the Scrutiny of Bills rightly said that those sorts of penalty provisions should be included in the primary legislation, not in some regulations that might, at some time in the future, be promulgated. The Committee for the Scrutiny of Bills had a number of other concerns, including the reversal of the onus of proof on strict liability offences. These concerns were raised by the committee, which is helping me come to my conclusion that this bill should be defeated.

I am also concerned about the impact that this legislation will have on the timber importation industry in Australia. I think it is a matter of fact that 97.5 per cent of the total volume of timber product imported into Australia is sourced from supplier countries where legality is not an issue. We acknowledge that 2.5 per cent of imports might be from illegally harvested forests and yet to try to address that problem we bring in the proverbial sledgehammer. That is not to say we should not keep trying but this bill, regrettably, is not going to do that. In its present form the bill is inefficient and it is bureaucratic, and it has been suggested in evidence given to the Senate committee that it is quite unworkable. As I mentioned, it is an overreaction to the possibility of illegal product entering Australia. As I understand it, those figures came from ABARES.

The timber-importing industry itself has been working with governments, since my time in government, to restrict the import of timber products sourced from illegal logging activity. But any instrument that does that must be workable, efficient and cost effective and, regrettably, this bill and the regulations—most of which we have not seen—do not seem to be the way to go.

The bill is certainly inconsistent with the government's commitment to cutting green tape and improving international trade efficiencies and arrangements. The Labor Party in opposition waxed lyrical and long about the need to reduce green and red tape. We all know their record. They have reduced red tape by a figure of, let's say, one, at the same time as they have increased regulations by a figure of about seven. So they have got rid of one and brought in seven. That is the Labor Party's commitment to a reduction in red and green tape.

There are real concerns that the timber product imported from high-risk countries is sourced from illegally logged material, but it is only a very small amount and there needs to be a better way to actually address those particular issues than the way this bill and the regulations do.

There is the issue of working more closely with our neighbours in Indonesia and PNG. We know that the Labor Party take a very cavalier attitude to Indonesia. You have only to look at how they stopped the import of a very substantial part of the protein consumption by the Indonesian people by cutting off the live cattle export without any warning to the Indonesians. We know what the Indonesians, rightly, think about that. We would be offended and we well understand why the Indonesians themselves are offended. Because this bill is poorly thought through—it takes the Big Brother approach to our neighbours in South-East Asia—it is also fraught with problems and should this legislation go ahead it is also likely to offend our nearest neighbours.

The time allotted for this speech is, regrettably, coming to an end but, for those and many other reasons I would have liked to have spoken on, I will be opposing this bill.

Senator XENOPHON (South Australia) (13:11): I indicate that I will be supporting the Illegal Logging Prohibition Bill 2012, notwithstanding that I have reservations about how effective it will be. Clearly, it is far from perfect. There is an old saying that 'The perfect should not be the enemy of the good' and I think that, on balance, this bill will do some good. If the opposition—and I say this respectfully—share the view that the issue of illegal logging should be addressed, then what alternative approach is there in respect of this so that it can be dealt with effectively rather than simply opposing the bill? That is what I got from Senator Macdonald's contribution and I respect his position on this. I do agree with Senator Macdonald that we do need to work closely with our neighbours, with Indonesia and Papua New Guinea. We have seen significant reports of corruption over the years in relation to illegal logging. Obviously, a cooperative approach, engaging with those governments, is the preferred course. But with good friends—as Papua New Guinea and Indonesia are to Australia; it is a mutual friendship, formed with very strong ties—we sometimes need to be not so much undiplomatic but more straightforward in our views and concerns about illegal logging.

Obviously, the committee stage of this bill will give us an opportunity to look at the potential effectiveness of this bill. I think this bill is, at least, a step forward. There has been wide consultation with the industry in relation to the bill. Industry is broadly supportive, although there are concerns about issues of red tape and effectiveness. I believe that we need to put this in context in terms of the evidence that has been heard by the committee and what is on the public record. This bill requires due diligence requirements to mitigate the risk of importing or processing illegally logged timber and, to me, that is important because without that sort of due diligence then the trade in illegally logged timber will continue unabated. We need to be aware of the impact of illegal logging, the level of corruption involved and the importance of tackling this issue. I see this bill as one of a number of steps and measures in tackling illegal logging.

At this point I think it is worth referring to the work that has been undertaken by Clare Rewcastle Brown. She is a British investigative journalist. She was born in the Malaysian state of Sarawak. She is the founder of the Sarawak Report website and Radio Free Sarawak. In terms of her biographical details she is the sister-in-law of former British Prime Minister Gordon Brown, so she is also known by virtue of her relationship by marriage to the former British Prime Minister.

During a visit to Sarawak in 2005 to speak at an environmental conference, Ms Clare Rewcastle Brown was asked by local journalists and others who were concerned about the impact of illegal logging to help publicise issues of deforestation. When she began to investigate this issue, she was not able to enter the state of Sarawak; she was blacklisted, despite being born in Sarawak. She also received death threats. In February 2010, she founded the Sarawak Report. This is a blog that seeks to highlight the issues of illegal logging and the destruction of the tropical rainforests of Sarawak. They have made a number of serious allegations of corruption against the state government, which is led by Chief Minister Abdul Taib Mahmud. These are matters that have been widely publicised due to her advocacy and that of the radio station, Radio Free Sarawak, which broadcasts into Sarawak to publicise these issues. Their DJ is Peter John Jaban, who is well known to the people of Sarawak.

These are issues that are in the public interest to publicise. The level of corruption associated with illegal logging is quite staggering. The profits made are staggering. This bill sets out a framework so that we can at least begin to tackle it.

It is also worth reflecting on a report about Sarawak on the ABC's 7:30 program last year on 14 April by Mike Sexton, an Adelaide based reporter. Mr Sexton made the point that Sarawak is blessed with natural resources, including stunning tropical rainforests. But during the 30-year reign of Taib Mahmud much of the forest has been cleared by logging and replaced with palm oil plantations. The deforestation has marginalised wildlife—most notably the orangutan, which is now an endangered species—and destroyed the lifestyle of the indigenous people, who traditionally live in communal homes known as long houses. Mr Sexton pointed out that the Sarawak government strenuously disputes the claims made by the radio station, arguing that it has a sustainable forestry industry and that it has delivered wealth and advancement, such as hydroelectric schemes. The home minister says that a police investigation has begun into what he calls 'the broadcast of malicious lies'. Obviously, the Sarawak government contests the claims made, although there have been investigations by the Malaysian Anti-Corruption Commission and there have been continued reports of threats and intimidation.

Most disturbingly, Clare Rewcastle Brown and Peter John Jaban decided to go public after one of their informants, a former Taib aide, was found dead in suspicious circumstances. These matters that I am referring to are on the public record. It is important to put into context the seriousness of illegal logging, the money that can be made doing it and the corruption involved. This bill will go some way towards demanding a level of accountability, due diligence and some basic levels of regulation, which will be of some considerable use. But it should be a building block for other measures to tackle illegal logging.

It is relevant in the context of considering this bill that the Australian timber industry has suffered because of illegal logging overseas. It has suffered because it cannot compete with cheap, illegally logged imports. That has cost Australian jobs and damaged the Australian industry significantly. I also note that, for instance, the Australian Network News recently, on 17 October 2012, had a story about the Premier of the Solomon Islands Guadalcanal province, Anthony Veke, calling on the government to act on illegal logging after a foreign logger was shot one weekend. This is an issue not just in Malaysia. It has been raised in Indonesia, Papua New Guinea and the Solomon Islands. This is an important and fundamental issue that this bill at least makes a genuine attempt to tackle.

Earlier this year, I was fortunate enough to meet with Tan Sri Bernard Giluk Dompok, who is the Minister of Plantation Industries and Commodities of the government of Malaysia. I discussed with him the concerns expressed by many with respect to the issue of labelling palm oil. This is not about getting people to not harvest palm oil but to ensure that it is sustainable. That means having a labelling system in force that will encourage greater production of sustainable palm oil, which is environmentally desirable. Several years ago, I introduced a bill, along with my colleagues Senator Bob Brown from the Australian Greens and Senator Barnaby Joyce from the Nationals—an unusual unity ticket if there ever was one—that sought to have palm oil products labelled. That is something that I still think is desirable. I am happy for other oils to be labelled also. I note that the opposition has shown some sympathy for that. The government has yet to act. It is important that this move should not be one against palm oil per se but about the way that palm oil is harvested. We need to make sure that it does not take place at the expense of forests being harvested illegally. The meeting that I had with Mr Dompok was a useful one.

I also had a meeting with Dr Jalaluddin Harun, who is the Director-General of the Malaysian Timber Industry Board. I must say that I was quite impressed with the approach of Dr Harun and his colleagues to the value adding of timber products. It is something that I have discussed with Michael O'Connor, the National Secretary of the CFMEU, who is quite excited at the potential for value adding of timber products, which would create jobs and is the future of a sustainable Australian timber industry.

So I think it is fair to say that the innovations through the Malaysian Timber Industry Board are very encouraging in terms of value adding, and that is clearly a relevant factor.

Going back to the issue of illegal logging, it is fair to say that there is widespread corruption. The allegations in Sarawak are incredibly serious—allegations of death threats, allegations of lives being lost—and that is very disturbing. I think this piece of legislation, by requiring due diligence to mitigate the risk of importing or processing illegally logged timber, will be useful. But I also think it would be useful for the Australian government to engage, as Senator Macdonald suggested—and I think quite wisely—with governments of those countries in the region where illegal logging is still a significant issue. But if it is the case that illegal logging in the state of Sarawak, for instance, is being sanctioned at the highest levels through the Sarawak government, then that is something Australia has to be outspoken about, and I hope this bill provides a vehicle for accountability of illegal logging that is taking place.

So I support this bill, and I look forward to the committee stages. And whilst this bill is far from perfect, I believe it contains a number of useful measures for accountability, for transparency and for due diligence that are long overdue.

Senator BACK (Western Australia—Deputy Opposition Whip in the Senate) (13:23): I wish to make clear and confirm the statements of the shadow minister, Senator Colbeck, that the coalition is strongly committed to addressing the trade of illegally sourced timber and timber products coming into this country. Contingent on the government being prepared to accept amendments that will put a reasonable time frame on this legislation, the coalition would go forward in supporting it, but in its present form and within the present time frame it will not.

I also understand that the industry itself is strongly in favour of continuing to work with the government to restrict the import of timber products sourced from illegal logging activity. But, again, industry is pleading with government for a round of consultation, both within Australia and with the countries that import timber and timber products, to ensure that the legislation is workable and that we can maintain good relations with those countries with whom we trade. The concern, both from this side and from industry, is that the bill in its present form is not going to achieve that—that it is bureaucratic and probably unworkable. And that is the role of people in this chamber: to assist the government to end up with legislation in final form that actually does make it workable and not so bureaucratic that it cannot be introduced without unnecessary imposts on industry.

I want to investigate for a moment the size and scale of the issue, if we can rely on ABARES data—and I am sure we can—as well as the relationship with our regional neighbours, particularly Malaysia, Indonesia, Papua New Guinea and to some extent China. They are the ones who will be most adversely affected should we not deal with this legislation and this consultation process in an expeditious and statesmanlike way—and we are at risk of not doing that. One of the concerns expressed to me by industry representatives is the whole question of due diligence in how they comply with the legislative requirement. Once again, we will be examining what the role of government and of government departments will be in that due diligence process. Once again, we just cannot leave this to industry without ministerial and bureaucratic involvement, and I wish to address that issue if I can. The bill is seen by many to be inconsistent with this government's commitment to cutting green tape and improving international trade efficiencies. Concern has been expressed that sufficient time has not been given to suppliers, particularly in South-East Asia, and that the timber product legality systems that have been under development would be accepted under the bill. And of course we then find ourselves at variance with some other countries of the world who import quite legally and for whom there is no question about the probity of the source of the timber and timber products. So the bill runs the risk of making timber products in this country less competitive against other building materials that are, as we know, less environmentally friendly.

But returning to the scale of the issue itself: ABARES data suggests that about 10 per cent of timber products imported into this country come from those countries that would be under some question mark—Indonesia, Papua New Guinea, Malaysia and to some extent China. If another basic assumption is correct—that up to a quarter, or 25 per cent, may be the subject of illegal logging—then we are looking at an issue involving 2½ per cent of the timber and timber products that come into the country. By definition, then—and by deduction—we know that 97½ per cent of the total volume of timber product into Australia, if you accept that figure of possibly a quarter being the subject of questionable source, is legally introduced into this country. And there is not and never has been an issue. So if we are dealing with legislation that is in some way going to put at risk that relationship with those countries, that is something we should examine, and I propose to do so.

The Joint Committee on Foreign Affairs, Defence and Trade examined this very issue. I will quote from two submissions made, respectively, by New Zealand and the United States—countries that are not under any suspicion in this. The New Zealand Institute of Forestry said:

The lack of definition of “regulated timber products” (until prescribed in regulations) adds to the difficulty of interpreting the definition of “illegally logged” and to the development of due diligence processes between importers and their exporting counterparts in other countries.

New Zealand are the largest of the importers of timber and timber products into this country, and I think the point they make should be reasonably taken on board by legislators here in Australia.

If I can, at the same time, refer to a brief quotation in their submission from the American Hardwood Export Council, they said: 'The council believes many of the trade related objections to the bill could be dealt with through outreach activities.' So we have evidence from countries with whom we have safely dealt for many years—countries that are under no threat, under no impost and under no cloud—saying to us that there are other mechanisms we can use.

I now turn to this relationship with countries in our region over whom there is the suspicion or the knowledge of illegal timber or timber products coming into this country—specifically, Indonesia, Malaysia, Papua New Guinea and to some extent China. It is only in the last few weeks that we have had the government referring to Australia as being in the Asian century. This provides us with the opportunity to define what we mean by that statement and what role we want to take. I do not think it is to the advantage of this country in its relationship with those in the region to be using a sledgehammer to crack a nutmeg in the way that we are.

I refer to submissions to the Joint Standing Committee on Foreign Affairs, Defence and Trade. The submission from the Ministry of Trade of the Republic of Indonesia makes a couple of very important points that this chamber should consider. It states:

The negative impact on trade should also not be underestimated bearing in mind that timber products commonly have long and complex chains of supply with mixed sources from different locations and different kinds of timber.

It goes on to say:

It is for this reason that the GOI has recommended the deferral of the legislation until 2015 to provide time to ensure the legislation will not have unintended consequences that will unnecessarily harm the mutual trade between our two nations. Furthermore, the three years of adjournment will provide time for proper consultation between both countries including detail clarification as well as period of adjustment for the Indonesian producers/exporters to comply with the regulation.

Again, that is a plea from our nearest neighbour—one of our largest trading partners—with whom the trading relationship over the last 12 months has been strained.

There are ample opportunities there in which we should move cautiously, in which we should take on board the advice of those who have submitted to the government and to various committees examining this particular situation—we are dealing with a circumstance possibly involving 2½ per cent of the product that is introduced into this country.

I come then to the imposition on Australian industry and Australian importers of timber and timber products. The proposed regulatory apparatus associated with this bill appears, in fact, to be contrary to the government's free-trade direction and commitment to reducing green tape. Estimates have been made that the cost of regulatory compliance as a percentage of the imported wholesale value of timber products to Australian larger importers, assuming an efficient legality verification compliance mechanism is in place—and I will come back to that—would be of the order of 2½ to 4½ per cent. That is for larger importers.

The percentage cost of compliance for smaller- and medium-sized businesses importing complex, composite products—with long supply chains right back to the grower at the point of harvest or from other countries or importing myriad product types, with each product or shipment being very small—will be immeasurably higher. In this economic climate there is such pain in the business community, reflecting itself in a lack of confidence or investment, regrettably in a circumstance of not adding new employment; indeed, they are having to put some employees off. The last thing we want to do is introduce unnecessary burdens that will further put those circumstances at stress and at risk.

It is not yet completely clear how the due diligence process will work. This is a point of immeasurable concern to industry. How does an importer comply? Is it sufficient to rely on the advice of the exporter or of a middle business associated with the exercise in the supply chain? The answer is no. The Australian importer must have their own due diligence, must satisfy themselves that there has been compliance with local laws in countries such as Indonesia, Malaysia, Papua New Guinea and China.

I ask the question, in the absence of better advice from the minister and the department: just how does an importer satisfy themselves and therefore satisfy independent scrutiny that they have undertaken that due diligence? None of that information, that due diligence process, has been released by the minister or by the department. Therefore, importing businesses in Australia are not unreasonably concerned. My own experience, limited as it is, was to observe the logging industries in Sarawak and Sabah. I can assure you, having seen what I saw and having followed up on some of the comments of Senator Xenophon a few moments ago—and I have no reason to disbelieve him, having observed what I did—as an importer, I would not like the task of going right back through the supply chain to observe for myself the compliance. Therefore, how do we deal with this matter better? We deal with it by allowing an extended period of time for consultation and we allow for a better process, a process of multilateral negotiations and liaison, a process of examining what has been undertaken successfully in Europe and the United States. We know that there have been failures in legislation and in procedures, even in such a developed country as the United States, when it comes to compliance.

The spirit of the legislation is fine but the timing is not appropriate. The mechanism by which the government is going about the process without adequate consultation and without examining alternative mechanisms is putting at risk our relationships with our nearest neighbours. They are the countries with whom, if we are to engage in the Asian century, we need to be engaging. I urge caution and I urge delay. I urge that we go through a process of consultation so that we can look at alternative ways of assisting these countries to comply. In the same way we can assist our own importing companies to ensure that, when the legislation is passed in whatever form, there are processes for due diligence that they know about, that they can comply with and that will not end up causing their businesses to fail or be significantly reduced to the extent that they become uncompetitive and allow other less environmentally friendly products to be used in the building and construction industry.

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (13:38): I thank senators for their contribution during the second reading debate. In summing up I note a report published earlier this year by the World Bank—and I think we should not miss this sentence—which stated:

Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe.

It went on to say that large-scale illegal operations are carried out by sophisticated criminal networks. Illegal logging is a social, environmental and economic issue globally, and we should not delay. Those opposite are, in effect, calling for a delay. Bear in mind that a delay means that every time we stand in this place we are saying that we support those who are part of sophisticated criminal networks that illegally log.

In 2007 the Labor Party made an election commitment to restrict the import of illegally logged timber into Australia. In 2010 both the Labor government and the coalition made election commitments to pass legislation restricting the import of illegally logged timber. What I hear now from the opposition, particularly Senator Back's helpful contribution, is that they not only want delay but are worried about a raft of issues that were addressed, by and large, in the Senate committee, by the department through workshops, through much industry dialogue and by industry itself calling for the ban of illegally logged timber. We now have the coalition walking away from that commitment. That is disappointing. It is not something I would have expected you would want the coalition to walk away from.

It is effectively a motherhood statement that we are all opposed to illegally logged timber entering Australia. It is in essence a very simple statement. It is, I suspect, difficult for Senator Colbeck to speak against the bill when, through the Senate Standing Committees on Rural and Regional Affairs and Transport, he made—and I want to recognise this—a substantial contribution to improve the bill's effectiveness and reach in this area. The government took cognisance of that, recognised the contribution that he made and accepted much of the recommendations that were put forward. The Illegal Logging Prohibition Bill, which is before us today, fulfils the government's commitment, and is another clear example of this Labor government delivering on the mandate it was given in the 2010 election to introduce this legislation. It is a bill that will support global efforts to combat illegal logging and to promote trade in legal timber. It will support our importers and our domestic processors who are already doing the right thing.

I note the concerns of those opposite about the development of regulations. I think both Senator Back and Senator Colbeck said something about correspondence between the government and the opposition on this matter. The government made an offer to the coalition about the regulations and the coalition rejected that. The government's position has always been that the regulations would be available for public comment six months from the bill passing, and I reiterate that today. The government will continue to engage with trading partners and importers and with state governments and domestic processors when developing and finalising the regulations. Again, to correct Senator Colbeck's comments about the regulations, I can advise that preliminary discussion drafts of two regulations have been distributed for comment to key trading partners and to other stakeholders. These draft regulations are available on the department's website for viewing. The distribution of these draft documents is the first step in the detailed consultation process through which the government will actively seek comment from domestic and international stakeholders as the package of regulations is developed.

The bill aligns Australia's efforts to combat illegal logging with international initiatives including legislation introduced in 2008 by the United States and developments in the European Union. The European Union are implementing a new timber regulation that requires importers to undertake due diligence when first placing timber or timber products on the market. The European Commission is scheduled to apply its timber regulation in March 2013. Australia's proposed legislation is closely aligned with the views of other countries in the Asia-Pacific region, which is reflected in the 2011 Asia-Pacific Economic Cooperation leaders declaration made in Honolulu which stated that economies would:

… work to implement appropriate measures to prohibit trade in illegally harvested forest products and undertake additional activities in APEC to combat illegal logging and associated trade.

An APEC expert group on illegal logging and associated trade has recently been established pursuant to a proposal from Chile, Indonesia and the United States and supported by Australia, and Australia participated in meetings in February and May 2012. The bill is consistent with Australia's international trade requirements under the World Trade Organization and relevant free trade agreements. The government will continue to source advice relating to Australia's international trade law obligations as the regulations are developed. Australia presented details of its proposed legislation to the Committee on Trade and Environment of the World Trade Organization on 14 November 2011.

The bill will regulate timber products at two key points of entry onto the Australian timber market—at the border, for imported timber products, and at timber-processing plants where domestic raw logs are processed for the first time. The bill will restrict the importation and sale of illegally logged timber in Australia in three main ways. First, it will prohibit the importation of all timber products that contain illegally logged timber and the processing of raw logs that have been illegally logged. The high-level prohibition enters into force on the day after royal assent of this bill. The prohibition will act as a strong deterrent and send a clear signal of Australia's intention to take action to combat illegal logging. To prosecute under this prohibition, a high bar has been set. The government will need to be able to prove that the illegally logged timber was imported or processed either intentionally with knowledge or recklessly. Second, it will require importers of regulated timber products and domestic processors of raw logs to undertake due diligence to mitigate the risk of those products containing illegally logged timber. Timber products for which due diligence will be required will be prescribed by regulations that are being worked with key stakeholders. Requirements for due diligence will come into force two years after the bill becomes law, which gives businesses sufficient time to establish and implement their due diligence systems and processes. Individual country initiatives and national schemes, including national timber legality verification and forest certification schemes like those being developed with Indonesia, can be one of the tools used by businesses in Australia to demonstrate that timber products have been legally harvested. Third, the bill establishes a comprehensive monitoring, investigation and enforcement regime to ensure compliance with all elements of the bill.

In conclusion, by restricting the trade of illegally logged timber products, this bill will restore the balance as to the legally harvested timber market. The bill will remove unfair competition posed by illegally logged timber for Australia's domestic timber producers and suppliers to establish an even economic playing field for the purchase and sale of legally logged timber products. What the bill does not do is place requirements on Australia's trading partners or their exporters. Australian importers will likely be seeing information from their suppliers about the timber they are purchasing, to minimise the risk of importing illegally logged timber. Information that may be sought will be the focus of future work and consultation. Guidance material will be developed to support those interested in the requirements under the bill. The Illegal Logging Prohibition Bill 2012 delivers on the government's commitment to restrict the importation and sale of illegally logged timber in Australia. It delivers on the promise, despite those who were opposed to what is in effect a very easy concept, that we—as a government and as individuals, traders and suppliers in the market—should not support illegally logged timber. The bill will promote the trade of legally logged timber and will be good for jobs in all well-regulated timber-producing markets. With those few words I commend the bill to the Senate.

Question agreed to.

Bill read a second time.

Senator MILNE (Tasmania—Leader of the Australian Greens) (13:49): Chair, I indicate for the benefit of my colleagues who are going to be dealing with the amendments—I am the only one with amendments and I am doing this informally now, but I will move amendments each time in a formal sense, so this is just to let people know—that it is my intention to deal with amendment (1) and then amendment (4) and then with (3), (9) and (18) together, (2), (5), (7), (8) and (19) together, (20) on its own, (21), (22), (23) and (6) together, and then (24) on its own. So I let you know that is how I would like to proceed to try and expedite things as quickly as I can. I move Australian Greens amendment (1):

(1) Page 2 (after line 7), after clause 2, insert:

2A Objects of this Act

      The objects of this Act are:

   (a) to prevent the trade of timber products derived from illegal logging; and

   (b) to help reduce illegal logging in Australia's region and globally; and

   (c) to encourage the sourcing of timber products produced using sustainable practices; and

   (d) to help Australia to become a country that trades only in sustainable timber products; and

   (e) to assist in the implementation of Australia's international obligations in relation to the eradication of corruption, including under:

      (i) the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions done at Paris on 17 December 1997 ([1999] ATS 21); and

      (ii) the Convention against Corruption done at New York on 31 October 2003 ([2006] ATS 2); and

      (iii) the Convention against Transnational Organised Crime done at New York on 15 November 2000 ([2004] ATS 12); and

   (f) to assist in the implementation of Australia's international obligations in relation to the environment, including under:

      (i) the Convention on International Trade in Endangered Species of Wild Fauna and Flora done at Washington on 3 March 1973 ([1976] ATS 29); and

      (ii) the Convention on Biological Diversity done at Rio de Janeiro on 5 June 1992 ([1993] ATS 32); and

   (g) contribute to the implementation of Australia's commitment to the environment under the Montréal Process, and the Santiago Declaration of Criteria and Indicators for the Conservation and Sustainable Management of Temperate and Boreal Forests made at Santiago on 3 February 1995.

Note:   In 2012, the text of an international agreement in the Australian Treaty Series was accessible through the Australian Treaties Library on the AustLII website (www.austlii.edu.au).

This amendment goes to the objects of this proposed act. The Greens want to include 'sustainability' in the objects clause of the proposed act. In the lead-up to the 2007 election the government announced its policy to bring in a ban on illegal timber imports with the heading 'Ensuring sustainable timber imports'. That has not appeared in the objects of the proposed act as currently before us. So the Greens believe that this is an important addition. In December 2009, the then Minister for Agriculture, Fisheries and Forestry, Minister Burke, signed off on changes to the objective of the government’s policy, which remains current. It ‘provides the basis for addressing all five components of the government’s illegal logging election commitment’. It states that the policy objective is ‘the Australian government will combat illegal logging and its associated trade by establishing systems that will promote trade in legally logged timber and wood products and, in the long term, trade in timber and wood products from sustainably managed forests’. I add, for emphasis, that it says 'sustainably managed forests'.

The explanatory memorandum recognises that this is existing government policy, and flags on several occasions the possibility of a shift from legality to sustainability in the legislation. It says:

Review elements of the policy necessary to meet the government’s policy objective would include consideration of the range of timber products that are covered and the possible timing of a shift from a legality requirement to one based on sustainability.

That is on page 49. It goes on to say:

At some future time it would be possible to consider whether the legality verification requirement could be replaced with due diligence applied to the sustainability of the products covered by the regulatory elements of the policy; (c) the economic impacts of the due diligence compliance requirements; (d) potential for increasing the legislative requirement from ‘legality’ to ‘sustainability’ of timber products (to meet the long-term objective of the policy); and (e) the effectiveness of the arrangements in reducing illegal logging in producer countries.

It is clear that the government recognises the five-year review is an opportunity to begin to examine this possible shift to sustainability. However, nothing in the bill as it is currently written reflects this. So we have a proposed objects clause which I think gives effect to what the government has said is its intention to move towards sustainability in timber trade and practice. It does so in a way that is cautious and non-prescriptive, and allows the five-year review—which is a review of the legislation, not the policy—to consider the shift from legality to sustainability. That is the basis of the amendment.

Senator COLBECK ( Tasmania ) ( 13:54 ): The opposition will not be supporting this amendment. As I indicated in my speech during the second reading stage, we have enough concerns about this legislation at the moment. I reject the minister's comment earlier that all we are looking to do is delay. What we are looking to do is allow industry and our trading partners enough time to put in place the measures that will effectively allow them to comply with this legislation. That is the concern that we have. In fact, our leader has written to the Prime Minister to express those concerns. The government rejected that opportunity.

With this clause, what the Greens are looking to do in bringing the term 'sustainability' into the whole argument—rather than the purpose of this legislation as it was originally designed, which is to deal with illegal logging—is to provide another layer in a weapon that would be used by environmental groups against industry. If you look at the Australian forest industry and the commencement of the arguments, we started off talking about old-growth forests and logging in old-growth forests. The Greens moved on from that process and started talking about high conservation value forests. In fact, some of those high conservation value forests are actually regrowth forests. Former Senator Bob Brown recently made a very glowing statement about a coupe on the back of Mount Wellington that is 'full of biodiversity, full of different species, a magnificent example of Tasmanian forest'—it was clear-felled and burnt in 1963. In the Greens' terms it was destroyed in 1963, but the Greens now claim it is a high conservation value forest and want to lock it up.

We are now talking about all native forests. The sustainability argument is one about the Greens being able to continuously redefine the argument to continue to campaign and achieve the objective of trying to kill off the forest industry—which is completely and utterly absurd when you consider that timber is the only renewable and sustainable building product available in the construction industry. Here the Greens are trying to provide a mechanism for their environmental groups, particularly some of the more activist ones, to continue to redefine the argument, to wind back the industry, to make attacks on the industry and to sustain their own political party. They have absolutely no interest in peace in the forests of Australia because then they would have nothing to argue about. The opposition will not be supporting this mechanism that the Greens have put up because it is just another mechanism for them to beat up on industry and redefine the argument to suit themselves.

This bill is about illegal logging. As the minister rightly said, the coalition has played a constructive part in the process of developing this legislation. We are disappointed that the minister has not been prepared to come as far as we might have liked to give industry—

Senator Ludwig: We have come a long way.

Senator COLBECK: I am happy to concede that you have come a fair way, Minister; but you have not come far enough to allow industry and our trading partners to put in place the provisions that will actually allow them to comply with the legislation—and that is the important thing. So we are not supporting the legislation and we are certainly not supporting this amendment.

Senator LUDWIG ( Queensland — Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery ) ( 13:58 ): I understand the Greens position on this. The government will not be supporting the amendment for the principal reason that this is about what clause 6 of the bill makes very clear—that the purpose of the bill is to prohibit the importation of illegally logged timber and the processing of illegally logged raw logs and requires importers of regulated timber products and processors of raw logs to conduct due diligence in order to reduce the risk that illegally logged timber is imported or processed. That is the essence of what the bill does. It does not stretch into the objects clauses, particularly what the objects clause in your amendment goes to. It is a very specific piece of legislation that is designed to prohibit the importation of illegally logged timber and the processing of it domestically.

What I can say is that the 2010 election commitment by the Australian Labor Party makes it clear that that would be the nature of the legislation that we would be implementing. I will end there and continue after question time.

Progress reported.

Senator McEWEN (South Australia—Government Whip in the Senate) (15:46): At the request of Senator Heffernan, I move:

That the Rural and Regional Affairs and Transport References Committee be authorised to hold an in camera hearing during the sitting of the Senate on Tuesday, 20 November 2012, from 4.30 pm, to take evidence for the committee’s inquiry into the Foreign Investment Review Board national interest test.

Question agreed to.

Senator McEWEN (South Australia—Government Whip in the Senate) (15:46): At the request of Senator Heffernan, I move:

That the Rural and Regional Affairs and Transport References Committee be authorised to hold a public meeting during the sitting of the Senate on Wednesday, 21 November 2012, from 4 pm, to take evidence for the committee’s inquiry into aviation accident investigation.

Question agreed to.

Senator McEWEN (South Australia—Government Whip in the Senate) (15:46): At the request of Senator Pratt, I move:

I move:

That the Joint Standing Committee on the National Capital and External Territories be authorised to hold a public meeting during the sitting of the Senate on Wednesday, 28 November 2012, from noon to 1.45 pm, to take evidence for the committee’s inquiries into the 2010-11 annual reports of the Department of Regional Australia, Regional Development and Local Government, and the National Capital Authority.

Question agreed to.

Senator McEWEN (South Australia—Government Whip in the Senate) (17:17): On behalf of the Select Committee on Electricity Prices, I present the Hansard record of proceedings and documents presented to the committee.

The ACTING DEPUTY PRESIDENT ( Senator Bernardi ) (17:17): Order! The President has received a letter from a party leader seeking a variation to the membership of a joint committee.

Senator McLUCAS (Queensland—Parliamentary Secretary for Disabilities and Carers and Parliamentary Secretary to the Prime Minister) (17:17): by leave—I move:

That Senator Ruston replace Senator Edwards on the Rural and Regional Affairs and Transport References Committee for the committee’s inquiry into the management of the Murray-Darling Basin on Friday, 23 November 2012, and Senator Edwards be appointed as a participating member.

Question agreed to.

Senator McLUCAS (Queensland—Parliamentary Secretary for Disabilities and Carers and Parliamentary Secretary to the Prime Minister) (17:18): These bills are being introduced together. After debate on the motion for the second reading has been adjourned, I shall move a motion to have the bills listed separately on the Notice Paper. I move:

That these bills may proceed without formalities, may be taken together and be now read a first time.

Question agreed to.

Bills read a first time.

Senator McLUCAS (Queensland—Parliamentary Secretary for Disabilities and Carers and Parliamentary Secretary to the Prime Minister) (17:19): I table four revised explanatory memoranda relating to the bills, and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

FAIR ENTITLEMENTS GUARANTEE BILL 2012

In 2010 the Gillard Labor Government made an election commitment to better protect the entitlements of Australian employees impacted by the insolvency or bankruptcy of their employer.

This commitment, entitled the Protecting Workers’ Entitlements Package, provides the strongest protection of employee entitlements working Australians have ever seen.

We made this commitment because Labor is the party of work and what work provides for us, financially but also for our families and sense of well being in society.

Today, I rise to introduce a bill which embeds our commitment to this package as it relates to the Fair Entitlements Guarantee.

In doing so the Fair Entitlements Guarantee Bill 2012 will replace the existing General Employee Entitlements and Redundancy Scheme (GEERS) and enshrine the Fair Entitlements Guarantee in legislation.

The bill will provide certainty for Australian employees who find themselves without a job and left out of pocket when their employer becomes insolvent or bankrupt and cannot pay them the employment entitlements they are owed.

On this side of the chamber we know that employees who lose their job through insolvency or bankruptcy of their employer have enough to worry about. They have to worry about where their next mortgage repayment will come from. They have to worry about how to buy the children new clothes or pay school fees. They have worry about what money will cover unexpected bills or an unexpected emergency. Those of us on this side of the chamber believe that these individuals should not have to worry about being paid what they have already earned.

It will be a good day for working Australians when this bill passes and they have certainty that their entitlements are protected even if the company they work for enters liquidation and cannot pay them what they are owed.

This bill will protect Australian employees under circumstances which are brought about through no fault or choice of their own.

This bill will ensure that Australian employees who are victims of employer insolvency or bankruptcy, where employment entitlements are owed, are supported by a Government that supports Australian workers.

In doing so, this bill also enshrines Labor’s commitment to the Australian sense of a fair go by providing a legislative framework employees can rely on and an entitlement which, unlike the employment entitlements those opposite advocate for, cannot be scrapped with the flick of a pen.

Eligible entitlements

Under this bill, eligible employees will be covered for unpaid entitlements including:

Redundancy;

Annual leave;

Long service leave;

Wages; and

Payment in lieu of notice.

In the majority of cases, employees will be entitled to an advance for unpaid entitlements as provided for in the relevant industrial instrument under which they are employed.

The bill will protect redundancy pay, up to a maximum of 4 weeks per year of service. This will mean that most employees will receive all of the redundancy entitlements they are owed.

The bill will only enable payment of unpaid wages for up to 13 weeks and will provide payment in lieu of notice at 5 weeks.

This bill also strengthens the recognition of eligible entitlements for employees who continue to be employed following the appointment of an insolvency practitioner. Under current arrangements, some employees lose out if they continue working through the administration of the company and neither the administrator nor GEERS covers their unpaid entitlement.

From now on if you are an employee in this situation you will be entitled to receive unpaid entitlements accruing right up to your last day of working. No longer will there be a gap in entitlements paid.

Where an advance for entitlements is made, the Commonwealth is empowered for recovering advances from the dividends payable once companies are wound up. In doing so this bill proposes that the Commonwealth have the same rights as creditors in the winding up or bankruptcy of the business that the employee would have otherwise had. This measure strengthens the Government’s commitment to working Australians and the taxpayer. It also makes clear that those companies who enter insolvency or bankruptcy due to irregular business practices can no longer avoid paying the entitlements of hard working employees.

Eligible employees

I want to make it clear that this bill establishes an important legislative safety net for genuine employee redundancy. It is not a scheme which can be used recklessly by employers seeking to purposely renege on their employer obligations. Under the bill, employees will only be eligible for an advance in genuine cases where they have lost their job as a result of the insolvency or bankruptcy of their employer.

Some people will not be eligible for advances under this proposed legislation. The bill maintains existing arrangements under GEERS that advances will not be payable to people that are excluded under the Corporations Act - contractors, directors and family members of a director.

This bill mirrors existing GEERS arrangements that assistance will not be available to support business restructures or where insolvent entities are able to pay employee entitlements within a reasonable period.

The Government has also taken the opportunity to simplify the assessment of transfer of business arrangements. To this end, from 1 July 2014, only where a claimant’s entitlements and service are recognised by the new employer will they be ineligible for financial assistance under the bill.

This measure will overcome operational barriers in assessing claims and reduce unnecessary delays in employees receiving their entitlements.

To further reduce complexity, this bill will also remove the existing eligibility arrangements for employees affected by Deed of Company Arrangements (DoCA) or equivalent bankruptcy proceedings. Employees often get very little say in how these DOCA arrangements are structured and it simply is not fair that they be disadvantaged when they don’t work well enough to save their job.

The bill maintains existing arrangements under GEERS that a claim for assistance will need to be made within 12 months.

The bill also clarifies that to be eligible for assistance under the bill, a claimant must have met the residency requirements as at the date of termination, as this is the most relevant date to assess what level of assistance an employee is entitled to receive.

The bill also includes three important areas where capacity for flexibility is needed. By outlining the circumstances and conditions that must exist before flexibility can be used, the bill contains the following key areas:

ability to make payments in administration prior to liquidation;

early advance of a payment; and

a regulation making power to enable regulations to be made to facilitate payments to people who are not employees.

Reviews and appeals

Ensuring a fair and transparent decision making process is a key part of this bill. A person that makes a claim for an advance can be confident that their claim will be assessed in a just and transparent way.

Where a person does not agree with a decision in relation to their eligibility for an advance or the amount of an advance they are eligible for, they will have the right to apply for a review of the decision. As is currently the practice under GEERS, where a decision is able to be reviewed, the Department will review the initial decision and advise the applicant of the review decision and the reasons for the decision.

Importantly, under this bill where a person does not agree with a review decision they may apply to the Administrative Appeals Tribunal for an external review. The Administrative Appeals Tribunal will conduct an impartial and timely review. This change to the review process will improve transparency and accountability.

Conclusion

I am proud that we are meeting the election commitment to better protect the entitlements of Australian employees impacted by the insolvency or bankruptcy of their employer. Protecting Workers’ Entitlements Package provides the strongest protection of employee entitlements working Australians have ever seen.

Today, Labor delivers on that commitment and with the passing of this bill the Government will deliver on its pledge to Australian employees by providing a clear, fair and robust legislative framework to protect the entitlements Australians work so hard for every day.

The Fair Entitlements Guarantee Bill I am introducing today is supported by the Labor Government and a range of stakeholders. We hope those opposite will also support this bill so as to ensure even stronger protections for working Australians across our Nation.

I commend this bill to the Senate.

TAX LAWS AMENDMENT (2012 MEASURES NO. 5) BILL 2012

This bill amends various taxation laws to implement a range of improvements to Australia’s tax laws.

Schedule 1 makes a small but important amendment to the definition of ‘eligible no-till seeder’ for the purpose of the conservation tillage refundable tax offset in Subdivision 385 J of the Income Tax Assessment Act 1997. Currently, in order to access the offset, a primary producer must purchase a no till seeding tool and a cart.

This requirement was included following consultation on the initial measure to ensure that farmers could access the offset on the cart as well. However, it is the ground-engaging tool component that delivers the benefits of conservation tillage practices, while the cart simply carries the seed and fertiliser.

Concerns raised since that initial legislation was passed suggested that the requirement to purchase both the cart and the tool together creates a financial barrier to participation in the tax offset, or conversely could encourage wasteful behaviour.

The amendment remedies this by ensuring that an eligible no-till seeder can comprise either the tool alone or the combination of the cart and the tool. The measure will apply from the same time as the original measure, 1 July 2012, to the benefit of primary producers wishing to upgrade just their seeding tool.

Schedule 2 phases out the mature age worker tax offset (MAWTO) from 1 July 2012 for taxpayers who were not already 55 or older on 30 June 2012, that is, those born on or after 1 July 1957.

Those currently eligible because they were aged 55 years or older on 30 June 2012 are unaffected by the change and remain eligible for the MAWTO.

By closing off the MAWTO to new recipients and investing in better targeted participation programs the Government will improve value for money while protecting those who have built the MAWTO into their household budgets.

The Government is encouraging workforce participation by older Australians through the $26 million Mature Age Participation – job seeker assistance program. This will provide eligible mature age job seekers aged 55 and over with a peer based environment in which to develop their IT skills, undertake job-specific training and prepare for work.

The Government’s $41 million response to the Final Report of the Advisory Panel on the Economic Potential of Senior Australians includes $10 million for new Jobs Bonuses that will encourage businesses to employ older Australians who want to stay in the workforce. The $1,000 bonuses will be paid to employers who recruit and retain a mature age jobseeker for three months.

The Government is also providing a $15.6 million extension of the successful Corporate Champions program to provide support to employers who wish to promote mature aged employment at their workplace.

Schedule 3 amends the excise law by putting in place a robust and sustainable compliance regime for gaseous fuels (liquefied petroleum gas – LPG, liquefied natural gas – LNG, and compressed natural gas – CNG) that recognises that the fuel tax regime applied to these fuels is different from that applying to liquid fuels.

The liquid fuels ― petrol and diesel ― are all subject to fuel tax before leaving licenced premises and entering the market. Fuel tax is subsequently removed if the fuel is used for non-transport purposes by way of fuel tax credits.

However, LPG and LNG that are destined for non-transport use are subject to automatic remissions of tax while non-transport use CNG receives an exemption when it enters the market.

As a result of the different approach for gaseous fuels where untaxed gaseous fuels can be held on unlicenced premises, a different administrative approach is required to ensure that fuel excise is paid when it should be.

The amendments ensure that for duty-free gaseous fuels there are requirements on suppliers, whether licensed or unlicensed, for record-keeping and providing access to ATO officials. There is also an appropriate penalty regime to encourage compliance.

This regime will have lower compliance costs for the gaseous fuels industry than applying fuel tax to all gaseous fuels that enter the Australian market, with subsequent fuel tax credits where appropriate. Businesses that currently comply with their excise and excise-equivalent duty obligations should already be keeping the required records.

The remaining amendments in Schedule 3 clarify the tax treatment of gaseous fuels used in forklifts and make it clear that gaseous fuel not directly used in fuel manufacture is subject to duty.

The amendments in Schedule 4 make clear how fuel blends will be treated in the future. This is done by clarifying the Commissioner of Taxation’s power to make legislative instruments to deal with these situations, rather than relying on legislative rules for exemption. This will provide certainty for the industry, as well as a more flexible and robust approach.

The amendments commence on 1 December 2012.

Schedule 5 amends the list of deductible gift recipients (DGRs) in the Income Tax Assessment Act 1997. Taxpayers can claim income tax deductions for certain gifts to organisations with DGR status. DGR status will assist the listed organisation to attract public support for their activities.

Schedule 5 adds one new organisation to the Act, namely, The Diamond Jubilee Trust Australia. The Diamond Jubilee Trust Australia has been established to raise funds in Australia for the commemoration of Her Majesty Queen Elizabeth II’s Diamond Jubilee. It will collect funds for the purpose of delivering charitable projects for the support and advancement of individuals of all ages, with a focus on the poor and disadvantaged, through supporting the work of the Queen Elizabeth Diamond Jubilee Trust in the UK.

Schedule 6 amends the wine equalisation tax producer rebate provisions to ensure that a wine producer cannot claim a rebate for wine used in manufacture, unless the previous producer or supplier provides a notice that a previous producer is not entitled to the rebate on that wine.

The changes protect the integrity of the rebate by removing the opportunity existing under current legislation for multiple rebates to be claimed on the same quantity of wine. The Government has responded to the wine industry’s concerns about inappropriate access to the rebate.

The amendments reduce the amount of rebate a producer can claim for acquired wine used in manufacture, unless a notice is received. The amendments provide a voluntary system of notification, where notices state the extent to which the rebate has not been claimed on a sale of wine.

The amendments also prevent multiple claims of the rebate with respect to wine purchased from a New Zealand participant.

The amendments apply to assessable dealings on or after 1 December 2012 or the day on which this Act receives Royal Assent, whichever is later.

Full details of the measures are contained in the explanatory memorandum.

I commend this bill to the Senate.

Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill 2012

This bill amends the Water Act 2007 to facilitate adjustment of the long-term Sustainable Diversion Limit (SDL) under the Basin Plan, within clearly set limits, and with a clearly defined process to provide transparency to this Parliament and the community. This mechanism will allow jurisdictions to work together collectively to improve on the socio-economic and environmental outcomes of the Plan.

I am committed to making a Murray-Darling Basin Plan to be presented to the Parliament that delivers a healthy river, strong communities and sustainable food production. The Basin Plan involves far reaching reform of water management so that the Basin is managed as a single connected area and in the national interest. It is clear that there will be a continuing need to adapt management of the Basin’s water resources over the next decade to respond to opportunities to obtain and enhance environmental outcomes, with, at least, no worse socio-economic condit­ions and vice versa. It is my view, therefore, that the Basin Plan should include an SDL adjustment mechanism. The mechanism will allow the outcomes of work to improve river management rules, infrastructure upgrades and the removal of constraints on the delivery of environmental flows to be integrated into the Basin Plan.

The inclusion of an SDL adjustment mechanism in the Basin Plan, which will be facilitated by this amendment, has been sought by all Basin governments. Stakeholders also raised the need for such a mechanism as part of the 20 week public consultation on the Basin Plan. The House of Representatives Standing Committee on Regional Australia, in its July 2012 Report into certain matters relating to the proposed Murray-Darling Basin Plan, also recommended the Commonwealth develop a mechanism to adjust SDLs automatically.

This amendment will allow the adjustment mechanism in the Basin Plan to operate as effectively as possible.

It is not the purpose of the bill to create the legal possibility of a mechanism. This already exists under the section 23 of the current Water Act. However, all jurisdictions and the Murray-Darling Basin Authority (the Authority) have now agreed that it is desirable for the Basin Plan to include an improved adjustment mechanism. The bill sets out the broad parameters for the mechanism, how it is intended to operate, and introduces transparency in the process, requiring any use of the mechanism to be reported formally and publicly to the Parliament.

Under the Water Act, the Basin Plan itself is a disallowable instrument and parliament will have the opportunity by that means to consider the precise elements of the SDL adjustment mechanism that will be written into the Basin Plan.

The current version of the Basin Plan includes an adjustment mechanism in accordance with the current act. As the legislation currently stands Parliament would not be notified of any adjustments, as well as these adjustments not being disallowable. This bill improves transparency while maintaining the position that amendments would not be disallowable.

The Water Act requires that the Basin Plan include an SDL for the water resources of the Murray-Darling Basin. This bill allows the Authority to make adjustments to the SDL in accordance with the provisions of the Plan. The adjusted SDL must continue to reflect an environmentally sustainable level of take, which is defined in the Water Act to include several elements.

It is envisaged that criteria to be specified in the Basin Plan will reflect the intention of all Basin Governments that the mechanism must operate on a no-detriment basis. The adjustments would then not be able to weaken the social, economic and environmental outcomes inherent in the Basin Plan.

Projects that enable environmental water to be used more efficiently, thereby reducing the need to remove additional water from productive use, must achieve equivalent environmental outcomes to those in the Basin Plan. Projects to enable improved environmental outcomes, must maintain or improve the socio-economic circumstances of basin communities compared with the Basin Plan.

Initiatives to recover more environmental water are likely to focus on things like improving the efficiency of on-farm irrigation or off-farm irrigation water delivery systems. The savings recovered by these initiatives will enable improved environmental outcomes to be achieved without impacting on irrigated production. These projects would be in addition to those already approved or planned to contribute at least 600GL towards the recovery of the proposed 2750GL, through the current Sustainable Rural Water Use and Infrastructure Program.

It is envisaged that governments would consider new investment in additional projects – called efficiency measures, in conjunction with action to address particular constraints in the system, thereby enabling the best use of any additional water recovered for the environment. The government’s intention is that all ‘impact neutral’ water recovered under these efficiency measures can only be credited towards delivering environmental outcomes beyond those envisaged under a 2750GL reduction.

The water savings identified through projects – called supply measures, to make environmental watering more efficient, will mean the proposed 2750GL recovery volume can be reduced. These proposals will need to achieve equivalent environmental outcomes to those under the 2750GL reduction proposed in the plan. An example of a supply project could be installing works on a significant floodplain site to deliver improved environmental outcomes at that site but by using less water.

Projects of the sort that could in the future deliver efficiency or supply measures are already underway in many communities throughout the Basin. Some of these I have described above. However, there is always room for innovation. This bill allows for projects like those above that are familiar to communities and industry, as well as for innovative ideas, to be considered. As is standard practice, projects will be put forward by the community, stakeholders, industry and/or Governments. Projects will be developed over time and in consultation with funding bodies, and will undergo thorough assessment in the business case stage and also due diligence checks. This means projects will be well understood by the time they are considered and assessed by the Basin Officials Committee and the Authority.

The adjustment of the SDL will need to be based on the best available science, involving the use of models and assumptions generally accepted by professional hydrologists and other experts at the time the calculation of any adjustment is made.

The bill allows the Authority to determine that criteria set out in the Basin Plan have been met for the purpose of adjusting the SDL after considering advice from the Basin Governments through the Basin Officials Committee.

This bill provides that an adjustment may be made within a specified variance threshold; a maximum of five per cent of the SDL of Basin water resources as a whole, though the variance at individual water resource plan areas or parts of water resource plan areas may be more or less than this.

The bill will allow the Basin Plan to require the adjustments to be reflected in the State water resource plans, including during the generally ten year accreditation period of these plans. Having these State plans include a mechanism to reflect the outcomes of projects to use less environmental water and recover more water for the environment without impacting on the local economy means, that the outcomes of projects will be given effect in water resource plan. The precise mechanism for this would be included in the Basin Plan.

The bill requires Minister to table in Parliament the notice of adjustment and the amendment. The amendment will be a non-disallowable instrument reflecting its technical nature and that the criteria for any adjustments will be included in the Plan itself, which is a disallowable instrument. In addition to the explanatory statement that accompanies all legislative instruments, the bill requires that a notice be tabled with any amendments. This notice must include detailed information on the changes to the SDL at the water resource plan area level and at the Basin wide level, together with an outline of the material on which the Authority based its decisions in determining that the criteria in the Plan have been met in relation to whether to adjust the SDL and the amount of the adjustment.

In closing, these amendments to the Water Act 2007 will provide a simplified but certain and transparent process for making adjustments to the SDL within the Basin Plan, and enable the potential benefits of these far-reaching reforms to be fully realised.

I commend this bill to the Senate.

WHEAT EXPORT MARKETING AMENDMENT BILL 2012

On 1 July 2008, the Australian Government reformed wheat export marketing arrangements with the abolition of the single desk and the establishment of the Wheat Export Accreditation Scheme (the Scheme) administered by Wheat Exports Australia (WEA). Previously Australian farmers could not choose who would export their wheat.

The abolition of the single desk has led to improved productivity and created new global export markets for Australian growers. This has led to improved job opportunities in rural and regional centres. There are now 26 accredited exporters with 19 of these being active in the last marketing year.

As promised by the government when the reforms were introduced, an independent review of the arrangements was undertaken by the Productivity Commission in 2010. The Commi­ssion found that the Scheme had served industry and the nation well, but that the industry was now mature enough to move to a deregulated model.

The government agrees in-principle with the Commission's recommendations. However, after carefully considering the views put forward by industry, it has decided to introduce the next set of changes through a staged approach which will provide a more efficient transition to full market deregulation in the longer term.

The first stage was the introduction of a 'lighter-touch' accreditation scheme to be applied until 30 September 2012. This change has reduced the level of 'red tape' for exporters while still meeting grower concerns about 'fit and proper issues' and maintaining the link with the access test for port operators that many exporters believe is critical. It is, however, not a 'softer-touch' as WEA still has the capacity to respond to any issues that may relate to the accreditation of an exporter.

Passage of the Wheat Export Marketing Amendment Bill 2012 will implement the next stages of the government response and complete the transition to a fully deregulated bulk wheat export market.

The bill will abolish the Scheme and the Wheat Export Charge (WEC) on 30 September 2012. WEA will continue in operation until 31 December 2012 to complete outstanding tasks such as preparation of its final Annual Report and also the Report for Growers.

Abolishing the Scheme will ensure that the benefits to industry provided by accreditation during the transition to deregulation are not undermined in the longer-term by the direct and indirect costs of continuing with a scheme that has served its purpose. These costs include the WEC and the administrative and regulatory burden of accreditation, as well as the negative impact of unnecessary regulation on efficiency and competition in the wheat industry over time.

The recent strong export performance has led to the WEA Special Account holding more funds than are required to fund the operation of WEA. As this represents an overpayment of industry funds, the government will look to amend the regulations and set the WEC rate at zero as soon as possible.

However, the Account will still hold surplus funds when WEA is abolished. The Department of Agriculture, Fisheries and Forestry will be repaid $500 000 owing from a previous funds transfer that was not used. The remainder will be reinvested in the wheat industry after consultation with relevant stakeholders.

The government agrees with the Commission's recommendation to retain the access test until 30 September 2014. The link between the access test and the ability to export bulk wheat will remain during this period. This action responds to concerns among some growers and traders about possible anti-competitive behaviour with respect to grain port terminal access.

Retaining the access test until 2014 will give the industry sufficient time, and appropriate incentives, to adjust to the new trading environment. It will also allow for some new features of the competitive environment to be institutionalised, while minimising the chances of damaging future investments or undermining reasonable returns to existing asset holders.

The bill will facilitate the removal of the access test requirements for grain port terminal operators on 30 September 2014. The market will then move to full deregulation, with all aspects of the industry subject to general competition law administered by the Australian Competition and Consumer Commission (ACCC). This will bring the wheat export market into line with other agricultural commodity markets and promote further competition in the wheat export industry, leading to increased productivity and profitability.

To provide certainty for growers and bulk wheat exporters about security of access to grain port terminal services in the longer-term, the access test will only be abolished if the industry has a non-prescribed voluntary code of conduct covering grain export terminal operations in place. The code must include continuous disclos­ure rules and be consistent with ACCC guidelines for voluntary codes of conduct. The Minister for Agriculture, Fisheries and Forestry will determine if the code of conduct is of a standard that will allow the abolition of the access test.

The implementation of an industry code of conduct will give growers certainty that, irrespective of which exporter they sell to, their product will gain access to grain port terminal services. It will reinforce Australia's international reputation as a reliable wheat supplier and give overseas customers certainty that all Australian exporters will be able to meet supply commitments. It will also help ensure that these facilities have the necessary throughput to attract the level of return on investment required to keep them viable.

The government is aware of some concerns from parts of the wheat industry that a lack of access to market information on stocks and flows of grains is impacting competitiveness. The government is willing to help industry find a solution, potentially through the voluntary code of conduct. It is already working with Grain Trade Australia and the wider industry to develop the code and strongly encourages all industry sectors to engage in this process.

If an acceptable code is not approved, the requirement for bulk wheat exporters that are grain port terminal service providers to pass the access test in order to be able to export will continue.

The bill reflects the government's commitment to promoting competition within the wheat export industry. Australian producers are the most innovative and efficient in the world. Passage of the bill will further develop a wheat marketing system that rewards this and provides benefits for all industry sectors.

I commend this bill to the Senate.

Debate adjourned.

Ordered that the following bills be listed on the Notice Paper as separate orders of the day:

(1)   Fair Entitlements Guarantee Bill 2012

(2)   Tax Laws Amendment (2012 Measures No. 5) Bill 2012

(3)   Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill 2012

(4)   Wheat Export Marketing Amendment Bill 2012

Senator CAROL BROWN (Tasmania—Deputy Government Whip in the Senate) (17:20): Pursuant to order and at the request of the chairs of the respective committees, I present reports on legislation from the Legal and Constitutional Affairs, the Education, Employment and Workplace Relations, the Environment and Communications and the Economics Legislation Committees, as listed at item 16 on today’s Order of Business, together with the Hansard records of proceedings and documents presented to the committees.

Ordered that the reports be printed.

The TEMPORARY CHAIRMAN ( Senator Bernardi ) (17:21): The committee is considering the Illegal Logging Prohibition Bill 2012. The question is that amendment (1) on sheet 7202 be agreed to.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:21): Just before question time, the minister was indicating that he would not be supporting the inclusion of sustainability in the objects clause.

I am very disappointed in that. The government was being consistent totally with what the Labor Party said it would do—and that was to provide for a transition to sustainability ‘in the long term trade in timber and wood products from sustainably managed forests’—and now the government has abandoned that.

I was very disappointed to hear Senator Colbeck saying that the inclusion of sustainability was somehow an attack on the logging industry. The logging industry are saying all the time that what they do is sustainable. It is questionable, of course, and we would argue that it is not sustainable. But, nevertheless, they would say that their principle is to behave in a sustainable manner and to manage forests in a sustainable way. However, I accept the fact that both the coalition and the government are refusing to include sustainability in this bill about preventing illegal logging.

But before we move on I ask the government: given that it is the government’s intention, as it says, to be able to transition within five years, and to meet the government’s policy objective, can the minister explain to me how that is going to happen if sustainability is not in the objects clause?

Senator McLUCAS (Queensland—Parliamentary Secretary for Disabilities and Carers and Parliamentary Secretary to the Prime Minister) (17:23): I thank Senator Milne for her question and her comments. At the outset I indicate to the chamber that we are clearly of the view that this legislation, as drafted, does in fact comply with both our 2007 and our 2010 election commitments. I will quote them.

Labor will encourage sourcing of forest products from sustainable forest practices and seek to ban the sale of illegally logged timber imports.

The bill will send the right message to sophisticated criminal networks. It delivers on our 2007 and 2010 election commitments, and as such we will not be supporting the Greens amendment, as indicated.

The TEMPORARY CHAIRMAN: The question is that amendment (1) on sheet 7202 be agreed to.

Question negatived.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:24): I move Greens amendment (4) on sheet 7202, standing in my name:

(4) Clause 7, page 5 (line 5), at the end of the definition of illegally logged, add "including, but not limited to, laws about the following matters:

(a) rights to harvest timber within legally gazetted boundaries;

(b) amounts payable in relation to rights to harvest and timber, including duties related to the harvest of timber;

(c) harvesting timber, including environmental and forest legislation including forest management and biodiversity conservation where it is directly related to harvesting timber;

(d) legal rights of third parties in relation to land use and tenure that are affected by harvesting timber;

(e) customs and other tax duties in relation to the timber product sector;

(f) trade in timber products.".

This is a very important aspect of the bill. It goes to the definition of ‘illegal logging’. If this is going to be an effective piece of legislation, our definition of ‘illegal logging’ has to be consistent with that of other people around the world; otherwise, we are just going to end up with leakage. So, if the EU says a product is not suitable for their market because they regard it as being illegally logged, and we on the other hand say, ‘No, actually our definition is different,’ we are then going to have material sent here that would not comply in the EU.

The current definition lacks clarity and certainty. It simply says:

illegally logged, in relation to timber, means harvested in contravention of laws in force in the place (whether or not in Australia) where the timber was harvested.

This is quite different; it is very vague. The EU has much more specific definitional requirements. The Greens amendment seeks to ensure that the definition of ‘illegally logged’ is consistent with the EU definition. That is why at the end of the definition of ‘illegally logged’ we want to include—and it would include but not be limited to—laws about the following matters: rights to harvest timber within legally gazetted boundaries; amounts payable in relation to rights to harvesting timber, including duties relating to the harvest of the timber; harvesting timber, including environmental and forest legislation including forest management and biodiversity conservation where it is directly related to harvesting timber; legal rights of third parties in relation to land use and tenure that are affected by harvesting timber; customs and other tax duties in relation to the timber product sector; and trade in timber products. That is exactly consistent with the EU.

Also, the legal rights of third parties in relation to land use and tenure are critical because we find in many of the areas where timber is being illegally logged the rights of indigenous people, in particular, are abused as licences are granted over areas to which they have actual traditional rights. They are thrown off the land and the timber is harvested for the profit of the company that has the licence, whether or not that has been legally granted.

So, to just say that ‘illegally logged’ means ‘harvested in contravention of laws in force in the place’ is way too vague. I reject the government’s reasoning here: that by becoming more prescriptive in the definition you might result in some elements of applicable legislation being overlooked or excluded through omission. That is one way of looking at it. On the other hand, when you go so vague it is going to be difficult to prove that something is illegally logged. So, I ask why the minister did not make it consistent with the EU definition. The EU have had this definition for some time. What is wrong with the EU definition and why would we not have adopted a definition consistent with it?

Senator McLUCAS (Queensland—Parliamentary Secretary for Disabilities and Carers and Parliamentary Secretary to the Prime Minister) (17:28): The government did go through a process of considering all representations that were made around the question of a stricter definition. I understand there are a number of systems in place around the world, and the EU is one, but there are others. After consultation, particularly through the Senate committees, we believe we have a very clear definition in the bill. It says:

illegally logged, in relation to timber, means harvested in contravention of laws in force in the place (whether or not in Australia) where the timber was harvested.

The definition was supported by the two Senate committees that considered the bill, who noted:

… a prescriptive definition of illegally logged may have unintended consequences, or may result in some elements of applicable legislation being overlooked or excluded through omission.

The government is of the view that we have the balance right, and we will not be able to support the Greens amendments.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:29): By accepting such a vague definition we are going to end up with no cases actually ever able to be proven, because the laws in force in the place where the timber was harvested will be determined entirely by the level of corruption, or otherwise, in the administration concerned. It is as simple as that.

Are you going to tell me that in certain areas—in certain parts of Indonesia, for example—people are not going to hand out licences which will be consistent with the law of the place but nevertheless will be based on a corrupt regime? I still have not had an answer, and perhaps the minister can inform me why we would not go with the EU definition. What is wrong with going with a more specific definition that actually lays it out?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:30): The definition is a clear definition within the bill. In relation to timber, it means harvested in contravention of the laws in force in the place, whether or not in Australia, where the timber was harvested. This has been through two Senate committee inquiries that considered the bill and noted—and this is the challenge for us all—that:

… a prescriptive definition of illegally logged may have unintended consequences, or may result in some elements of applicable legislation being overlooked or excluded through omission.

So you can end up being far too prescriptive, which means that you find gaps, omissions and holes and you then have to backfill those and you end up with a very long, convoluted definition.

My view—and I think the Senate committee reports hold the same view—is that a clear, simple definition covers all of the issues that we have referred to. Over the next two years we will develop the regulations. Parts of the drafts are already out for discussion with the various stakeholders to ensure that the circumstances in which you describe do not occur. No-one wants to see illegally logged timber from any country get into this country. It is imperative that we have a system in place—the due diligence process—that ensures that.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:31): I would just ask the minister to tell me what is wrong with the EU definition.

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:32): That is a matter for the EU. I am sure when you are in parliament with the EU you can ask them that question. What I am keen on doing is ensuring that the legislation for this country is relevant, simple, and concise and meets the expectations of stakeholders and is workable.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:32): I hope that, when it is virtually impossible to bring a case, this will be reviewed. I have yet to see from the government or anyone else what is wrong with the EU definition. Nobody has actually been able to come up with that. They have been working with this for a while. However, I hear you saying that you are not going to accept a more defined and prescribed definition of illegally logged—and so be it.

Senator COLBECK (Tasmania) (17:33): I indicate that the opposition will not be supporting this particular amendment. It gives a clear demonstration of the problem that the government has got itself into with this bill, whereby the regulations are not fully available yet and so nobody really understands the fundamentals of how a breach of the act might occur. Hence we see the Greens again trying to expand the operations of the legislation versus what might occur in the regulations—which the minister has said are supposed to be available shortly and some of which are already available.

The fundamental difference between the European system, the FLEGT system, and what is being proposed here in Australia is that the European system is in fact a voluntary process, where countries make nation-to-nation arrangements that deal with the specifics of the relationships between the two countries. This is a catch-all piece of legislation that deals with everything in one hit. So there is a good reason to have a difference in the way that the definitions are put together in this context, because we are dealing with a number of pieces of legislation and a number of arrangements in a number of countries. For example, the land tenure issues in an individual country will be very different in one place to another place. In the EU circumstance, given that it is a voluntary process and those arrangements are dealt with under the umbrella of the FLEGT system on a nation-to-nation basis, there is a very good reason to have a process where you might be more specific in the way that you deal with it.

In this circumstance, the government is again reinforcing the reasons that the coalition is concerned about the way that this bill is being brought on. The fact is that we wanted the opportunity to be able to use the Senate process to scrutinise the regulations prior to the bill being enacted, so that we could make sure that these sorts of problems did not occur and we could cover off with them as part of the Senate process. Whether or not that occurs, I am not sure. I am not whether the minister is going to have them ready by 24 December—which was his commitment to Mr Abbott in the letter he wrote to him. I would hope that would be the case. One of the things that the coalition wanted to see was that the Senate had the opportunity to look at the regulations prior to the bill being enacted and the high-level effects coming into effect under the legislation. But, in this context, the opposition will not be supporting this particular amendment, amendment (4) on sheet 7202.

Question negatived.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:36): by leave—I move Greens amendments (3) and (9) to (18) on sheet 7202:

(3) Clause 7, page 4 (line 24), at the end of the definition of due diligence requirements, add:

   ; and (c) for supplying timber products—has the meaning given by section 18E.

(9) Clause 13, page 9 (line 12), before "A", insert "(1)".

(10) Clause 13, page 9 (after line 21), at the end of the clause, add:

(2) The form of declaration prescribed by the regulations must require the person to include the following information:

   (a) the name of the person importing the timber product;

   (b) the name of the person who supplied the product to the person importing the product;

   (c) the botanical name and the common name for the timber used in the product;

   (d) the cost of the product to the person importing the product, in Australian dollars;

   (e) the country or countries of origin of the product;

   (f) the region or forest coupe, or any other information that identifies the site, where the timber for the product was logged;

   (g) details of the logging permit, logging approval or harvest concession in relation to the timber for the product, issued by the country or countries of origin;

   (h) the name and voyage number of the vessel on which the product is being imported;

   (i) the number of the shipping container in which the product is being imported;

   (j) any consignment identifier, bill of lading number or invoice number in relation to the product;

   (k) a description of the product;

   (l) the type of product being imported and the trade name, if any, of the product;

   (m) if the product is comprised of more than one kind of timber or is comprised of timber and one or more other materials—the kinds of timber and other materials that the product is comprised of;

   (n) the customs tariff classification to which the product belongs;

   (o) the quantity of product covered by the declaration;

   (p) the due diligence system, and any components of the system, in the country of origin used to verify that the timber for the product has not been illegally logged;

   (q) an assessment of the level of risk that the timber for the product has been illegally logged, as either a low, medium or high risk;

   (r) any other information prescribed by the regulations.

(3) A declaration made by a person in accordance with this section must be published on the internet within 7 days of the Customs Minister receiving it.

(11) Clause 14, page 9 (lines 29 and 30), omit "may include requirements in relation to one or more of the following", substitute "must include requirements in relation to the following".

(12) Clause 14, page 10 (lines 1 to 9), omit paragraph (3)(a), substitute:

(a) gathering information for the purposes of assessing that risk;

(13) Clause 14, page 10 (line 18), at the end of paragraph (3)(i), add ", including statements of compliance".

(14) Clause 14, page 10 (lines 20 to 29), omit subclauses (5) and (6), substitute:

(5) The regulations must provide that evidence of compliance with the laws, rules or processes under laws, including certification schemes, in force in a State or Territory or another country may be taken into account as part of the evidence demonstrating compliance with due diligence requirements for importing regulated timber products.

(15) Clause 18, page 14 (lines 3 and 4), omit "may include requirements in relation to one or more of the following", substitute "must include requirements in relation to the following".

(16) Clause 18, page 14 (lines 5 to 13), omit paragraph (3)(a), substitute:

(a) gathering information for the purposes of assessing that risk;

(17) Clause 18, page 14 (line 20), at the end of paragraph (3)(h), add ", including statements of compliance".

(18) Clause 18, page 14 (lines 22 to 29), omit subclauses (5) and (6), substitute:

(5) The regulations must provide that evidence of compliance with the laws, rules or processes under laws, including certification schemes, in force in a State or Territory may be taken into account as part of the evidence demonstrating compliance with due diligence requirements for processing raw logs.

These amendments relate to due diligence and the declaration form that is required in relation to the import of timber in a determination of whether or not that timber has been illegally logged.

This is a critical provision as far as the Greens are concerned, because the current provisions relating to the declaration form are very unclear. When the officials from the Department of Agriculture, Fisheries and Forestry were in a working group meeting in August 2011 they proposed, without prejudice, a declaration form that was modelled on the Lacey Act.

It required information regarding the species and genus of the timber, the country of origin, the value of the import and other information critical to satisfying due diligence. But it is not clear what the declaration form in the current bill is going to be. It appears to be primarily a declaration of legality.

Whilst we support a declaration of legality, it is not clear what other information is going to be on that form. I am asking for the minister to be very specific about this level of information, because one of the very key things for the Greens is that you must be able to trace the timber in any timber product back to the coupe. If you cannot do that then you are never going to prove that it has been illegally logged. I make that point very strongly.

Most of the areas in the world from which you secure timber are going to have legal operations as well as illegal operations. Unless you can trace the actual timber back to the coupe, you might as well give up on this; it is just a piece of window dressing unless we can do that. The Greens are saying the form should include the following:

(a) the name of the person importing the timber product;

(b) the name of the person who supplied the product to the person importing the product;

(c) the botanical name and the common name for the timber used in the product;

(d) the cost of the product to the person importing the product, in Australian dollars;

(e) the country or countries of origin of the product;

And I say 'countries of origin' because timber is often logged in one country and sent to another country, where it is made into a product and then sold into a third country. So timber illegally logged in Indonesia could find its way through Singapore or into China and back into Australia as a piece of furniture or some other product. Unless you have the country or countries of origin, then it would be just a piece of furniture 'made in China' and the actual origin of the timber would not be known. The form should also include:

(f) the region or forest coupe, or any other information that identifies the site, where the timber for the product was logged;

As I indicated in my second reading speech, this is absolutely critical. I go back to 'forestry law 41' in Indonesia, which was a forestry law that protected forests. The mining industry in Australia got it overturned.

If you go down to the coupe level, that will tell you who has the licence to log. If it is illegal, that is one thing; but you also need to be able to know whether a deal was done, with local government or the national government or whatever, in order to give a licence to somebody. That would be consistent with the law but nevertheless would be illegal, because it was delivered in relation to bribery or because it actually sold off land that did not belong to the person involved in the first place. So you need to be able to go to the corruption as well as to the notion that it was illegal. They are the two things and that is why you have to be able to go back to the coupe.

The point is that with DNA testing, you can do this. One of the brilliant things about science now is that, if you go to the coupe level, you can actually do DNA testing. You can cut down a tree in the particular coupe and you can do the DNA testing. If it turns up in some piece of furniture, you can determine exactly where it came from, providing you do the original work in the first place. This is the issue for me. The form should also include:

(g) details of the logging permit, logging approval or harvest concession in relation to the timber for the product, issued by the country or countries of origin;

(h) the name and voyage number of the vessel on which the product is being imported;

(i) the number of the shipping container in which the product is being imported;

(j) any consignment identifier, …

(k) a description of the product;

(l) the type of product being imported and the trade name, …

(m) if the product is comprised of more than one kind of timber or is comprised of timber and one or more other materials—the kinds of timber and other materials that the product is comprised of;

(n) the customs tariff classification to which the product belongs;

(o) the quantity of product covered by the declaration;

(p) the due diligence system, and any components of the system, in the country of origin used to verify that the timber for the product has not been illegally logged;

(q) an assessment of the level of risk that the timber for the product has been illegally logged, as either a low, medium or high risk;

(r) any other information prescribed by the regulations.

That is the kind of brief you need if you are going to get serious about tracking products or illegal timber that comes into Australia. If you do not do that—and you just go with what appears we are going with, which is basically a certification system, just saying that due diligence could be satisfied by reliance on certification schemes or on the laws of the country in force at the time—then the standard being imposed on importers is a negligent standard. It requires that importers make informed decisions regarding the nature of the evidence that must be provided in order to reasonably assure legality. Allowing existing schemes to replace the obligations on importers, in my view, runs contrary to the bill.

So, from my point of view, we need to be very specific, and I would like the minister to stand up and tell us now: what is actually going to be on the declaration form? Will it go down to the forest coupe level? Will it have DNA identification? If no, why not?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:43): So as not to disappoint Senator Milne, I will be direct: it will not go down to the coupe level. Sometimes I think there are two debates going on. It is a due diligence process. What we want to ensure is, ultimately, that the industry is not so burdened by regulation that it cannot operate, even where it is positively seeking to import timber of any description from well-known sources. What we do want them to do, which is outlined in the bill, is to prohibit the importation of timber products—that is the first overarching thing we are doing by passing this bill. The second is allowing a process to run its course for the next two years, where the due diligence can be worked through with industry so as to achieve the outcome.

If you go to the second reading speech, the outcome is about the following:

Our own research and the work of the European Union indicate that the best way to minimise trade in illegally harvested product is to implement a due diligence framework. Importers and processors will be required to undertake a process of due diligence on those products to mitigate the risk that the timber has been illegally logged. The level of culpability for these products is negligence which differs from the standard subjective fault elements of intention, knowledge or recklessness. Negligence is an objective fault element which looks to the standard of care that a reasonable person would exercise …

It is important to ensure that the trade in timber products can continue and that the importers at the border—not those all the way down the supply chain—can provide a due diligence to the regulator to ensure that the timber is not illegally logged. There is also a compliance framework in place. There has to be a compliance framework so that we can then assess how it is running.

The third issue which I would bring to your attention is the system that you are suggesting is a prescriptive one which would, quite frankly, not work. It would mean that the burden on each importer to have all of that detail would effectively halt the trade. It is not the intention of this legislation to do that.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:46): I would like to ask the minister if, under what he proposes, a piece of furniture comes into this country from the Congo, how would he know whether it was illegally logged or not?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:46): Without naming or indicating countries, it is about the due diligence process. The importer will be required to undertake a due diligence to their satisfaction that it is not illegally logged timber. The compliance system in place will ensure whether or not the due diligence has been undertaken. The system is not new or novel. It works in a range of industries, and it works very effectively in a range of industries. It was one that the Senate committee looked at and adopted. It is one that I have been persuaded would operate fairly and effectively to ensure that we would do two things: we would minimise the risk of illegally logged timber entering Australia but still allow the trade to continue—that is, the trade in legally logged timber—without tying it up in that much red tape that it would prohibit the industry from operating.

Senator MILNE (Tasmania—Leader of the Australian Greens) (17:47): Basically, you are saying that all an importer has to say is that, as far as they are concerned, they believe that it came from a legally logged coupe. Whether or not somebody bribed someone to give them a licence does not come into it. Even so, for example in the Karijini National Park in West Sumatra, we know that there is illegal logging going on. If you were an importer, how would you know otherwise if they say: 'Oh, no, it didn't come from there. It came from logging outside the park'? How is that importer going to know the difference?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:48): Again, if you look at the way the legislation is constructed, it states:

Timber products, for which due diligence will be required, will be prescribed by regulations that will be developed … The government will use—

if you logically work through how due diligence works—

a number of inputs when finalising timber products to be prescribed by regulations including an economic assessment of the range of product types, value and volume of timber annually imported into Australia.

Importers of regulated timber products and processors of domestically grown raw logs will be required to undertake due diligence …

They will find that they have to comply with the framework on what they have to do to satisfy themselves that they have undertaken that due diligence. Undertaking that work will be based on a risk management approach. That risk management approach will assess various risks and take into account the issues that you have raised to ensure that the due diligence is well done, accurate and provides the regulator with sufficient information to also look at it. It will also be an area where the compliance program in place can test these due diligence statements as well.

It is important not to have a system that simply halts trade at the border of both illegally logged timber and legally logged timber. It is important that we do have a system. This system is one that has been recognised by the European Union. It is a system that is risk based. If you look at the majority of systems that we are putting in place today, they are risk based. They are not interventionist models. They are not prescriptive models. They work on the basis of a compliance framework finalising both the risk based system plus a compliance system to ensure that we minimise the risk of illegally logged timber. Would you then guarantee forever that you will not get illegally logged timber into Australia? It is about minimising the risk. There will always be some people who will take the risk. What we want to ensure is that they get caught.

Senator XENOPHON (South Australia) (17:50): I have a number of questions for the government that relate to Senator Milne's amendment. The minister says the bill is about minimising the risk of illegally logged timber. I will ask some general questions, if I may, before I go to the specific aspects of Senator Milne's amendment. Firstly, what is the government's best estimate of the amount of illegally logged timber that is coming into Australia at this time? Secondly, the government says that this bill is about a framework to minimise risk of illegally logged timber coming into this country. This is an issue in terms of not just deforestation and environmental damage but also costing Australian jobs. What does the government say should be the target? What is its goal, aspiration or policy aim? To what extent does the government say that this bill will reduce the level of illegally logged timber, and what is its broad policy aim for the next five to 10 years, for instance?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:52): Broadly, if you look at the global trade, it is sometimes very hard to be accurate by individual countries. If you had a sense of that then you might have a different approach. You can do an assessment but it is very hard, until you put a framework in place, to look at the particular size and nature of illegally logged timber. The broad assessment would be that it is about $400 million, if we are to use a figure, but again I would not say with any degree of accuracy that that is the number. The legislation will look to ensure that we minimise it—

Senator Xenophon interjecting—

Senator LUDWIG: Yes, that is in Australia. The global figure is much bigger; it is about $60 billion. It is worthwhile to reiterate the three steps to the due diligence process. It is about identifying and gathering information to enable the risk of procuring illegally logged timber to be assessed, then assessing and identifying the risk of timber being illegally logged based on this information, and then mitigating this risk depending on the level identified. I always talk about a framework, so firstly you have the due diligence process in place, which is about identifying, gathering, and assessing and then having a compliance framework to ensure that the risk is minimised. We do not talk about a zero tolerance because it is a risk based framework. The aim is always for a zero tolerance but the risk based system will provide that the compliance framework is in place to ensure that illegally logged timber coming into Australia is minimised.

Senator XENOPHON (South Australia) (17:54): Further to that, can the minister advise where that figure of $400 million comes from? If the global trade in illegal logging is worth $60 billion, is that $400 million a ballpark figure? Does the government consider it could be greater than that? Let us assume that it is $400 million: if there is a framework, as the minister has outlined, to minimise the risk of illegally logged timber coming to Australia, can the minister advise what the government says would be the likely outcome of this bill? What is intended to be the policy outcome? Is it going to be $50 million or $100 million in three or four years' time? Will it be a more gradual process than that? That is quite important.

I should also say at this stage that earlier today I made reference to Clare Rewcastle Brown, who has been very active with Radio Free Sarawak, who has been outspoken on illegal logging, who cannot get back into the country of her birth, Malaysia, because of the matters she has raised both in her blog and on her program. I made references to publicly available information such as found in Wikipedia, but I should also point out that I have had conversations with Clare Rewcastle Brown earlier this year that I found very enlightening in terms of the work she does.

Going back to that figure of $400 million, does the government concede it could be greater than that? But assuming it is $400 million, what does the government hope the effect of this bill will be in approximate dollar terms in reducing the level of illegal logging coming into the country?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (17:56): If you put it into perspective, Australian imports about $4.4 billion of timber and wood products, excluding furniture, annually. Australia's proportion of illegally sourced timber products has been estimated to be about nine per cent—and it is an estimation of total imports—or $400 million, as I said. If you go to the revised EM, there are two reports that are noted on page 44. One is Poyry's 2010 report, Legal Forest Products Assurance—a risk assessment framework assessing the legality of timber and wood products imported into Australia, and that is where the figures are obtained. It might provide some assistance.

As to the impact, it is about adding to the global stock of countries that are working to end the trade of illegally logged timber. In doing that, it is not only about what will happen in Australia but also about joining with the EU as it moves to operate in March 2013. It is about joining with the Lacey Act in the US. It is joining with Australian efforts to combat illegally logged timber and, ultimately, it is about bringing an end to the trade of illegally logged timber. That clearly is the long-term goal. What we expect to achieve in the short to medium term is difficult to quantify. However, it would certainly be a matter of looking five years hence—should the legislation pass and the review is undertaken—and expecting to see a significant reduction from the estimate of nine per cent that is currently there.

Senator XENOPHON (South Australia) (17:58): I do want to get to Senator Milne's specific amendment in a minute, but these are preparatory matters that from my point of view are essential to lay the groundwork for the context of Senator Milne's amendment. What does the government say in relation to the comparison between this bill and the EU laws that will be in place by March 2013 and the Lacey Act in the US? Does the government say that this bill is more stringent or less stringent than the legislation in the European Union or, indeed, in the United States? What are the key differences between those pieces of legislation? I know that the Gibson guitar case has been referred to in the United States as to how that law has operated there.

In terms of being able to measure the success or otherwise of this piece of legislation, what auditing, what benchmarking, what analysis and what approach will be taken to measure this? If we pass a piece of legislation, and there is no way of knowing how effective it will be or not, you will have criticism from both sides of the fence on this—from the Australian Greens, who say that it is nowhere near stringent enough, and from the opposition, who say that it is tying up businesses in red tape. I am just trying to establish how we are going to measure the effectiveness of this piece of legislation. What auditing processes will there be to measure it? Or is it, to quote a former US defence secretary, a known unknown or an unknown unknown?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:00): Far be it for me to quote ex-US defence secretaries. The important thing to look at, if you reflect on what you said, is that there is one extreme element that says that I have not gone far enough. That is not in this chamber. There is another extreme element that says that we should do nothing. I actually think that on the basis of that I have probably got the balance right. What we as a government have done is looked at the experience under the Lacey Act and drawn on the EU experience to make legislation that is both relevant and practical to Australia, that does not impede to such an extent that it does not operate, that means that at the border the importers can meet the diligence requirements and that the importers can meet the objects of the act to ensure that we do minimise the risk of importing illegally logged timber.

In respect of your auditing question: there will be audits. The way it will operate is that the regulator will do audits of the importers, of all of the relevant paper warfare that they do to ensure compliance with the legislation. That is how it works. That will be based on risk, using a risk matrix to determine where the risks lie and making sure that the audits target risk. Otherwise you will end up with a model that simply checks everything. If you check everything, you will be wedded to a paper warfare that does not actually combat illegally logged timber. It will just be producing ticks on sheets of paper. This matrix, a proper auditing process that targets risk, is about targeting where your high risks are and auditing those. Of course, the way audits work is that if there are issues that arise then usually there are more audits for those areas to ensure compliance. You do not simply audit it once, find a problem and move on. The risk matrix system usually encourages that you go back and continue to check those to make sure that they do comply.

Senator XENOPHON (South Australia) (18:02): I have just a couple more questions, if I may, and I will get to Senator Milne's amendments in a moment. Is the minister saying that the risk matrix that he refers to will be similar to the risk matrix we have, for instance, for biosecurity? Will it be one in 100 or one in 200? Will it be determined by intelligence as to where the source of the timber may be? Also, will details be made publicly available as to the number of the resources and the number of audits that take place? They are just some preliminary questions.

As to the specific amendments proposed by Senator Milne, is the minister saying that any of the parts of the information requested by the Australian Greens in this amendment—such as details of the volume permit, the name and voyage number of the vessel, any consignment identifier, a description of the product or the Customs tariff classification to which a product belongs—are in themselves unreasonable in the context of what is being proposed? I realise that Senator Milne's amendments are quite prescriptive, but is the government saying that what is being sought by Senator Milne through her amendments is in itself unreasonable or onerous, or is it saying that it proposes, at least in broad terms, to cover the matters raised by these amendments in the regulations?

Further to that—I do not want to throw in too many questions, but I am conscious that these are Senator Milne's amendments—does the minister concede that the matters sought by Senator Milne would actually close the loop in trying to determine whether a product is illegally logged or not? I am trying to understand the context of the effectiveness of this legislation without it having an undue regulatory burden but with it also being effective in terms of its intent.

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:05): The easiest way to explain it without doing injustice to Senator Milne is that Senator Milne's model is an interventionist, prescriptive model. The model that is before the Senate today is a due diligence model. It is a framework. They are different, so they are like comparing oranges and applies, to give an analogy from our agriculture minister. Senator Milne's prescription would not operate in a risk framework system. Why? It is because if you adopted an interventionist, prescriptive model then you would have a whole different type of legislative underpinning for it. If you then tried to stick it into a risk based model like this one, it would sit there with a range of onerous requirements that could never be met by importers for legally logged timber, let alone illegally logged timber, and the system would not operate.

The way that this matrix system works is the same way it works for Customs, the same way it works for business and the same way it works for a range of other industries that manage risks. It is about identifying those risks, gathering the information about those risks and having a compliance framework to deal with those risks. You are effectively asking me to compare two different systems. I have rejected the earlier system, which was a prescriptive system, as being unworkable. I think the Senate committee also adopted that, or maybe it was around the other way. Maybe the Senate suggested that a risk based system was far more user-friendly, far more able to be operated and would also achieve the aim, which is critically important—that is, minimising the importation of illegally logged timber.

Senator MILNE (Tasmania—Leader of the Australian Greens) (18:07): The minister has just completely undermined himself. Anyone who has dealt with the Rural and Regional Affairs and Transport Committee knows that the committee has very little confidence in the import risk assessment matrix when it comes to biosecurity. We have been through it a thousand times. You say that you identify the risk and it is all managed, and everything. Our experience is—and Senator Boswell will confirm this as well—that the risk assessment has been absolutely hopeless. We all know that.

On that, Minister, I do not know if you heard Background Briefing over the weekend. I was completely horrified to hear about the level of illegal import of birds into Australia. The fact is there was an aviary full of diseased birds and when the vet informed the owner of the aviary that the birds were diseased and that the disease could only have come in on an illegally imported bird, the aviary owner sold all the birds in the aviary all over Australia—presumably spreading that disease all over Australia. No action could be taken because the disease was not on the list of prohibited diseases in Australia. That is how the import risk assessment works for biosecurity. We have seen it.

If you tell me that this is going to be an import risk assessment of whether timber has been illegally logged then I can tell you now there will be zero prosecutions under this. What assessment are you going to make of the level of risk that timber coming from Indonesia has been illegally logged? What level of risk are you going to give timber coming from PNG having been illegally logged? What is the level of risk from the Congo? There is no way that you could import those things without saying that there would be a high level of risk.

Now that the DNA technology is available, you can trace where timber comes from. That is how they traced back the floorboards in the stadium at the London Olympics to timber logged out of Tasmania's forests. That is how they did it. That is how we can do it. If you are serious about illegally logged timber, that is what you would be doing—going to DNA testing not to a matrix of risk. There is so much corruption in these countries in handing out logging licences that they may well comply with the law, but the fact that they have been illegally allocated in the first place cannot be covered in your so-called risk matrix.

I will be fascinated after a short period of time to see whether there have been any prosecutions. Frankly, how is an importer of a lounge suite going to make an assessment about whether the structural timber in that lounge suite has been illegally logged? How are they possibly going to do that? I am intrigued as to how you can apply a risk matrix to that. Minister, I would like to specifically know: now that the technology exists, why would you not include DNA testing and coupe identification? In that way you would have an absolutely foolproof system—you would not be able to deny where the tree came from in the first place.

It seems to me that, if you are not going to go this way, we are going to end up with window-dressing around illegal imports of timber. When and if you try to prosecute an importer saying that they have imported illegal timber, they will simply say, 'When we did the risk analysis we determined that there was a low level of risk that it would be illegal.' How are you ever going to prove it is not, anyway? It seems to me that what we are seeing now with the refusal to do this is we will get a piece of legislation but it will not deal with the kinds of serious undertakings to stop the importation of illegal timber that you say you are trying to stop. I want to know why you think an import risk assessment matrix is superior to DNA testing at the coupe level, whereby you can take a sample of any product, any time, anywhere and away you go.

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:11): For the due diligence, say, it does not rule out that the importer may utilise that type of technology. It is not technology specific. The difficulty always is that if you pick a particular technology—and you would be familiar with telephone interception legislation—over time you can get caught and find that it has been overtaken by new and different types. That is why it is a framework based on due diligence provided by the importer and audited by the regulator. If the importer wants to use that type of technology, it does not rule it out and it can be utilised to substantiate their due diligence. It is important to recognise here that it is not a requirement that everyone adopt a particular type of technology because it will not suit all circumstances.

Again, the importer of commercial quantities of furniture will have to go through a process of due diligence. On the risk matrix, I think you misunderstand how a risk matrix operates. It is the same one we use in policing. It is the same one we use in business. We utilise the same risk matrix. Again, you confuse an IRA with a risk matrix. They are two different things. I cannot help with why you confuse that, but you do. It is important to recognise that risks identified are the important part. You identify high risk, you identify moderate risk or you identify low risk, and your effort is in the high- risk area.

Senator MILNE (Tasmania—Leader of the Australian Greens) (18:13): I reject the notion. The minister says, 'An importer could use that technology.' They cannot use that technology unless there is a record of a sample being taken at the point at which the coupe is identified. Otherwise, yes, you could get a DNA test that would tell you something about that piece of furniture, but it does not tell you where it came from if you do not have an original sample to measure it from. That is the whole point: to give yourself a benchmark against which any derived product can be measured.

It is quite clear that the government is going to go down this path which I think will be ineffective. The technology already exists to do a much better job in terms of due diligence, but it is obvious that the government is not going to support that happening.

I think we are going to end up with a piece of legislation where the due diligence and the declaration form are superseded and we are going to have a below-average kind of system. It would have helped us a great deal if we could have seen the form that we are going to use before debating this here, rather than just having a vague reference to it.

Senator XENOPHON (South Australia) (18:14): Further to Senator Milne's statement and line of questioning, can the minister indicate whether the DNA technology that can be used could form part of the risk matrix? In other words, could there be a requirement that there be DNA taken at the source of the logging and in the finished product in Australia? Is that something the minister would consider likely or unlikely? Does the minister concede that it would be a gold standard in ruling out whether a particular product was coming into Australia from a source of illegal logging?

My other question relates to matters I raised this morning regarding the serious allegations made by Clare Rewcastle Brown of corruption in the state government of Sarawak, led by Chief Minister Abdul Taib Mahmud. How does the government of Australia propose to engage? We are not talking about a rogue operator, where you can get the cooperation of another government; these are serious allegations of state based corruption, as Senator Milne has pointed out. The allegations are online that a former aide, who was an informant for the Sarawak Report and Radio Free Sarawak, was found dead in a Los Angeles hotel room with a plastic bag around his head in September 2011, just over a year ago. How do we engage with that, and do you concede the issue of DNA testing is the gold standard to determine risk?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:17): I will separate the two concepts. One is the due diligence that is required by the importer and one is the risk matrix. They are distinct and different. When you talk about DNA as being part of the risk matrix you have fallen into error. It is not part of the risk matrix. It is for the importer to demonstrate whether or not it is legal timber, through due diligence. They may utilise that DNA testing, but they may also utilise a whole range of other legitimate ways to demonstrate that it is not illegally logged timber.

Secondly, regarding the risk of corruption more broadly, the Australian government works through a number of multilateral forums, including the United Nation's Commission on Crime Prevention and Criminal Justice, to combat illicit timber and forest products trafficking in the Asia-Pacific region. In 2010 the Attorney-General's Department and AUSTRAC delivered workshops on environmental crimes and money laundering which were attended by a number of Asia-Pacific nations. That is, broadly, the work that the Australian government does in these regions.

Specifically, the way this legislation will operate is that it will require due diligence by an importer to meet all of the requirements within the legislation. The auditing and the compliance system in place—in other words, the third part—will identify where there has been problems in the due diligence process. That is the answer to the two parts to the second question, which related to the international work that the government is doing in those fora and to how the compliance system will work on the ground.

Senator XENOPHON (South Australia) (18:19): That brings us to a specific issue, to see how this works in practice. Has the Australian government made any representations to the federal government of Malaysia in relation to the many allegations of gross endemic corruption and violence involving the state government of Sarawak? There is a perception that the government of Australia may feel constrained in representations that it makes, in part by virtue of the free trade agreement. It also—and this is an issue that has been raised—may feel constrained to raise these uncomfortable matters with the federal government of Malaysia as a result of the so-called 'people-swap deal' on which this government has had numerous negotiations.

What is occurring in Sarawak is of grave concern. I have spoken to Clare Rewcastle Brown and she has expressed those concerns in the strongest possible terms. Have any representations been made to the government of Malaysia given our close relationship and friendship with the people of Malaysia? There are concerns that in the context of illegal logging there may be gross and systemic corruption at a state government level—has that ever been raised with the government of Malaysia?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:21): Much of that will fall outside of my portfolio, but I will take it on notice and see if I can provide a response. The EM itself explains the range of bilateral cooperation that this department has—Australia has signed bilateral agreements with China, Indonesia and PNG which include cooperation arrangements for combating illegal logging and promoting sustainable forest management. The government is seeking to strengthen the current level of cooperation with Indonesia to combat illegal logging, and has arrangements in place to work with Malaysia in this policy area. It has engaged in discussions to formalise cooperation with Vietnam and New Zealand on similar issues.

So work is being undertaken on that and also on ensuring those relationships to combat illegally logged timber are strengthened. But I do want to take the specific issue on notice. I think it would be an error for me to venture there without getting advice.

Senator XENOPHON (South Australia) (18:22): I do not want to hold up Senator Milne in relation to this but, finally, I was in Malaysia over the weekend. I met last Friday, at length, with the opposition leader, Anwar Ibrahim. There are real and serious concerns in that nation—in terms of those who could be facing elections at any time between now and towards the middle of next year—about irregularities in the electoral rolls and widespread electoral fraud, and that the elections could well be stolen. I am concerned about how the Australian government feels about how robust any system put in place with Malaysia would be where independent groups such as Bersih, the movement for clean and fair elections in Malaysia, have raised very serious concerns. These bilateral arrangements will only be as good as the willingness of both parties to enforce them and, given what Anwar Ibrahim himself told me just three days ago of his grave fears about the true will of the Malaysian people being reflected at the next election, it makes me worry about collateral issues such as illegal logging and the fulsome cooperation of the Malaysian government in respect of that.

Senator MILNE (Tasmania—Leader of the Australian Greens) (18:24): I just want to know from the minister: will due diligence be satisfied by certification schemes? Will you take that as saying, 'That's due diligence; we're now satisfied because it has certification that the timber has not been illegally logged'? Will that be enough for your form?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:24): The importer can use a certification scheme as part of due diligence or in satisfaction of due diligence. But, again, they are audited and looked at to see whether or not they are a true reflection of what occurs. So, again, it is an area where, at face value, you would say it would satisfy due diligence. That is why you have an auditing and compliance system in place—to ensure that it is a legitimate certification, that certified documents are used, that the chain is there and that all of the requirements are met. It is not about us projecting into other countries to examine their systems. It is about ensuring the importer at the border has undertaken the requisite due diligence for the timber to be allowed to be imported into Australia.

In dealing with Senator Xenophon's broad question, again, I will narrow it to this: it is about ensuring we have a due diligence process in place to deal with the importation of illegally logged timber at the border. That is the nub of the issue. As to what happens in particular countries, I am sure you can ask the Minister for Foreign Affairs about our broad engagement with a range of countries across the globe. But the interest here is about minimising the importation of illegally logged timber, utilising a risk framework with due diligence placed on the importer—that is, the Australian importer—to ensure that they have taken the necessary steps to ensure that the timber is not illegally logged.

Senator MILNE (Tasmania—Leader of the Australian Greens) (18:26): I just ask for clarification from the minister: I did ask whether due diligence could be satisfied by certification schemes. I understand that it could be part of what might be a due diligence test. What I am asking is: will the minister rule out that certification will replace other obligations, if you like, that may be on the form?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:27): It forms part of the due diligence process; it does not replace it. There is third-party certification by the FSC, the PEFC and the national certification scheme in Indonesia, the SVLK, which is being developed to meet EU requirements. They are all certification schemes. Should an importer utilise those, they will form part of their due diligence. It is not a case of ticking one box; it does not mean having one box ticked. It is due diligence.

Senator BOSWELL (Queensland) (18:28): I would like to ask a question, following Senator Milne's question, about due diligence and certifying bodies. There are two, as far as I am aware. The Forest Stewardship Council and its ruling general assembly includes Greenpeace; the Wilderness Society; the Australian Conservation Foundation; Friends of the Earth; the World Wildlife fund, WWF; and other environmental non-government organisations, ENGOs. What place will those certifying bodies have in the legislation? How will they be written into legislation?

Senator LUDWIG (Queensland—Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (18:29): They are not written into the legislation as such. An importer could use them as part of their overall due diligence process. It is not the case that they play a role in the legislation. It is a matter for the importer to determine how they will meet that requirement. So they could either use FSC as a way of meeting their due diligence requirements or use a range of other measures to meet the due diligence requirements.

Sitting suspended from 18:30 to 19:30

Senator COLBECK (Tasmania) (19:30): I indicate that the opposition will not be supporting these amendments. As the Minister for Agriculture, Fisheries and Forestry said—and I am trying desperately not to verbal him—these amendments effectively could shut the trade down, because they are all about Greens tape. They are about not utilising the process that was discussed during the Senate inquiry. They are about making the process so difficult and so complicated that it is effectively impossible to carry out trade.

For the information of the chamber I can indicate that the draft statement of compliance, or due diligence declaration, includes: the vessel name, the voyage number, the container number, the consignment identifier, a description of the product, some information about the origin or the country of harvest, the name and address of the timber or wood product supplier, the name and address of the importer, the quantity of the product, the value of the product and the due diligence system used to verify the legality of the product.

It is important to understand that a due diligence system, whether or not it be a certification scheme, is not just about ticking a box or having a certification scheme. It is about, if you have a certification scheme, complying with that, your audits saying you are complying with that, and there being processes that you undertake to verify what you are saying within your certification scheme. That could include FSC certification or PEFC certification. As I said in my contribution on the second reading, PEFC are putting into place as part of their certification systems a due diligence stream. As I understand it, at this point in time FSC have not announced whether or not they are going to do that. If they decide not to do that, it would be a fairly significant deficiency in their scheme. Quite frankly, I do not see how they can afford not to have a due diligence stream within their certification system if they are going to be serious players in the market in respect of supply chain certification. One of the important elements of any certification scheme is the chain of custody certification.

To reinforce my concerns about the potential costs of what the Greens are proposing—and it is clearly about imposing costs on timber traders and importers; they know what they are doing, which is trying to impose additional costs on the industry—I have an example of a business that has looked at one product line in a process of working out how it will comply with what is being proposed at this point in time. This business is looking at a fairly simple complex-wood product which is a three-ply. Across this business there are over 1,500 import consignments a year with an average of 42 individual product lines in each consignment. That is a total of 63,000 separate due diligence declarations that this business will have to fill out. Complying with the draft due diligence declaration took this business about 1.5 hours. The business says it can bring this time down with systems that will be put in place, but that is not the real issue. If you consider those 63,000 declarations at 1½ hours each and even consider that this can be taken down to half an hour each, that is still a significant workload being imposed. Just imagine what it would be like if the list that the Greens want to impose is put in place, rather than a systems based approach, which is what the committee recommended.

The real problem is that even though it is a relatively simple product, a three-ply product, and despite the fact that the supplier has full chain of custody certification from FSC for the mill and for one of the four concessions it controls, the business was still unable to identify the core of the veneer in terms of species or the concessions from which the logs were sourced. What Senator Milne is trying to impose again reinforces the concerns that the opposition has. It is about businesses having the systems in place to be able to comply with the legislation and giving them the time to do that. Even with full chain of custody certification from the Forest Stewardship Council, this business still cannot identify the core material for the plywood. That basically shuts that product out of the Australian market under the Greens proposal. It reinforces the opposition's concerns about ensuring that the systems are put in place to allow the compliance to occur. I do not think I need to say any more on this at this point in time. I have reinforced the concerns that we have and the proposition that we put to the government when Mr Abbott wrote to the Prime Minister earlier in the year. I have also indicated that we will not be supporting the Greens amendments.

The TEMPORARY CHAIRMAN ( Senator Moore ): The question is that Greens amendments (3) and (9) to (18) be agreed to.

Question negatived.

Senator MILNE (Tasmania—Leader of the Australian Greens) (19:44): by leave—I move amendments (2), (5), (7), (8) and (19) together:

(2) Clause 6, page 3 (lines 10 to 14), omit all the words from and including "This Act" to and including "processed.", substitute:

This Act prohibits the importation of illegally logged timber, the processing of illegally logged raw logs and the supply of regulated timber products.

This Act also requires importers of regulated timber products, processors of raw logs and suppliers of timber products to conduct due diligence in order to reduce the risk that illegally logged timber is imported, processed or supplied.

(5) Clause 7, page 6 (after line 1), after the definition of premises, insert:

processed timber product means a thing that is, is made from or includes, a raw log that has been processed.

(7) Clause 7, page 6 (after line 5), after the definition of Secretary, insert:

supply has the meaning given by section 7A.

(8) Page 6 (after line 8), after clause 7, insert:

7A Supplying timber products

   (1) A supply of a timber product includes a supply of the product by way of sale, exchange, gift, lease, loan, hire or hire purchase.

   (2) For the purposes of subsection (1), it is irrelevant whether the supply is:

      (a) for consideration; or

      (b) a wholesale or retail supply.

Note:   Offences under this Act relating to supplying timber products do not apply in relation to second hand products.

(19) Page 14 (after line 29), after Part 3, insert:

Part 3A—Supplying

Division 1—Supplying illegally logged timber

18A Supplying illegally logged timber

   (1) A person commits an offence if:

      (a) the person supplies a thing; and

      (b) the person is a constitutional corporation, or the person supplies the thing:

         (i) in the course of, or for the purposes of, trade and commerce with other countries, or among the States or between a State and a Territory; or

         (ii) in a Territory; or

         (iii) on behalf of a constitutional corporation; or

         (iv) to a constitutional corporation; or

         (v) on behalf of the Commonwealth or a Commonwealth authority; or

         (vi) to the Commonwealth or a Commonwealth authority; and

      (c) the thing is, is made from, or includes, illegally logged timber; and

      (d) the thing is not prescribed by the regulations for the purposes of this paragraph.

Penalty:   5 years imprisonment or 500 penalty units, or both.

   (2) Subsection (1) does not apply if the timber product is a second hand product at the time of the supply.

18B Supplying illegally logged timber in regulated timber products

   (1) A person commits an offence if:

      (a) the person supplies a thing; and

      (b) the person is a constitutional corporation, or the person supplies the thing:

         (i) in the course of, or for the purposes of, trade and commerce with other countries, or among the States or between a State and a Territory; or

         (ii) in a Territory; or

         (iii) on behalf of a constitutional corporation; or

         (iv) to a constitutional corporation; or

         (v) on behalf of the Commonwealth or a Commonwealth authority; or

         (vi) to the Commonwealth or a Commonwealth authority; and

      (c) the thing is, is made from, or includes, illegally logged timber; and

      (d) the thing is a regulated timber product; and

      (e) the thing is not prescribed by the regulations for the purposes of this paragraph.

Penalty:   5 years imprisonment or 500 penalty units, or both.

   (2) The fault element for paragraph (1)(c) is negligence.

   (3) Subsection (1) does not apply if the timber product is a second hand product at the time of the supply.

18C Forfeiture

   (1) A court may order all or any part of a thing to be forfeited to the Commonwealth if:

   (a) the court convicts a person of an offence against section 18A or 18B in respect of the thing or part; and

   (b) the thing or part is the property of the person.

   (2) The person is entitled to be heard in relation to the order.

   (3) The thing or part may be dealt with or disposed of in any manner that the Secretary thinks appropriate, but only after:

   (a) if the periods provided for lodging appeals against the order and the conviction have ended without such an appeal having been lodged—the end of those periods; or

   (b) if one or more such appeals have been lodged—the appeals lapse or are finally determined.

Division 2—Suppliers ' due diligence

18D Supplying a timber product

      A person commits an offence if:

   (a) the person supplies a thing; and

   (b) the person is a constitutional corporation, or the person supplies the thing:

   (i) in the course of, or for the purposes of, trade and commerce with other countries, or among the States or between a State and a Territory; or

   (ii) in a Territory; or

   (iii) on behalf of a constitutional corporation; or

   (iv) to a constitutional corporation; or

   (v) on behalf of the Commonwealth or a Commonwealth authority; or

   (vi) to the Commonwealth or a Commonwealth authority; and