Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2019
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
OFFICIAL DEVELOPMENT ASSISTANCE MULTILATERAL
REPLENISHMENT OBLIGATIONS
(SPECIAL APPROPRIATION) BILL 2019
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Foreign Affairs and
Minister for Women, Senator the Hon Marise Payne)
OFFICIAL DEVELOPMENT ASSISTANCE MULTILATERAL
REPLENISHMENT OBLIGATIONS
(SPECIAL APPROPRIATION) BILL 2019
OUTLINE
This Explanatory Memorandum accompanies the Official Development
Assistance Multilateral Replenishment Obligations
(Special Appropriation) Bill 2019 (the Bill).
The purpose of the Bill is to appropriate money from the Consolidated Revenue
Fund (CRF) to meet the following Official Development Assistance
Multilateral Replenishment Obligations:
The World Bank's International Development Association;
The World Bank's debt relief schemes including the Heavily Indebted
Poor Countries Initiative and the Multilateral Debt Relief Initiative;
The Asian Development Bank's Asian Development Fund;
The Global Environment Facility Trust Fund; and
The Multilateral Fund for the Implementation of the Montreal Protocol.
Consistent with our membership arrangements of the above multilateral
organisations, Australia pledges towards a replenishment every three to four
years with the cash payments being made over a three to ten year period.
The International Development Association (IDA), implemented through the
World Bank Group, is the largest pool of concessional finance in the world. It
provides grants, technical expertise and concessional loans to promote growth
and reduce poverty in the world's poorest and most vulnerable countries. The
IDA is important to Australia as it delivers in ways that are beyond the capacity
of any bilateral donor.
The Heavily Indebted Poor Countries Initiative (HIPC Initiative), implemented
through the World Bank Group, provides debt relief to eligible HIPCs on debt
owed to participating multilaterals. The HIPC Trust Fund can prepay or
purchase a portion of the debt owed to a multilateral creditor and cancel such
debt, or pay debt service as it comes due.
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The Multilateral Debt Relief Initiative (MDRI) also implemented through the
World Bank Group, provides for one-hundred percent relief on eligible debt
from three multilateral institutions - the International Monetary Fund, the
International Development Association and the African Development Fund - to
a group of low-income countries.
The Asian Development Fund (ADF) through the Asian Development Bank
(ADB) provides grants to ADB's lower-income developing member countries.
Activities supported by the ADF promote poverty reduction and improvements
to quality of life in the poorer countries of the Asia and Pacific region.
The Global Environment Facility Trust Fund (GEF) addresses global
environmental issues and supports sustainable development activities in
developing countries across five international conventions covering climate
change, biodiversity, desertification, organic pollutants and mercury. Through
our contributions to the GEF, Australia fulfils our obligations under a number
of multilateral environmental agreements to which we are a party.
The Multilateral Fund for the Implementation of the Montreal Protocol
(MPMF) assists developing countries to phase out ozone depleting substances
under the Montreal Protocol on Substances that Deplete the Ozone Layer.
Australia supports the MPMF as an integral part of the Montreal Protocol
infrastructure to help protect and restore the ozone layer and reduce its effects
on the climate system.
FINANCIAL IMPACT
This Bill does not involve any additional underlying cash impacts as the
expenditure for existing obligations and estimates for future obligations are
funded from the agreed Official Development Assistance envelope. On
average, Australia pays AU$350 million annually for existing obligations.
HUMAN RIGHTS IMPLICATIONS
The Statement of Compatibility with Human Rights appears at the end of this
Explanatory Memorandum.
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NOTES ON CLAUSES
Part 1 - Preliminary
Clause 1 - Short title
Clause 1 is a formal provision specifying the short title of the Bill, which, when
enacted, is to be cited as the Official Development Assistance Multilateral
Replenishment Obligations (Special Appropriation) Act 2019.
Clause 2 - Commencement
Clause 2 provides that the Act will commence the day after it receives Royal
Ascent.
Clause 3 - Definitions
Clause 3 provides definitions of the terms and expressions used in the Bill and
lists the various international multilateral organisations that Australia is a
member of and the relevant Acts that covers Australia's membership.
Clause 4 - Payments required to be made
Clause 4 lists the international multilateral organisations and the mechanism
through which Australia provides its commitment to provide funding to each
replenishment.
Clause 5 - Issue of promissory notes
Clause 5 authorises the Treasurer, as the responsible Minister, to make and
issue promissory notes to the international financial institutions identified in
Clause 4 in accordance with the approved instrument of commitment or
contribution agreement signed at the time of each pledge.
Promissory notes are financial instruments that are frequently used as part of a
process to discharge the Government's obligations to international financial
institutions.
The promissory notes will be non-negotiable, non-interest bearing and payable
at par value on demand.
Promissory notes provide both parties with more control of encashments but
can still be considered by the international financial institutions as an asset.
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The issuance of promissory notes does not authorise an appropriation for
discretionary activities such as Australia's contributions to specific trust funds
or a contribution towards a capital subscription increase managed by the
international financial institutions.
In the event that the Government determines that Australia should provide
funding to a specific trust fund or to contribute towards an increase in capital
subscriptions, then an appropriation would need to be made available through
the annual budget process.
Clause 6 - Appropriations
Clause 6 authorises the Consolidated Revenue Fund to be appropriated for the
purposes of making payments to the international financial institutions listed in
Section 4 of the Bill.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011
Official Development Assistance Multilateral Replenishment Obligations
(Special Appropriation) Bill 2019
1. This Bill is compatible with the human rights and freedoms recognised
or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
2. This Bill is to provide a standing (special) appropriation for expenditure
in relation to Australia's official development assistance multilateral
replenishment obligations to the following organisations:
The World Bank's International Development Association;
The World Bank's debt relief schemes including the Heavily
Indebted Poor Countries Initiative and the Multilateral Debt
Relief Initiative;
The Asian Development Bank's Asian Development Fund;
The Global Environment Facility Trust Fund; and
The Multilateral Fund for the Implementation of the Montreal
Protocol.
3. The broad focus of these multilateral organisations is development and
debt relief for the world's poorest countries and global environmental
issues. As part of its membership arrangements to the above multilateral
organisations, Australia pledges to a replenishment contribution every
three to four years, and generally makes cash payments over a three to
ten year period.
4. Contributions from member countries, like Australia, enable the
multilateral organisations like the International Development
Association and Asian Development Fund to fund programs and
initiatives that promote governance, capacity building, economic
transformation and jobs in the poorest regions of the world, as well as
development interventions that tackle conflict, fragility and violence,
forced displacement, climate change, and gender inequality.
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5. Whereas, member contributions to the Heavily Indebted Poor Countries
Initiative and Multilateral Debt Relief Initiative provide these
organisations with funds that enable them to provide debt relief aimed at
ensuring that the poorest countries in the world are not overwhelmed by
unmanageable or unsustainable debt burdens.
6. Finally, contributions to the Global Environment Facility and
Multilateral Fund for the Implementation of the Montreal Protocol
support these multilateral organisations to fund global projects that
attempt to address environmental issues, such as climate change, land
degradation, biodiversity, sustainability and management of water
resources.
Human rights implications
7. This Bill engages the following human rights:
Right to equality - Article 3, Convention on the Elimination of
All Forms of Discrimination against Women (CEDAW);
Right to an adequate standard of living - Article 11(1) of the
International Covenant on Economic, Social and Cultural Rights
(ICESCR); Articles 5(e)(iii) of the Convention on the
Elimination of All Forms of Racial Discrimination (CERD);
Article 14(2) of the CEDAW; and Articles 24(2) and 27 of the
Convention on the Rights of the Child (CRC); and Article 28 of
the Convention on the Rights of Persons with Disabilities
(CRPD).
Right to equality and an adequate standard of living
8. Article 3 of the CEDAW provides that State Parties shall pursue
measures in all fields, in particular in the political, social, economic and
cultural fields, to ensure the economic development and empowerment
of women.
9. Article 11(1) of the ICESCR provides that State Parties shall take all
appropriate steps to ensure realisation of the right of everyone to an
adequate standard of living, including adequate food, clothing and
housing, and to the continuous improvement of living conditions.
10. Article 5(e) (iii) of the CERD provides that State Parties shall undertake
to eliminate racial discrimination in all its forms and to guarantee the
right of everyone to the enjoyment of rights, including the right to
housing.
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11. Article 14(2) of the CEDAW provides that State Parties shall pursue
measures to eliminate discrimination against women in rural areas in
order to ensure that they participate in and benefit from rural
development and, have rights including, to:
participate in development planning at all levels;
have access to adequate health care facilities;
organise self-help groups and co-operatives to obtain equal
access to economic opportunities through employment or self-
employment;
to have access to agricultural credit and loans, marketing
facilities, appropriate technology and equal treatment in land and
agrarian reform as well as in land resettlement schemes; and
to enjoy adequate living conditions, particularly in relation to
housing, sanitation, electricity and water supply, transport and
communications.
12. Article 24(2) of the CRC provides that State Parties shall take
appropriate measures to:
diminish infant and child mortality;
ensure the provision of necessary medical assistance and health
care to all children, with emphasis on developing primary health
care; and
combat disease and malnutrition, including within the
framework of primary health care, including through, the
application of readily available technology and the provision of
adequate nutritious foods and clean drinking-water.
13. Article 27 of the CRC provides that State Parties shall take appropriate
measures to assist those responsible for the child to ensure that each
child has access to a standard of living adequate for the child's physical,
mental, spiritual, moral and social development; and provide material
assistance and support programmes where needed, particularly with
regard to nutrition, clothing and housing.
14. Article 28 of the CRPD provides that State Parties shall take appropriate
measures to ensure persons with disabilities have access to an adequate
standard of living for themselves and their families, including adequate
food, clean water services, clothing and housing, and to the continuous
improvement of living conditions.
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15. Australia's replenishment contributions to the above multilateral
organisations assist in global efforts to reduce poverty, alleviate
suffering and promote sustainable development, as well as to take
effective action on global environmental issues, like climate change.
Conclusion
16. This Bill is compatible with human rights because it promotes the
protection of human rights, in particular the right to equality and an
adequate standard of living.
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