Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights Mission to Australia, 7-11 February 2011

I want to begin by expressing my gratitude to the Government of Australia for inviting me to undertake a mission to the country and for its cooperation during the mission.

The key purpose of my official visit to Australia was to assess the impact of Australian development aid on the realization of human rights and the right to development, as well as the achievement of the Millennium Development Goals in recipient countries in the Pacific region. I also explored the role of human rights within Australia‟s foreign aid policy and assessed the human rights implications of Australia‟s trade negotiations and development partnerships with the Pacific Island countries.

During my visit, I have had very insightful discussions with Government officials (including representatives of AusAID and members of the Development Effectiveness Steering Committee. I have also had discussions with the Australian Human Rights Commission, civil society representatives and academics.

While I will present my findings, conclusions and recommendations in a comprehensive report to the United Nations Human Rights Council, I would like to share some preliminary findings and recommendations with you.

I note that the primary objective of Australian development aid is to “assist developing countries reduce poverty and sustainable development, in line with Australia‟s national interest.” I also note that some of AusAID‟s programme sectors directly or indirectly promote human rights, particularly of disadvantaged and marginalized groups. However, AusAID does not have a specific policy requiring all its programmes to be consistent with a human rights-based approach to development.
In order to adequately and fairly respond to the development challenges in recipient countries while promoting fundamental rights of the citizens of these countries, human rights should inform the design and delivery of Australian aid. A rights-based approach would require AusAID programmes to, inter alia:

• recognise people as key participants in their own development (rather than passive recipients of goods and services)
• focus on marginalized, disadvantaged and excluded groups
• focus on reducing disparity
• assure local ownership of the development process
• ensure full and meaningful participation of all stakeholders

I believe that adopting a human rights-based approach would enhance the effectiveness and sustainability of Australia‟s development aid programme.
Human rights are also critical for achieving the MDGs because they provide a framework for addressing the root causes of poverty: inequality, discrimination, exclusion and disempowerment.

The Review of Aid Effectiveness currently being undertaken by an independent panel to assess whether the current systems, policies and procedures for the aid program maximize effectiveness and efficiency, is an invaluable opportunity for the Australian Government to ensure that human rights become an overarching objective of Australian development work, and that the processes and practices of Australian agencies engaged in development assistance, particularly AusAID, entrench a human rights framework based on the international human rights instruments to which Australia is party. In addition, Australia aid programmes should underpin people‟s entitlement to basic standards of living, freedom from discrimination and participation, as well as transparency and accountability in public affairs.
Consideration should also be given to reducing the level of technical assistance provided by Australian private contractors.

Besides supporting capacity building for government in recipient countries, it is important that Australian aid programmes dedicate more efforts to sustain the work of local civil society organizations that play a vital role in ensuring public participation and accountability.

I commend Australian Government for its commitment to increase the allocation of resources to development aid to 0.5 percent of Australian GNI by 2015. Nevertheless, I would like to urge the Government to adopt a clear road map for the achievement of the internationally agreed ODA target of 0.7 percent of GNI.
With regard to the free trade negotiations currently underway in the region, such as PACER-Plus, development assistance should not be used as a means of inducing Pacific Island countries to enter into trade agreements. Furthermore, Australia‟s aid programmes should be guided by the needs of the recipient communities, rather than focused on Australia‟s national interest.

I welcome Australia‟s policy decision to use, for the most part, grants, rather than loans as development assistance. However, there is some concern – which I share – that Australian development and trade programmes may be advocating public sector reforms (such as reduction of public expenditure), privatisation and structural adjustment in the region which might have adverse impacts on the poorest members of the community in the region. In order to avoid impeding progress on health, education and other MDGs, I recommend that consideration should be given to undertaking human rights impact assessments for development programmes and trade agreements with developing countries in the region.

I am also concerned about the lack of information available to the public about the transactions undertaken by the Australian Export Finance and Insurance Corporation (EFIC) given that some aid is delivered through the statutory corporation‟s activities. In this regard, I would encourage the Australian Government to undertake measures designed to ensure accountability and transparency in EFIC‟s operations, particularly those undertaken under its National Interest Account.

Finally, I commend Australia for its contribution to multilateral debt relief initiatives. Despite their limitations, these schemes have allowed heavily indebted poor countries some fiscal space to increased spending on basic social services such as health and education. However, the voluntary nature of these initiatives have enabled some private commercial creditors („termed vulture funds‟) to buy up defaulted sovereign debt at vastly reduced prices, hold out and then litigate to obtain the full face value of the debt plus exorbitant interest and legal costs.

During my report to the UN Human Rights Council in June last year, I called upon all States to consider enacting legislation that would limit the ability of these vulture funds to use their courts to recover extortionate amounts from poor countries and, in the process, eroding the gains from international debt relief efforts.

I wish to take this opportunity to call upon the Australian Government to consider passing legislation similar to that enacted in the UK in April 2010 which limits the ability of vulture funds to recover on these debts. As I have stated on previous occasions, it is illogical to grant debt relief and at the same time allow vulture funds to litigate against poor countries benefiting from multilateral debt relief efforts.