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Senator the Hon Linda Reynolds CSC
Minister for Defence
Nicky Hamer (Minister Reynolds’ Office): +61 437 989 927
Defence Media: firstname.lastname@example.org
5 September 2019
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Thank you Hannah for that warm welcome. It’s wonderful to be back here today with you.
I’d like to start by acknowledging the traditional custodians of the land on which we meet, the Whadjuk people of the Noongar nation, and pay my respects to their elders past, present and emerging. I also pay my deepest respects to the Aboriginal and Torres Strait Islander men, and women, who have served our nation with such great distinction over the many years, in both times of peace and in war.
A particularly warm welcome to the many African Ministers and senior officials in the audience, alongside your Excellencies from across Africa. Welcome to you all.
It’s an honour to be here with you again at Africa Down Under – the centrepiece of Australia-Africa Week.
I welcome all delegates to my home state of Western Australia, especially those who have travelled a great distance to be here with us today – thank you.
Although it is an unusual state of affairs that it is colder here than it is in Canberra at this time of year. It is a warm welcome but just not temperature-wise. This conference is now in its seventeenth year. And it keeps getting bigger and better!
It is the key forum for us to strengthen economic ties between African nations and Australia, address our shared challenges and celebrate and build on the ever-growing success we are having together in mining, resources and energy. Some may have thought as the new Minister for Defence I would not be back here this year – but let me tell you – nothing is more important than this opportunity for us to come together to further develop existing relationships and develop new opportunities.
In my remarks here today, my message today is a straightforward one: there are great opportunities in the Australia-Africa relationship; but it is up to all of us in this room - and perhaps those of us who haven’t made it back yet from the ministerial dinner last night – but it’s up to all of us here, the non-government sector, businesses, the resources sector and government representatives– to work together to realise these new opportunities. No one sector or no one country or group can do it alone.
We have strong existing links – but now I believe we need to find ways to turbo-charge them. Because we want to make the most of the opportunities we have – commercially, socially and strategically. I think our partnership is one based on sovereign respect but also having a look at a lot of the presentations that have already BEEN delivered here, it’s also now excitingly going into one of technological change and also shared innovation. I believe it’s not only the right thing to do now, but it is in our national interest. The challenge for everyone in this room to make it a reality.
We have wonderfully strong and diverse people-to-people links. More than half a million Australians of African heritage live here and there are many African diaspora communities living here. All enrich our nation. It is time for us to be bolder and push the current boundaries - as everyone here today knows - in our increasingly connected world geography is not the barrier it once was. Geographically, Australia is a three-ocean nation. The Pacific, the Southern Ocean and our shared home in the Indian Ocean. Here in Western Australia, unlike those on our eastern coast, we have traditionally looked north and west – far west right across the Indian Ocean Rim. We have always had a different perspective on our place in the world, here in Western Australia.
The world includes our shared Indian Ocean neighbourhood. Our neighbourhood is going through a period of significant geopolitical change, which I have discovered in this job at the Shangri-La Dialogue earlier this year, it is causing significant anxiety. Not just in the Pacific and South East Asia, but also right across the Indian Ocean rim. The rules-based order that has defined global security and prosperity since World War Two is becoming increasingly contested. I believe we are currently in the process of very significant global realignment.
Australia, in that world, is increasingly looking to traditional liberal democratic friends and allies and how we can work together in new ways. In Africa, this has traditionally been with fellow members of the Commonwealth. Increasingly however, Australia, like other democracies, is looking to develop new relationships with other nations who share our democratic values. As Indian Ocean rim nations, we clearly have common strategic interests with African nations. A desire for peace and prosperity – which requires mutual sovereign respect and importantly adherence to international laws. Our economic relationships are built on strong and longstanding person-to-person and investment ties. We collaborate to meet development, educational and humanitarian challenges as well as shared objectives.
I am slightly embarrassed to say that prior to representing the Australian Government at Mining Indaba in 2017 – even though I am from Western Australia, I knew very little about our close mining and economic ties that exist between us all that bind us already. At the time I found it somewhat ironic that coming from Perth I had to go to Cape Town to meet half of West Perth! But I am so glad I did. Once again, Western Australia is quietly but persistently leading the way in this relationship. With 11% of the nation’s population, we contribute over 40% of commodity exports.
There is no better example of the quiet, but persistent and valued ties that we have than in our minerals and energy sectors. Sub-Saharan Africa has the highest concentration of Australian resources projects in the world – it is estimated it is at around one-third of the total number outside Australia. According to the Australia-Africa Minerals & Energy Group, approximately one in 20 ASX-listed companies have an investment today in Africa.
These companies have already invested around $40 billion in their African operations. Something very significant, but one I think few Western Australians actually realise. In addition to the ASX-listed companies, there are many more Australian-based extractive and mining equipment, technology and services companies with operations in Africa, which are listed on overseas exchanges.
Our business engagement is primarily in mining and education – two areas that offer immediate and significant potential for future two-way growth.
It would be remiss of me not to mention the contribution that Australian mining continues to make to our nation’s economic growth. I was pleased to see yesterday the National Accounts for the June quarter. According to the Bureau of Statistics resources accounted for more than half of our nation’s growth – national GDP grew by 0.5 percentage points in the quarter and mining contributed over half of that.
Significant opportunities also exist, to diversify and establish new commercial links with the emergence of markets in agribusiness, premium food and technology-based activities.
I am proud that Australian companies contribute to African economies, and communities, in positive and sustainable ways. And I know you had presentations on that contribution here yesterday. Ways that I believe support the sovereign goals of nations large and small. Ways that are demonstrably and measurably assisting with the realisation of Sustainable Development Goals – goals that all nations, including Australia domestically, are pursuing. The successful attainment of Sustainable Development Goals also directly contribute to supporting democracy.
In Kenya, Australia’s Base Titanium’s Kwale Project, for example, employs more than 900 people, with 64 per cent of all employees coming from Kwale County.
Base Titanium is expected to contribute around $330 million in revenue to the Kenyan economy and has directly invested in infrastructure, including funding the Likoni Port facility. Perenti, formerly operating as Ausdrill, a company known to many of you here, is another Australian company that has made its mark on the continent over almost three decades – training over 21,000 West Africans and generating more than $6.2 billion in local revenue since its mining operations commenced. But this is not just about resource companies.
Another example known to many of you here is Cotton On, an Australian clothing company that in 2014 established a smallholder farming community development program - centred on growing cotton - with a strong focus on women. This project was so successful it has been expanded into other agricultural opportunities including poultry, corn, potatoes and many others. There are now over 3,500 participating households and they have raised incomes by between 30 to 300 per cent. Now that’s a fantastic example of how ethical companies in Africa can contribute to improving living standards and livelihood opportunities.
The fact is, Africa is on the cusp of a boom which will have strategic implications for our mutual prosperity and security. Four of the fastest growing economies in the world last year were in Africa. Population growth is projected to grow from 1.2 billion to 2.4 billion by 2050. Millions of Africans every year are moving into the middle class. Many eager for the goods and services that Australia can provide. Generating great two-way economic opportunities. And these opportunities will be reinforced by work underway towards greater regional economic integration. These moves are pleasingly gaining momentum with the recent entry into force of the African Continental Free Trade Area (AfCFTA) for the countries that had deposited instruments of ratification.
Working in the region, including across borders, should in time become simpler and more streamlined for all to operate in. Covering the 55 members of the African Union, this will be the world’s largest free trade area since the establishment of the World Trade Organization. It will cover a market of over 1.2 billion people and a combined gross domestic product of more than US$3.4 trillion. The Economic Commission for Africa estimates that establishing this free trade area could boost intra-African trade by over 50 per cent by eliminating import duties, and by double this amount if non-tariff barriers are also lowered. Realising this will be a long-term process, but we want to make sure we play our part to see this succeed. This is why the Australian Government is working to provide training opportunities for the negotiators as they continue to settle details. This prospect of greater opportunities is exciting, but we must acknowledge and respond to existing and emerging challenges.
The Australian Government is concerned about the deterioration of the security environment and the spread of terrorist groups, particularly in parts of West Africa where many Australian companies have operations. There are many complex issues at play that pose a great threat for governments in the region and we recognise and congratulate the efforts they are making to protect their citizens – who bear the greatest cost of terrorism. It is essential that new Australian companies to the region understand the security environment where they work. The Australian Government is committed to assisting with that endeavour. We are working closely with partner governments, other diplomatic missions, and local and international experts to provide the best, and most up-to-date, information possible.
This year’s West Africa Mining Security Conference, organised by our High Commission in Ghana, with great support from corporate sponsors, was a good example of how we do this. The Conference brought together security experts and industry representatives to discuss trends and practical actions for managing security risk. The Australian mining sector leads the world in the extractive sector. We embrace technology and lead the way in innovation. As a Western Australian, I am particularly proud of the ethical way most, not all, but most of our businesses conduct themselves both here and overseas.
African nations are estimated to have some 30 per cent of the world’s mineral, oil and gas reserves. The potential for socio-economic development is considerable but that will only happen if the countries with these resources have access to foreign capital and also partner with companies who are committed to ensuring sovereign benefit. As a nation that relies on foreign capital, Australia understands that very well. One such opportunity lies in the development of the critical minerals and rare earths sectors. Critical minerals, such as rare earth elements, are essential inputs for a wide range of high-tech products such as mobile phones, computers and rechargeable batteries as well as a wide range of military technologies. Africa has substantial deposits of 10 out of the 35 minerals identified in the US Critical Minerals list, with the recent discovery of helium in Tanzania – in addition to Algeria – takes this number to 11. These resources are considered essential for the economic and industrial development of the world’s major economies. Australia’s Critical Minerals Strategy – released in March – not only provides a plan for our nation’s critical minerals market but aims to position Australia as a world leader in the exploration, extraction, production and processing of critical minerals.
We know from our own experience that developing a resources sector is not just about finance, technical skills and workforce. It is also about getting the regulatory frameworks right – frameworks that do three things. Firstly, that it supports a sustainable industry. Secondly that it encourages the development of clean technologies. And thirdly one that ensures respect for the sovereignty of the nation. Our diplomatic missions in Africa are working hard to share our experience with African governments because we know that open and transparent business environments are essential to attracting investment and sustainable economic growth. Reviews of mining codes and regulations are underway in many African jurisdictions.
Australian companies place particular value on regulatory certainty, so clear guidance on licensing, approvals, taxation and other issues will be met with increased confidence and, with that, generate comparative advantage.
Transparency and accountability are important for attracting international business – not only because it is good for business, but because it delivers commercial returns and sustainable social benefits. We know more than most here in Australia and Western Australia that there are plenty of competitors for investment opportunities and for capital in the mining sector. A level playing field of transparent regulation helps nations get the best out of their resources sector because it promotes real competition and drives greater innovation and efficiency across the sector. But from an Australian business perspective, we also need to ensure that Australian business is viewed as an attractive business partner. That our businesses are seen as a sovereign partner of choice.
Australian companies are not just corporate entities – they are national diplomats.
Brand Australia is an important asset that we must work together to protect. It relies on us being credible and responsible partners, at an industry level and a government level, and that we meet the highest standards. Australian companies are implementing wide-ranging sustainability and community development projects in consultation with local communities – which demonstrates a commitment to more than just profits. We are closely engaged with the Extractive Industries Transparency Initiative, which sets the global standard in upholding open and accountable management of oil, gas and mineral resources. From next year, Australia will chair the Voluntary Principles Initiative. This is an important platform to bring together corporate, government and civil society interests to minimise the potential for human rights abuses in the extractives context. Our important involvement with this initiative helps support a global extractives industry that respects human rights and maximises developments returns for sovereign nations. More than anything, it is the right thing to do.
But our nation also relies on you – as industry representatives you are our informal diplomats, you form part of our nation’s ‘soft power’ – and you must be mindful of our brand and uphold the highest standards. Beyond our commercial links, Africa and Australia are connected by many other strong ties. We have diplomatic relations with 54 African countries and have missions in nine locations. It’s wonderful to see all nine Heads of Missions here today, and it is particularly great to see that six are now women. We invest in building African expertise through our development assistance programs. As Minister for Defence, it would be remiss of me not to also recognise the importance of our relationship with Africa as an important Indian Ocean neighbour and Indo-Pacific partner.
In conclusion, the future of our relationship is only defined by the limitation of our imagination and our boldness and our ability to work together. Geography and history is no longer a limitation. Both are now opportunities for new partnerships, based on mutual respect and also technological innovation. Burgeoning markets in Africa – and the resources sector in particular – present great opportunities on both sides of the Indian Ocean. The creation of businesses that are transparent, competitive and sustainable are paramount to attracting and retaining foreign investment on both sides in the Indian Ocean. But these opportunities on offer will only come to fruition if all of us in this room take the initiative to drive these relationships forward – with sovereign respect at the core of all that we do.
I encourage you all to strike up conversations, share ideas and most of all – be bold.
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