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senate vote 2021-10-18#2
Edited by
mackay staff
on
2021-12-17 12:16:56
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Title
Bills — Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Bill 2021; in Committee- Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Bill 2021 - in Committee - Fossil fuels
Description
<p class="speaker">Dorinda Cox</p><p>I move Australian Greens amendment (1) on sheet 1406:</p><p class="italic">(1) Page 7 (after line 16), at the end of the Bill, add:</p><p class="italic">Schedule 3 — Fossil fuels</p><p class="italic"> <i>Export Finance and </i> <i>Insurance Corporation Act 1991</i></p><p class="italic">1 Subsection 3(1)</p><p class="italic">Insert:</p><p class="italic"> <i>fossil fuel-based infrastructure:</i></p><p class="italic">(a) subject to paragraph (b), includes infrastructure for:</p><p class="italic">(i) the extraction or transportation of fossil fuels; or</p><p class="italic">(ii) fossil fuel-based electricity generation; and</p><p class="italic">(b) does not include electricity transmission infrastructure.</p><p class="italic"><i>fossil fuels</i> includes any of the following:</p><p class="italic">(a) coal;</p><p class="italic">(b) oil and other petroleum-based products;</p><p class="italic">(c) natural gas;</p><p class="italic">(d) products, by-products and wastes from extracting or processing fossil fuels to which paragraphs (a) to (c) apply.</p><p class="italic">2 Subsection 3(1) (definition of <i>Northern Australia economic infrastructure</i> )</p><p class="italic">Repeal the definition, substitute:</p><p class="italic"><i>Northern Australia economic infrastructure</i>:</p><p class="italic">(a) subject to paragraph (b), has the same meaning as in the <i>Northern Australia Infrastructure Facility Act 2016</i>; and</p><p class="italic">(b) does not include fossil fuel-based infrastructure.</p><p class="italic">3 Subsection 3(1) (definition of <i>overseas infrastructure development</i> )</p><p class="italic">After "of infrastructure", insert "(other than fossil fuel-based infrastructure)".</p><p class="italic">4 Before section 81</p><p class="italic">Insert:</p><p class="italic">80A Prohibition on assistance for fossil fuel-based infrastructure</p><p class="italic">(1) Assistance must not be provided under this Act if the assistance is for purposes relating to, or is expected to result in, the development of fossil fuel-based infrastructure.</p><p class="italic">(2) It must be a condition of any assistance provided under this Act that the assistance not be used (whether directly or indirectly) for the development of fossil fuel-based infrastructure.</p><p class="italic">(3) <i>Assistance</i> includes a guarantee, indemnity, loan, insurance, reinsurance, financial service, financial product, subsidy or investment.</p><p>This amendment seeks to prohibit Export Finance Australia from investing in fossil fuel projects and fossil fuel based infrastructure. Since 2009 EFA has invested at least $1.57 billion in fossil fuel projects, and we can't afford to be propping up fossil fuel projects anymore. It's bad for the climate and it doesn't make any economic sense. In order to respond to the global climate crisis we need to ensure export finance is not being used to invest in fossil fuels. There is a very real possibility that the government will want EFA to fund gas import terminals throughout South-East Asia in a desperate attempt to find more customers for our gas. We cannot let this happen if we want to stay below the 1.5 degrees of warming. The International Energy Agency has said that to meet the Paris objectives, not one new coal or gas infrastructure project can proceed. By voting against this amendment both parties are abandoning a chance of a safe climate.</p> <p class="speaker">Amanda Stoker</p><p>I might take a few moments to respond to some of the matters raised in the contribution just made by Senator Cox, who I welcome to the chamber, having seen her sworn in today. EFA's equity powers will be focused on overseas infrastructure development and export linked Australian businesses and sectors of economic significance. That includes, for instance, critical minerals. EFA assesses requests for its financing support on a case-by-case basis consistent with its mandate to support Australian export related businesses and overseas infrastructure development that delivers benefits for Australia. As a key export industry for Australia, EFA offers support to the fossil fuel sector, including small and medium-sized enterprises that are involved in supply chains.</p><p>EFA investments are carefully screened. There are robust due diligence processes in place that assess any financial, social, environmental or other risks. There's a range of policies, rules and guidance that impact upon EFA's ability to finance fossil fuels. They are in various places, including in the statement of expectations that is issued by the Minister for Trade, Tourism and Investment, the OECD rules and the Equator Principles.</p><p>The minister's statement of expectations for EFA sets out criteria that all resource related projects, including fossil fuels, must meet to qualify for financing, and those are: (1) there is a demonstrated market gap in the availability of finance; (2) the transaction doesn't come at the expense of SME transactions; (3) the project has significant Australian content, including through SME supply chain participation and/or benefit; and (4) that the project is commercially viable.</p><p>The government also requires EFA to align its environmental policies with several internationally recognised environmental and social standards, including the International Finance Corporation's performance standards, which set out a process for assessing project related greenhouse gas emissions; and the Equator Principles, a risk management framework adopted by financial institutions for determining, assessing and managing environmental and social risk in projects. And these policies and practices will also apply to the EFA's use of its equity power.</p><p>In closing, it's also worth noting that EFA is increasing its investments in the renewable energy sector. For example, EFA recently provided a $41 million loan to facilitate the development of three onshore wind farms in Vietnam. I think all of those matters go really to the essence of the concern that is expressed in this amendment and demonstrate substantially why it's not required.</p> <p class="speaker">Louise Pratt</p><p>I think the Greens have moved the amendments on sheet 1406—subsection 3, part 1 and part 2. Is that where we're up to?</p> <p class="speaker">James McGrath</p><p>No. My understanding is that the question before the chair is amendment (1) on sheet 1406.</p> <p class="speaker">Louise Pratt</p><p>Can I just clarify that subsection 4 is being moved separately. Is that correct?</p><p>The TEMPORARY CHAIR: That would be the case. It's up to the Greens to formally move it. We're dealing with amendment (1) on sheet 1406.</p><p>Thank you. I'll, therefore, use this opportunity to outline Labor's response to those issues. It is our approach to be informed by scientific evidence rather than by ideology, including in regard to the financing of fossil fuels and associated infrastructure. We recognise that there will continue to be international demand for fossil fuels for some decades, even in the context of reducing global emissions. I come from Western Australia, where we see a large proportion of national income and exports being derived currently from these exports. We need to work with industry to bring down and manage those emissions so that we can meet a net zero target.</p><p>In that context, we don't believe that Australia, as a resources trading nation, should be pulling up the ladder from beneath it while emerging economies are trying their hand at producing energy and trading resource commodities. We can't leave them behind when we've had so much economic benefit from this already. Labor stands by the Paris Agreement principles, which encourage developed economies to assist emerging economies on their slower journey to decarbonisation rather than starving them of fair financing. If nations like this do not get this pivotal investment from ethical countries like Australia, then they will risk falling into debt diplomacy traps from unethical actors in the region.</p><p>We see here unintended consequences of the proposed amendment if we were to exclude Export Finance Australia from supporting developing economies to transition to cleaner fuels. For example, under its overseas infrastructure powers Export Finance Australia can provide finance to assist developing economies to build energy projects that support transition to cleaner fuels. Export Finance Australia can then monitor the implementation of these projects through the life of the loan, including through the use of independent environmental and social consultants where appropriate. We are concerned that, had the Greens party's proposed prohibition been in place, Export Finance Australia could not have funded an Australian electrical firm's work on an LNG power station in PNG—the POM power station near Port Moresby that has replaced diesel electricity with LNG and significantly reduced PNG's carbon footprint. So we're concerned that other critical infrastructure could fall foul of the prohibition that's been put forward in this amendment—for example, airports or marine ports that require construction of fuel infrastructure for ships or aircraft or critical minerals and rare earth projects. On that note, Labor does not support this amendment.</p> <p class="speaker">Larissa Waters</p><p>I beg the indulgence of the chamber and ask that the position of the Australian Greens on the second reading amendment, for which a division was not held, be recorded: that we support our own amendment. I'm not sure if our colleagues were popping that on the record at that time, because we've left them in a pickle on the first day, and our apologies to them for that.</p> <p class="speaker">James McGrath</p><p>I'm sure that can be accommodated.</p> <p class="speaker">Larissa Waters</p><p>I'd like speak on amendment (1) on sheet 1406. I'll speak briefly to it, in addition to any comments that my colleague Senator Cox would like to make. This is an amendment that's been circulated in my name that says that Efic, or EFA, the subject of this bill, should not be giving money to fossil fuel infrastructure. It's somewhat reminiscent of the discussion that we had when we were debating the northern Australia infrastructure bill, the NAIF bill, where, likewise, this government sought to allow equity investment to be made by that investment vehicle. This is a similar bill. It wants Efic to be able to take an equity stake in projects but, also, there's no prohibition on such investment being made in fossil fuel infrastructure. We are concerned that this bill will facilitate yet another body simply investing public dollars and taking an equity stake in fossil fuel projects.</p><p>This is five seconds before Glasgow. This is when we are in a climate emergency, and it is somewhat distressing, but perhaps not surprising, to hear the opposition say they're worried that this will stop the Commonwealth from funding airports. That is not, in fact, the case. The drafting of the amendment is very clear. This would apply to the Export Finance Insurance Corporation. As we previously said when the NAIF bill was up for debate, we do not think governments should be taking an equity stake in fossil fuel infrastructure, and we do not think taxpayer dollars should be used to fund fossil fuel infrastructure. So the intent of this first amendment, amendment (1) on sheet 1406, is to do just that: it would cover coal, oil, petroleum, natural gas and by-products related to that.</p><p>It's a very simple choice for the chamber to make. Do you want public money to prop up fossil fuels and government to be taking an equity stake in fossil fuel projects or don't you? I'm looking forward very much to the vote on this one, because this is a crucial point of distinction. I think the Australian public expects that the opposition—but perhaps not this government—would not be supporting public money and an equity stake being taken by a government in fossil fuel projects. I commend this amendment to the House.</p> <p class="speaker">James McGrath</p><p>The question is that Greens amendment (1) on sheet 1406, moved by Senator Cox, be agreed to.</p><p></p><p></p> -
- The majority voted against an [amendment](https://www.openaustralia.org.au/senate/?id=2021-10-18.172.1) introduced by WA Senator [Dorinda Cox](https://theyvoteforyou.org.au/people/senate/wa/dorinda_cox), which means it failed.
- Senator Cox [explained that](https://www.openaustralia.org.au/senate/?id=2021-10-18.172.1), "*This amendment seeks to prohibit Export Finance Australia from investing in fossil fuel projects and fossil fuel based infrastructure.*"
- ### Amendment text
- > *(1) Page 7 (after line 16), at the end of the Bill, add:*
- >
- > *Schedule 3 — Fossil fuels*
- >
- > *Export Finance and Insurance Corporation Act 1991*
- >
- >> *1 Subsection 3(1)*
- >>
- >> *Insert:*
- >>
- >> *fossil fuel-based infrastructure:*
- >>
- >>> *(a) subject to paragraph (b), includes infrastructure for:*
- >>>
- >>>> *(i) the extraction or transportation of fossil fuels; or*
- >>>>
- >>>> *(ii) fossil fuel-based electricity generation; and*
- >>>
- >>> *(b) does not include electricity transmission infrastructure.*
- >>
- >> *fossil fuels includes any of the following:*
- >>
- >>> *(a) coal;*
- >>>
- >>> *(b) oil and other petroleum-based products;*
- >>>
- >>> *(c) natural gas;*
- >>>
- >>> *(d) products, by-products and wastes from extracting or processing fossil fuels to which paragraphs (a) to (c) apply.*
- >>
- >> *2 Subsection 3(1) (definition of Northern Australia economic infrastructure )*
- >>
- >> *Repeal the definition, substitute:*
- >>
- >> *Northern Australia economic infrastructure:*
- >>
- >>> *(a) subject to paragraph (b), has the same meaning as in the Northern Australia Infrastructure Facility Act 2016; and*
- >>>
- >>> *(b) does not include fossil fuel-based infrastructure.*
- >>
- >> *3 Subsection 3(1) (definition of overseas infrastructure development )*
- >>
- >> *After "of infrastructure", insert "(other than fossil fuel-based infrastructure)".*
- >>
- >> *4 Before section 81*
- >>
- >> *Insert:*
- >>
- >> *80A Prohibition on assistance for fossil fuel-based infrastructure*
- >>
- >>> *(1) Assistance must not be provided under this Act if the assistance is for purposes relating to, or is expected to result in, the development of fossil fuel-based infrastructure.*
- >>>
- >>> *(2) It must be a condition of any assistance provided under this Act that the assistance not be used (whether directly or indirectly) for the development of fossil fuel-based infrastructure.*
- >>>
- >>> *(3) Assistance includes a guarantee, indemnity, loan, insurance, reinsurance, financial service, financial product, subsidy or investment.*
- ### What does this bill do?
- According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd2122a/22bd016):
- > *The purpose of the [Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Bill 2021](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fr6749%22) (the Bill) is to give legislative effect to the Government’s decision to broaden the range of transactions that [Export Finance Australia](https://en.wikipedia.org/wiki/Export_Finance_Australia) (EFA) can finance.*
- >
- > *Specifically, the Bill will amend the Export Finance and Insurance Corporation Act 1991 (the EFIC Act) to:*
- >
- > * *permit EFA to make equity investments and*
- > * *permit EFA Australia to offer standalone guarantees for overseas infrastructure transactions.*
-
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