Annual Report 2003-2004

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1. Overviews2. Performance3. Corporate4. Financials5. Appendixes6. Glossaries and Compliance Index

Your location: Performance > Outcome 1 > Output 1.1 > 1.1.4 South Pacific, Middle East and Africa

OUTPUT 1.1: Protection and advocacy of Australia’s international interests through the provision of policy advice to ministers and overseas diplomatic activity

1.1.4 South Pacific, Middle East and Africa

On this page: Overview :: Iraq :: South Pacific :: Africa :: Middle East


The department played a leading role in the Government's more active intervention to improve security and governance in the South Pacific, and worked to advance Australia's security and commercial interests in the Middle East and Africa. In both regions we have helped achieve some impressive results, working closely with other Australian agencies.

Developments in relation to Iraq continued to be a high priority for ministers and the department. The department played a key role in the coordination of government policy on Iraq, and our post in Baghdad skilfully advanced Australian commercial and other interests with Iraqi institutions and the Coalition Provisional Authority (CPA) in uniquely difficult operating conditions.

The department effectively coordinated the Australian-led Regional Assistance Mission to Solomon Islands (RAMSI). RAMSI succeeded in bringing security quickly to Solomon Islands and stabilising the budgetary situation. It made a good start on longer-term economic and governance reform.

We coordinated and played a leading role in developing the Government's new approach to relations with Papua New Guinea (PNG). The department negotiated to secure PNG's approval of a treaty to underpin the placement of more than 60 Australian officials and 210 Australian police in line positions to improve PNG's law and order, financial management, border security and transport security.

The department assisted the Prime Minister's successful campaign at the 2003 Pacific Islands Forum (PIF) Leaders' meeting to elect Mr Greg Urwin as the first-ever Australian Secretary-General of the Forum Secretariat (see box on page 58). We also helped develop the Prime Minister's agenda of pooled regional governance for the South Pacific, particularly in aviation.

We played a major role in developing a more robust policy approach to Nauru, aimed at placing in Nauru Australian officials with the necessary mandate to improve financial management and police performance.

Working closely with the Department of Agriculture, Forestry and Fisheries, the department—including a large number of overseas posts—played a key role in finding a destination for the live sheep cargo of the MV Cormo Express. This served to maintain Australia's animal health, commercial and diplomatic interests.

We helped secure two important trade objectives in the Middle East—agreement to begin discussions on a free trade agreement (FTA) with the United Arab Emirates, and the end of Iran's informal restrictions on imports from Australia. We assisted Australia's growing commercial—particularly mining and hydrocarbon—interests in Africa in a number of ways. We opened a new high commission in Ghana, where there is strong Australian commercial involvement in the gold mining industry. We helped secure the political support needed for a US$140 million investment in the Libyan oil sector by an Australian company and supported the joint announcement by Mr Downer and Mr Vaile that Australia would open a mission in Libya.


Developments in relation to Iraq continued to be a major focus of attention for ministers and the department during the year. The interagency Iraq Task Force (ITF)—led by the department—remained the principal mechanism in Canberra for coordination of whole-of-government policy, operational decisions and advocacy on Iraq issues.

From representative office to embassy

The Australian Representative Office (ARO), established in Baghdad in May 2003, spearheaded the advancement of Australian interests on the ground in Iraq. The ARO was converted into a fully fledged embassy on 28 June 2004 upon the establishment of the Iraqi Interim Government (IIG). Australia's Ambassador to Iraq, Neil Mules AO, was the first head of mission to present his credentials to the IIG.

The Government provided the department with $6.9 million of new funding in 2003–04 to establish the ARO and allocated $11 million for the next three years to maintain the embassy in Baghdad.

Our embassy skilfully advanced Australian commercial and other interests with Iraqi institutions and the CPA in uniquely difficult operating conditions. This contribution received special recognition when the Prime Minister bestowed Australian honours on three embassy staff members in Baghdad on Anzac Day 2004.

Transfer of authority

Australia worked closely with Coalition and Iraqi partners to support the transfer of authority to the Iraqis. The department led inter-agency policy formulation and advocacy to support the establishment of an appropriate legal framework for Australia's continuing civilian and military presence after the 28 June handover.

The department, working through our mission to the United Nations (UN) in New York and other posts—notably Washington and London—coordinated Australian input into UN Security Council Resolution 1546. This landmark resolution, adopted unanimously on 8 June 2004, endorsed the plan for Iraq's political transition, reaffirmed the mandate of the multinational force in Iraq, and set out a substantial role for the United Nations. The ITF advocated Australia's views on a range of policy and operational matters with key allies.

Rehabilitation assistance

The department worked closely with AusAID and Defence in developing and implementing Australia's Iraq rehabilitation assistance strategy. A number of other departments and agencies also maintained their involvement on Iraq issues through the ITF.

This assistance strategy, to which the Government committed $125 million, was based on carefully targeted contributions of Australian civilian and military expertise in fields: where Australia has been able to add particular value; which engaged our priority national interests; and which were of priority for the Iraqis.

Around 30 Australian civilian and military experts were deployed to the CPA. They provided advice to Iraqi and Coalition counterparts on agriculture, food security, economic and trade policy, donor coordination, the petroleum sector, legal issues, and national security policy, among other fields. Notable contributions included:

Photo - See caption below for description
Australia’s Ambassador to Iraq, Neil Mules AO, presented credentials to the President of Iraq, Sheikh Ghazi Al-Yawar, in June 2004. Photo: Courtesy of the Iraqi Interim Government.
Enlarge image :: Photo gallery

Developing links with decision-makers and opinion-leaders

Another priority objective was to develop strong links with decision makers and opinion leaders in Iraq. To this end the department and the ARO supported a series of high-level Australian visits to Iraq, including by the Prime Minister in April 2004, Mr Vaile in December 2003 and the Defence Minister, Senator Hill, on two other occasions.

We arranged visits to Australia by the interim Iraqi Ministers of Agriculture and Trade, as well as two key members of the Iraq Governing Council, including Patriotic Union of Kurdistan Secretary-General Talabani in late 2003. We supported a visit by an Iraqi Grains Board delegation in March 2004. We helped organise an AusAID-funded training course on the World Trade Organization (WTO) for five officials of the Iraqi Trade Ministry in June 2004.

Security of Australians in Iraq

Security of our diplomatic staff, civilian advisers, Australian Defence Force (ADF) personnel and other Australians in Iraq remained a major preoccupation during the period.

The ADF, through its Security Detachment, provided essential protective security to our diplomatic staff in Baghdad. These protection arrangements, and those for our civilian advisers deployed to the CPA, were constantly reviewed through an inter-agency process in Canberra led by the department.

Commercial opportunities

The ITF, in close cooperation with Austrade, actively supported the efforts of Australian companies to pursue commercial opportunities in Iraq.

Mr Vaile visited Baghdad in November 2003 to promote Australian companies, including those seeking sub-contracting opportunities from large US firms undertaking major rehabilitation contracts. Ministers and the department worked closely with AWB Ltd helping to secure wheat sales to Iraq of over 1.7 million tonnes, worth more than $600 million, since March 2003. Assistance was also provided to Australian company Worley Group which, in consortium with US company Parsons, won a contract worth up to US$800 million to rehabilitate oil infrastructure in northern Iraq. Despite the security situation and other challenges, a range of Australian companies won contracts in Iraq to the value of more than $170 million during the period, with advice and other assistance from the department. These included SAGRIC International, CSIRO, SMEC, ANZ Bank, and GRM International.

For a report on the department's responsiveness to public and business needs for information on Iraq, see Outcome 3.

South Pacific

The department led the development of policies to respond to increasingly critical governance, economic management and security concerns in the South Pacific.

We coordinated implementation of new approaches involving in-line placement of Australian officials in economic management and law enforcement in Solomon Islands, PNG and Nauru. We supported the efforts of the Prime Minister and Mr Downer to reform the Pacific Islands Forum (PIF) and to encourage pooling of regional resources. The department played a key role in the negotiation of the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean, which came into force on 19 June 2004. The Convention will ensure that Pacific island countries continue to benefit from fishing activities in the region.

During the year, we supported visits by the Prime Minister, Mr Downer, the Defence Minister, Senator Hill and the Justice Minister, Mr Ellison to Solomon Islands; by Mr Downer to Tonga and Fiji; and by the Justice Minister, Mr Ellison to Vanuatu.

TABLE 9. Australia's trade in goods and services with the South Pacific, Middle East and Africa
  Export Export   Import Import  
Goods(a) and Services CY2002
New Zealand and Territories 10 165 10 547 6.8% 6 553 6 810 5.4%
Papua New Guinea 1 318 1 134 -2.5% 1 388 1 676 10.0%
Other Pacific Islands 1 851 1 734 2.6% 1 088 1 208 3.7%
Middle East(b) 7 117 5 193 9.2% 2 902 3 185 11.8%
South Africa 1 489 1 578 5.8% 1 225 1 427 13.3%
Other Africa(c) 1 373 1 114 11.8% 620 496 4.6%
Total 23 980 21 513 6.4% 13 803 14 816 7.5%

Source: DFAT Stars database and ABS International trade in services by partner country 2003.
(a) Goods data is on a recorded trade basis.
(b) Excluding Egypt
(c) Including Egypt

Solomon Islands

The Australian-led Regional Assistance Mission to Solomon Islands (RAMSI), which deployed in July 2003 in response to a formal request by the Solomon Islands Government and Parliament, was a major priority. The mission had a remarkable impact, restoring law and order and stabilising the Solomon Islands Government finances (see box). As the coordinating agency for RAMSI, the department's efforts played a significant part in RAMSI's achievements.

Regional Assistance Mission to Solomon Islands (RAMSI)

Since RAMSI's arrival in Honiara on 24 July 2003, it has had a significant impact on a country that was previously on the brink of state failure.

In cooperation with the Solomon Islands Government and the people of Solomon Islands, RAMSI assisted in:

RAMSI also began work with the Solomon Islands Government and people to implement longer-term reform involving economic reform, the strengthening of accountability institutions and rebuilding of government agencies, including the RSIP.

Led by a senior departmental official, RAMSI included personnel from the AFP, ADF, the Treasury, AusAID, the Department of Finance and Administration, the Attorney-General's Department and the Department of Foreign Affairs and Trade—as well as personnel from nine other Pacific countries.

The department maintained a Solomon Islands Task Force in Canberra to support RAMSI through its initial phase until November 2003. After that, this function was absorbed by our Pacific Islands Branch. Throughout the year, the department chaired regular inter-departmental committees, with Honiara-based officials included via teleconferencing facilities. These tight coordination processes played a significant role in RAMSI's success, with objectives achieved through careful sequencing and implementation.

The department played a central role in encouraging participation and information sharing throughout the region. This included lobbying for and then assisting preparation and deployment to Solomon Islands of police, military and civilian personnel from across the region. The department also promoted regional consultation through coordination of briefings for regional leaders and regular distribution of RAMSI information and updates through our posts in the region.

Pacific Islands Forum

The department supported the Prime Minister's participation in the watershed PIF leaders' meeting in Auckland in August 2003. With our posts, we assisted the successful campaign to elect Mr Greg Urwin as the Secretary-General of the PIF Secretariat, the first Australian (and non-islander) to hold the position, with the aim of reforming the Secretariat. At a special retreat in April 2004, Forum leaders tasked the Secretary-General to implement a range of reforms, in particular to focus the Secretariat's work on policy advice and coordination.

Australian Secretary-General for the Pacific Islands Forum

The department coordinated and managed a successful campaign to elect the first ever Australian Secretary-General of the Pacific Islands Forum (PIF) Secretariat, former senior diplomat Greg Urwin.

Mr Urwin took up his position as Secretary-General at the beginning of 2004 after his election at the PIF leaders' meeting in Auckland in August 2003. Australia has been a member of the Forum since its beginning in 1971, but had never previously held the position of Secretary-General. Mr Urwin was elected after a campaign by Australia on the need for reform of the Forum so it could better help island countries overcome contemporary governance and security challenges.

In April 2004, PIF leaders endorsed an agenda for reform to:

With AusAID, we supported a Pacific Regional Transport Study initiated by the Prime Minister and endorsed by PIF leaders to improve regional transport links. The study made a number of recommendations to achieve more efficient and effective aviation and shipping services. Our posts presented the study to Forum leaders for their consideration at the end of June 2004, and lobbied for its acceptance.

We contributed to a major review of the PIF, commissioned by leaders, and supported the role of the Prime Minister's nominee, Mr Bob Cotton, in the Eminent Persons Group which conducted the review. Key elements of the review were supported by leaders at the special retreat in Auckland in April 2004. Leaders agreed to a range of reforms drawn from the report to focus the work of the PIF on contemporary challenges, including good governance and security.


The department implemented a more robust policy approach towards Nauru in an effort to address its dire economic situation. With other agencies, we negotiated a memorandum of understanding (MOU) in February 2004. It resulted in agreement that the Australian Government provide a Finance Secretary and Police Commissioner with necessary powers to improve finance and law and order management in Nauru. A Treaty was subsequently concluded along these lines in May 2004. The Government provided the department with funding ($0.9 million) for the maintenance of the temporary Consulate General in Nauru.


The department continued to support the development of a close partnership with Fiji. Mr Downer held annual talks with his Fiji counterpart, Mr Tavola, on bilateral and regional issues in December 2003. The department managed a study of options to enhance the viability of Fiji's textile, clothing and footwear industry, which arose from discussion between the Australian and Fiji Prime Ministers in August 2003, and consulted Fiji on policy options for both countries.

Photo - See caption below for description
Minister for Foreign Affairs, Mr Alexander Downer, played host to his Papua New Guinea counterpart, Sir Rabbie Namaliu, at the fifteenth Australia–PNG Ministerial Forum, at Mt Lofty House in the Adelaide Hills in December 2003. Photo: Chesser Studios.
Enlarge image :: Photo gallery

Papua New Guinea

The department coordinated the Government's new policy approach to PNG.

The Enhanced Cooperation Program (ECP) aims to place substantial numbers of Australian police and officials in line positions in PNG to help improve financial management, law and order (including by dealing with corruption), and border and transport security. This policy was agreed by Australia and PNG at the Australia–PNG Ministerial Forum in December 2003, which was organised by the department. We also led successful negotiations for a treaty covering the deployment of Australian personnel under the ECP, enabling full implementation to occur later in 2004.

The department led the multi-agency regional Bougainville Transition Team (BTT). This underlined Australia's continued efforts in the Bougainville Peace Process, following the withdrawal of the successful Australian-led Peace Monitoring Group. During its six months of operation, the BTT worked with all parties to maintain confidence in the peace process, and to facilitate important steps towards Bougainville's autonomy.

Regular contact between departmental officials and PNG counterparts consolidated Australia's interests in security, economic and consular issues, including through the signing of a counter-terrorism MOU in December 2003.

New Zealand

The department supported Mr Vaile in hosting a ministerial forum in August 2003 to celebrate the twentieth anniversary of the Australia–New Zealand Closer Economic Relations (CER) Trade Agreement.

The department worked with other agencies on further initiatives under CER, such as the harmonisation of regulatory regimes, and facilitated a business dialogue on the biotechnology sector. We developed a proposal for adopting a Change of Tariff Classification model for determining origin for goods under CER, and undertook informal consultations with industry.

We facilitated the inaugural Australia–New Zealand Leadership Forum in Wellington in May 2004. Thirty-eight prominent Australian leaders from government, business and community sectors participated. The forum—with the objective of exploring ways to improve trans-Tasman relations—considered economic, defence, political and social ties.

Figure 12. Australia's trade in goods(a) and services with New Zealand (TEXT DESCRIPTION)

Figure 12. Australia's trade in goods(a) and services with New Zealand

(a) Goods data is on a recorded trade basis.

Source: DFAT Stars database.


The department took forward Australia's relations with Africa by establishing a new high commission in Ghana and moving Australia's mission in Nigeria to more suitable premises in the capital Abuja.

We supported Australian business interests in Africa, including in relation to a major US$140 million investment in the Libyan energy sector and other Australian energy interests in north and east Africa. Our work with other agencies helped bring about the joint announcement by Mr Downer and Mr Vaile that Australia would re-open a diplomatic mission in Libya.

Australia expressed its concern over the dramatically worsening humanitarian crisis in the Darfur region of western Sudan, and the department worked with other nations and international donors to press for effective political action to end the conflict there. Australia made a substantial contribution to the international relief effort in Darfur.

The department provided support for Mr Howard's visit to Nigeria for the Commonwealth Heads of Government Meeting in December 2003. The best efforts of Australia and other Commonwealth countries to encourage a return to democratic principles in Zimbabwe were not successful and Zimbabwe withdrew from the Commonwealth at the December meeting. The department ensured that Zimbabwe's neighbours in Africa understood that Australia's position was driven by concern for the plight of the Zimbabwean people suffering under the Mugabe regime. This was demonstrated through our continued pursuit of 'smart sanctions', designed to influence the Mugabe Government to return to good governance and the rule of law, while avoiding harm to the people of Zimbabwe.

The department facilitated Australia's effective functional cooperation with South Africa on a range of issues, including fisheries and environment. The high commission in Pretoria secured political and logistical support from the South African Government in the successful apprehension of the illegal fishing vessel, Viarsa I, (see sub-output 1.1.7 for more information).

Middle East

The department concentrated on deepening Australia's economic engagement with the Middle East, principally with the Gulf states.

Mr Vaile's visit to the United Arab Emirates in May 2004, supported by the department, reinforced the messages conveyed by our officials about the importance Australia attached to building the infrastructure of economic relations, including the possibility of a free trade agreement with the United Arab Emirates and an economic arrangement with the Gulf Cooperation Council. Work by the department and the post in Abu Dhabi helped secure the agreement of the United Arab Emirates to discuss the scope of an FTA.

Australia's growing commercial engagement with the region was further reinforced by a number of other high-level visits supported by the department and posts. They included visits by three state premiers and a large number of state ministers. The department and posts helped the Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade in its enquiry into Australia's trade and investment relations with Gulf States (including Iran).

Iran continued to engage the department's attention because of concerns about its nuclear program (see sub-output 1.1.8 for more information) and Australia's important trade interests there. High-level departmental efforts and representations by the post in Tehran resulted in the removal of informal restrictions placed on Australian exports to Iran. We made clear to Iran the extent of Australia's concern about the disqualification of a large number of candidates for parliamentary elections.

The department carefully managed the publicity surrounding the rejection by Saudi Arabia of a shipment of Australian live sheep on the MV Cormo Express to ensure that Australia's reputation as a supplier of high-quality produce did not suffer. The department and posts, particularly in Nairobi, helped ensure that arrangements for the eventual passage of the vessel to Eritrea and the disembarkation of the sheep proceeded smoothly.

As the Israeli–Palestinian dispute moved no closer to resolution, the department continued to argue for a just and comprehensive settlement based on a two-state solution. We supported Mr Downer's visit to Israel where he conveyed to leaders the strength of Australia's commitment to Israel's security.

The Council for Australian–Arab Relations, the Secretariat for which is provided by the department, established a comprehensive program to develop relations. The programs included guidance for small and medium exporters, a Young Professionals Exchange Program and an Australian studies program for schools, initially in the United Arab Emirates, Kuwait and Qatar.

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