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THE INTERNATIONAL YEAR IN REVIEW
The international environment over the past year proved demanding for the department. Both in Australia and overseas, we placed high priority on meeting the challenges of political and security developments in the region and participating in the continuing debate over the international trade agenda. The department continued to provide high-quality advice to the Government across the broad spectrum of foreign and trade policy issues and remained committed to delivering the best services possible, particularly consular and passport services, to the Australian community. The department was responsive to ministers and supported them in their advocacy of Australias interests internationally.
The historic ballot in East Timor on 30 August 1999in which an overwhelming majority of the East Timorese people voted for independence from Indonesiaand the violence that followed presented one of the greatest foreign policy challenges to Australia in recent history. In strong support of the Government, the department, both in Canberra and through our overseas posts, worked with great determination and professionalism to help bring about a resolution to the crisis and to generate international support for the deployment of the International Force in East Timor (INTERFET), which was agreed to by the Indonesian Government and mandated by the United Nations Security Council.
Following the deployment of INTERFET and the restoration of security, the department continued to work with the United Nations and the East Timorese during the establishment of the United Nations administration in the territory. We will continue our close cooperation with the administration to support the future development of East Timor.
Australias involvement in the East Timor crisis caused strains in our relationship with Indonesia over the period, a relationship that was being recast by Indonesias own transition to a more open and democratic system of government. The Australian Government supported this process of democratisation in the lead-up to, and following, the Indonesian parliamentary elections in June 1999 and presidential elections in October. The department, including through the Australian embassy in Jakarta, has developed links with the Indonesian Government and parliament and has been engaged in rebuilding a constructive relationship with our neighbour based on mutual respect.
Recognising the significance of the changes under way in Indonesia, and the prospect those changes hold for a more broadly based bilateral relationship than was the case in the past, Australia is also sympathetic towards the great economic and social challenges facing Indonesia. As well as using its membership of the International Monetary Fund Executive Board to support Indonesias economic rehabilitation, Australia is continuing a large-scale bilateral program of economic, technical and humanitarian assistance.
The political crises in Fiji and Solomon Islands in the latter part of 19992000 demanded responses from the department on a number of fronts. In addition to providing policy advice to ministers and encouraging the parties towards resolution of the crises, we provided significant consular services. The evacuation in June from Solomon Islands of more than a thousand Australians and other nationals for whom we took responsibility was the first evacuation undertaken by the Australian Government involving both sea and air operations, and took place while we sought to lessen tensions and mediate in the dispute. In Fiji, the safety of Australians was the highest priority, and the department kept the Australian community closely informed of developments that might affect their safety and well-being through regular updates of travel advice. We supported the Governments efforts to urge a return to democracy at the earliest opportunity.
International trade and economic issues
The failure of the Seattle ministerial meeting of the World Trade Organization (WTO) in December 1999 to reach agreement to launch a new round of multilateral trade negotiations was a setback. The launch of a new round was, and remains, a major trade policy focus of the Government. Despite the disappointing outcome, the department was able to achieve strong developing country support for Australias ambitious agriculture reform proposals, and previously mandated agriculture and services negotiations were subsequently begun. We continued efforts to build consensus in the international community for the launch of a new round, including through Mr Vailes hosting of the meeting of APEC Ministers Responsible for Trade in Darwin in June 2000. We also encouraged further market opening and trade facilitation with our trading partners and worked to combat domestic protectionist pressure in some of our major export markets through dialogue with the governments concerned.
The department also responded to the Australian communitys concerns about the impact of globalisation, and worked to outline the benefits of trade to Australians. We began a series of public information activities to improve information for Australian exporters on how they can work with the Government to benefit from Australias membership of the WTO. We also produced brochures highlighting exporters contributions to the economy in rural and regional Australia. These brochures, tailored for regions of Australia, were released in conjunction with the Trade Outcomes and Objectives Statement 2000 launch in April. The statement, prepared by the department and released by Mr Vaile, sets out Australias trade policy goals and strategies for 200001.
As much of East Asia continued to emerge from the financial crisis of the late 1990s, the department sought to ensure that Australian companies were well positioned to take advantage of economic recovery in those countries and assistthrough the provision of knowhow and vital investment and infrastructurein the regions future economic development. Our emphasis, in support of the Government, on the need for the region to stay the course on economic reform and trade liberalisation had some influence on outcomes. Regional markets largely remained open and Australias exports to the region, which had dipped during the worst of the crisis, recovered during the year. Australia is well placed to expand its markets even further. Agreement by the Association of Southeast Asian Nations (ASEAN), Australia and New Zealand to examine the feasibility of a Free Trade Agreement was a promising step forward.
The department worked to strengthen Australias major bilateral relationships, including that with our largest neighbour Indonesia. Regular high and working-level dialogue was maintained with the United States on a wide range of security, trade and economic issues. The department supported highly successful AustraliaUS Ministerial Consultations (AUSMIN) in Washington in November 1999. There was progress on a number of vexing bilateral trade issues, including a satisfactory resolution of the Howe leather subsidy dispute. The department continued to press the US Administration to remove restrictions on access to the US market for our lamb meat exports, while also pursuing WTO legal action in Geneva. More broadly, we worked hard against protectionist impulses in the United States that threaten unsubsidised Australian exports. We engaged the United States closely in the lead-up to, and after, the ballot in East Timor, and continued to maintain a strong dialogue on events in our region. In support of our portfolio ministers, the department established lines of communication with the teams of both main presidential candidates.
With a new US Administration taking office in 2001, and the US Congress likely to remain subject to inward-looking and protectionist pressures, Australias relations with the United States will remain a high priority in our policy advocacy. We will encourage the United States to remain strategically engaged in the Asia-Pacific region and we will also vigorously pursue our bilateral and multilateral trade interests with Washington.
The department continued to work closely with Japanese officials on a wide range of bilateral, regional and multilateral issues. A particular focus of discussion was the way forward for free trade arrangements in the Asia-Pacific region. The departments efforts contributed to the easing of some access restrictions in the Japanese market. We also had productive exchanges on deregulation and competition issues. The department supported work to negotiate an agreement on common approaches to the regulation of e-commerce, which was signed by Mr Howard and his Japanese counterpart, Mr Keizo Obuchi, in July 1999. We had a close dialogue with Japan on East Timor and warmly welcomed Japans generous financial support that facilitated regional participation in the INTERFET force.
The visit of President Jiang Zemin in September 1999, the first visit to Australia by a Chinese head of state, marked a high point in Australias relationship with China. The department played a key role in preparing for the visit and in the negotiation of a bilateral consular agreementa major development that will enable the department to provide more comprehensive services to Australian nationals in Chinaand several other memorandums of understanding. Considerable work by the department over a number of years culminated in a bilateral market access agreement that will come into force upon Chinas entry into the WTO. Mr Vaile signed the agreement during his May 2000 visit to China. In addition to making these advances in bilateral relations, through our human rights dialogue, we continued to urge China to improve its human rights performance, making representations on specific cases and implementing a technical assistance program in this sensitive area.
I am pleased that the year also saw significant advances in our relations with India. Mr Downers and the Prime Ministers highly productive visits in March and July 2000 respectively, helped generate forward momentum in a number of areas in our relationship with this major Asian power.
Security, legal and environment issues
Regional security was enhanced with the historic summit between the leaders of North and South Korea in June. Australia warmly welcomed the successful meeting which contributed to the lessening of tensions on the Korean Peninsula and offered the potential for greater strategic stability. Australia was active in its diplomacy with the two Koreas. Sustained efforts by Mr Downer and departmental officials culminated in May with the Governments decision to resume diplomatic relations with the Democratic Peoples Republic of Korea (DPRK). Our contribution to encouraging strategic stability and peaceful resolution of Korean Peninsula issues was welcomed in the region and particularly by the Republic of Korea, whose own policy of engagement with the DPRK Australia has supported. Stability on the peninsula will continue to be one of the most important regional security issues for the department.
The successful review of the Nuclear Non-Proliferation Treaty (NPT), which saw, for the first time since 1985, agreement to a series of steps towards nuclear disarmament, was a good outcome for Australia. The NPT provides an important security benefit to the international community. Australias active role in other non-proliferation forums continued during the year, principally through our work as Chair of the Australia Group, which seeks to strengthen controls over the export of technology that might be used in chemical and biological weapons programs. We were disappointed that our strenuous efforts to encourage ratification of the Comprehensive Nuclear Test-Ban Treaty by the US Senate did not lead to that result. The Clinton Administration remains committed to ratification, and Australia will continue to press the case with it and the successor Administration.
Our support for Mr Downers participation in the Commonwealth Ministerial Action Group helped shape the Commonwealths response to developments in Fiji, Solomon Islands, Pakistan and Zimbabwe. We also supported the Government in working closely with the United Nations, most notably in East Timor, where the Security Council strongly endorsed Australias role. During the year the department, together with other government agencies, reviewed the UN human rights treaty system as it affects Australia. The outcomes of the review were announced by ministers in August 2000.
International environmental issues remained a high priority for the department. We consulted with other governments as part of preparations for the sixth conference of the parties to the Kyoto Protocol on climate change, scheduled to take place in November 2000. Australia has vital national interests to balance on climate change, and the department will continue our work to develop whole-of-government strategies on this and other environmental issues.
Consular and passport services
The delivery of consular and passport services to the Australian community reached new levels during the yearthe number of Australians travelling abroad and the number of passports issued by the department were both at record highs. As more Australians travel, and to more places, the number of people requiring the departments consular and passport services will continue to grow. I am confident the department is well placed to meet the challenge. An international benchmarking study undertaken as part of a review of the departments consular function revealed that, while other participating countries provided comparable services, Australia provided the most comprehensive and the highest-quality services, and the cost of those services to the taxpayer also compared very favourably.
Departmental staff, in Australia and overseas, were called upon to respond to almost 21 000 cases involving Australians in difficulty over the year, and did so with dedication and professionalism in what were often difficult situations.
The departments consular work involved responding to a number of crises and provided timely and targeted information for the Australian traveller. Our regularly updated travel advisories were increasingly reported in the media and consulted by the public in greater numbers than ever before.
The department continued to deliver high-quality passport services to Australians through passport offices in Australias major cities and more than 100 consular and diplomatic missions overseas, including Austrade-managed posts and Canadian missions. With an estimated 3.3 million Australians travelling abroad over the yeara 3.25 per cent increase from 199899the department issued 1.14 million passports, a 5.4 per cent increase from 199899.
Public diplomacy activities undertaken by the department focused on providing timely information to the Australian people and the media on Australias foreign and trade policies, particularly the Governments approach to East Timor. The department also began a program of work internationally to highlight Australian culture, with overseas posts taking a leading role. In the lead-up to the Olympic Games in Sydney, the department also played an important supporting role in promoting Australia and the Games to an international audience, and facilitating visits from high-level overseas guests. Australia hosted the Asia-Pacific Economic Summit 2000 to coincide with the Olympics, offering an important opportunity to promote Australias trade and investment interests. The department supported ministers and the World Economic Forum (WEF), along with the Victorian Government and the Australian Davos Connection, in preparing for the meeting in September 2000 and encouraging high-level Australian and international attendance.
With the aim of making our work more accessible to the community, and consistent with our approach of providing Australians with comprehensive, relevant and up-to-date information on foreign and trade policy, the department enhanced our Internet website, making it more informative and user-friendly. This will continue to be a priority area for our interaction with the broader Australian community.
CORPORATE MANAGEMENT AND ACCOUNTABILITY
The passage of the Public Service Act 1999 changed the legislative framework under which the department operates and offered us a welcome opportunity to take more responsibility for managing our resources.
We launched a new corporate plan, setting out our broad priorities and strategies for the next three years.
Human resources management
The departments ability to deliver high-quality outcomes to the Australian people depends upon the professionalism of our staff, including the ethical standards and values they bring to their work. The Corporate Plan 20002002 reflects our corporate management focus on fostering a work environment that encourages efficiency and is professionally rewarding for staff. The plan emphasises the additional flexibility and cultural sensitivity that are crucial requirements for our staff.
A key implication for the department of the new Public Service Act was the change in status of the departments locally engaged employees in diplomatic and consular missions overseas. Under the Act, these staff, who make up nearly half of all staff employed by the department, are no longer regarded as employees of the Australian Public Service (APS). The department has taken this opportunity to launch a comprehensive review into management of our locally engaged staff. The review, which will be completed during 200001, will examine whether the department is able to exercise more flexibility in employment arrangements for locally engaged staff, whose work we value highly.
I was pleased that a new certified agreement, covering employee terms and conditions for the period 200003, was concluded and adopted by staff. Intensive consultative negotiations led to a 71 per cent vote in favour of the agreement, a very heartening result. The agreement, which took effect on 1 July 2000, deals with key issues of remuneration, performance management, structure of staffing broadbands and overseas conditions of service. It retains the fundamental link between performance and remuneration. I am confident that the new agreement is competitive with those of other public service agencies and will provide a strong basis on which to continue to improve the employment conditions we offer staff.
The department launched a new strategic plan for people management to guide the approaches we will be taking in all areas of people management. The plan takes account of the need for the department to ensure that our recruitment, training and deployment practices are fully integrated and of high quality. Although the department remains a very desirable place in which to work (more than 2 500 graduates applied in April 2000 for the departments proposed 2001 intake of 25 positions) and enjoys high retention rates, we face a unique management challenge in maintaining a lean and highly mobile workforce. Together with the new certified agreement, the people management strategy should allow us to continue to offer challenging and rewarding work to all of our staff, and retain a well-motivated workforce.
With the aim of encouraging staff to streamline their work practices, I continued to implement a working smarter campaign during the year. The policy tackles a longstanding aspect of the departments culture: the tendency for staff to work excessive hours and in ways that are not conducive to a healthy balance between professional and personal life. The policy, which was the subject of extensive consultation with staff and has been well received by them, focuses on achieving high productivity and promoting good work management so that all staff can operate at a sustainable pace with maximum effectiveness, and respond to emergencies as they arise.
Financial management and accountability
The department has made changes to our financial management practices to fulfil our obligations under the Finance Management and Accountability (FMA) Act 1997. A new financial management information system was introduced at the beginning of the year. The new system smoothed our adjustment to an accrual-based outcomes and outputs framework and enabled us to meet our reporting and accountability obligations. Within the department, the system allows us to manage better the different cash requirements of our overseas posts and to manage more than 170 bank accounts internationally. The system also facilitated our adaptation to the requirements of the new tax system.
The department continued the transition to the broader accrual framework, including by developing performance-based indicators. The fluid international operating environment and the necessarily long-term nature of our goals continue to challenge us in this regard. We refined our performance information through the course of the year, drawing on our own and broader public sector experiences. A refined framework was included in the 200001 portfolio budget statements.
The department transferred a number of functions to external providers during the year, in accordance with the Governments outsourcing agenda. This included outsourcing the labour-intensive task of calculating allowance payments to Australia-based staff serving overseas. We are continuing to market test a wide range of corporate services and other non-core functions where it is considered there are potential savings or efficiencies for the department.
Effective internal audit and evaluation processes are essential in a geographically dispersed organisation such as ours. We continued to evaluate using client feedback as one mechanismthe performance of our Canberra-based divisions, offices in the States and Territories, and overseas posts. Key stakeholders and clients, including other government agencies, provided very positive feedback in general to the department on our overseas network, recognising the departments important whole-of-government role and the support that our network provides to the full range of Australian interests being pursued by the Government in the international arena. During the year, we introduced a new risk management policy to help us deal with the uncertainties of a changing operating environment and meet higher standards of public sector accountability.
With the Department of Finance and Administration, the department continued work on an output pricing review. Pricing of the consular and passports function was completed during the year. The price of the departments remaining outputs will be reviewed by the end of 2000. We are attaching a high priority to the remaining elements of the review, which is an opportunity to test our performance in meeting the Governments requirement for high-quality services at a competitive cost to the taxpayer.
The output pricing work will be informed by a broader review the department undertook on foreign and trade ministry best practice. The review, completed early in the 200001 year, was aimed at determining where the department stands in relation to international best practice among other foreign and trade ministries in terms of cost-effectiveness and efficiency of the delivery of our overall services to government and the public. It showed that in comparison with ministries of other participating countries the department is using our resources efficiently. The departments running costs per head of staff and the proportions of the departments staff and money devoted to corporate support compare well with the other ministries.
Security and information technology
The department has a singular responsibility to protect the classified and sensitive information we manage, and has specific obligations arising from our whole-of-government responsibilities for security at overseas missions and for the global communications network. Security awareness and training was a major focus during the year. There was a substantial increase in the number of security clearance reviews, and regular security awareness courses were expanded to cater for all staff, including staff of other portfolio agencies (AusAID and Austrade).
During the year, the department began implementation of a new secure communications system. The systemSecure Australian Telecommunications and Information Network (SATIN)is based, unlike its predecessor, on commercially available software and standard hardware systems and offers strong productivity and other benefits to the department. SATIN has been implemented in Canberra. We plan to introduce it to overseas missions progressively and are currently examining associated funding issues.
The department is also undertaking a review that will define our evolving information technology needs, including for the whole-of-government classified communications system, and that will define the main information management projects and funding requirements for the department over the next five years.
I am pleased that the departments three-year Y2K compliance program culminated in all critical systems, including the secure diplomatic communications network, remaining fully operational in the New Year.
I am confident that the department is well placed to meet the foreign and trade policy and corporate management challenges that lie ahead. Our network of overseas posts has seen the addition of Dili, Abu Dhabi and Zagreb over the past 18 months. It is expanding to 83 with the opening of missions in Lisbon and Copenhagen in the second half of 2000 and will continue to play a pivotal role in advancing Australias interests. In a fluid and uncertain international environment, Australia will need to continue to build on the strength of its bilateral relationships and work within regional and multilateral forums to achieve our objectives; the department will continue our pursuit of these objectives in the year ahead.
Australias role in the Asia-Pacific region continues to evolve and mature. We welcome the emergence of regional groupings, such as ASEAN plus Three. We recognise the potential significance of such a forum and would be happy to join at some later stage if invited to do so. In the meantime, the departmentin support of ministerswill take every opportunity to play ourselves into the new dynamic of dialogue and cooperation in East Asia. One way we are looking to do this is through our economic links, exploring with our East Asian partners the scope for free trade arrangements and other links between Australia and the region.
We will continue to be responsive to the wider domestic community and consult closely on issues that are of interest to, and affect, Australians. Australians will continue to travel and work abroad in increasing numbers. Around 800 000 Australians now live abroad and around 3.3 million Australians travelled overseas during the year. This will expand the demand for our services, and we will continue to give high priority to assisting Australians in Australia and overseas.
We will also strive to maintain high professional and ethical standards and to reward and encourage high levels of performance by staff. Through this, we aim to continue to develop as a focused and well-motivated organisation that provides the best possible services to the Government and the people of Australia.
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