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2010-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT
AMENDMENT BILL 2012
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon Bob Carr, Minister for Foreign Affairs)
INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT AMENDMENT BILL 2012
PURPOSE
The International Fund for Agricultural Development Amendment Bill 2012 allows Australia
to accede to the Agreement Establishing the International Fund for Agricultural
Development (IFAD) under Australian law.
OUTLINE
Australia was a founding member of IFAD in 1977, but withdrew from the Fund in
August 2004 (effective from 2007) due to a number of factors, including the Fund's limited
relevance to Australia's aid priorities at the time.
In 2011, the Australian Agency for International Development (AusAID) conducted a
comprehensive review of the Fund. The Review found that since 2004, the Fund's reform
process had resulted in improvements to strategic planning, project quality and impact,
knowledge management and innovation. The Fund is now considered by donors and
developing countries to be an effective, results-focused, value-for-money development
partner.
The Government announced Australia's intention to re-join IFAD at the 35th session of
IFAD's Governing Council on 22 February 2012, and as part of the 2012-13 Budget. Australia
is seeking to re-join IFAD at the 37th session of the IFAD Governing Council in February 2014.
Legislation implementing Australia's obligations under the Agreement Establishing IFAD
must be in place before Australia can accede to the IFAD Agreement. The original domestic
legislation which implemented the IFAD Agreement was the International Fund for
Agricultural Development Act 1977 (the IFAD Act 1977). That legislation was never repealed,
despite Australia's withdrawal from IFAD and denunciation of the IFAD Agreement in 2004.
The principal provisions in the IFAD Amendment Bill 2012 allow Australia to legally accede to
the Agreement Establishing IFAD under Australian law by:
1. amending the definition of `Agreement' (Section 3) to ensure the legislation refers to
the most recent version of the Agreement;
2. repealing a section (Section 4) stating that membership of IFAD is approved; and
3. removing the Schedule to the IFAD Act 1977 (as it refers the original IFAD
Agreement) and replacing it with a web link to the most recent IFAD Agreement,
which is updated as the Agreement is amended.
FINANCIAL IMPACT STATEMENT
The Government has provided up to $126.4 million over four years from 2012-13 as part of
re-joining IFAD. The next replenishment of IFAD will have an impact on the fiscal balance of
up to $120.0 million in 2013-14, as the total replenishment commitment is expected to be
made in that year. Underlying cash impacts will occur as contributions are disbursed from
2014-15. Final details will be confirmed following satisfactory completion of the treaty and
pledging process.
INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT AMENDMENT BILL 2012
NOTES ON CLAUSES
Clause 1: Short Title
1. Clause 1 is a formal provision specifying the short title of the Act.
Clause 2: Commencement
2. Clause 2 describes when different parts of the Act commence:
· Sections 1 to 3 of the Act and anything not covered elsewhere commence on the day
the Act receives Royal Assent.
· Schedule 1 of the Act commences on a day fixed by Proclamation, not occurring before
Australia becomes a member of IFAD. If no Proclamation is made, the provisions will
commence six months after Australia becomes a member of IFAD again.
Clause 3: Schedule(s)
3. Clause 3 provides that any Act specified in a Schedule to the Bill is amended or repealed
as set out in the Schedule. There is one schedule to the Bill, which amends the
IFAD Act 1977.
SCHEDULE 1-INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT ACT 1977
Clause 1: Section 3 (definition of Agreement)
4. Clause 1 of Schedule 1 repeals the current definition of Agreement in the
IFAD Act 1977, substituting in a new definition. The new definition provides for
amendments to the Agreement over time without needing to update the
IFAD Act 1977.
Clause 2: Section 4
5. Clause 2 of the Schedule repeals Section 4 of the IFAD Act 1977. Section 4 provided
that membership of IFAD is approved. The section is not required for Australia to
re-join IFAD.
Clause 3: Subsection 6(1)
6. Clause 3 of the Schedule ensures that the word `Fund' (referring to IFAD) is
capitalised in Section 6 of the IFAD Act 1977.
Clause 4: Schedule
7. Clause 4 of the Schedule repeals the current Schedule to the IFAD Act 1977. The
Schedule contained the original text of the IFAD Agreement. The Schedule is no
longer required, as Clause 1 in the Schedule provides for amendments to the
Agreement over time.