Hayes John: International Finance Agreements Amendment Bill — In Committee 
Hayes John: International Finance Agreements Amendment Bill — In Committee 
[Volume:642;Page:11816] 
JOHN HAYES (National—Wairarapa) 
: 
 I am quite astonished by my colleagues from the Green Party because they were full participants in the Foreign Affairs Defence and Trade Committee which considered the International Finance Agreements Amendment Bill. At no point did they raise concerns about the bill put in a dissenting voice or vote against the bill. So it is quite astonishing to come to the floor of this Chamber and find them voting against it. 
I say to my colleague from the Maori Party Hone Harawira that I am sure he knows quite a number of Maori who own dairy farms and corporations that are raising money and investing in the future of their mokopuna by generating income from exporting dairy products. I will tell him that in 1994 when I was Ambassador to Iran we faced a situation where the Iranian Government defaulted on $100 million of letters of credit that had gone through the Iranian banking system. That money was owed to 14 New Zealand companies. Members may recall that Mr Cosgrove’s erstwhile colleagues Roger Douglas Mike Moore and I suppose David Lange got rid of the Export Guarantee Office. We used to have a State agency in this country that guaranteed the exports of New Zealand companies. The Export Guarantee Office had gone down the gurgler by 1993-94 and we were in a situation where those New Zealand companies—there were 14 of them—had potentially lost $100 million of their money. They were carrying the loss—not the State as used to be the situation. 
So I say to my colleague in the Maori Party that it is in the interest of his people who are engaged in dairying or logging for example to support this legislation. I will repeat to him that we are in a situation whereby this legislation and the risks that are covered by it—as set out in the convention in new schedule 7 of the principal Act—are about issues of currency transfer. That means that in a situation like that which occurred recently in the Solomon Islands were it a member—unfortunately it is not—when it hit the wall and could not provide enough foreign currency to meet its bills then this insurance scheme would have come into play. It would have come into play in Iran because Iran is a member were we members back then—when Australia was unlike this Government. 
If we think about a second area of new schedule 7 we realise article 11(a)(ii) of the convention will allow the covering of business risk where any legislative action administrative action or omission attributable to the host Government has the effect of depriving the holder of a guarantee of its ownership or control—in other words situations where the host Government takes something off the holder as could easily happen in Fiji where we have martial law at the moment. 
The bill also provides under article 11(a)(iii) of the convention in new schedule 7 for breach of contract. That is something that happens regularly in Papua New Guinea. This scheme is used for example to cover the Lihir goldmine. What is the Lihir goldmine about? It is about providing an export income to Papua New Guinea. It is about providing jobs to Papua New Guinean people. It is about using the money gained from the extraction and export of that gold from a very highly sophisticated goldmine in order to educate children. The money from that goldmine allows the Government to fund its anti-AIDS programme. AIDS is a huge problem in Papua New Guinea. That money can also be used to engage in roadmaking and to pay for heavy machinery imports—all sorts of things that ultimately are of benefit to the people of Papua New Guinea. I ask my colleagues in the Maori Party not to keep their heads in the sand. 
We also have to look at events in the Pacific area because under new schedule 7 article 11(a)(iv) of the convention also enables New Zealand companies—and particularly small to medium sized companies—to cover losses attributed to any military action or civil disturbance. I think there of Tonga. Do members recall that Tonga’s capital burnt down very recently? I think of the Solomon Islands. The capital there was burnt down too. I am still with article 11(a)(iv) of the convention in new schedule 7 where we have cover for civil disturbance. Those things are a reality in the Pacific. I know that the Government is burying its head in the sand and pretending we can use a megaphone to beat the heck out of the military regime in Fiji for example. That is to the detriment of New Zealand companies that are trying to do business there—for example running hotels exporting food and those sorts of things. Belonging to this insurance convention will insulate New Zealand companies particularly small to medium sized ones from the risks this Government is imposing upon them. 
It is also really important that we ask the Government to engage in encouraging those Pacific countries that are not yet members of the convention—for example Tonga and the Solomon Islands— to join it. When that happens their companies will be able to benefit from that membership. 
 If I could move on a little I notice that in article 32 of the convention in new schedule 7 there is a structure for appointing a board of directors. I would simply like to point out particularly to my Labour colleagues in the select committee—to our chair Dianne Yates to Paul Swain and to Jill Pettis—who will be leaving this House over the next few months or if not then certainly next year that there is a possibility of work after they leave this Parliament by finding themselves a slot as a director of the agency. That is really encouraging and it may be a way to help those people to move on. 
We warmly support the bill.