English Bill: International Finance Agreements Amendment Bill — First ReadingText is incorporated into the Bound VolumeEnglish Bill: International Finance Agreements Amendment Bill — First Reading[Sitting date: 15 September 2015. Volume:708;Page:6595. Text is incorporated into the Bound Volume.]Hon BILL ENGLISH (Minister of Finance): I move That the International Finance Agreements Amendment Bill be now read a first time. I nominate the Foreign Affairs Defence and Trade Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 22 October 2015 and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday during a week when there has been a sitting of the House despite Standing Orders 191 and 194(1)(b) and (c).This is the piece of legislation that enables the Government of New Zealand to become a member of the Asian Infrastructure Investment Bank and to implement our obligations under the articles of the agreement of the Asian Infrastructure Investment Bank. Just as a little bit of history to this legislation last year the Chinese Government floated the idea of an Asian infrastructure bank. At the time there was I have to say some scepticism about whether there was the room for such a bank the need for it and whether it would be structured in a way that meant that there could be multilateral participation in that bank.The New Zealand Government already has shareholdings in the World Bank and its various manifestations and the Asian Development Bank. New Zealand took something of a brave step early on partly with the encouragement and assistance of Singapore to be the first developed country that put up its hand to engage developing countries and that put up its hand to engage in discussion with the Chinese Government about the possibility of the Asian Infrastructure Investment Bank being a true multilateral institution because like many others we anticipated that it would be fairly similar to the other Chinese banking operations that are completely controlled by the Chinese Government. As it happened—principally with New Zealand’s effort but also with that of others—the discussions with the Chinese Government progressed very positively and much more rapidly than we might have anticipated. It turned out that this initiative taken personally by President Xi Jinping—it came to be seen that this initiative was intended by the Chinese Government to be a modern multilateral institution. So that is how it has turned out.I want to acknowledge the role of the New Zealand officials particularly the role of the former Secretary to the Treasury John Whitehead in negotiating an outcome—unexpected I think by the broader community of developed countries and developing countries that took an interest in the structure of the bank. Since New Zealand put up its hand to engage in those discussions many other developed countries have joined. A number of them commented to me at the signing ceremony in Beijing that the fact that New Zealand had participated early and was happy with the arrangements was a positive signal to them that it was the type of institution that they could support.The Chinese Government with its focus on getting things done has set out a timetable as have the negotiators of the articles of the bank more correctly. This bill is part of meeting that timetable. Why have we been interested? Because our future lies in the Asian region. In the context of a lot of discussion about uncertainty over whether the Chinese economy continues to grow at the rates to which we are accustomed it is important that we broaden our interests across South-east Asia—as this Government has—and build up our relationships and understandings in other well-populated markets where growth rates are significant: Indonesia the Philippines and Viet Nam. One has to visit those countries only briefly to see the demand and the need for very significant investment in infrastructure.This kind of multilateral institution allows a range of countries to participate but I suspect it will also lead to the setting of both asset standards and financial standards that ensure quality infrastructure investment in those economies. Every bit of that infrastructure will be of benefit in the long run to the New Zealand economy. A well-functioning Indonesian economy will in 10 or 20 years be a powerhouse of growth. There is no doubt about that. It is the same for the Philippines the same for Viet Nam and the same for other countries such as Thailand Malaysia and so on.Those kinds of considerations were reflected in the international treaty examination of both the bank and its articles of agreement which was handled by the Foreign Affairs Defence and Trade Committee. I want to thank that committee and the officials but particularly the committee for taking quite seriously their opportunity to scrutinise this. There was an opinion that I was looking forward to seeing and it was a constructive forward-looking opinion.The purposes of the bill are to amend the International Finance Agreements Act to enable us to participate. Through our involvement in the negotiations we have seen the founding documents of the Asia Infrastructure Investment Bank that promote and uphold the principles of broad and open membership strong and efficient governance mechanisms and a firm commitment to sustainability to environmental and social safeguards and to transparency and openness. I am pleased to say that these are the kinds of standards that we take for granted somewhat in New Zealand and it is important to see them embedded in this institution.The bill gives certain articles of the agreement the force of law in New Zealand. Clause 7 provides for various privileges and immunities including from legal proceedings for the Asia Infrastructure Investment Bank its assets and archives and its officials. This is consistent with the immunity afforded to the staff of other international financial institutions in accordance with the International Finance Agreements Act. Founding members of the Asia Infrastructure Investment Bank have been requested if possible to complete ratification by the end of the year. This will allow entry into force of the articles and the start of the bank’s operations by that time.That is another reason why I think we have got broad agreement to expedite this piece of legislation. Multilateral institutions are often known for the slowness with which they move. We have issues with the Asian Development Bank whose procurement processes mean that our aid projects across the Pacific are held up because they apply the same standards to small Pacific aid projects as they would apply to a multibillion-dollar investment in a large South-east Asian economy. This particular multilateral institution has been formed quickly. It is moving from concept to operation remarkably quickly by any international standard.If this is the way that we can do business with other countries not just China but the other 49 or 50 members then it is a great example of not only how we can contribute but a great example of a higher degree of global cooperation on some of these issues than I have seen in other examples of multilateral institutions.It is intended that the bill be brought into force when New Zealand becomes a member of the Asian Infrastructure Investment Bank. Two things must happen before that. First New Zealand must have ratified the Articles of Agreement of the Infrastructure Bank. Second they must have been entered into force—that is approved by at least 10 signatories whose initial capital subscriptions comprise no less than 50 percent. We will be a very small proportion of that 50 percent capital but we can contribute by getting the job done. Again I want to thank the Foreign Affairs Defence and Trade Committee and the officials for their work and I commend this bill to the House.