Pacific Scoop

Pacific trade office faces up to debate over funding independence

Chris Noonan

Former Pacific Chief Trade Adviser Dr Chris Noonan ... scathing criticism over funding model and "independence". Photo: Pacnews

Pacific Scoop:
Report – By Sherita Sharma in Suva

Debate has been stirring on whether donor countries should be allowed to have a say on the running of the Pacific Chief Trade Adviser’s Office.

The future of OCTA is being thrown about the region’s discussion table, by both donors and the Forum Island countries.

Donor countries Australia and New Zealand provide funds for the OCTA to operate and some suggest they have the right to dictate some terms on the running of the OCTA.

PIF 40 years logoFormer Chief Trade Adviser Dr Chris Noonan resigned earlier this month for personal reasons but after a scathing criticism of what he said were Australian efforts to undermine the independence of the office.

Trade justice campaigner for Australian Fair Trade and Investment Network (AFTINET), Harvey Purse said generally donors have some rights to ensure funding is used for the purpose intended.

According to Purse, the OCTA funding scenario is not a standard funding situation for donors as it was based on the OCTA being completely independent of the two donor countries.

However, FIC countries repeatedly emphasise the importance of an independent OCTA, controlled and owned by the island countries.

Right to run
The argument is that since it concerns the trade nature of the Pacific states, they are the ones who have the right to run the OCTA.

The issue went under fire when funders Australia and New Zealand pushed for the OCTA to operate strictly over PACER-Plus and not to tend to other regional issues.

In July, New Zealand agreed to give NZ$1.3 million (US$1million) to the OCTA for two years to fund PACER-Plus negotiations.

AFTINET believes a restriction in the agreement is that the funds from New Zealand can only be used for PACER-Plus related matters.

The agreement does not restrict the OCTA from seeking funds from sources other than Australia and New Zealand or what those additional funds can be used for.

The OCTA is yet to have a similar arrangement with Australia.

Australia drafted two funding agreements which were not accepted because both attempted to place difficult reporting and audit provisions on the OCTA.

Purse said civil society is pushing the Australian government to fund in a manner that respects independence of the OCTA and does not restrict it from advising on other trade matters as well.

Modified arrangements
Since New Zealand signed an agreement acceptable to the FICs, AFTINET expects Australia to modify its proposed arrangements to reflect the agreement between New Zealand and the FICs.

In March, Australia had called for a delay in establishing the OCTA as an independent legal entity through the Constitution.

The next Forum Trade Ministers’ meeting in May saw ministers agreeing that funding arrangements should not compromise the OCTA’s independence.

In 2009, the Australian and New Zealand governments had agreed to fund the OCTA, with AU$500,000 and NZ$650,000 a year respectively for 3 years.

In the first year, funding was given through the Pacific Islands Forum Secretariat (PIFS) but after that the OCTA had to deal directly with Australia and New Zealand governments.
Australia is yet to cover the remaining two years.

The Pacific Island Forum Leaders Summit in September will discuss the OCTA’s activities and AFTINET hopes Australia will announce a mutually acceptable agreement.

Purse said OCTA needs secure funding to be full resourced and independent of the donor countries to adequately advise the FICs on PACER-Plus.

Proposal submitted
The PIFS had submitted a proposal to the European Union in 2009 (when OCTA was established) to fund OCTA under EDF (European Development Fund) 10.

The EU declined as it was already funding Economic Partnership Agreements (EPAs).

The Commonwealth of Nations and the United Nations have also been suggested as other sources of funding for OCTA.

The independence and security of the OCTA is also in question.

“Setting up OCTA is a reaction to the very real perception that the PIFS is dominated by Australia and New Zealand and would not be able to provide independent advice on PACER-Plus negotiations,” said Purse.

Having OCTA set up in Vanuatu ensures FICs have ownership of the OCTA and its independence.

The governing board is comprised of seven members who are either trade ministers or senior trade officials selected from the FICs.

The FICs can be certain of their ownership and the OCTA’s independence as long as Australia and New Zealand remain on the outside of OCTA.

The OCTA’s main role is to provide support and advice to the FIC countries during PACER-Plus negotiations. It is wholly controlled and owned by the FICs.

Sherita Sharma is a second year student journalist from the University of the South Pacific in Fiji.