Interview

China’s actions cause for concern: Australia

Speaking to The Hindu, Australia’s top diplomat Peter Varghese, who is in Delhi for the first India-Japan-Australia high-level trilateral talks, confirmed the discussion on regional security had included concerns over the South China Sea. “It’s the pace and the scale of China’s reclamation which is causing some anxiety in the region. This is something we’ve expressed publicly, and ASEAN countries have expressed,” Mr. Varghese said in the interview.

Here is the full interview

You’re here for the first India Japan Australia secretary-level trilateral. Tell us what was discussed, given that this was in the pipeline for years, but India has been a little hesitant to schedule the talks.

It is an idea we have been discussing for some time in all three countries. We see it as a natural progression, given the way our interests across strategic and economic issues have been converging. So we are looking at what happens in the region and beyond, and that was the focus of this first meeting. This is a very significant time in the region’s history, we have a churn occurring, and an economic story which is successful. We do have a strategic challenge in the region as well.

When you say the word “churn”, we are seeing concern expressed around the world, especially by the US on China’s reclamation of islands in the South China Sea. Were those discussed?

Yes, it’s a concern that many of us have, Australia included. It’s the pace and the scale of China’s reclamation which is causing some anxiety in the region. This is something we’ve expressed publicly, and ASEAN countries as well. We all want to see a China that is constructive, we want to see these territorial issues handled in a way that doesn’t create instability and heightened tensions. The rule of law, peaceful resolution, avoiding unilateral actions that could be seen as intimidatory are a part of that. We would encourage China and the ASEAN states to reach an agreement on a code of conduct.

And that was discussed at the trilateral today?

We talked about the regional security environment and we did talk about what was happening in the South China Sea.

China has rejected these allegations, accusing many countries of a double standard. Is there a danger that a trilateral of this kind being held at this time could be seen as a front against China?

If it were, it would be a misperception. This is not a meeting directed at anyone. We are three countries with a lot to do bilaterally, and we see benefit in cooperation.

India and Australia are also undertaking naval exercises at present…could this also become a trilateral with Japan?

We aren’t looking at that right now. Let us remember we have dialogue and exercises with many countries, including China actually. So there are many bilateral and multilateral arrangements, and we need more intensified contacts.

Given that is the India-US-Japan-Australia quadrilateral on the agenda?

Well not right now. The quad did exist for a period. But then it ended. So we are focussing on trilaterals instead.

You have a number of bilateral meetings with Indian officials as well. Are you essentially stock-taking? Because six months after the PM visited Australia we haven’t seen much movement on the initiatives announced, whether it has been the Free Trade Agreement (CECA) being discussed, or the nuclear deal or even specific announcements of investment.

I think we have seen some progress, so its more than stock-taking. We have seen seven rounds of the CECA negotiation, and the eighth will be held shortly. We were encouraged by the last round, and felt we made progress in the key elements that is goods, services and investment, and while it’s clearly an ambitious target to conclude by the end of the year, we are working hard to try and do that and the Indian side is equally committed. Our instructons from our PMs is to get it done, and the minister responsible Andrew Robb is visiting several times this year to try to get it done by the end of the year.

Are you suggesting it may not get done by end-2016, as promised?

We are working for it to be done by then, those are our instructions, we will give it our best shot.

When it comes to investments, we have heard about $10 billion worth of deals in the pipeline for some time now. When are we likely to see those?

We have been talking to the Indian government about obstacles that are in the way of bigger Australian investments, particularly in the mining sectory, where the prospects are biggest. And given the emphasis of the Modi government on opening India up for investment, we hope these projects on iron ore, diamonds etc can get up and running…some have been in the pipeline for several years. We are certainly finding a more responsive and sympathetic attitude from the government in the past year, and Mr Modi’s emphasis on getting things done is registering with the bureaucracy. But that said, we haven’t managed to remove the obstacles yet.

When you speak of obstacles, which is the biggest one?

The biggest project is Rio Tinto’s project for iron ore in Orissa. That is a very substantial one and Rio is keen for that to get up and running. I think they have made it clear they are in for the long haul, and although they wanted to sort out clearances many many years ago, the project has been in the making for decades.

What is your wishlist that India needs to do according to you to remove the hurdles?

I think in terms of investment, it is about the final approval. In Orissa both the centre and state are yet to give clearances. The regulatory burden is seen by companies in Australia as excessive, and also the interpretation varies, so what we are looking for is certainty and simplicity, and the government says it wants to see progress too. We recognise that the Land Acquisition amendments is not easy and in a country like India the politics over this is fiendishly complex, so I think no one expects them to be sorted out overnight. But we are seeing a commitment from the government moving in the right direction.

Conversely, the Adani coal project is having similar problems in Australia from clearances to court battles to greenpeace and environmental protests….are they resolvable?

You have to separate the problems from each other there. As far as the government goes, we have given all the clearances, the state government has worked quickly. When it comes to litigation that is in the hands of the courts, and not much the government can do. The government doesn’t have a role in financial arrangements or any other. And the courts are the courts.

On the 1-2-3 or administrative arrangements, where the government does have a role, we still see no progress, nearly a year since the nuclear deal was declared…

But we are very close to that. We have had a very productive round of negotiations in the past month. And I have every confidence we will get there real soon. We are bound by our legal commitments (to AONM). What we need is a system for accountancy and reporting which will enable us to fulfil the requirements.

Is India willing to shift on its position that only the IAEA can carry out the accountancy and reporting. So far, the government has maintained publicly that with both US and Canada it hasn’t compromised on that.

I think each negotiation is different. Australia’s legal framework is different to those of the US or other suppliers. In our discussions both sides have been pretty creative in a way that we can meet our framework consistent with India’s position. I don’t think there is a contradiction. Question is how we can get the details we need. So we will square the circle.

An Australian parliamentary committee has also debated the Indo-Aus deal, and its report is 4 months overdue. Despite your confidence on squaring the circle, my question is, is the India-Australia deal in trouble?

No it’s not in trouble, and I don’t expect our parliamentary committee will rule on it either. It isn’t date-specific, but we need it in place before any Australian company can ship Uranium to India.

And a timeline for India’s request for membership to NSG and export control regimes like Wassenaar, Australian and MTCR…Given China’s opposition to non_NPT members in the NSG, how hopeful should India be?

Well Australia will be supportive, but ultimately India has to convince all the members that it will abide by all the regulations required. India would like to be a member of all the groups in the same timeframe and we are working closely together on these. We don’t want to give a timeline, or journalists like you will hold us accountable as to why we haven’t got it done…(laughs)

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