The foreign investment equation

Foreign investment in land and resources incites strong emotions in Australia and the Philippines. Both countries welcome foreign investment, but with the important caveat that it should be in the national interest.??

Last month, the Australian Government released the first Register of Foreign Ownership of Agricultural Land which showed that 13.6 percent of Australian agricultural land is owned by foreign interests. Australia is a big country and this represents an area over three times the size of the Philippines!??

The Register dispelled a number of popular myths. Chinese investment in Australia generates controversy, yet China ranked only fifth as a source of investment owning 1.4 million hectares, a long way short of the United Kingdom with 27.5 million hectares, the United States (7.7 million), the Netherlands (2.9 million) and Singapore (1.8 million). ??

However, the big surprise for me in the Register was that Philippines interests ranked number six, owning 1.1 million hectares of agricultural land in Australia, not very far behind China. This statistic got very little media attention in Australia, but I was pleased to see this very healthy Philippines’ contribution to the Australian economy.??

In recent weeks I have had the opportunity to see the positive contribution that Australian mining investments are making in the Philippines. President Duterte and Department of Environment and Natural Resources Secretary Lopez have both spoken positively about Australian mining standards as a model for responsible mining in the Philippines. But what does this mean in practice???

The starting point for mining in Australia is that there is a global demand for minerals and we have a lot of them to supply. The Philippines is similarly endowed with mineral wealth, but it is a decision for the Government as to whether it wants to exploit these resources or leave them in the ground. ??

In Australia’s experience, strong laws and regulations which are effectively enforced lead to economic and social benefits from mining which outweigh the costs. I am told that Philippines’ mining laws and regulations are similar to Australia’s. Their proper implementation and enforcement could well unlock the benefits of mining that Australia has enjoyed.??

This has included regional development, empowering indigenous communities, jobs and economic growth. The mining sector in Australia employs more indigenous people than any other sector and makes a significant contribution to the economic development of indigenous communities. It also makes a major contribution to government revenues and to Australia’s export earnings, comprising around 48 percent of our exports.??

Mining has an impact on the natural environment and the landscape can be permanently altered. This is a particular consideration in fragile and bio diverse areas. But this is also true for other human activities such as agriculture, transport infrastructure, urban expansion, even tourism.

The environmental impact of mining can be managed and minimized. Rehabilitation of mine sites has restored the landscape to a natural state or repurposed it for other uses such a forestry or recreation. Mining companies in the Philippines plant more trees than any other industry and I saw evidence of rehabilitation underway at the mines I visited in the Philippines. In Australia, shopping mall carparks take up more land area than mines and mining co-exists in proximity to pristine natural heritage sites, agricultural production and tourism ventures.  ??

Australian mine operators apply the same or higher safety standards in the Philippines that they apply in Australia. They are skilling up local employees, building roads which benefit the whole region, contributing to Philippines Government revenues and supporting community development.??

Every country has the right to set the conditions for foreign investment. For foreign investors, a predictable, transparent and stable operating environment is essential as is a healthy economic return. The best foreign investments also bring significant benefits to the host country. Communities in Australia and the Philippines must have confidence that the investment, whether it be in a mine, a cattle station or a vineyard, is in their interests too.

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(Amanda Gorely is the Australian Ambassador to the Philippines.  Follow her on Twitter @AusAmbPH.)