Hon Warren Entsch MP Chairman Joint Standing Committee on Northern Australia PO Box 6022 Parliament House Canberra ACT 2600 Fax: 02-6277 2238

Dear Mr Chairman

Enquiry into Operations and Methods for Stimulating the Tourism Industry in Northern Australia

Would you be kind enough to consider the following submission as it relates to the operations and methods for stimulating tourism on Christmas Island as part of your remit into your broader Northern Australian tourism enquiry?

We note the terms of reference for your review include but are not limited to:

1. Domestic and international tourism comprising: recreational, environmental, cultural, educational, and industrial tourism;

2. The role of peak bodies, local communities, and all levels of government in developing and promoting tourism opportunities nationally and internationally, including regulations and workforce issues that may inhibit tourism development; and

3. Communication and transport infrastructure (particularly air, sea, road and rail transport and port infrastructure) which may facilitate and grow tourism.

Our submission primarily deals with the role of government in developing and promoting tourism opportunities as well as transport and other infrastructure that may facilitate the growth of the industry.

Our submission is in eight parts. Part one provides some background information. Part two deals with the need to have an economic development strategy or strategic plan for the island. Part three outlines why good public policy is served by government having an economic plan for the island and part four deals with planning for growth. Part five deals with one matter that inhibits tourism promotion and part six looks at some barriers to growth. Part seven deals with the complex land allocation and approvals process and part eight island infrastructure.

Part One – Background

Christmas Island is located in the Indian Ocean closer to Asia than mainland Australia. It is 2,650 kilometres northwest of Perth and 494 kilometres south of Jakarta.

The island has a land mass of approximately 135 square kilometres of which 85 square kilometres is set aside in perpetuity in the Christmas Island National Park. The land tenure on Christmas Island is broadly divided between-

 National Park 63%  Uncommitted Crown Land 19.2%  Mine lease 13.7%  Other Committed land 4.1%

Through its almost total ownership of land, the Australian Government largely controls the Christmas Island economy. And where it may not be able to influence the island’s primary economic settings through its land ownership regime, it can do so courtesy of its complicated land allocation and development approvals processes.

The Government’s influence over the economy is perhaps best demonstrated by the major drivers of economic activity over the last thirty years.

In 1987 the Government decided to close the phosphate mine. Unemployment increased along with a decreasing island population.

In 1990 the Government approved the reopening of the phosphate mine, leading to in excess of 150 direct jobs being created.

In the early 1990s the Government approved a casino development, leading to the creation of a large number of jobs during the construction phase and up to 300 hotel-casino jobs until it closed some four years or so later.

In the late 1990s the Government approved the development of the Asia Pacific Space Station. That project failed.

In the early 2000s the Government constructed the Immigration Detention Centre (IDC).

The IDC has been in operation for around ten years.

This year the Government announced the IDC will close by 30 June 2018.

It is clear from the events of the last thirty years that the Government plays a central role in the economy of the island.

Part Two - Economic Development Strategy for Christmas Island

The closure of the IDC by 30 June 2018 will have a negative impact on the island economy. At this stage it is not entirely clear how severe that impact will be on local business and employment opportunities.

It is unfortunate certain government agencies perceived the IDC and other asylum seeker accommodation as providing the permanent jobs required to underpin the island’s economic base. It is unfortunate because other proposals designed to bolster the economy were dismissed.

The challenge for the island today is creating an alternative economic base.

There has been some suggestion that tourism is capable of filling the void created by the forthcoming closure of the IDC and eventually becoming the economic mainstay of this island. However, there does not seem to be any clear plan as to how this will eventuate.

Until recently, Government showed no enthusiasm towards accepting repeated suggestions that an economic strategy or strategic plan be developed and implemented for the island. Indeed, some ideas on ways to grow the island’s economic base seem to have been treated with disdain.

Late last year the former Minister for Territories provided funding for the Regional Development Organisation (RDO) to develop a New Strategic Plan for Christmas Island. However, nothing has been published indicating that the government will adopt as government policy the New Strategic Plan or some other economic strategy that will articulate the future direction of the economy.

We again strongly recommend Government develop and approve an economic strategy/strategic plan for the island.

Recommendation – The Committee recommend in the strongest terms that the Government commit to endorsing an economic strategy or strategic plan for the island.

We believe the development of an economic strategy that encompasses tourism is essential for a number of reasons.

First, existing and potential tourism operators need to know in broad terms what developments may or may not be supported by government. There is little point in seeking to attract economic activity in a particular aspect of the industry if it has no chance of being approved.

A casino licence is a case in point. At the moment the Christmas Island Resort and Casino is closed. Despite recommendations from your Committee, Government has embarked on endless reviews seemingly designed to put off to another day making a decision on whether or not to grant a licence. Government indecision impacts on the development of the industry as we will explain later.

Second, the tourism industry and the entire island community need to know if the government is serious about developing the industry.

In the past a great deal of time and effort has been expended developing a plan or strategy for the island. However, the plan or strategy has never been endorsed by government. The Shire of Christmas Island produced, after extensive community consultation, the Our Future: Christmas Island Community Strategic Plan 2011-2021.

Regretfully, these plans or strategies have held little weight in subsequent government decision making processes. Government departments and agencies have continued to implement their own agenda irrespective of whatever the plan or strategy provides. And as there appears to be no coherent or agreed view between government agencies as to economic future of the island, government decisions (to the extent they are made) have been confusing and contradictory when viewed through an island wide economic growth lens.

It appears previous attempts to develop a strategic or economic plan capable of implementation has not been realised as a consequence of government departments and agencies not being part of the development and approval process. A major shortcoming has been the reluctance to have Cabinet endorse the plan as government policy. These weaknesses need to be addressed.

Recommendation – The Committee recommends the development of the new strategic plan involve government agencies and once approved by each agency and the community, be presented to Cabinet for endorsement as government policy.

There are additional reasons for government endorsing an economic policy for the island.

With the forthcoming closure of the IDC, the main economic drivers on the island will be phosphate mining and government services. We have undertaken informal discussions with Government over a plan to extend the life of the mine. However, if Government is not inclined to support that proposal and perceives tourism filling the economic void created by the premature closure of the mine, it needs to be clear headed about how that might be achieved and its implications.

Replacing the contribution the mine makes to the local economy will be challenging, as the following will demonstrate

In the 2015-2016 financial year, the company was responsible for direct payments to the Commonwealth totalling $27,128,636, comprised of the following:-  Company tax 13,961,946  PAYG (employee tax deductions) 7,177,356  Payroll tax (paid to the Commonwealth) 1,531,835  FBT 400,303  Royalties and Levies 4,057,196

In addition to the above, the company funded the feral cat eradication program with $250,000 per annum – an amount which otherwise would have needed to be found out of government resources.

In addition also, the company paid $4,120,501 to other government authorities for utilities/services.

Contribution to the Christmas Island Economy

Almost all company employees are permanent island residents; not fly in-fly out. The total island payroll for the year was $23.7m. Our employees shop at the local retail outlets, eat out the local restaurants and generally provide an income source for many of the smaller businesses.

As a company we also engage the services of local contractors when required. In the 2015-2016 financial year we paid $3,618,728 to local businesses.

All employees are entitled to a number of flights per year for themselves and specified family members. This coupled with senior management, customer, consultant and contractor flights to the island means that we pay for up to eight to ten seats on every flight.

Contribution to Island Community

We operate a community grants program that provides small sums to community organisations for various cultural and other events. In 2015-2016 we allocated $209,629 to community projects.

It is also worthwhile considering how the population of the island may be affected by the changing nature of the economy and measures that may need to be taken to secure alternative business and employment opportunities.

Without going into detail, the following is worth pondering.

Lord Howe Island is a very popular tourist destination. It limits the number of tourists that may stay on the island to 400 a day. The latest figures we could obtain suggest it receives 15-16,000 visitors a year. It supports a permanent population of around 350 people, around 25-30% of the Christmas Island population. As a comparison, Christmas Island had received an estimated 800 – 1,000 tourists per year prior to accommodation on the island becoming dominated by immigration related personnel.

Education exports have been mentioned as a possible source of creating economic activity on the island. Some islands around the world have been successful luring major universities or other education providers to their shores, with the accompanying economic stimulus that creates. However, that has been achieved in some cases by major tax breaks being offered to providers.

The island’s future population base and tax breaks or other incentives to attract investment are thorny public policy matters. But they are matters that need to be addressed if there is to be a plan to grow the tourism industry or develop other economic opportunities for the island.

Of course government is at liberty to decide against adopting any economic strategy for the island. If that is the case, there seems little point engaging the community in the development of a strategy that at best will describe community aspirations and at worst will be a point of frustration whenever government decides to adopt a course of action that is not in accordance with community views.

Christmas Island Resort and Casino

Earlier we advised the Christmas Island Resort and Casino is closed.

It appears the owner/s of the resort are waiting for the government to make a decision on the casino licence before making a decision on the future of the resort. This means the largest potential provider of tourist accommodation remains closed pending a government decision.

Government’s inability or unwillingness to make a decision has the capacity to impact on potential new tourism investments. A potential investor in tourism accommodation may be hesitant about making any financial commitment in a new resort or the like if there is a chance of tourists being lured away to casino accommodation if a licence is granted.

It is important the question of casino licence be determined one way or another. We see no reason for this decision to be delayed.

We recognise the Regional Development Organisation (RDO) has been charged with the responsibility to develop a New Strategic Plan for Christmas Island. However, neither the RDO nor Christmas Island community will determine if a licence is issued. That is a government decision and the government should make it.

When the government made a decision to issue a casino licence in the early 1990s it did so to stimulate island tourism. At that time it was perceived the casino would act like a magnet in attracting visitors to this island. Since then new casinos have been developed and online gambling is gaining momentum.

Will allowing the casino to operate today attract visitors to the island? While we are not qualified to answer that question, we believe the purpose of providing a licence must be to stimulate island tourism and for no other purpose. This, in our view, means limiting the licence to casino operations on the island and not elsewhere through online gambling.

Recommendation – The Committee recommend Government make a decision on whether a casino licence will or will not be made available on Christmas Island. Any casino licence issued by the government should be restricted to Christmas Island and not be licence that permits online gambling.

Part Three - Reasons for Government to stimulate the Christmas Island Tourism Industry

It is always a vexed question as to whether government has a role in stimulating the economy, particularly in a small remote community. Is the public interest served by some level of government involvement? And why should government seek to assist one community and not another?

The answer in part to these questions can be found in a report of the Joint House Standing Committee on the National Capital and External Territories. In their report on “The strategic importance of Australia’s Indian ocean territories”, the Committee found that Australia’s Indian Ocean Territories of Christmas Island and the Cocos (Keeling) Islands are strategically important to Australia, particularly in relation to Australia’s defence and border protection interests.

We would argue that if the findings of that Committee are correct (and we respectively say they are), the best way for Australia to maintain a legitimate peacetime hold on these territories is by having on each a vibrant community able, as far as possible, to be self-sustaining with as little as possible government transfers. That is, the national interest is served by government implementing measures that prompt the creation and maintenance of independent private businesses capable of providing the jobs and income needed to maintain a vibrant community.

Is tourism the solution and can it provide the jobs and financial stimulus required to sustain a viable community? Possibly. But can it do that without some form of government involvement and assistance. Doubtful.

We would argue that if government wishes to see tourism become the mainstay of the Christmas Island economy, it will need to provide a level of assistance and involvement to make this happen. In our view market forces alone will not result in the development of an industry capable of meeting the economic needs of the island.

Part Four - Planning for Growth

In looking at the options for growth of the tourism industry, it is pertinent to commence with an understanding of the size of the industry today and then consider optimum size of the industry having regard to the role government and the community perceive the industry playing in the future.

The capacity of the tourism industry to make contribution to the local economy may be assessed in a number of ways including by the number of tourist accommodation providers and the number of visitors each has the capacity to accommodate. For isolated islands with a relatively small population, this is probably the most useful measure.

We understand the tourism accommodation providers on Christmas Island are-

Accommodation Rooms

Sunset Lodge 12 VQ3 12 Cocos Padang 12 (4 units with three bedrooms) Mango Lodge 11 CI Lodge 1 34

Total 81

Other Accommodation (Airbnb/Short term rentals)

Captains Last Resort 1 Captains Look Out 1 Hibiscus House 2 The Cabin 1 The Retreat 3 Tong Chee House 2 The Sanctuary 2 Villa Papya 1 CI Bali Style Retreat 3 Island Time Apartment 3

Total 19

Total Active Rooms 100

Christmas Island Resort 155 (closed) CI Lodge 2 34 (closed)

A new two person accommodation eco-lodge has been approved in the National Park.

The capacity of the tourism industry to make a major contribution to the Christmas Island economy has been the subject of ongoing debate for decades. From time to time the Australian Government has examined the economic underpinnings of the island and assessed the contribution tourism makes to the islands economic base.

With hopes being placed on the tourism industry becoming the economic mainstay of the island, the time has arrived for some serious research to be carried on the capacity of the industry to fulfil that expectation.

Tourism Research Australia (TRA) is a branch within the Tourism Division of Austrade. It promotes itself as Australia's leading provider of quality tourism intelligence across both international and domestic markets and provides advice to government and industry on the measures that need to be taken to strengthen the industry.

We believe TRA is ideally placed to provide government and industry with the information needed to assess the capacity of the industry to play a dominant role in the islands economy.

Recommendation – The Committee recommend the Australian Government commission Tourism Research Australia to-

 Assess the contribution tourism presently makes to the Christmas Island economy, in terms of providing business opportunities and employment;  Assess the contribution the tourism industry has the potential to make to the Christmas Island economy assuming full occupancy of existing tourist accommodation;  Assess and report on the number of tourist accommodation places required to sustain an island population of approximately 1,200 residents.

We make this recommendation for the following reasons-

1. The need to understand what contribution the tourism industry presently makes and is capable of making to the island economy; and

2. The need to understand if it is necessary to attract any additional tourism accommodation providers to sustain an island population of approximately 1,200.

We believe the information provided by this research will be of value to existing operators, government and potential new investors. Government will be able to assess if the existing industry is of an adequate size to be the economic mainstay of the island and if not, determine measures to encourage additional investment in the industry.

For our part, we have examined to some degree the wisdom of investing in the tourism industry and may be tempted to consider that option in greater detail once we understand what, if anything, government is prepared to do to nurture the growth of this industry. However, in the absence of any clear government policy we perceive any major investment to be problematic given our experience in dealing with regulatory agencies.

Part Five - Promotion of Tourism on Christmas Island

There has been a perception that the reputation of Christmas Island as an eco-tourist destination has been damaged by negative publicity around the IDC and the phosphate mine.

For some time certain elements have suggested tourism cannot expand until the mining operation is closed. We were pleased to see this view has been repudiated in the Christmas Island Destination Study 2013-2018 which observes mining and tourism can co-exist and we invite the Committee to make a similar finding.

Nevertheless, it is unfortunate but true that some elements in the broader community seem to delight in painting a picture of the island that is far from reality.

We have recently encountered this with the campaign being waged by Birdlife Australia. This so called professional organisation has waged a campaign against the mine being granted temporary access for exploration purposes on previously cleared tracks with total clearing of seven hectares. Their online petition suggests that many rare and protected bird species will be devastated if approval is granted.

In Appendix One we outline the nature of the claims made against us and truth of the bird populations on the island. However, it is worthwhile dealing with one bird species here. It has been suggested that the Christmas Island Frigatebird could be devastated by our application. Independent research shows the Frigatebird population live in known discrete areas. We are not seeking access to any area near that bird population. It seems this is yet another case of not letting the truth get in the way of a good story.

We understand there is a limited amount government can do to correct misleading information. That said, government could direct Parks Australia to publish maps showing the location of the rare and protected bird species on Christmas Island. The Government can play a key role in the publication of such information to reassure potential tourists that the bird species are not threatened by our mining application and operations, and will be around for future visitors. Promotion of a ‘doom and gloom’ story by conservation groups only serves to harm development of a future tourism industry for the island. Government needs to provide an independent view to balance this negative and damaging view.

Part Six - Barriers to Growing the Tourism Industry

One of the key components of driving the development of the tourism industry is having regular and affordable flights to the island.

At present there are two flights a week from Perth and one a week from Jakarta. The flights starting in Perth are triangular flights with Cocos Island. The flights are provided by Virgin Australia under a contract with the Australian Government.

The flights are unreliable. Sometimes they leave on time and sometimes they do not go until a day or two later. Sometimes the weather causes the flights to be cancelled. There is no complaint about that. But other times it appears mechanical breakdowns are the cause of the problem.

Last year when we were inconvenienced again by the unreliable aircraft, we sent the following letter to Virgin Australia-

On the 4 March 2017 I had occasion to again travel to Christmas Island to meet with the Minister for Regional Government and Territories over the failing port infrastructure. The meeting was scheduled on the 6 March, allowing my colleagues and I to leave the island on 7 March.

The Christmas Island community often feel like the forgotten lot, being a long way from Canberra and Perth. On this occasion that feeling was reinforced; the port crane was out of action thus preventing food and other vitals being landed on the island. And the internet was effectively down for many on the island; in part due to the failure to implement transitional arrangements from one communications system to another.

To add insult to injury, the Virgin plane due to depart on 7 March was initially delayed in Perth due to ‘technical’ problems. The plane arrived on the island about an hour or so late. After boarding the plane we sat on the tarmac for a while and were then advised the plane had more technical problems. We were then off loaded and told to wait in the terminal. After about 45 minutes we were informed the plane could not fly and we would need to remain on the island for an unknown period of time.

Virgin found us some basic accommodation. We then waited to be informed about when a replacement plane would transport us back to Perth. The following day we were advised the plane would leave on Thursday – a delay of two days.

I appreciate Christmas Island is a difficult destination. The weather frequently makes landing impossible and flights have to be delayed on the day. And for most flights there is a light load factor that to some extent is compensated by the contract you have with the Australian Government.

On this occasion the cancellation of the flight was due to a technical fault. This of itself might seem unremarkable until it is known that this was the third time in three weeks the plane encountered technical faults resulting in the flight being cancelled or delayed.

Not being an expert on aircraft, I sort some advice on the plane used on this service. I was surprised to be advised the plane (registration number VH-FNP) had been owned and sold by multiple owners since 1993 including Turkish Airlines, Sky Service, Thomas Cook UK, Airworld, Leisure Air, TransAer, Britannia Airways, Airtours and more. Exactly why these airlines disposed of this aircraft is not known, but the ownership history suggests that others found it unreliable.

The aircraft expert informed us that with such a history this aircraft should not be used over such long distances and went so far as to suggest that is was irresponsible to do so.

I must confess that I was taken aback by this advice. I know you have held very senior positions in the airline industry for decades and have taken the safety of passengers and flight crew very seriously. But something seems to be amiss here.

The two colleagues with me were seriously inconvenienced by the failure of the aircraft. One of my colleagues is the Chairman of our parent company CI Resources and an owner and operator of his own successful land and housing development companies. My other colleague is a part owner of a Canberra based consulting firm whose clients include some major corporates in Australia. In both cases they had to cancel and rearrange meetings, meaning a loss of time and income. And while my commitments are not so acute, the delay for me meant not having any time to spend with family members from interstate.

Adding to my concern is the fact that my company had two employees on the flight for the purpose of undertaking training courses in Perth.

All of this is disappointing to say the least. When Virgin Australia won the contract to fly to Christmas and Cocos islands everyone cheered. Good planes – reliable service. Now that is not the case.

Could I suggest that if Virgin is not interested in providing a reliable service with sound aircraft it surrender the contract and let another airline interested in doing so provide this critical service to the island community.

To be fair to Virgin, they did later explain the history of the plane’s ownership and usage. It was not as concerning as otherwise appeared.

The point we make is that an unreliable service to the island is a barrier to growing the industry. Most potential tourists do not have the luxury of time and need to know they can return home by a nominated date. Also there are some key environmental ‘events’ (such as the red crab migration) where a delayed flight may mean the visitor fails to see the event.

We encourage the Committee to examine this matter in some detail and report on the following-

 The number of flights that have been delayed by one day or more since 1 January 2017;  The reasons for the delay;  Who makes the decision as to when a replacement flight will be provided for the cancelled flight;  What matters are taken into account if a replacement flight is not provided the following day;  To what extent do the present arrangements create a barrier to growing tourism?

Part Seven - Land Allocation Process

For decades the Christmas Island community has complained about the opaque nature of the land allocation process and lack of clarity around the environmental approvals process. These matters have been perceived as major barriers to new tourism developments on the island.

In March 2017, the then Minister for Local Government and Territories released the Christmas Island Crown Land Management Plan, which sets out proposed parcels of land available for development.

In the same month the Department of Infrastructure and Regional Development issued guidelines for the registration of interest for the purchase or lease of crown land on Christmas Island.

The guidelines noted that-

There is a strong relationship between the development of land and economic growth. The availability of land for private development supports housing, retail, tourism and commercial activities, providing opportunities for growth and employment. Approximately 27 per cent of land on Christmas Island is Crown land administered by the Department. (Our emphasis)

The availability of land parcels are part of the Australian Government’s commitment to supporting economic growth and sustainable development on Christmas Island. The Department is inviting suitably experienced individuals and organisations to register their interest in purchasing or leasing Crown land on Christmas Island.

Vegetation on Crown land is a mixture of native and planted vegetation.

The expressions of interest process closed on 12 May 2017.

The expressions of interest process created the impression that government was interested in making land available to potential new tourism developments.

Some of the land identified for tourism or other developments is covered by native vegetation and requires a proposed investor to seek clearing permits to clear the land.

One month after the commencement of the expression of interest process and before it had closed, the Department of the Environment and Energy (DoEE) advised it had developed four principles that would be used to assess all future developments on Christmas Island that involved some clearing of native vegetation.

The Department advised proposals to clear native vegetation will only be approved where the proposed action will not-

1. Increase the abundance or distribution of invasive species; 2. Result in a reduction in breeding for listed threatened species; 3. Reduce the distribution of land crabs; 4. Increase the fragmentation of native vegetation.

These new principles seem to suggest that some of the land advertised in the expression of interest process will not receive environmental approval. This seems to mean that investors purchasing or leasing the land will not be permitted to develop it.

These new principles add to the complexity of obtaining land development approval and it remains unclear what unallocated crown land (if any) will be made available for development purposes.

Even before these new principles were announced, the processes for seeking approval to clear native vegetation were complex, time consuming and expensive. The process involved the following steps-

Step One involves a proponent obtaining a clearing permit under the Environment Protection Act 1986 (W.A.) (CI) (the EP Act). This requires environmental surveys to be undertaken to show the proposed action (development) meets the clearing permit criteria under applied Western Australian legislation. These types of clearing permits may be issued by the Minister for Territories.

Step Two is more complex. It involves seeking approval under the Environmental Protection and Biodiversity Conservation Act (the EPBC Act) and Environmental Protection and Biodiversity Conservation Regulations. This requires a formal assessment under Act which is expensive and time consuming. For example, our recent small scale and low impact exploration application took around six months to complete, involving environment studies and public consultation. A further 13 months have passed, and the Government have still yet to make a decision on what is a very low impact activity.

The architecture of the EPBC Act has some bizarre features. For Christmas Island, these provisions mean the only option for obtaining approval to clear native vegetation is under the general referral provisions of the Act. This means applications to clear an insignificant amount of land are subject to the cost and time associated with general referral provisions of the Act.

We have been advised that (DoEE) is working with the Department of Infrastructure and Regional Development (DIRD) with the aim of aligning development and environment policy on Christmas Island. Apparently this will involve the development of the following guidelines/policies-

Guidelines on Commonwealth environmental approvals for development proposals on Christmas Island

We understand DoEE intends to develop guidance for developers on how to navigate environment law on Christmas Island to provide greater clarity and certainty. The guidelines apparently include information on when to refer matters under the Act and when EPBC Act permits do and do not apply on Christmas Island.

Christmas Island vegetation clearing policy

DoEE is apparently working on a document designed to provide guidance to assist developers on vegetation clearing on Christmas Island. It is being developed in response to requests for guidance on protected species considerations for future developments. This guidance includes discussion on high value biodiversity areas and species habitat that requires particular attention when considering proposed developments on the Island.

Christmas Island Crown Land Management Plan

We have been advised that DoEE and DIRD have also been working together on the Christmas Island Crown Land Management Plan and jointly assessing the Registrations of Interest to ensure development and environment policies are aligned.

Obtaining and developing land on Christmas Island remains an opaque, complex and expensive process and significant barrier to developments that may involve some clearing of native vegetation. If the government believes the clearing of some or any native vegetation would have a significant impact on an island species, it should make that position known and advise specified areas of unallocated crown land that are not available for development. This will ensure potential investors only consider land that may be available for development.

Part Eight - Public Infrastructure

Public infrastructure on Christmas Island is poor and not conducive with a modern tourist destination.

Last year the wharf crane finally suffered a major breakdown after years of unreliability and warnings from us that the crane was not fit for purpose. The crane is used in landing supplies for the island community and the breakdown severely affected the entire community, including our business. Fortunately, we have a small hundred ton crane that could temporarily be used for this purpose. Loading was slow and expensive but without it, the community would have been left to air freight supplies, and our business would have been threatened by the inability to load and ship

product and to receive critical supplies that maintain our operations. We estimate the impact to our business alone to be in excess of $1 Million, plus the costs to taxpayers let alone causing considerable frustration in the local community with lengthy delays for supplies.

We understand the DIRD has a grossly inadequate capital budget that is incapable of meeting the needs of the island and its other areas of responsibility. Today we remain concerned about the marine infrastructure and the opposition we are finding to authorising infrastructure that will enable two ships to be berthed/loaded at one time.

It would be unreasonable to ask the Committee to make an assessment of the island infrastructure needs. To that end we recommend an audit be carried out of island infrastructure requirements and for government to demonstrate support for the development of tourism by allocating sufficient financial resources over three years to provide the infrastructure the island needs.

Recommendation – The Committee recommend government undertake an audit of island infrastructure and commit to a three year funding program to bring the infrastructure up to mainland standards.

We would be pleased to make a presentation to the Committee when members visit the island in late January 2018.

Thanking you

Clive Brown Chairman 22 January 2018

Appendix One

APPENDIX ONE

The Facts about Claims by Birdlife Australia and Birdlife International Phosphate Resources Limited is seeking environmental approval for exploration clearing covering a very small area (0.07 km2 which is less than 0.07 % of the Island’s 101 km2 of intact vegetation, or 0.05% of the Island). This will involve clearing of predominantly understory vegetation along previously cleared exploration lines, and avoids all areas of high biodiversity or special features. Birdlife Australia and Birdlife International oppose the Company’s application for low impact exploration activities. They are actively campaigning against the Company based on factually incorrect and misleading “information” to garner support for a petition calling on the Australian Government to end mining on the island. Their petition poses a significant risk to employment and the future economic sustainability of the Island. The Company welcomes informed debate based on facts and science but are shocked Birdlife has sunk to publishing false and misleading information to support their campaign, as well as to solicit financial donations. Here are the facts: Abbotts booby and the Christmas Island Frigatebirds Birdlife imply that the CI frigatebird is threatened by mining: “Critical rainforest habitat for 2 of the world’s rarest seabirds - the Endangered Abbott’s booby & Critically Endangered Christmas Island Frigatebird – is under threat” and ”The Christmas Frigatebird Fregata andrewsi (Critically Endangered) only breeds in one small area on the Island” Fact-The Christmas Island frigatebird population breed in three discrete areas, none of which are near the proposed exploration areas or PRL mining areas. This species will be unaffected.

Birdlife claim that the Abbotts Booby population will be devastated by exploration and mining: “new phosphate mining proposals threaten devastation… Clearing for mining has left the Abbott's Booby with only 25 square kilometres of forest to breed.” Fact-The 25 km2 figure is a significant underestimate and contradicts their own reference material. Birdlife International’s own factsheet on the species describes it as occupying 80 km2 (Birdlife International, 2018) and describes the species as ‘stable’. It appears Birdlife is using this incorrect figure to create unnecessary fear and public opposition. The 80 km2 figure is consistent with Geoscience Australia’s vegetation mapping of primary rainforest (Geoscience Australia, 2014a), which supports the emergent Syzygium and Planchonella trees which Abbott’s typically nest in (Yorkston & Green, 1997). Fact-The Abbott’s Booby population primarily nest in the national park. More than 91% of Parks Australia’s Abbott’s booby records are from sites permanently protected within the Christmas Island National Park (Department of National Parks, 2016). The Abbott’s booby recovery plan states that “Clearance of Abbott’s booby breeding habitat has essentially ceased, and almost all habitat is within Christmas Island National Park.” (Department of the Environment and Heritage, 2004) Fact-Extensive environmental surveys were undertaken by PRL for Abbott’s Booby and this information is being used to avoid all potential impacts on known nesting trees. Fact-The Company has publicly stated that it will ensure there is no damage to known Abbott’s Booby nesting trees. The application for environmental approval, if granted, will not result in any damage to Abbott’s Booby nest trees. Fact-Contrary to Birdlife’s claims, Abbott’s booby is not under threat from phosphate mining. This is backed up by both Parks Australia and the Government’s Expert Working Group.

Birdlife claim “The disruption of the primary forest canopy through mining exploration and tracks exposes booby nests to strong winds and creates turbulence which can eject the eggs and chicks.” Fact-There is no scientific evidence to support claims that the clearing of exploration tracks would cause turbulence and resultant impacts to Abbotts booby. The whole Island was historically gridded out for exploration and this has never been raised as a historical impact. Further, Reville et al (1990) in planning research on turbulence states “It seemed unlikely that clearings less than 50 m wide would generate significant turbulence or increase in wind velocity.” The proposed exploration lines only require removal of understory regrowth and small trees and this will not affect the upper canopy. The tracks are only 5 m wide, so they do not have potential to create turbulence which might impact Abbott’s booby nests high in the tree canopy.

The major threats to biodiversity Birdlife claim – clearing forests are the greatest threat to wildlife: “The clearing of forests for phosphate mining and the associated impacts of invasive species – introduced by lax quarantine – are the greatest threats to the island’s unique wildlife.” Fact-Mining and habitat loss is not the greatest threat to the flora and fauna of the Island. An intensive review by the Government’s Expert Working Group confirmed that invasive species are the principal past and future threat to the Island’s biodiversity and urgent action is needed to prevent further biodiversity loss.

“The highest priority for the management of biodiversity on Christmas Island is the preservation of the functional ecology of the island and surrounding seas. This depends on implementing high quality quarantine, and reforming island governance and the funding systems for conservation.” (Beeton, et al., 2010) Fact-Programs to control cats, rats, yellow crazy ants, wolf snakes and giant centipedes are being undertaken for some species, and urgently needed to be expanded avoid further fauna extinctions.

Fact-Invasive species control programs need financial resources and closing mining will remove vital funds the Company provides to Parks Australia for conservation and rehabilitation purposes.

What is PRL applying for? Birdlife claim – PRL have applied for new areas to mine: “new phosphate mining proposals threaten devastation.” Fact-Contrary to Birdlife’s emotive and unsubstantiated statements, PRL have not applied to extend their lease areas and there is no mining application before Government for approval.

Fact-PRL have applied for approval to undertake small-scale, low impact exploration in a few targeted areas to evaluate phosphate resources.

Fact-Detailed environmental assessment documents were published in accordance with the EPBC Act and available for public comment yet only one submission (Birdlife Australia) was opposed to the exploration proposal. The other 25 submissions supported the proposed activity.

Birdlife claim - Exploration will have significant impacts: “approving the exploration will destroy the habitat of a suite of bird species already at high risk through habitat loss.” Fact-PRL have invested in desktop studies, and flora and fauna field surveys to assess biodiversity values. Through an environmental risk avoidance process, PRL has removed any proposed exploration lines in areas of crown land that were found to have high environmental values or features of significance. 3

Fact-The exploration application is distant from all Christmas Island frigatebird colonies and contrary to Birdlife’s suggestion, will have zero interaction or impact upon frigatebirds nor will exploration result in any impacts to Abbott’s booby nesting trees. Fact-The proposed exploration is a small scale, temporary and minor operation which will have low environmental impacts to the fauna and flora of the Island, with rapid natural recovery expected. The Value of Rehabilitation Birdlife claim that rehabilitation would do more harm than good: “Even if the intention was to replace the soil, doing so would do more harm than good by introducing further invasive pests.” Fact-It is difficult to understand why a conservation organisation would be opposed to rehabilitation when this is an accepted conservation strategy recommended by the nation’s conservation experts. It is a formalised strategy in the Abbott’s booby recovery plan, the Christmas Island National Park Management Plan and the DRAFT Christmas Island Biodiversity Conservation Plan (Department of the Environment and Heritage, 2004; Director of National Parks, 2014a; Director of National Parks, 2014b).

“Rapid implementation of the CIRRP [rehabilitation plan] focussing on the priority sites detailed in Table 2 of the Christmas Island National Park Management Plan (Environment Australia 2002) will provide significant long-term benefits to the recovery of Abbott’s booby.” (Department of the Environment and Heritage, 2004) Mining, Ecotourism and Future Funding for Conservation Birdlife claim that continued mining threatens future expansion and development of tourism “Mining approval…would deprive its human population of a long-term economic future,” and “Mining directs investment away from this sustainable industry. And, worse, it destroys its main tourism assets.” Fact-Ecotourism and mining can exist together as most of the Island and the key ecotourism features are permanently protected in National Park. The presence of mining strengthens the viability of the community and supports infrastructure and services essential to a tourism industry. Fact- Birdlife says it values ecotourism, however, by spreading false fear and innuendo about the iconic ecotourism features and species being ‘devastated’ they only serve to put off future visitors and damage the future potential of ecotourism on the Island. Fact-As a remote Island there are key challenges and constraints of quickly developing and maintaining a viable and sustainable tourism industry. The closure of mining would have an immediate and dramatic effect on frequency of aviation services, tourism accommodation and restaurant viability, frequency of shipping services, and the general viability of the community, schools and services. The upcoming closure of the Detention Centre will reduce employment on Island and make the presence of the mine even more important for a sustainable local community. This shows that Birdlife have absolutely no understanding of the local challenges for the Christmas Island community.

“Tourism is a small but prospective industry, however, transport costs, island access and accommodation are extremely limiting at present.” (Beeton, et al., 2010) Fact-Birdlife have failed to acknowledge that stopping mining will cause immediate economic and social impacts, and reduce funds for Island wide environmental programs. The mine is the only source of funds for rainforest rehabilitation on Christmas Island providing a conservation levy to restore Abbotts booby habitat (Director of National Parks, 2014a; Department of the Environment and Heritage, 2004). The conservation levy generated by mining normally provides around $1.5 million per annum to Parks Australia for rehabilitation and conservation programs. The Expert Working Group recommended that the Government “Develop secure and sufficient long-term funding arrangements for biodiversity conservation priorities on Christmas 4

Island” (Beeton, et al., 2010). Stopping mining will only reduce the scarce funds available for conservation which will impact on fauna and habitat recovery efforts.

Fact-PRL contributed $1.35M over five years towards the Island Wide Cat Eradication Program. Cats are one of the biggest threats to bird species on the Island, along with yellow crazy ants and climate change. This funding has contributed to significant increases in nesting success for the Red-Tailed Tropicbird (Algar, et al., 2012) (Algar, et al., 2014), and is believed to be contributing to the stabilisation of the Christmas Island Flying Fox population (ABC, 2015).

Fact-PRL have supported a range of positive environmental projects such as research into environmentally friendly baits for the yellow crazy ant, vegetation mapping, hydrological mapping, and artificial nest boxes to assist the recovery of the Christmas Island Hawk Owl. References

ABC, 2015. Australian Broadcasting Corporation. [Online] Available at: http://www.abc.net.au/news/2015-12-04/scientists-scramble-to-save-christmas-island-flying-fox/7003238 [Accessed 23 November 2016].

Algar, D., Hamilton, N., Holdsworth, M. & Robinson, S., 2012. Eradicating Christmas Island of cats and black rats. LANDSCOPE 27(4), p. 43–47.

Algar, D., Hamilton, N. & Pink, C., 2014. Progress in eradicating cats (Felis catus) on Christmas Island to conserve biodiversity. Raffles Bulletin of Zoology Supplement No 30, p. 45–53.

Beeton, B. et al., 2010. Final Report of the Christmas Island Expert Working Group to the Minister for Environment Protection, Heritage and the Arts, Canberra: Director of National Parks.

Birdlife International, 2018. [Online] Available at: http://datazone.birdlife.org/species/factsheet/22696649 [Accessed 18 January 2018].

Department of National Parks, 2016. Abbott's Locations 2009-2015, s.l.: s.n.

Department of National Parks, 2016. Christmas Island Island Wide Survey and Inkcard Data, s.l.: Unpublished.

Department of the Environment and Heritage, 2004. National Recovery Plan for the Abbott’s Booby Papasula abbotti, Canberra: Department of the Environment and Heritage.

Director of National Parks, 2014a. Christmas Island National Park Management Plan (2014-2024), Canberra: Director of National Parks.

Director of National Parks, 2014b. DRAFT Christmas Island Biodiversity Conservation Plan, Canberra: Department of the Environment.

Geoscience Australia, 2014a. Christmas Island Vegetation and Clearing Map, Canberra: Geoscience Australia.

Hennicke, J. & Weimerskirch, H., 2014. Coping with variable and oligotrophic tropical waters: foraging behaviour and flexibility of the Abbott's booby Papasula abbotti. Marine Ecology Progress Series, Volume 499, pp. 259-273.

Nelson, J., 1971. The biology of Abbott's booby Sula Abbotti. The Ibis, 113(4), pp. 430-467.

Nelson, J. & Powell, D., 1986. The breeding ecology of Abbott’s booby. Emu, Issue 86, pp. 33-46.

Raupach, M., Bradley, E. & Gadiri, H., 1987. A wind tunnel investigation into the aerodynamic effect of forest clearings on the nesting of Abbott's booby on Christmas Island, Canberra: CSIRO Division of Environmental Mechanics.

Reville, B., Tranter, J. & Yorkston, H., 1990. Impact of Forest Clearing on the Endangered Seabird Sula abbotti. Biological Conservation, Volume 51, pp. 23-38.

Yorkston, H. & Green, P., 1997. The breeding distribution and status of Abbott's booby (Sulidae: Papasula abbotti) on Christmas Island, Indian Ocean. Biological Conservation, Volume 79, pp. 293-301.