Created: Wednesday, 07 October 2009 11:53
Last Updated: Wednesday, 07 October 2009 11:53
The Committee's Recommendations are set out below. The recommendations are numbered according to the relevant chapters. For example, 2.1 is the first recommendation in chapter 2, 5.3 is the third recommendation in chapter 5, and so on. The recommendations are preceded by Findings.
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Treasure to incorporate into the standard ANZIC industry classifications the Australian Bureau of Statistics' draft definitions on environmental goods and environmental services. (p. 30)
The Committee recommends that both the Federal and Victorian Governments continue to build close relationships with the countries in East and South East Asia and the emerging markets in Indochina and Eastern Europe both at a broad level (through sister state relationships, heads of agreement, Ministerial visits, etc) and through specific institutional linkages in the environmental sector.
The primary purpose of all such relationships must be the prospect of substantial commercial benefit to the private sector. (p. 56)
The Committee recommends that the Victorian and Federal Governments build close relationships with countries such as Singapore and Canada which offer opportunities for collaborative export efforts to third markets. (p. 56)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Development and Co-operation to carefully monitor whether recipient countries make sufficient use of AusAID's Green Development Import Finance Facility Program and the extent to which Australian environmental companies participate in such projects. (p. 77)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Development and Co-operation to address the following issues:-
that in awarding overseas contracts, AusAID gives due consideration to industry development issues and scrutinises actual Australian content of a project at tender and ensures adoption of appropriate auditing protocols at completion,
that AusAID and the Australian Government generally increase the promotion of the source of foreign aid in the recipient country, and
that in order to encourage innovative environmental companies to pursue new foreign markets through the foreign aid mechanism, AusAID, in awarding contracts, should give less weighting to a track record in the host country and more weighting to suitability of a specific service or equipment being offered. (p. 81)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Trade to review the Austrade International Project Intelligence Network (IPIN) data base at the end of 1995 to assess whether it is regularly updated, captures projects at the earliest possible stages and is regularly used by the environmental sector. (p. 82)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Trade to carefully monitor the take-up of Austrade's export assistance programs by Victorian environmental services companies. (p. 91)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Industry, Science and Technology to carefully scrutinise the take-up of DIST administered programs with a view to increasing their usage by environmental sector firms. (p. 95)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Industry, Science and Technology to expedite the development of an environmental industry capability register.
The Committee further recommends that the register be maintained and resourced accordingly. (p. 95)
The Committee recommends that the Victorian Minister for Industry and Employment requests the relevant Federal Government Ministers to carefully monitor the performance of the following recent Federal initiatives:-
The Department of Industry, Science and Technology's Project Development and Technology Diffusion Network; and
The Commonwealth Environment Protection Agency's Environmental Co-operation with Asia Program, and National Environment Industries Database. (p. 97)
The Committee recommends that the Department of Business and Employment carefully re-evaluates the flexibility of its programs and the eligibility criteria with the aim of increasing the take up of programs by environmental sector firms. (p. 101)
The Committee recommends that the Department of Business and Employment review its Trade Fairs and Missions Program so that the program not only offers occasional support to the industry to participate in a designated Trade Fair or Mission but also that individual companies be given assistance under the program to participate in specialist international Trade Fairs. (p. 101)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Minister for Industry, Science and Technology to further rationalise the large number of industry and export assistance programs with a view to improving their general accessibility. (p. 107)
The Committee recommends that the Department of Business and Employment encourages Victorian environmental companies to utilise the services of Austrade's Environmental Business and Development Managers soon to be appointed in Shanghai, Jakarta and Bangkok or Kuala Lumpar. (p. 108)
The Committee recommends that the State Government Departments and agencies, and Local Government, wherever practicable, use Australian companies and technology to ensure that the access of Australian firms to State Government and Local Government contracts is equal to that of foreign firms where there is no significant difference in price and the suitability of technology. (p. 114)
The Committee recommends that Government agencies using Victorian environmental technologies be encouraged to promote Victorian environmental industry by receiving potential buyers of such technologies and demonstrating the advantages of the technology. The Department of Business and Employment should allocate additional human and financial resources to encourage such promotional efforts as part of a co-ordinated environmental exports strategy. (p. 114)
The Committee recommends that the Victorian Government, at a range of levels, continues to form close relationships with Governments and environmental agencies in a number of target markets. This should involve the Minister for Industry and Employment, the Minister for Conservation and the Environment. The Minister for Natural Resources, environmental agencies, industry associations and the relevant Victorian Government Departments. While general sister state or city relationships may offer benefits, the Committee would encourage specific agreements or exchanges which focus on the environmental sector. (p. 116)
The Committee recommends that in order to further develop the in-house skills of environmental agencies and to support the export bids of private sector consortia, that Victoria's environmental agencies ought to be encouraged to be involved in export activity. However, the Committee recommends that environmental agencies continue to focus on their core business. (p. 12)
The Committee recommends that Victoria's public sector environmental agencies, when selling their services overseas, be required to use international marketing organisations (such as the Overseas Projects Corporation of Victoria or a private sector company). Such organisations need to be skilled and experienced in marketing international public services, particularly in the aid area. (p. 123)
The Committee recommends that policy makers in Victoria responsible for the reform of the water industry carefully monitor the impact on environmental exports of the foreign management of the Adelaide Engineering & Water Supply Department. (p. 127)
The Committee recommends that in overseeing the re-structuring of the water industry in Victoria, the Minister for Natural Resources seeks to ensure that the functional integration skills traditionally associated with a vertically integrated organisation are retained in Victoria. (p. 127)
The Committee recommends that the Department of Business and Employment formulates an across the whole of Government set of strategies which is managed by a Victorian Environmental Industry Council.
The Council would:-
be chaired by the Minister for Industry and Employment (or nominee),
comprise representatives from the various Victorian environmental agencies, major public purchasers of environmental goods and services and the industry (which may be drawn in part from the Victorian chapter of the Environmental Management Industry Association of Australia),
be based on the models of the US Office of Environmental Exports and the Canadian initiative, "Team Canada", and
be responsible for developing and maintaining a data base of foreign graduates of environmental courses from Victorian Universities. Such a data base ought to also include senior personnel in foreign environmental markets who have worked in or have some affiliation with the Victorian environmental industry. (p. 129)
The Committee recommends that the Victorian Minister for Industry and Employment requests the Federal Ministers for Industry, Science and Technology; Trade; Environment; Sport and Territories; and Development C-operation to ensure that the Commonwealth and State Governments, like their competitors, adopt a coherent set of policy strategies which are co-ordinated across Government and are applied and audited by a single agency responsible for promoting the increase in environmental industry exports. (p. 163)
The Committee recommends the retention of the Federal Government's 150% tax rebate for R&D (discussed in chapter 5) and encourages the efforts of the Victorian Strategic Industry Research Foundation (SIRF), (discussed in chapter 6) to develop and subsequently commercialise new technologies. Given the significant export opportunities the SIRF to devote resources to this industry. (p. 163)
The Committee recommends that the protection of intellectual property be the subject of a separate formal Inquiry by Government because the issue of protecting the intellectual property emanating from the commercialisation of R&D is such a fundamental issue and one common to all industries where new technology is a major determinant of competitive advantage. (p. 175)
The Committee's Findings are set out below. The Findings are numbered according to the relevant chapters. For example, Finding 2.1 is the first Finding in chapter 2, Finding 4.8 is the eighth Finding in chapter 4, and so on.
The Committee finds that the sub-sector of the environment industry where Victoria has key strengths and which offer significant medium term export prospects are the following:-
Water quality management,
Water waste treatment,
Air quality control and monitoring,
Noise pollution reduction,
Site remediation and rehabilitation, and
Cleaner production techniques.
Indeed some of the above strengths are supported by Victoria's leading capacity in bio-technology research.
The Committee finds that the current level of Australia's environmental exports is estimated at A$ 300 million p.a. and notes that the Environment Management Industry Association of Australia (EMIAA) as part of its 'Internationalisation Strategy' believes that exports could increase to A$ 1 billion by 2001.
The Committee finds that there is a lack of reliable statistics on the export of the Australian environmental sector.
The Committee finds that whilst Western Europe, North America and Japan are substantial markets with significant growth in dollar terms, they cannot be considered as major market opportunities as they each have very large and competitive domestic industries and they are net exporters and as such, are competing with Australia in the growth markets of Eastern Europe, South America and Asia.
The Committee finds the environmental markets in South America and Eastern Europe to be at an embryonic stage and as such, there are problems with the capacity to pay and the existence of appropriate environmental legislative and administrative frameworks.
The Committee finds that the export markets which offer Australia the most realisable opportunities are those which display all or most of the following characteristics:-
Growing community concern about the environment,
A legislative framework regarding the environment,
A private and public sector capacity to pay for environmental infra-structure and services, and
A workable system of enforcement of environmental regulations.
The Committee finds that given Victoria's competitive advantages in particular areas of the environment sector and the significant short to medium term opportunities for exports to South East Asia, industry and Government efforts and programs ought to be targeted (though not exclusively) to South East Asia. Longer term opportunities are likely to exist in the emerging markets of India, Vietnam, China, the Philippines, Cambodia and Eastern Europe.
The Committee finds that given the complexities of some of the growing and emerging markets mentioned above, it is sometimes an appropriate strategy to collaborate with companies and/or Governments in other countries as part of a market entry strategy.
The Committee finds that foreign aid is a very important source of funding for most of Australia's target export markets in the environmental sector. From the perspective of environmental companies, while the approval process may be very lengthy, the risk of non or late payment is virtually eliminated.
The Committee finds that particularly in the environmental sector, foreign aid can be long term strategic importance because a relationship is formed between foreign companies and the environmental agencies and policy makers in the host country. Companies may gain a significant competitive advantage in the long term as the non-aid funded private and public sector demand takes off.
The Committee finds that there are opportunities for environmental companies to increase their access to a number of foreign bilateral aid agencies such as the Japan International Co-operation Agency (JICA). This can be done directly with the agencies themselves and also by building alliances with key environmental and construction firms in the donor countries.
The Committee finds that Australian participation in most MDB's projects is proportionately lower than Australia's contribution or voting rights in such organisations.
The Committee finds that while it is important to encourage firms to pursue a larger share of MDB projects, for many environmental companies (particularly SMEs) pursuing aid markets, AusAID is the most critical aid agency, especially in relation to the target export markets in South East Asia.
The Committee finds that the recent AusAID Green DIFF initiative would appear to provide significant indirect assistance to aspiring environmental exporters.
The Committee finds the key information for environmental firms in accessing the aid markets to be:-
Access to timely information
The systematic bias in the selection process in all aid agencies (including AusAID) against companies which have yet to establish a successful record of conducting business in the target market; and
The fact that many aid projects (especially those funded by MDCs) are well beyond the financial or production capacity of small to medium sized environmental firms.
The Committee finds that there is a need at a national level for a comprehensive and up-to-date data base on various aid projects around the world at the earliest stages of the project cycle. While Austrade has recently introduced the IPIN data base, it is too early to tell if this adequately meets industry needs and importantly, whether it is regularly updated and captures projects at the earliest stages of approval.
The Committee acknowledges that Austrade, as the Australian Government's international trade promotion organisation, plays an important role in assisting individual firms enter export markets and also plays an important role at the more general Government to Government level given the significance of Government as regulator and purchaser in the environmental industry.
The Committee finds that given the generalist nature of the Austrade organisation, it can provide critical advice at the initial stages of entering the market (in terms of identifying relevant contacts, etc.) but becomes less relevant as the firm pursues specific contracts. In this regard the Committee welcomes the recent Federal initiative to appoint specialist environmental industry Business Development Managers in Shanghai and Jakarta and in either Bangkok or Kuala Lumpar.