Asian Infrastructure Investment Bank Bill 2015

Bills Digest no. 16 2015–16

PDF version [612KB]

WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Robert Dolamore, Economics Section
Geoffrey Wade, Foreign Affairs, Defence and Security Section
3 September 2015

Contents

The Bills Digest at a glance
Purpose of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions

Date introduced: 13 August 2015
House: House of Representatives
Portfolio: Treasury
Commencement: The formal provisions of the Bill commence on the day of Royal Assent. The operative provisions of the Bill commence on the later of the Bill receiving Royal Assent and the day Australia becomes a member of the Asian Infrastructure Investment Bank.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

The Bills Digest at a glance

Purpose of the Bill

The Bill facilitates Australia becoming a founding and substantial financial member of the Asian Infrastructure Investment Bank (AIIB).

Background

The AIIB is a new multilateral development bank which is being established to help finance infrastructure development in Asia. China announced its intention to establish the Bank in October 2013.
Two factors appear to have driven the decision to establish the AIIB. First, emerging market economies want a stronger voice and more influence in multilateral economic institutions, reflecting their growing economic power. Second, there is a significant infrastructure funding gap in the Asia region estimated to be around US$8 trillion in the ten years to 2020.
Currently 50 countries have signed the AIIB’s Articles of Agreement as founding members.
Relatively early on China indicated it was keen for Australia to join the AIIB.
The Treasurer and the Minister for Foreign Affairs announced the Government’s decision to join the AIIB on 24 June 2015.
The Treasurer signed the AIIB’s Articles of Agreement in Beijing on 29 June 2015.
Australia will be the AIIB’s sixth largest shareholder.
Internationally, the establishment of the AIIB has been controversial. Both the United States and Japan have declined to join. This appears to reflect two key concerns. First, there is concern the AIIB will undermine or replace the existing multilateral development institutions. Second, there are concerns about the extent to which China will use the AIIB to pursue its broader economic and geopolitical agendas. However, such concerns are keenly contested.

Proposed measures

The Bill provides an appropriation for the payment of Australia’s contribution to the AIIB; authorises the Treasurer, as the responsible Minister, to issue promissory notes to the AIIB to meet Australia’s financial obligations; and enables regulations to be made to confer privileges and immunities on the AIIB, officers and employees of the Bank and experts and consultants performing services for the Bank.

View of interest groups non-government parties/independents

Business groups have welcomed Australia joining the AIIB.
Australia’s membership of the AIIB appears to have broad support in the Parliament.

Purpose of the Bill

The purpose of the Asian Infrastructure Investment Bank Bill 2015 (the Bill) is to facilitate Australia’s membership of the Asian Infrastructure Investment Bank (AIIB) by:

providing an appropriation for the payment of Australia’s contribution to the AIIB
authorising the Treasurer, as the responsible Minister, to issue promissory notes to the AIIB to meet Australia’s financial obligations and
enabling regulations to be made to confer privileges and immunities on the AIIB, officers and employees of the Bank and experts and consultants performing services for the Bank.

Background

The AIIB is a new multilateral development bank which is being established to help finance infrastructure development in Asia. Chinese President Xi Jinping and Premier Li Keqiang proposed the establishment of the AIIB during their respective visits to Southeast Asian countries in October 2013.[1]

The focus of the AIIB will be fostering the economic development of the Asia region. This is reflected in the AIIB’s mandate which is set out in its Articles of Agreement:

The purpose of the Bank shall be to (i) foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors; and (ii) promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.[2]

The AIIB will be headquartered in Beijing, China.

The AIIB will have an initial capital base of US$100 billion, divided into one million shares having a par value of US$100,000 each.[3] Of this capital stock 20 per cent will be in the form of paid-in shares and the remaining 80 per cent will be callable shares. In addition, the AIIB will be able to raise funds by issuing bonds in financial markets as well as through inter-bank market transactions and other financial instruments.[4]

It appears that relatively early on China was keen for Australia to join the AIIB.[5] Initially, there was some uncertainty about what position Australia might take.

On 29 March 2015 Prime Minister Abbott announced Australia would ‘sign a memorandum of understanding that would allow Australia to be involved in negotiations to set up the [US]$100 billion bank’.[6] At the time, the key issues requiring resolution before Australia would consider joining the AIIB included ‘the bank's board of directors having authority over key investment decisions, and that no one country control the bank.’[7]

After discussions with key regional and non-regional partners, the Treasurer and the Minister for Foreign Affairs jointly announced on 24 June 2015 that Australia would become a founding member of the AIIB.[8]

The Treasurer signed the AIIB’s Articles of Agreement in Beijing to give effect to the Government’s commitment to join the Bank on 29 June 2015.[9] Australia will have the sixth largest shareholding in the Bank.[10]

During the second reading debate the Parliamentary Secretary to the Minister for Communications outlined some of the ways Australian firms are expected to benefit from the AIIB financing improved infrastructure:

New ports and railways in countries like India, Indonesia and Korea will mean that Australia's exports have new opportunities to reach new markets or expand existing markets. Australian firms will be well placed to benefit from infrastructure projects which are funded in whole or in part by the Asian Infrastructure Investment Bank. These projects could lead to work for Australian engineering businesses and construction management businesses and could lead to opportunities for Australian providers of finance, consultancy services and so on. The benefits of the Asian Infrastructure Investment Bank for Australian business look promising. The Asian Infrastructure Investment Bank also looks to be a promising vehicle to stimulate much-needed infrastructure across Asia, in turn stimulating economic growth and productivity in the nations of Asia. As a nation which is part of the Asian region, we clearly have an interest in greater prosperity throughout Asia and we therefore clearly have an interest in participating in the Asian Infrastructure Investment Bank as a policy tool designed to stimulate the achievement of that greater prosperity.[11]

Currently some 50 countries have signed the AIIB’s Articles of Agreement as founding members.[12] A further seven countries are expected to join the Bank as founding members. The window of opportunity for countries to join as founding members closes on 31 December 2015. After this date other countries may be accepted as members of the AIIB, with the process for admission expected to be finalised once the Bank’s Board of Governors is in place.

Governance arrangements

From the available information it appears the governance arrangements for the AIIB will be very similar to those of other large multilateral economic institutions such as the International Monetary Fund (IMF) and World Bank. The key elements of the AIIB’s governance structure are:

The Board of Governors: All the powers of the AIIB will be vested in the Board of Governors.[13] Each member of the AIIB be represented on the Board of Governors and will appoint one Governor and one Alternate Governor.[14] The Board of Governors will meet annually and the powers necessary for the day-to-day running of the Bank are likely to be delegated to the Board of Directors.[15] However, the Board of Governors will retain certain ‘reserve’ powers, for example covering the admittance of new members.[16]
The Board of Directors: The AIIB is to have 12 Directors on its Board of Directors; nine are to be elected by ‘regional’ members (countries classified as part of Asia and Oceania by the United Nations except as otherwise decided by the Board of Governors) and three by non-regional members.^{^[17]} It is expected that the Board of Directors will be responsible for the Bank’s general operations. The Board of Directors will establish oversight mechanisms addressing areas such as audit, evaluation, fraud and corruption, project complaints and staff grievances. The AIIB’s website says that these oversight mechanisms will be consistent with the principles of ‘transparency, openness, independence and accountability’.[18]
The President: The President of the AIIB is to come from a regional member country and will be elected by the Board of Governors.[19] The AIIB’s Articles of Agreement provide that the process for selecting the President will be ‘open, transparent and merit-based’.[20] The President will be able to serve up to two five year terms.[21] China’s Jin Liqun was selected by consensus as President–designate of the AIIB at the 6th Meeting of Chief Negotiators representing the Bank’s 57 Prospective Founding Members in Tbilisi, Georgia on August 24, 2015.[22]
The Vice Presidents: These office holders will be appointed by the Board of Directors on the recommendation of the President, with the process required to be ‘open, transparent and merit-based’.[23]

The AIIB will have a weighted voting system whereby the number of votes a country has will largely be determined by the size of its shareholding. A member’s votes will be the sum of its Basic Votes, Share Votes and, where applicable, Founding Member Votes.[24] All members will receive an equal number of Basic Votes, with the size of this pool of votes equal to 12 per cent of the total number of votes.[25] A member will also receive one Share Vote for each share of capital stock it holds.[26] If a member is a founding member it will also be allocated 600 Founding Member Votes.[27]

To illustrate the disparity in voting power, China, the largest AIIB shareholder will have 297,804 Share Votes while the Maldives will have just 72 Share Votes.[28]

A weighted voting system ensures decision-making reflects the relative size of a country’s capital contribution. However, it potentially creates a longer-term challenge because of the need to ensure the distribution of power within the organisation keeps pace with shifts in relative economic power. In multilateral organisations, representation and voice can be strongly linked to perceptions of legitimacy and effectiveness.

As China will have over a quarter of the votes, under the AIIB’s Articles of Agreement it will have an effective veto over issues requiring a ‘super majority’, defined as 75 per cent of votes and two-thirds of all member countries.[29] The types of issues requiring a super majority include selecting the President, increasing the capital stock of the AIIB and changing the size and composition of the Board of Directors.[30] However, this is not without precedent. The United States is the only country to have a veto over major governance decisions at the IMF and World Bank.[31]

Naturally, at this early stage, how the AIIB will operate on a day-to-day basis has yet to be finalised. As a founding member, Australia will be able to seek to influence the development of the AIIB’s policies and procedures. This includes in critical areas such as how projects are selected, social and environmental safeguards and oversight arrangements.

The pressure to establish a new multilateral development bank

The AIIB will be entering an increasingly complex multilateral institutional space. Since the end of the Second World War, the IMF and World Bank have been the key multilateral economic institutions. The IMF has been the cornerstone of the global financial safety net, while the World Bank has been the world’s foremost organisation for providing direct development assistance and a focal point for global development efforts.[32] However, over the years a number of regional and sub-regional organisations have been created, which aim to achieve similar objectives to these institutions.

As a result, the multilateral development space, in which the AIIB will be operating, has changed significantly. Robert Wihtol argues:

Johannes Linn, former World Bank vice president, observes that ‘the multilateral assistance architecture, previously dominated by the MDBs [Multilateral Development Banks], is now a maze of multilateral development agencies, with a slew of subregional development banks, some exceeding the traditional MDBs in size’. The large number of financial institutions has expanded the financial coverage of countries, sectors, and issues. A complex network of partnership and joint financing arrangements has emerged among the banks and funds.[33]

Against this backdrop, two factors appear to have driven the decision to establish the AIIB. First, emerging market economies want a stronger voice and more influence in multilateral economic institutions, reflecting their growing economic power. As the then Secretary to the Australian Treasury, Martin Parkinson, observed in a speech last year: ‘As they grow, they’re naturally tending towards forums and institutions that reflect their needs and respond to their voices’.[34]

Arguably, from a global perspective it would be more efficient if the existing multilateral institutions were reformed to truly reflect the growing economic importance of emerging market economies rather than creating new institutions. Unfortunately, the governance and decision-making structures of the IMF and World Bank have not kept pace with this reality. It is therefore not surprising that emerging market economies are establishing alternative multilateral institutions.

Second, there is a significant infrastructure funding gap in the Asia region. The Asian Development Bank (ADB) has estimated that if Asia is to fully realise its potential for inclusive growth, infrastructure investment of US$8 trillion will be required between 2010 and 2020.[35] Around 32 per cent of this funding requirement is needed just to maintain or replace existing structures.[36] The ADB has drawn attention to the extent of this challenge:

Infrastructure in Asia still shows some deficiencies and a wide diversity both in terms of quantity and quality. In developing Asia, millions of families lack electricity, basic sanitation services, and safe water; and businesses are constrained by the lack of reliable electricity and transport services. These networks are generally overloaded, unreliable, or expensive, so the economies function below their capacity. There is still huge underinvestment in infrastructure, so the total requirement for infrastructure investment is very large.[37]

Given the magnitude of this funding requirement there is much that could potentially be achieved if the AIIB is successful in mobilising additional funding and allocating this money to infrastructure projects that offer highest net benefit in terms of improving the wellbeing of people living in the region.

Controversial aspects

Internationally, the establishment of the AIIB has been controversial. Both the United States and Japan signalled quite early they would not be joining the Bank. This appears to reflect two key concerns.[38] First, there is concern that the AIIB will undermine or replace the existing multilateral development institutions. Second, there are concerns about the extent to which China will use the AIIB to pursue its broader economic and geopolitical agendas and interests:

From energy and natural resources to infrastructure and now technology-intensive sectors, Chinese companies are making great strides in establishing a global footprint and building Brand China. This “Go Out/Go Global” policy is supported by the PRC government, with state-owned enterprises (SOEs) were among the most active players. Of particular interest are Chinese firms involved in transportation infrastructure and construction, as they stand to receive a tremendous boost from recent China-backed initiatives, notably One Belt, One Road[39] and the Asian Infrastructure Investment Bank. Since these initiatives promote, among other things, regional transportation connectivity, they could help China export its surplus capital as well as the capacity for infrastructure that it has developed over the years.[40]

The United States is reported to have lobbied Australia, South Korea, the United Kingdom and other European countries not to join the AIIB.[41] A key turning point was when the United Kingdom broke ranks in March this year, citing mostly commercial reasons, and agreed to join the Bank as a founding member.[42] Within days France, Germany and Italy had followed the United Kingdom’s lead and by the end of March a number of other countries including Australia had signalled their intention to join.[43]

The concerns of the United States and Japan about China’s decision to create the AIIB are contested. For example, Joseph Stiglitz argues:

In fact, America’s opposition to the AIIB is inconsistent with its stated economic priorities in Asia. Sadly, it seems to be another case of America’s insecurity about its global influence trumping its idealistic rhetoric – this time possibly undermining an important opportunity to strengthen Asia’s developing economies.[44]

Committee consideration

Senate Selection of Bills Committee

The Bill has been referred to the Economics Legislation Committee for inquiry and report by 15 September 2015.[45] Details of the inquiry are available here.[46] At the time of writing the Economics Legislation Committee had not yet reported.

Senate Standing Committee for the Scrutiny of Bills

The Committee has sought advice from the Treasurer as to the scope of possible immunities and privileges that might be provided by regulation under clause 8 of the Bill and an explanation as to why these privileges and immunities are to be set out in regulation rather than in the Bill itself.[47] At the time of writing the Committee had not published the Treasurer’s response.

Joint Standing Committee on Treaties

The Committee is conducting an inquiry into the Bill with submissions closing on 11 September 2015.[48] Details of the inquiry are available here.[49] At the time of writing the Committee had not yet reported.

Policy position of non-government parties/independents

Australian Labor Party

The Australian Labor Party has indicated it supports the Bill. During the second reading debate the Shadow Treasurer, Chris Bowen, emphasised the role the AIIB will play in financing much-needed infrastructure in the Asian region:

The Asian Infrastructure Investment Bank will fulfil a very important role. There is a significant gap in infrastructure around the Asian region—around [US]$8 trillion over the next decade is the widely agreed figure, which is a figure I certainly agree with. The bank represents an opportunity for countries of the world to come together and pool funds, and to provide authorised capital so that the bank can facilitate infrastructure investment. We will have a very substantial shareholding of about US$3.7 billion. I note that the second biggest shareholder in the bank is India at about US$8.3 billion and a share of 7½ per cent. Our shareholding is substantial, as is appropriate. This is not a matter that will be reflected in budget figures, but it is an appropriate shareholding for us to have as a very significant economy in the Asia-Pacific region. We certainly support Australia's involvement and we will facilitate, in every sense possible, Australia being as involved as is possible because we should be. But we should have shown much greater leadership than we did. We should have shown the leadership of a nation that understands the opportunities of Asia.[50]

The Shadow Minister for Foreign Affairs, Tanya Plibersek, noted that membership of multilateral institutions such as the AIIB gives Australia the opportunity to shape these institutions in a positive way:

As a party, we certainly believe in the importance of multilateral institutions and regional and international cooperation. We say that our involvement as a nation of 20-odd million people gives us the ability to shape those institutions in a positive way.[51]

Australian Greens

During the second reading debate the Australian Greens Treasury spokesperson, Adam Bandt, did not indicate whether the Australian Greens would support the Bill but called for Australia to use its position as a founding member of the AIIB to ensure projects financed by the Bank meet the highest environmental and labour standards:

I hope that the government, as a potential founding member of this bank, takes the opportunity to live up to the rhetoric about transparency and insists that, when the bank is formed, there are minimum requirements to protect the environment and minimum conditions to protect the people who are working on the projects that this bank will finance. Otherwise, the government is potentially giving a blank cheque to environmental exploitation and the exploitation of people.[52]

Palmer United Party

Earlier this year the Leader of the Palmer United Party, Clive Palmer, issued a media release calling on Australia to join the AIIB.

Federal leader of the Palmer United Party and Member for Fairfax, Clive Palmer, today called on the Abbott Government to establish Australia as a foundation member of the Asian Infrastructure Investment Bank (AIIB).

Mr Palmer said Australia’s future was tied to Asia and participating in the international financial institution would be crucial to the nation’s economic development.[53]

Other parties/independents

At the time of writing the policy positions of other non-government parties and independents were not yet known.

Position of major interest groups

A number of organisations representing the views of the business community have indicated they support Australia joining the AIIB, including:

The Australia China Business Council (ACBC) supports Australia’s membership of the AIIB as a way of cementing Australia’s role in the region and creating new opportunities for Australian business.[54] Further, the ACBC argues that as a founding member of the AIIB, Australia will be able to ‘play a key role in discussions on the bank’s structure, governance and oversight provisions within the bank’.[55]
The Australian Industry Group (AiG) has welcomed Australia’s participation in the AIIB arguing that financing infrastructure development in the Asia-Pacific region will ‘foster greater trade and economic development in the region of Australia’s closest and most important economic partners’.[56]
The Business Council of Australia (BCA) supports Australia joining the AIIB and has welcomed the government’s announcement that the AIIB’s governance arrangements will represent best practice.[57] The BCA has encouraged the government to ensure the AIIB works with other institutions like the G20 Global Infrastructure Hub in improving the provision of infrastructure in the region. The BCA notes Australian companies will benefit from ‘opportunities to participate in developing and building new AIIB financed infrastructure, as well as having access to improved infrastructure which facilitates trade in the region’.[58]
Industry Super Australia (ISA) supports Australia’s participation in the AIIB arguing the move ‘will be a huge fillip for Australian expertise in funds management, engineering, construction, architecture and legal services which could be widely applied to projects financed by the AIIB’.[59]

Financial implications

As a member of the AIIB, Australia is required to make a capital contribution to the Bank as payment for its shareholding. In his second reading speech the Treasurer, Joe Hockey, outlined the size of Australia’s financial commitment to the AIIB:

Australia’s initial shareholding will be US$3.7 billion, including US$738 million in paid-in capital. The remaining US$2.9 billion is callable capital and will be a contingent liability on the Commonwealth balance sheet.[60]

The paid-in capital is to be paid in five equal annual instalments starting from when Australia ratifies the AIIB Articles of Agreement.[61]

The Explanatory Memorandum states that Australia’s membership of the AIIB will have no direct impact on the underlying cash balance, fiscal balance and net debt.[62] This is because Australia will be using cash to purchase shares in the AIIB. Thus, while there will be a change in the composition of the Australian government’s assets there will be no change in the bottom line.

Special appropriations

A special appropriation is a provision within an Act that provides authority to spend money for particular purposes. Clause 7 of the Bill establishes an appropriation for the purposes of making payments to the AIIB for Australia’s share subscription; making any other payments required by the AIIB’s Articles of Agreement; and issuing promissory notes to the AIIB.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[63]

The Parliamentary Joint Committee on Human Rights considered the Bill did not require additional comment.[64]

Key issues and provisions

Parliament is being asked to approve measures needed to implement Australia’s obligations under the AIIB’s Articles of Agreement.

The key provisions of the Bill are:

Clause 4 defines Bank to mean the Asian Infrastructure Investment Bank; Bank Agreement to mean the AIIB’s Articles of Agreement; and payment to include payments in a foreign currency.
Clause 5 authorises payments to the AIIB for the purposes of Australia’s share subscription, whether in full or in part, and any other payments which may be required under the AIIB’s Articles of Agreement.
Clause 6 authorises the Treasurer to make promissory notes and issue them to the AIIB, with these notes to be non-negotiable, non-interest bearing and payable to the Bank at par value on demand.
Clause 7 establishes a special appropriation for the purposes of making payments to the AIIB under clause 5; and payments under promissory notes under clause 6 subject to these payments being required by the Bank’s Articles of Agreement.
Clause 8 states that regulations may confer privileges and immunities[65] on the AIIB, officers and employees of the Bank; and consultants performing services for the Bank. Subclause 8(1) specifies that privileges and immunities necessary or desirable to give effect to Chapter 9 of the Bank’s Articles of Agreement may be conferred on the AIIB by the regulations. Chapter 9 (Articles 44 to 52) of the AIIB’s Articles of Agreement sets out the status, immunities, privileges and exemptions[66] that must be given to the Bank by each AIIB member state.[67] This means for example, that the Bank is recognised as having international legal personality, which means this organisation possesses international rights and duties (Article 45). It also means that the Bank will enjoy immunity from every form of legal process, except in cases arising out of or in connection with the exercise of its powers to raise funds, through borrowings or other means, to guarantee obligations, or to buy and sell or underwrite the sale of securities (Article 46(1)).

Subclause 8(2) specifies that the privileges and immunities conferred on the officers and employees of the AIIB and experts and consultants performing services for the Bank are to give effect to Article 50 of the Bank’s Articles of Agreement. This means for example, that experts and consultants performing services for the bank, who are not local citizens or nationals, shall be given the same immunities from immigration restrictions, alien registration and so forth that would ordinarily be given to members of other international organisations. Subclause 8(3) specifies that the privileges and immunities conferred on the officers and employees of the AIIB and experts and consultants performing services for the Bank are to give effect to Article 51(2) of the Bank’s Articles of Agreement (which requires members to exempt Bank officers’ salaries from taxation). Subclause 8(4) specifies that the privileges and immunities conferred under clause 8 are in relation to the laws of the Commonwealth and the states and territories. Subclause 8(5) makes clear that clause 8 does not limit the operation of the International Organisations (Privileges and Immunities) Act 1963.[68] In Australia, this Act sets out which international organisations are able to be granted privileges and immunities, as well as specifying what privileges and immunities can be granted. The actual conferral of privileges and immunities on an organisation occurs by way of regulations made by the Governor-General.

Clause 9 authorises the making of regulations that are required, permitted, necessary or convenient to give effect to the Bill (including the regulations to confer privileges and immunities on the AIIB, officers and employees of the AIIB and experts and consultants performing services for the AIIB referred to in clause 8).

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

[1]. Asian Infrastructure Investment Bank (AIIB), What is the Asian Infrastructure Investment Bank?, AIIB website, accessed 24 August 2015.

[2]. AIIB, Articles of Agreement, n.p., 2015, Article 1(1), accessed 24 August 2015.

[3]. Ibid. Article 4(1).

[4]. AIIB, Purpose, functions and membership, AIIB website, accessed 24 August 2015.

[5]. Y Zheng, ‘Multination Asian bank plans capital of $100 billion’, China Daily (online edition), 30 June 2014, accessed 26 August 2015.

[6]. S Peatling and P Wen, ‘Prime Minister Tony Abbott gives green light to $100 billion Asian Infrastructure Investment Bank’, Sydney Morning Herald (online edition), 29 March 2015, accessed 30 August 2015.

[7]. Ibid.

[8]. J Hockey (Treasurer), and J Bishop (Minister for Foreign Affairs), Australia to join the Asian Infrastructure Investment Bank, media release, 24 June 2015.

[9]. J Hockey (Treasurer), ‘Second reading speech: Asian Infrastructure Investment Bank Bill 2015’, House of Representatives, Debates (proof), 13 August 2015, p. 1.

[10]. J Hockey (Treasurer), and J Bishop (Minister for Foreign Affairs), Australia to join the Asian Infrastructure Investment Bank, op. cit.

[11]. P Fletcher, (Parliamentary Secretary to the Minister for Communications), ‘Second reading speech: Asian Infrastructure Investment Bank Bill 2015’, House of Representatives, Debates (proof), 19 August 2015, p. 100, accessed 31 August 2015.

[12]. Currently, the following countries have signed the AIIB’s Articles of Agreement: Australia, Austria, Azerbaijan, Bangladesh, Brazil, Brunei Darussalam, Cambodia, China, Egypt, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Iran, Israel, Italy, Jordan, Kazakhstan, Republic of Korea, Kyrgyz Republic, Lao PDR, Luxembourg, Maldives, Malta, Mongolia, Myanmar, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, Portugal, Qatar, Russia, Saudi Arabia, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Turkey, the United Arab Emirates, the United Kingdom, Uzbekistan, and Vietnam. AIIB, What is the Asian Infrastructure Investment Bank?, op. cit.

[13]. AIIB, Purpose, functions and membership, op. cit. AIIB, Articles of Agreement, op. cit., Article 23(1).

[14]. AIIB, Articles of Agreement, op. cit., Article 22.

[15]. Ibid., Articles 23(2) and 24(1).

[16]. Ibid., Article 23(2).

[17]. Ibid., Article 25(1)

[18]. AIIB, Purpose, functions and membership, op. cit. AIIB, Articles of Agreement, op. cit., Article 26(iv).

[19]. AIIB, Articles of Agreement, op. cit., Article 29(1).

[20]. Ibid. See also AIIB, Purpose, functions and membership, op. cit.

[21]. AIIB, Articles of Agreement, op. cit., Article 29(2).

[22]. AIIB, Selection of the President-designate, AIIB website, accessed 26 August 2015.

[23]. AIIB, Articles of Agreement, op. cit., Article 30(1). See also AIIB, Purpose, functions and membership, op. cit.

[24]. AIIB, Articles of Agreement, op. cit., Article 28(1).

[25]. Ibid., Article 28(1)(i).

[26]. Ibid., Article 28(1)(ii).

[27]. Ibid., Article 28(1)(iii).

[28]. Ibid., Schedule A, p. 29.

[29]. Ibid., Article 28(2)(ii).

[30]. Ibid., Articles 29(1), 4(3) and 25(2), respectively.

[31]. World Bank, Countries: United States – overview, World Bank website, accessed 3 September 2015. See also Danish Institute for International Studies (DIIS), Trapped in history – The IMF and the US veto, DIIS policy brief, DIIS website, April 2015, p. 1, accessed 3 September 2015.

[32]. M Parkinson, Are the Bretton Woods institutions still relevant for the emerging market economies?: address to the Reinventing Bretton Woods conference, Washington DC, speech, 11 April 2014, p. 5, accessed 24 August 2015.

[33]. R Wihtol, Whither multilateral development finance?, ADBI Working Paper Series, 491, Asian Development Bank Institute, Manila, July 2014, p. 7, accessed 24 August 2015.

[34]. M Parkinson, Are the Bretton Woods institutions still relevant for the emerging market economies?, op. cit., p. 9.

[35]. Asian Development Bank, Infrastructure for supporting inclusive growth and poverty reduction in Asia, Manila, May 2012, p. 3.

[36]. Ibid., p. 14.

[37]. Ibid. p. 9.

[38]. P Lipscy, ‘Who's afraid of the AIIB: why the United States should support China's Asian Infrastructure Investment Bank’, Foreign Affairs (online edition), 7 May 2015, accessed 1 September 2015.

[39]. ‘One road, one belt’ refers to China's proposed New Silk Road Economic Belt, which will link China with Europe through Central and Western Asia, and the Twenty-first Century Maritime Silk Road, which will connect China with Southeast Asian countries, Africa and Europe.

[40]. L B Pitlo, ‘Chinese infrastructure investment goes abroad’, The Diplomat (online edition), 6 August 2015, accessed 30 August 2015.

[41]. R Wihtol, ‘Beijing’s challenge to the global financial architecture’, Georgetown Journal of Asian Affairs, 2(1), Spring/Summer 2015, pp. 8–9, accessed 26 August 2015.

[42]. Ibid., p. 9.

[43]. Ibid. p. 10.

[44]. J Stiglitz, ‘In defence of the Asian Infrastructure Investment Bank’, The Guardian (online edition), 15 April 2015, accessed 24 August 2015.

[45]. Senate Standing Committee for the Selection of Bills, Report, 10, 2015, The Senate, 20 August 2015, accessed 21 August 2015.

[46]. Senate Standing Committee on Economics, ‘Asian Infrastructure Investment Bank Bill 2015 [Provisions]’, Australian Parliament website, accessed 21 August 2015.

[47]. Senate Standing Committee for the Scrutiny of Bills, Alert digest, 8, 2015, The Senate, 19 August 2015, p. 3, accessed 21 August 2015.

[48]. Joint Standing Committee on Treaties, Treaty tabled on 12 August 2015, Australian Parliament website, accessed 21 August 2015.

[49]. Ibid.

[50]. C Bowen, ‘Second reading speech: Asian Infrastructure Investment Bank Bill 2015’, House of Representatives, Debates (proof), 19 August 2015, p. 84.

[51]. T Plibersek, ‘Second reading speech: Asian Infrastructure Investment Bank Bill 2015’, House of Representatives, Debates (proof), 19 August 2015, p. 89, accessed 24 August 2015.

[52]. A Bandt, ‘Second reading speech: Asian Infrastructure Investment Bank Bill 2015’, House of Representatives, Debates (proof), 20 August 2015, p. 27, accessed 24 August 2015.

[53]. C Palmer (Leader Palmer United Party), Australian jobs depend upon membership of Asian Infrastructure Investment Bank, media release, 25 March 2015, accessed 24 August 2015.

[54]. Australia China Business Council, Business leaders welcome AIIB decision, media release, 24 June 2015, accessed 24 August 2015.

[55]. Ibid.

[56]. Australian Industry Group, Australian Industry Group comment on Asian Infrastructure Investment Bank, media release, 24 June 2015, accessed 24 August 2015.

[57]. Business Council of Australia, Statement on Australia joining the Asian Infrastructure Investment Bank, media release, 24 June 2015, accessed 24 August 2015.

[58]. Ibid.

[59]. Industry Super Australia, Industry Super Australia welcomes Canberra’s support for Asia Infrastructure Investment Bank, media release, 24 June 2015, accessed 24 August 2015.

[60]. J Hockey (Treasurer), ‘Second reading speech: Asian Infrastructure Investment Bank’, op. cit., p. 2.

[61]. Explanatory Memorandum, Asian Infrastructure Investment Bank Bill 2015, p. 3, accessed 24 August 2015.

[62]. Ibid., pp. 3‑4.

[63]. The Statement of Compatibility with Human Rights can be found at page 9 of the Explanatory Memorandum to the Bill.

[64]. Parliamentary Joint Committee on Human Rights, Twenty-sixth report of the 44th Parliament, 18 August 2015, p. 1, accessed 21 August 2015.

[65]. Common privileges and immunities that apply to international organisations include ‘immunities from jurisdiction and execution, the inviolability of premises and archives, currency and fiscal privileges, and freedom of communication’. See Allen & Overy, ‘Why contracting with an international organisation is different’, Allen & Overy website, 12 November 2012, accessed 30 August 2015.

[66]. It is well-established that international organisations have a right to those privileges and immunities necessary for the fulfilment of the organisation’s purpose. See I Brownlie, Principles of public international law, 6th ed., Oxford University Press, New York, 2003, p. 652.

[67]. AIIB, Articles of Agreement, op. cit., Article 44(1).

[68]. International Organisations (Privileges and Immunities) Act 1963, accessed 2 September 2015.

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