Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, at the `How to do Business with the United Nations' Conference, Melbourne, 20 February, 1997

Introduction

It gives me great pleasure this morning to address such a large group of companies looking to do business with the United Nations.

I want to congratulate the Committee for Melbourne and the other major sponsors, ANZ, Business Victoria, the Melbourne Exhibition Centre, Thames Water Asia/Pacific and VicHealth on coming together with my Department to make this conference possible.

I would also like to acknowledge in particular the contribution of the United Nations Association of the United States of America. The association has contributed two very good speakers, Ralph Cwerman, and Sandrine Tesner, to today's conference. It has helped bring together the team of experts which has come to Melbourne to address you today.

The Association, founded in 1945, has a membership of some 30,000 in the United States. It is the leading US centre for research and information on the work and structure of the United Nations system.

I also welcome the involvement of Mr. Roger Shipton, President of the United Nations Association of Australia, as a speaker today.

Business Opportunities with UN Organisations

The activities of the UN and its associated organisations represent significant opportunities for internationally competitive Australian firms.

UN agencies contract out activities in the order of US$3.7 billion worth each year. That is a staggering amount of business, and I am sure you will hear in more detail today that the opportunities for supplying these agencies are vast and varied. The sorts of goods and services purchased by UN agencies include food, drugs, vaccines and medical equipment, vehicles, industrial and communications equipment, computers and software, as well as sea and air freight. All of these are, of course, areas in which Australian companies can compete, and compete well.

In 1995, Australian companies won US$33.7 million worth of business in UN contracts. This represents a substantial increase over the US$18.9 million secured in 1994. While the amounts tend to vary from year to year, this near doubling of the dollar value of contracts won by Australian firms is testament to their competitiveness.

But there is always room for improvement. Australia's 1995 contracts - while an improved result - still represent only around 0.8 per cent of the total figure of US$3.7 billion. To put that in perspective, nineteen other countries did more business with the UN in the same period, including the Ukraine, Panama and the Netherlands. Moreover, as Australia contributes nearly 1.5 per cent of the UN's regular budget, we would like to see Australia's percentage of UN business significantly improve.

So, clearly, there is plenty of scope to raise Australia's profile amongst UN agencies as a supplier of quality goods and services.

The Government's Trade and Multilateral Procurement Strategy

The Australian Government has a trade and multilateral procurement strategy designed to help Australian firms do just that.

I outlined the Government's comprehensive trade strategy in the Trade Outcomes and Objectives Statement which I tabled in Parliament on 5 February. The statement, for the first time, sets out benchmarks for our performance on trade policy. It met a pre-election commitment and is an important part of the Coalition Government's strategy to strengthen trade and foreign investment performance to bring benefits to business and the Australian community.

Our capacity to create new jobs - and our ability to raise the living standards of all Australians - depends vitally on increasing our national wealth through trade. Between the September quarter 1995 and the September quarter 1996, Australia's GDP rose by 3.8 per cent in real terms. About one quarter of this increase was provided by the growth in net exports of goods and services. Increased trade is necessary to help sustain GDP growth and jobs growth.

As part of the Government's trade strategy detailed in the Statement, I also set out the high priority which we place on our efforts to assist Australian companies in winning contracts let by UN agencies.

Specifically, the Government's multilateral procurement strategy comprises two main elements.

First, Austrade, and the Department of Foreign Affairs and Trade are active domestically in encouraging Australian companies to take up multilateral procurement opportunities. Austrade's Export Hotline is a valuable source of information.

In March last year the Government established Multilateral Procurement Unit within the Department of Foreign Affairs and Trade. This unit reinforces Government efforts to develop and implement its multilateral procurement strategy. It has engaged relevant state business bodies and produced a number of publications outlining how to go about taking advantage of multilateral procurement opportunities.

The second element of the strategy involves overseas staff from both agencies assisting in the essential task of collecting early information about project opportunities. These staff also work to establish close links with procurement officials in UN agencies and with executing agencies in borrower countries for bank-financed projects.

Lessons for the Future

Let me now say a few words about how Australian business can maximise future opportunities in the UN system, using the experience of the past.

It is clear that UN agencies want to diversify their sources of supply. They recognise the capacity and quality of Australian products and services, and therefore they would like to see more Australian companies on their databases.

Australian companies need to be well-informed and proactive if they are to win contracts. UN officers have indicated to us that there does not appear to be a high level of awareness among Australian firms of the procurement procedures followed by the UN agencies. Also, many companies do not respond regularly to invitations to bid, and thereby run the risk of not being asked to bid again.

Companies also need to ensure that they complete their tender documents thoroughly and meet tender deadlines - so they are not disqualified at an early stage. These are straightforward and simple matters but - as every business person knows - the matters that most need to be got right.

Paying attention to the business basics is vital. Personal contact is important, as is providing full information, if not samples, of the product or service being offered.

Although involvement in multilateral procurement can mean long lead times and substantial financial commitments for Australian businesses, the rewards are potentially great.

Business Opportunities with MDBs

I have spoken this morning primarily about the UN as that is the subject of the conference.

Everything I have said, however, applies equally to multilateral development institutions such as the Asian Development Bank, the World Bank and the European Bank for Reconstruction and Development.

As in the UN case, Australian companies have recently been lifting their profile in their business involvement with these institutions. But, again, there is plenty of room for even greater involvement as the market for activities undertaken by these three banks put together is of the order of US$30 billion.

Conclusion

I applaud the vision of those companies who have attended today. I am delighted to see several large organisations here but I am especially pleased to see so many small-to-medium sized ones as well.

The UN is one of the world's largest customers. Australian companies and businesses cannot afford to forget that important fact.

I believe that together we can win a considerable amount of business through pursuing contracts in multilateral procurement. Australian companies can provide high quality goods to agencies which are engaged in programs and activities which benefit the world community. As an added bonus, Australian goods and services are then showcased around the world.

The Government applauds the improved effort of Australian companies over the last couple of years in taking advantage of the available opportunities.

We remain committed to helping this strong Australian involvement grow even more significant in the years ahead.