Chapter 3Committee view
3.1The humanitarian crisis in Myanmar is complex and has significantly worsened following the military coup in 2021. Myanmar is one of the poorest countries in Asia with around half of the population living in poverty. The crisis is a product of many years of political instability, with military interference a common occurrence in Myanmar’s political history. This has resulted in armed conflicts, poverty, the decline in health and education outcomes, and systematic human rights violations, including the particular vulnerability of ethnic minorities in Myanmar. The humanitarian and human rights crisis has led to mass displacement—the United Nations (UN) estimates that 1.9 million people are internally displaced, and 17.6 million people will need humanitarian assistance in 2023. Furthermore, international development organisations and civil society organisations (CSOs) are facing major barriers to their operations within Myanmar, with the military regime increasing its restrictions and control over their activities.
3.2The committee recognises that Australia’s development assistance must work effectively to mitigate the impacts of the conflict on the most vulnerable and assist the country to find a pathway to peace, stability and democracy, particularly given the geo-strategic significance of Myanmar and the risk of regional instability. The committee understands that the State Administrative Council (SAC) controls mostly urban areas in Myanmar and has withdrawn from regional and rural areas, where approximately 70 per cent of the country is under the control of the National Unity Government (NUG) and EthnicResistance Organisations (EROs).
3.3The majority of inquiry participants argued that, given the complexity of the situation in Myanmar, the Australian Government needs to apply a greater level of flexibility through its due diligence framework to ensure that aid is reaching those most in need. The committee recognises that those in non-SAC controlled areas of the country are disproportionately affected by the conflict. This is where the majority of displaced people are located and where the need for assistance is greatest.
3.4The committee heard evidence that Australia’s humanitarian assistance has been delivered predominantly through UN agencies and pooled funding. The committee recognises the role that the UN and multilateral organisations play in the coordination and delivery of humanitarian and development assistance. However, the committee is of the strong view that it is clear that in the context of Myanmar, this business-as-usual approach is not sufficient. The interference of the military regime in the form of both regulation and violence has significantly impacted the ability of multilateral and international organisations to reach the area’s most in need of aid.
3.5International organisations delivering aid through traditional UN Office for the Coordination of Humanitarian Affairs (OCHA) coordinated humanitarian architecture in-country are being forced to choose between delivering aid in SAC-controlled areas or areas outside of SAC control. Indeed, OCHA reporting against its own humanitarian plans has shown that aid is being disproportionately skewed toward urban areas. According to OCHA’s 2022 mid-year report, 81 per cent of food aid beneficiaries were in the urban areas of Yangon and Rakhine State and only 16 per cent of beneficiaries were internally displaced or stateless persons. In the first half of 2023 its reach had expanded, however, of the USD $181 million spent, 39 per cent of beneficiaries were in Yangon, Rakhine state and Ayeywady Delta, where there is comparatively little conflict and displacement.
3.6On the other hand, inquiry participants emphasised that local organisations like CSOs and ERO networks have the flexibility, knowledge, and rapport to enable locally led responses, and are the ones currently delivering aid and essential services in non-SAC controlled regional areas that are most in need. In conflict zones it is important more than ever to engage with local groups who have a better understanding of what support is needed and where it can be used most effectively. However, the committee understands that these localised networks and CSOs are not direct recipients of Australian aid.
3.7During the committee’s hearing, the Department of Foreign Affairs and Trade (DFAT) officials spoke about the risk involved in delivering aid but seemed to take what can only be described as a ‘cost benefit analysis’ view of Australian aid distribution, rather than actively seeking ways to meet the very real needs of people under attack from their own military. While the committee recognises the importance of managing the allocation of aid to ensure it is not misspent, a business-as-usual and inflexible risk-averse approach within conflict zones like Myanmar prevents aid from reaching those most in need.
3.8In dire circumstances such as those being faced in Myanmar, there needs to be flexibility from DFAT when making a due diligence assessment. As reflected in the questioning of committee members at the hearing, it is clear that risk management criteria in the framework such as environmental safeguards would be the least of the concerns of those living on the ground in Myanmar. The department was unable to provide the committee with a satisfactory answer on how the financial delegates applying the due diligence framework are supported to make difficult decisions about balancing risk and discounting certain criteria to achieve the desired aid outcome.
3.9The committee is of the view that the DFAT due diligence framework currently limits the groups that can receive aid funding to the detriment of the equitable distribution of aid across the regions of Myanmar. Submitters outlined a number of challenges that local groups face in trying to meet the requirements of the framework, whilst balancing this against the need to mitigate the risks of operating in a hostile environment. For example, the longevity requirements under the framework precludes many of the organisations that formed after the February 2021 coup as aid partners. This includes groups such as the civil disobedience movement (CDM) and CSOs who provide essential services that operate in areas controlled by the NUG and EROs.
3.10The committee notes DFAT’s advice that the due diligence framework considers risk, not only in relation to Australia’s legislative requirements such as fraud and anticorruption, but that proportionality is also considered when applying the framework, taking into account the operating context in a particular country. However, at the committee’s hearing, DFAT officials had difficulty assuring the committee that the financial delegates applying the due diligence framework are sufficiently supported with structural guidance to confidently make difficult decisions about balancing risk to achieve the desired aid outcome.
3.11The committee agrees with the majority of submitters who argued that DFAT’s framework could function more effectively and efficiently, in the context of Myanmar, to ensure that aid gets to those most in need. The committee believes that this requires a more tailored and flexible funding model, with a great focus on supporting locally led approaches to aid delivery. Importantly, the provision of aid at a more localised level does not mean forgoing the application of rigorous risk management procedures and ensuring value-for-money. The Australian Council for International Development (ACFID), for example, suggested that Australian NGOs with strong local networks and locally led ways of working can play a role as an intermediary, supporting local partners to meet due diligence requirements and providing technical support. In Myanmar’s case, funding these types of organisations directly, rather than through multilateral organisations, is a more efficient delivery model that would result in more of every dollar reaching people in need.
3.12The committee acknowledges the proposals put forward by submitters to improve the risk management processes and the level of flexibility within the due diligence framework when delivering development assistance in complex and contested environments like Myanmar. Particularly, the committee sees merit in the development of an alternative and more flexible due diligence framework to sit aside the current framework. The committee further notes the evidence provided by Baptist World Aid, particularly that an alternative framework should be developed by DFAT in consultation with ACFID members.
3.13The committee acknowledges that there appears to be some reluctance from assessment officers tasked with conducting a risk assessment for smaller aid groups, where not all criteria can be met, to make a recommendation, and a tailored framework would enable a greater amount of funding to flow to where it is needed most. Department financial delegates should be supported with clear guidance to give them the confidence to make more flexible decisions when applying the due diligence criteria in contested environments like Myanmar.
3.14The committee notes that the approaches of other countries such as the UnitedStates (US) and Finland have focused efforts on strengthening CSOs and ERO networks to prepare them for a democratic future for their country. In addition, economic development and health programs are also supported to deliver basic services and humanitarian aid in order to sustain the resilience of vulnerable, conflict-affected communities. In the case of the US, legislative changes have been made to support these efforts. The committee notes that the due diligence framework set out by DFAT currently precludes groups like the NUG and ERO networks to receive aid funding.
3.15The committee encourages the Australian Government to consider how it can effectively support the citizens of Myanmar in non-SAC controlled areas which may involve working with EROs and the NUG, perhaps in joint coordinated efforts with like-minded countries.
3.16The committee recommends that the Australian Government direct the Department of Foreign Affairs and Trade to develop and implement an alternative and more flexible due diligence framework to be used when a recipient community is in a defined contested environment.
3.17The committee recommends that the Australian Government direct the Department of Foreign Affairs and Trade to develop a decision support tool to assist officers conducting risk management assessments to make it easier to facilitate better distribution of aid funding using the proposed contested environment due diligence framework.
3.18The committee recommends that the Australian Government utilise any new due diligence framework to engage with and strengthen ties with aid partners and stakeholders on the ground in contested environments, such as the National Unity Government, faith-based non-government organisations and civil society organisations.
3.19The committee recommends that further details be released as soon as possible on the Australian Government’s new International Development Policy’s key commitments on:
providing multi-year funding and capacity development to local organisations, with support as needed to meet policy requirements; and
designing a new Civil Society Partnerships Fund that will support local CSOs.
3.20In particular, detailing how these programs will apply in the context of Myanmar and resolve the challenges being faced under the current framework.
Senator Claire Chandler
Chair
Liberal Senator for Tasmania