Island leaders sign up for aid management overhaul

Pacific Island leaders have signed up for Australia and New Zealand's push to tidy up aid funding in the Pacific, agreeing on a new regime of annual reporting and peer reviews of their aid plans.

The 15 leaders at the Pacific Forum leaders' retreat yesterday emerged with a "compact" aimed at better co-ordinating the aid given to them.

They agreed to use more aid to develop the private sector in their countries and to begin a system of annual reporting and peer review of their development plans to ensure aid was being effectively used. Australian Prime Minister Kevin Rudd said the decision followed increasing frustration at the "spaghetti bowl" of the current system and a new awareness that better co-ordination was needed.

Donors - including China and other new influences in the Pacific - will also be asked to sign up to the compact and provide an annual report on the support they are providing to help reduce aid fragmentation.

The leaders also issued a "call to action" to developed countries on climate change, asking developed countries to come up with "ambitious and robust" emissions reductions targets by 2020 and to show they were serious about them by legislation and implementing policies to ensure they were met.

They also set a longer term target of reducing emissions by at least 50 per cent below 1990 levels by 2050.

The New Zealand Government will release it's target for 2020 by next week in preparation for talks in Copenhagen later in the year.

The call to action was one of the areas agreed on by the 15 Pacific Forum leaders at their annual leaders' retreat in Cairns yesterday.

Mr Rudd has made climate change one of the focuses of the conference, spurred perhaps by his struggle to secure enough support to pass legislation for an emissions trading scheme.

Prime Minister John Key said New Zealand was likely to contribute to a $25 million fund Australia was providing for renewable energy projects in the Pacific and had already informally agreed to fund a solar energy project in Tonga.

The Pacific Forum leaders also agreed to begin negotiations under the Pacer Plus trade agreement - but Fiji will only be kept informed of the progress of the negotiations, rather than be party to them. The decision on Fiji indicates Australia had refused to soften its tougher stance on Fiji when the matter was discussed at the leaders' retreat.

The Melanesian nations in particular had pushed for Fiji to be part of the negotiations, particularly because it was one of the largest economies in the forum. Mr Key had also indicated he was comfortable with it taking part provided it could happen without breaching the suspension of Fiji from the forum.

Mr Rudd said Fiji's role would be low key and "low level" and there would be no ministerial involvement.

The decision will disappoint Fiji. The day the leaders met, Radio New Zealand International reported Fiji's interim Foreign Minister Ratu Inoke Kubuabola as arguing that the free trade groupings were "standalone" rather than forum events and Fiji had a legal right to be included in all discussions and negotiations.

The forum also agreed to maintain the suspension of Fiji, which is now also facing suspension from the Commonwealth if it does not commit to 2010 elections by September.

Mr Key said the leaders were unanimous in agreeing the forum's stance was appropriate, saying there was increased frustration at the interim regime's "increased heavy handedness" since the suspension.

He said the meeting was very successful.