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MR RUDD: Let me begin by just making some further remarks about Norway. The reports which are now coming in from Olso are increasingly horrific. Of the deaths of some 87 people, 80 of whom seem to be young people on an island holiday camp for the Norwegian Labour Party youth wing.

For young people involved in politics, for young people having fun during the summer, this is just horrific, it’s inexplicable, we’re left dumbfounded by it.

For the country at large, the violence we’ve seen visited upon the city of Oslo and the good people of Norway is beyond the pale—unacceptable by any human standard. I’ve been to Oslo many times, over many years. I have many friends in Norway among whom I count the Prime Minister, Jens Stoltenberg and the Foreign Minister Jonas Store.

And so to both of them and through the media I want to express again our fundamental solidarity with the Norwegian Government and Norwegian people at this most difficult time.

On the meeting of the ASEAN Regional Forum and the East Asia Summit over the last couple of days let me make a couple of remarks.

Now the first is the East Asia Summit, with, for the first time, the inclusion of the Secretary of State of the United States and the Russian Foreign Minister Lavrov has reached an historical point.

And that historic point is we now have a forum which will meet at summit level, with all the principal players at the table, meeting regularly on an agenda which deals with all the political, security and economic challenges of our region.

This has taken many, many years to do. But at last we’ve got there. At last we’ve got the architecture that we need for the future in charting a peaceful and prosperous future for East Asia.

Having the architecture is one thing. Building the house is something else. That will take time. It will take patience. But what we now have is an ability to move forward on a number of the contentious security policy and other questions which confront our neighbourhood.

Today, in the context of the ASEAN Regional Forum, we discussed a number of those particular challenges. There’s been a long and considered discussion on the problem of nuclear proliferation on the Korean peninsula; the nuclear enrichment program of the North Korean regime and its destabilising activities around the region.

In Australia, our view is very simple: the uranium enrichment program on the part of the North Koreans equals a fundamental violation of international law as expressed through two UN Security Council resolutions.

Furthermore, if you match the uranium enrichment program by the North Koreans with their missile development program, progressively North Korea represents a threat not just to the South, but also to the wider region, including Australia.

We take these developments in North Korea deeply seriously. This regime is fundamentally destabilising to the wider region and also brings to bear Australia’s direct national security interests.

Another matter of relevance to regional security as discussed is of course that of the South China Sea.

We welcome the progress that has been achieved in recent days by the ASEANS and China, agreeing on, for the first time, guidelines which give expression to the Declaration of Conduct, which was agreed between ASEAN and China back in 2005.

Significantly, that Declaration provides for this: that for outstanding territorial disputes in the South China Sea, one: they should be settled peacefully; two: they should not involve either the threat or the use of force; and three: they should be negotiations conducted on the basis of all the relevant principles of international law, including the 1982 UN Convention on the Law of the Sea. This is fundamental for the future.

All states, including Australia, have a deep interest in these matters being resolved peacefully.

More than 60 per cent of Australia’s trade goes through the waters of the South China Sea. We therefore have a direct interest in these matters being attended to peacefully.

Finally, there’s been extensive discussion both in the EAS, the East Asia Summit and also in the ASEAN Regional Forum on Australia’s proposals for enhanced counter-disaster management across wider East Asia.

Natural disasters regrettably have become a regular feature of our neighbourhood. We think of Christchurch, we think of Japan, we think of the Sichuan earthquake, we think of the Indonesian tsunami. And these are just some of the spate of natural disasters that afflict the wider region.

If you look at UN data, there’s been a virtual doubling of the number of reported natural disasters across this wider region since the 1980’s.

Therefore, the responsibility for governments is to have a better system to react. And to manage natural disasters as well as to better prepare for them, is more acute than ever.

Australia has presented a non-paper on this subject which goes to a plan over the next three years.

We’ve attracted a high degree of support from various countries participating in the East Asia Summit and more broadly.

It will in time become a joint proposal between Indonesia and Australia, as they themselves have also presented a non-paper.

But the key objective is this: to make sure that next time a big one hits, we are in a better state of preparedness than we have in the past.

From Indonesia, I head to Nairobi. And from Nairobi and Kenya also with the World Food Programme, to inspect directly the sort of support which the WFP is giving to the ongoing drought in the Horn of Africa.

This drought is the worst in 60 years. It affects some 10.8 million people. And a combination of Somalia, Djibouti, Ethiopia and of course Kenya itself.

The international agencies have declared a famine in parts of Somalia. We are particularly concerned about 1.8 million people within Somalia, who, because of the security challenges within the country, we have real problems with international agencies gaining proper access to them.

So my job in going there is to underline, a)what Australia has done so far. We’re one of the largest contributors to this humanitarian effort around the world at present—certainly within the top five.

Secondly, to see what more needs to be done.

And to thirdly stand together globally with the Executive Director of the World Food Programme calling on the rest of the world to rise to the occasion in order to prevent this humanitarian crisis to become an absolute disaster.

Happy to take your questions.

JOURNALIST: Mr Rudd, you had a meeting with Yang Jiechi this morning. What did you discuss? Would you comment on that?

MR RUDD: Xie-xie. Are you from Chinese television? To our friends from Phoenix, let me say this: I had a good discussion with the Chinese Foreign Minister as I had during this time in Indonesia with the Foreign Minister of Japan, with Foreign Ministers from other regional countries, obviously including Indonesia, as well as India and others besides, including Secretary of State of the United States, Hillary Clinton.

With Foreign Minister Yang Jiechi obviously we discussed our bilateral relationship. We discussed China’s new growth model, which has been released through the 12th Five-Year Plan, about which I’ve been speaking about a lot in Australia in recent weeks.

That is why the Trade Minister will lead a trade delegation to China. To China’s five large second-tier cities, including Guangzhou, Chongqing, Chengdu, Changsha and Wuhan.

This is a major thrust in Australian trade policy. And the delegation will include nearly a hundred Australian significant exporters in the services sector.

The other thing that we discussed was the need to accelerate the negotiations for the successful conclusion of the FTA between both countries.

The 16th round has occurred. There are still issues remaining. But it’s in both our countries interest for this matter to be brought to a conclusion.

On top of that we also discussed wider developments in the region, including of course what’s going on in the South China Sea and including in the Korean peninsula. That’s broadly the scope of our discussions.

JOURNALIST: On North Korea, do you agree with the United States position that in order for the Six Party talks to resume, North Korea needs to show a more concerted effort on peace with South Korea?

MR RUDD: Well the Foreign Minister of the DPRK recently articulated his Government’s views on these matters.

On behalf of the Government of Australia I have just robustly responded in the meeting of the ASEAN Regional Forum.

Concerning North Korea’s outrageous claims, concerning the actions of both the ROK and the United States – indeed, the sources of provocation for instability on the Korean Peninsula. It’s clear to me that the Government of North Korea is detached from reality if it believes that others are the source of this destabilisation rather than themselves. North Korea stands in absolute violation of two UN Security Council resolutions over their uranium enrichment program.

In the last 12 months they have torpedoed a South Korean naval vessel and murdered nearly 50 South Korean sailors. On top of that again we have had the unwarranted shelling of South Korean territory by the North Koreans.

And yet at a gathering like this the North Koreans stand up and blame others. This is unacceptable. Therefore it is absolutely clear that through the resumption of bilateral contact between North and South Korea, and the wider dialogue with the North Koreans, that the North Koreans must change their behaviour.

This is not abstract for Australia. It’s a uranium enrichment program with the objective of developing nuclear weapons.

It is a weapons program designed to be deployed within missiles. That’s why they have a missile development program.

That’s why I have said on a number of occasions in the past, this is of direct relevance to all regional countries including Australia. It’s a serious matter. It’s not out there in the margins of our national security concern.

It’s real. And I’ve reflected those concerns to the North Koreans today.

JOURNALIST: Just as a point of clarification there though. You’re saying it poses a direct threat to Australia. Do you mean through general destabilisation in the region or are you talking about these missiles actually reaching Australia?

MR RUDD: What I’m talking about very bluntly is firstly the development of nuclear weapons, secondly the weaponisation of nuclear material, and thirdly the deployment of that weaponised material into missiles, short medium and, over time, long range. If it’s a long range missile which is developed over time – and that is the question, which is developed over time – then of course it represents a threat to Australia.

What is uncertain is the current stage of development of the North Korean long range missile program.

What we do know is this country having gone from nowhere into nuclear capabilities a couple of decades ago – it’s come a long, long way and it’s a threat to all of us, including Australia.

JOURNALIST: When you gave your response in this morning’s session did you suggest to the North Koreans that they needed to reengage with reality?

MR RUDD: Yes.

JOURNALIST: In what terms?

MR RUDD: My language in response to the North Korean intervention was that the statement did not reflect reality in a number of quite specific areas and I ran through them one by one – both in terms of their analysis of the actions of South Korea and in terms of their analysis of the reaction of Japan on the question of abductions, but more particularly on the question of their violation of UN Security Council resolutions concerning the uranium enrichment program. And so in the great tradition of Australian diplomacy, we were forthright, but legitimately so, because the statements made today represented a complete departure from reality by them. Anything else?

JOURNALIST: Mr Rudd, yes. Just wondering how far away is the Australian Government from making a decision on Manus Island, because our understanding is that you had detailed discussions with PNG and they’ll be taking them back to the Cabinet within the next couple of weeks.

MR RUDD: Well, what PNG does with its own processes is a matter for PNG.

As I’ve said before, PNG is at a delicate time in PNG domestic politics. And therefore things will evolve in PNG at a time appropriate to them. That’s the first point.

Second thing, as I said quite explicitly the other day, I had met with the PNG Foreign Minister and we discussed the whole question of the future of possible processing of asylum seekers within PNG.

That discussion is ongoing between myself and the Foreign Minister. There’s certainly more work to be done, but we are actively engaged on the question.

But always mindful – as I said – of this current delicate stage in PNG politics and entirely respectful of PNG’s internal political processes.

JOURNALIST: Just to follow up on that, in terms of the instability – or the uncertainty might be a better word – we spoke to the Foreign Minister and he said the Government is intact, there’s nothing to worry about, we can certainly deal with anything that comes up in regards to this.

MR RUDD: Well my own relationship with the Foreign Minister is terrific and as with most Ministers in the PNG Government that’s not an issue.

What we are simply mindful of is the other uncertainties within broader PNG domestic politics.

We are prosecuting those discussions effectively. I did have a detailed discussion with my PNG counterpart the other night. We’ll continue those discussions over the period ahead. And they do involve, obviously, the possibility of a processing centre within PNG.

JOURNALIST: From your conversation with Minister Yang this morning, do you have any sense of when the Chinese would be willing to convert the guidelines on negotiation towards a Code of Conduct into an actual negotiation on a Code of Conduct?

MR RUDD: One of the great uncertainties is how long this next process will take. If I listen to some of my friends in ASEAN, they have an expectation this will be done relatively swiftly.

If I listen to my friends in China, they have a different speedometer attached to this.

And of course the Chinese Foreign Minister has been very explicit about saying that the conclusion of a Code of Conduct would be possible under what he described as “appropriate conditions”.

So that is where that stands in terms of expectations. From Australia’s point of view, we have simply said that it’s important that a Code of Conduct be concluded as quickly as possible.

There are two sets of issues here. One is the methods which are deployed in the peaceful resolution of outstanding territorial disputes – both terrestrial and maritime.

And the other is to maintain freedom of navigation across the seas themselves.

Australia has a particularly direct interest attached to the latter. So our interests, therefore, are underpinned by concluding a COC as soon as is physically possible.

But as I said this will be a matter between the ASEANs and the Chinese.

JOURNALIST: Is there a sense of urgency, given the escalation in the number of incidents and the seriousness of incidents since, say, early 2009? And do you have any sense that the Chinese in particular are prepared to pull back on that matter?

MR RUDD: I think one thing we should acknowledge here is the important stabilising effect the conclusion of the Declaration of Conduct guidelines on the South China Sea have had.

That is, after six years of negotiations, these guidelines have been concluded. And that is a positive step forward. And all governments have recognised that here. Both the ASEAN Regional Forum and in other forums over the last several days.

Secondly, however, we need to be very mindful about any impact over time any further instability in the South China Sea might cause.

And therefore from the Australian Government point of view – as I said before – we would want to see this Code of Conduct concluded as soon as is practicably possible.

One of the things of course that shippers will be mindful of is any associated increase in the cost of insurance of shipping through the region. I’m unaware as to whether any of the insurance companies have made any determinations on that.

But it’d be important to observe whether they do, including Lloyds of London.

JOURNALIST: I just wanted to ask further on your discussions with the Chinese Foreign Minister. Did you talk at all about the prospect of Chinese labour coming to Australia to deal with our patchwork economy as was suggested by the second secretary a couple of weeks ago?

MR RUDD: I did reiterate what I’ve said on earlier occasions. If our good friends in China would like a good and open debate about the degree of openness of the Australian economy to foreign investment and the degree of openness of the Chinese economy to foreign investment, I’m always willing to participate in such a debate. And I made this point very clearly in the BOAO Forum in Perth only last week.

More broadly though, this is a very good bilateral economic relationship. And my point to Australian business over the last several weeks has been: read the 12th Five-Year Plan.

Understand the change in China’s economic growth model away from labour-intensive manufactures located in China’s coastal megacities towards a new growth model which focuses increasingly on the services sector in other Chinese metropolitan centres.

And understand that this represents a whole new range of economic opportunities for Australian business beyond agricultural commodities, beyond mining commodities and beyond our traditional forms of engagement

And that goes to education services, health services, environmental services, tourism services and the rest.

Folks, I think I’m going to get shot if I don’t jump on a plane. All the best. Thank you.

END

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