The same way it does in any other part of the world: it orients itself with the local configuration of the magnetic field. If you take a close look at the magnetic declination map at this site you should be able to tell the direction a compass needle will point any place in the world.
Edited to remove overlarge image.
This message has been edited. Last edited by: DorianGreyed,
So if I studied the map right, the compass points true north in Western Australia. And slightly east of true north in Eastern Australia. My guess was that below the equator, the compass points generally south. And at the equator, it goes nuts.
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