Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report entitled—it's not a catchy one—The Defence Industry Security Program:review of Auditor-General report 4 of 2021-22.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—It's going to very workmanlike, I'd say to the shadow minister. The report examined Defence's implementation of the Auditor-General's recommendations and suggested improvements to the program. National security imperatives require Defence to execute and enforce strict contractual obligations with defence industry. National security and intelligence agencies advise that foreign espionage is at an unprecedented high and that Australia's defence industrial base is a top-tier target. In this environment, there can be no room for complacency or error. The Auditor-General's report No. 4 of 2021-22, Defence's contract administrationDefence Industry Security Program, raised serious concerns regarding Defence's implementation of the Defence Industry Security Program and management of noncompliance.

To oversimplify a really complex and, at times, eye-glazing but really critical subject, Defence has a really solid policy in place. Full marks for the strategy and the policy to have secured the defence industrial base. However, there were serious gaps identified by the Auditor-General in Defence's implementation and operationalisation—a dreadful American word if ever there was one—of that policy.

The committee carefully considered Defence's progress in implementing the six recommendations it committed to a month ago. I would commend Defence on the seriousness with which they've responded to the report and the significant increases in resources. If I recall, I think they've gone from in the order of 20 staff to around 80 staff, at least, working in the Defence Industry Security Program. And, of course, the efforts right across the public sector to secure the defence industrial base are complemented and boosted by the ongoing funding the government's provided in the last two budgets via ASIO and the Home Affairs portfolio—always lovely to see the minister here—and the countering espionage in defence threat program.

The committee makes three recommendations in this report. The first is that Defence:

… listen more carefully to industry concerns raised via this inquiry regarding the quality of DISP security training including for APS staff and embed a structured, transparent mechanism to ensure industry feedback directly informs continuous improvement to ensure training meets industry's reasonable expectations.

We thank those members of the defence industry community who chose to submit to the inquiry and to appear. It is sometimes a bit difficult to get industry or businesses to submit when their comments may be seen as critical of government policy or departments. They fear putting their heads up. They may get into trouble. But they were very constructive suggestions received.

Secondly, that 'Defence provide written advice to the Committee within six months of the tabling of this report detailing the implementation of the CRM system, how it assists with knowledge management and engagement with DISP entities, and its ability to recall accurate, auditable, and accessible data on DISP entities.' I don't want to talk too fast because I want the shadow minister to be able to really reflect and focus on the words that I am conveying here on the good work of the committee. 'Noting the importance of the DISP and the inherent link to national security'—I'm sure both the minister and shadow minister take national security very seriously—'the committee will continue to take an active interest in Defence’s further improvements to DISP administration in line with its role on behalf of the parliament.' That means you, shadow minister; we work on your behalf. 'The committee recommends the following actions to occur at six and twelve months respectively.'

Recommendation 2.44 says:

The Committee recommends the Department of Defence implement systems which regulate and audit DISP compliance, and:

The Department of Defence is a giant behemoth, tens of thousands of personnel, probably a few too many contractors given the policies of those opposite and not enough APS staff but we are fixing that, building a bit of capability and saving you money. But across this behemoth, Defence is strangely unable to identify and point to people signing contracts. They said there are over 1,000 people who sign contracts. We said, 'Well, surely, you must know who signs contracts in the Department of Defence. How can you know which contracts require DISP inclusion and clauses and, therefore, whether those people signing those contracts have the required training?' Amidst much head scratching, there has been earnest commitments to do more.

Recommendation 2.44 goes on to say:

If you have your pen out, you can take notes, or I can give you a copy later, shadow minister.

As I said, it is peculiar that the department has been unable to point to which contract managers manage these critical contracts but we will see what comes back.

We need to make sure that while department can't externally or independently assure every action under the DISP program that there is a robust and valid assurance program sitting around that.

So as I bring this statement to a close on behalf of the committee, I extend my thanks to the stakeholders and submitters who contributed so thoughtfully to the inquiry, whose carefully formed and expert views are acknowledged with respect and drawn upon in this report. I particularly acknowledge the senior officials from the Department of Defence who are not complacent about the risks and who have allocated significant extra resources—as I said before, to quote myself, 2280—to DISP administration, complementing the government's ongoing investment via ASIO—I will close with one more acknowledgement of the minister over there—and others enhancing the security of the defence industrial base. I also thank the deputy chair and all the committee members for their collegiate approach, and the secretariat for their efforts in support of this inquiry. I commend the report to the House.