Asylum seekers at the Manus Island detention centre (file image)
A report says some offshore detention contracts were given to firms without proper due diligence. Image by Eoin Blackwell/AAP PHOTOS
  • politics

Criminal charges unlikely over dodgy offshore contracts

February 12, 2024

Public servants who gave lucrative government contracts to companies suspected of bribery and money laundering should be held accountable but the man who put their work under the microscope admits that’s unlikely to happen. 

Home Affairs Minister Clare O’Neil on Monday released a report by former ASIO boss Dennis Richardson into the history of offshore processing contracts.

The review looked at allegations the Department of Home Affairs used contractors to deliver regional processing services that were suspected of misusing taxpayer money in Nauru and Papua New Guinea.

Mr Richardson excoriated the department’s processes for entering contracts.

“Proper due diligence was lacking when it came to contracts with relatively small companies with limited or no public profile, and where operations were to be in high risk environments,” he said.

Former Defence Secretary Dennis Richardson.
 Dennis Richardson says people should be held accountable if individual wrongdoing is found. Image by Lukas Coch/AAP PHOTOS 

This resulted in Home Affairs having contracts with a company whose owners were suspected of seeking to circumvent US sanctions against Iran and with suspicious money movement suggesting laundering and bribery.

Companies under investigation by the AFP also had contracts with the department, as did a company whose CEO was being investigated for possible drugs and arms smuggling into Australia. 

Speaking after the report’s release, Mr Richardson said people should be held accountable if individual wrongdoing was found.

“If you could identify one, two, three, four officials who were clearly responsible in their own right, yes,” he told AAP.

“However, that is not the case – you have officials who have come and gone over the years, you have officials across different organisations.

“You would need the wisdom of Solomon to sort it out if you want to go down that track.”

Home Affairs Minister Clare O’Neil
 Clare O’Neil says federal police will look at the report’s findings. Image by Mick Tsikas/AAP PHOTOS 

Greens senator Nick McKim described the findings as “egregious failures” and flayed the department for incompetence as he renewed calls for a royal commission into offshore detention.

Mr Richardson said the decision to award contracts to shonky providers was one of haste and “a lack of curiosity and critical thinking” as well as agencies not working together rather than incompetence.

The department was operating in a high pressure environment where time was of the essence and even in hindsight, it may have had to enter into contracts with the companies anyway. 

“However, with proper due diligence, Home Affairs could have considered alternative suppliers, and, if this was not possible, the implementation of mitigating measures,” the report found.

Regarding a regional processing agreement with Management and Training Corporation, Mr Richardson found the government could have confidence in the existing contract.

The company had been paid more than $420 million as of August 30, 2023.

The report found no evidence of ministerial involvement in the regional processing contract or procurement decisions.

Liberal Senator James Paterson at estimated
 Liberal senator James Paterson has questioned the timing of the report’s release. Image by Lukas Coch/AAP PHOTOS 

No individuals were referred to the Australian Federal Police or the National Anti-Corruption Commission as a result of the review.

The contact details of three people were passed on, with their consent.

Ms O’Neil blamed Peter Dutton, who was home affairs minister when the contracts were awarded, for the failures.

Coalition senator James Paterson shifted blame to public servants involved.

“It is always the case ministers are not involved and should not be involved directly in contracting,” he told reporters in Canberra.

“The responsibility for this, as Mr Richardson found, falls with the department.”

Home Affairs secretary Stephanie Foster at Senate estimates
 Home Affairs secretary Stephanie Foster says the department can always make improvements. Image by Lukas Coch/AAP PHOTOS 

The department dealt with historic problems in contracts and learnt from past mistakes, Home Affairs secretary Stephanie Foster told a Senate committee hearing.

The review made four recommendations, one of which was redacted. 

It called for the department to beef up its integrity risk process and culture as well as more carefully considering the ethical conduct of tenderers, suppliers and supply chains.