Second Reading

Resumed from an earlier stage of the sitting.

[speeches and comments of various members]

Hon ALISON XAMON: I rise to make a few comments on the Procurement Bill 2020. My colleague Hon Diane Evers, as the lead speaker, has comprehensively outlined the Greens’ response to this bill, but I am moved to also make a few comments, particularly arising from the work that I have been involved in for the past two and a half years on the Joint Standing Committee on the Corruption and Crime Commission. The committee undertook a self-initiated inquiry that resulted in the report, “Red Flags...Red Faces: Corruption Risk in Public Procurement in Western Australia”. That report is quite pertinent to the bill that is before us today. Of course, the timing is interesting. The bill came to this place for debate and potential passage around about the same time that the committee finally tabled its report. What a lost opportunity it has been to ensure that we had a final bill that could have taken full advantage of the recommendations that came out of the particular inquiry that I was involved with that would have been quite pertinent and value-added quite considerably.

As stated in the report itself, public procurement, by its nature, is vulnerable to corrupt practice. In recent times, plenty of examples of corruption of Western Australia’s public sector procurement processes have been exposed. I particularly want to thank those brave whistleblowers who came forward in those instances and ensured that those investigations have been undertaken. I particularly draw members’ attention to recommendation 2 of the report, which states —

Corruption prevention and detection should be a core aim of the new procurement framework, rather than being an issue addressed ad hoc ...

It is that lost opportunity that I want to make some comments on, because I would have preferred a final procurement bill that perhaps more comprehensively and centrally addressed issues around corruption prevention. I recognise that a range of provisions in the bill reflect even in a cursory manner some of the recommendations that came out of the inquiry, but by no means would I suggest that it is as comprehensive as what I think the committee envisaged would be rolled out had the bill fully encompassed corruption prevention measures.

One of the committee’s findings—I think it has been reflected, to a point, within the legislation in front of us today— is that far too often we have complex and inconsistent processes across government procurement. Particular areas of corruption and misconduct have been identified around procurement, particularly around issues of fraud, conflicts of interest and gifts and benefits. Unfortunately—this evidence has come out time and again—it is very difficult to measure the full extent of corruption because its very nature is covert. Even the most recent high-profile corruption cases that have emerged around procurement have resulted from whistleblower activity. It is not being systemically picked up through our forensic audit processes and not because the Corruption and Crime Commission is initiating its own inquiries and uncovering corruption in public sector procurement. The inquiry also found that often a great deal of incompetence and inexperience is exhibited within that procurement process. The particular risk with that, of course, is that it can hide corrupt behaviour. Noting that the procurement framework in WA is fragmented, as well as being complex, inconsistent and difficult to navigate, I recognise that a more consistent framework across the state is a step in the right direction.

I listened very carefully to previous speakers’ comments about the risks of wholesale centralisation for the sake of it, and I think there are some intelligent learnings to be taken from that comment. We can look at making sure that we have a more consistent statewide framework without necessarily going down the centralisation path. My colleague Hon Diane Evers spoke at length about the value of ensuring that there is capacity for localised expertise in procurement matters, noting her great, ongoing passion for ensuring that regional Western Australia receives the best possible deals and that procurement processes are best able to provide ongoing benefits for local communities. We need to achieve a balance between ensuring that we have consistency across the state and can minimise the capacity for fragmented processes to increase the risks of procurement, but not centralise procurement to the point at which we effectively lose the capacity for informed and localised decision-making. I recognise that this is a challenge. This bill tries to at least deal with the fragmentation. The five-year review is obviously welcome. The Greens are always happy to see review processes engrained within the statute. Hopefully, that will help shed some light on how successful that is likely to be.

I note also that we have not been able to enshrine within statute many of the provisions in this report. Those provisions would have greatly enhanced the legislation.

I note the requirement for quality training across government. That is an area in which we do not do well. We need to provide training around how to do procurement properly. The report also goes into quite a lot of detail about the red flags that people who are engaged in procurement processes need to be aware of when it comes to corruption risks. The committee found that we need a dramatically different way of approaching the delivery of training around these areas within our public sector. I want to bring to the attention of the house one recommendation that this procurement bill has effectively jumped over. That is recommendation 3, which states —

The Department of Finance, as part of the procurement reform program, should assess public procurement processes in Western Australia against the principles of the Open Contracting Data Standard. Where procurement processes fall short of compliance with those principles, increased compliance (where practicable) should be addressed as a matter of priority. The Minister should report to the Parliament on where compliance could be increased in its response to this report or within six months of the date of tabling of this report.

We are yet to receive the government’s formal response to the recommendations and findings within this report. I hope we will receive that soon. I note that the bill does not encapsulate the full scope of those recommendations. As I have said, that is a bit of a lost opportunity. The debarment regime is an interesting recommendation that should have been encapsulated. The Greens have indicated our concern about leaving such an important regime to be set through regulations. As my colleague Hon Diane Evers has said, the Greens would have preferred that regime to be enshrined within the statute. Nevertheless, the policy of the debarment regime is consistent with a number of the recommendations in the report, particularly finding 31, which states —

It is important that private industry is well informed of its obligations when dealing with the public sector. A greater emphasis and focus should be placed on educating contractors and tenderers on engaging in procurement transactions with the utmost integrity. The Committee will maintain a watching brief on the roll-out of the Ethical Procurement Framework by the Department of Finance.

It will be interesting to see how that debarment regime is enacted in practice. It is important that the government sends a clear message to contractors and to those from whom they procure a range of goods and services that it expects the highest possible standards of integrity, and that wrongdoing will not be tolerated. That will be an interesting regime to look at.

The report highlights that agencies generally have limited capacity to carry out audits and investigations, and that it is essential that audit committees and investigative branches within agencies are resourced adequately. The bill seeks to provide a more robust audit and investigation function to identify people who may engage in procurement corruption. We need to ensure that is appropriately resourced so that those provisions can be enacted appropriately.

A number of other areas of procurement need urgent reform in order to minimise corruption risks. We need to constantly ensure that conflicts of interest are managed appropriately. That is an ongoing challenge in a state as small in population as Western Australia.

Sitting suspended from 6.00 to 7.30 pm

Hon ALISON XAMON: I have a few more remarks. In summary, before we were interrupted for the dinner break, I said that the Greens support the Procurement Bill 2020 and mentioned that my colleague Hon Diane Evers had comprehensively outlined the Greens’ response to the bill. For the last two and a half years I have been a member of the parliamentary committee inquiring into corruption risks in public procurement in Western Australia, and it is disappointing that this has not been seen as an opportunity to ensure that a lot of the learnings from that inquiry— we still await the government’s response because the report was tabled only recently—instructed a better bill. What a lost opportunity that is.

Before the dinner break, I was commenting on concerns around how we manage broader issues of conflict of interest in public sector procurement. In a state with a population as small as that of Western Australia, unfortunately, it can be very difficult to manage issues of conflict of interest because we have a limited supplier base. That makes it particularly difficult to manage conflicts of interest, particularly in smaller communities, and we need to find ways to effectively do that. There have been quite a lot of concerns about how that has been mishandled, particularly around local government issues.

It is not within the scope of the bill in front of us, but I want to put on the record that I think we have a long way to go in supporting whistleblowers within the public sector around issues of public sector procurement and corruption risks. The committee found that the public interest disclosure avenue of reporting is not being utilised as well as we would hope. Unfortunately, the committee received evidence that there is still significant disquiet amongst people about coming forward because of their concerns about not being adequately protected, and, at worst, they feel as though they will end up experiencing adverse consequences for coming forward. As I said, it is particularly concerning when we look at some of the more recent high-profile public sector procurement corruption matters that have come to the fore. They have, effectively, come about because of the bravery of whistleblowers. That is concerning, and I am hoping that we will see additional improvement in that area. The laws were reformed not that long ago, yet we apparently do not quite have that right.

Finally, I want to draw members’ attention to finding 60, which states —

The Committee has identified a need for system-wide implementation of a procurement framework that prioritises corruption prevention and detection. Procurement frameworks across Australian jurisdictions generally place more emphasis on value for money (with some thought on anti-corruption as an additional consideration).

Unfortunately, when it comes to dealing with corruption as a primary consideration, I do not believe that the Procurement Bill 2020 has hit the mark. It is an area that I think we will need to do a lot more work on. Hopefully, that can be picked up as part of the five-yearly review, but perhaps it can be picked up as an additional bill in itself that will add to this procurement legislation before that five-year time frame is up. I think that it is really important that we heed the lessons from the inquiry. I think we need quite a lot of additional reform in this space. That is quite apparent. With those few words I would like to say that, as has been said, we will be supporting the bill, but I think we still have a long way to go.

[speeches and comments of various members]

Title put and passed.


Bill reported, with amendments, and, by leave, the report adopted.

As to Third Reading — Standing Orders Suspension — Motion

On motion without notice by Hon Stephen Dawson (Minister for Environment), resolved with an absolute majority —

That so much of standing orders be suspended so as to enable the bill to be read a third time forthwith.

Third Reading

Bill read a third time, on motion by Hon Stephen Dawson (Minister for Environment), and returned to the Assembly with amendments.


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