STEVE LEWIS & LISA CORNISH | News Limited Network
A SMALL CLUTCH of private sector firms is cashing in on the foreign aid spending boom - with just three corporations securing a colossal $4.12 billion in contracts since Labor came to office.
While critics claim the private firm are encouraging "boomerang aid'' - with well-paid consultants engaged in fly in/fly out arrangements - AusAID continues to sign lucrative contracts for these contractors to run expensive programs in some of the world's most troubled hot-spots.
AidWatch, which monitors the foreign aid program for malpractice, argues that private firms are "much less accountable'' than leading charitable organisations such as World Vision, Caritas and Oxfam who are also engaged to provide aid services.
Coffey International, a listed company which earned $213 million for the six months to December, has secured 248 AusAID contracts worth a hefty $1.61 billion since November 2007. Just a few months ago, it signed a $29 million contract to help Indonesia improve its health systems over the next five years.
And GRM International, which last August lost a lucrative Afghanistan contract following allegations of fraud, signed 256 contracts with the Government agency, worth just over $1.2 billion.
GRM, once owned by the Packer family, signed a $22 million contract to supply education services in Papua New Guinea last October.
Brisbane-based Cardno wrote 171 contracts since November 2007 with AusAID, worth $1.31 billion, according to the AusTender website.
The trio are usually engaged by AusAID as "managing contractors'' to oversee key projects in some of the world's major trouble spots - such as Afghanistan - and oversee projects in health, governance, financial management and security.
In the past they have been heavily criticised for offering inflated salaries to indivual consultants - sometimes half-a-million dollars or more in tax-free annual payments.
US-based URS ranks fourth on the AusAID contract "hit list'' with 67 contracts worth $316.9 million.
JTA International - a Brisbane-based specialist in health services - has snared 37 contracts worth $280.6 million, including a seven-year $107 million deal to try and improve "capacity building'' in Papua New Guinea.
Dr James Goodman, the chair of AidWatch, criticised the large sums paid to the private sector.
"This is an example of boomerang aid,'' Dr Goodman said, of the monies paid to private firms.
"It's like an oligopoly of private providers and when you have an oligopoly, you have malpractices,'' he said.
And don't forget G4S, the UK multinational which got the contract to run the Manus detention centre, which I believe is paid out of AusAID funds.
Wendy Bacon has a revealing article about G4S - "the World's 'Third Worst' Firm Runs Manus"
"G4S’s current job on Manus Island is similar to its other thousands of contracts around the world. It aims to deliver on its contract, including the production of water, while minimising costs and making a profit.
"The latest person to want to investigate complaints for herself is Australia’s Human Rights Commissioner Gillian Triggs.
"But the Government has advised her that she cannot go to the island to verify complaints although she does have the power to investigate them from Australia.
"This is despite the centres being set up for Australia, operated by private providers according to contracts negotiated in Australia and paid for with Australian taxpayers’ money."
http://newmatilda.com/2013/03/07/worlds-third-worst-firm-runs-manus
Posted by: Peter Kranz | 13 March 2013 at 08:16 AM
Very interesting post KJ. This raises one of those issues that is out there, but very rarely discussed in Australia.
But it certainly is in PNG, where more than a few people have watched in disbelief as Australian consultants fly in, do very little, and then leave, laden with aid-gold (which is not to say all consultants do 'very little').
And dare I say it, academics in Australia are leading the charge.
From my experience in PNG, Australian academics act as consultants in two main capacities.
Either they work for AusAID usually through one of the big boys, such as Coffey International. The pay scales I hear are out of this world.
Alternatively, many take positions with big mining and oil.
In my experience most consultants are 'tenured' academics, to use the American term. So the payments supplement their university salary (between AUD$90,000 - $200,000), and perhaps give them a welcomed chance to do some fieldwork on the side.
I have a number of concerns though with this practice.
1. Does it cultivate a relationship of dependency/patronage between academics and their paymasters?
2. Are academics taking the knowledge given to them, free of charge, by the people of PNG, and then converting this into a commodity for their own benefit? And is this fair?
3. Attached to consultancies are onerous employment contracts; does this, in effect, prevent academics from voicing their concern where problematic practices are observed?
4. Should the public trust research results published by scholars in an area, where their employers (Aus government or a mining company) have vested interests?
These are tentative questions, voiced with a critical slant - but I really don't know the answer. It would be interesting to know what others think.
A quick disclaimer - I am an academic, but owning to the nature of my research (state crime + corporate crime), consultancies are not really a conundrum I have to deal with.
Posted by: Kristian Lasslett | 13 March 2013 at 07:25 AM