The public service must do more to eliminate conflicts of interest and ensure personal relationships in the workforce are not leading to power imbalances, the sector’s chief has told senior bureaucrats.
The Australian Public Service commissioner, Gordon de Brouwer, outlined his concerns in a letter to the leaders of all government departments and sought their assistance to identify, disclose and manage all conflicts.
The letter was not prompted by one specific incident but reflects intense scrutiny on the public service’s conduct after a number of scandals including the provision of government grants and outsourcing to consultancy firms.
“There is a need to strengthen our approach to the declaration and management of conflicts of interest by senior leaders,” said De Brouwer’s letter, sent in December.
The commissioner, who is responsible for ensuring the public service meets its ethical and integrity standards, highlighted the letter in a submission to an ongoing parliamentary inquiry into the ethics and accountability of the consulting industry.
Sections of the letter seen by Guardian Australia reveal the commissioner asked secretaries to “ensure you and your senior executive service employees have up-to-date declarations in place, as well as strategies in your agency to mitigate or manage conflicts that are identified”.
“I ask, too, that you ensure similar arrangements are in place for all relevant agency functions and processes, such that conflict of interest declarations are triggered for those participating in activities such as recruitment, procurement, awarding grants, or performing regulatory roles,” De Brouwer said.
He told senior executives that “conflicts of interest can also arise from personal relationships, including relationships with colleagues”. It is not known what incident, if any, prompted the commissioner to issue the warning.
“It is essential that these relationships be declared and properly managed in order to mitigate any real or apparent conflict with employees’ official duties,” the letter said.
“The risks associated with such relationships are heightened where there is a supervisory relationship or a power imbalance between the individuals.
“I ask that you ensure that you and your senior staff understand the obligations to take reasonable steps to avoid conflicts of interest and to declare and manage those conflicts that cannot be avoided.”
While the letter did not cite any specific examples, several department leaders have faced scrutiny for conflict of interest controversies in recent months.
In March, a review by former senior public servant Ian Watt found taxpayers forked out $374m for contracts deemed to be poor value for money and have perceived conflicts of interest.
Earlier this month, the secretary of the Department of Climate Change, Energy, the Environment and Water, David Fredericks, criticised EY Oceania’s conflict of interest disclosures. He signalled his team would be taking a tougher approach in future.
As revealed by Guardian Australia, the firm was supporting the oil and gas industry’s lobbying efforts while being paid by for independent advice on the government’s signature climate policy and gas emissions. The firm has denied any conflict of interest, but did not inform the department of its separate engagements.
Fredericks told a Senate estimates hearing it was also important for firms to address the “perception” of a conflict of interest and that “it’s very clear in this instance that EY fell short” of that.
“It is something … that we all need to keep a very sharp eye on going forward as well,” he said.
The Aged Care Quality and Safety Commission has also faced criticism after it revealed four consultancy firms disclosed more than 520 real, potential or perceived conflicts of interest while being paid more than $40m to audit the safety and quality of aged care homes over two years.
The commission said no work was assigned to consultants who disclosed a conflict but many senators, unions and transparency watchdogs have questioned whether they should have been employed at all.
In August, Guardian Australia revealed PwC Australia did not disclose any real or perceived conflicts of interest to the federal government before it was awarded a $2.3m aged care contract that has been suspended since June amid a continuing investigation.
