Senate Legal and Constitutional Affairs Legislation Committee [Part 2], , 1:16:41 to 1:28:19
Inquiry into potential conflicts of interest regarding a Deloitte contract with the Illicit Tobacco and E-cigarette Commissioner.
Topics: Integrity, Procurement
Speakers: Amber Shuhyta, Senator Barbara Pocock, Unknown Speaker, Rear Admiral Brett Sonter, Speaker 14
>> Thank you. Thank you. Um I have some Thank you. Well, I have some questions about a specific contract uh that the uh established links to the tobacco
would like to know first of all whether any disclosures were sought from Deote or its work for the tobacco industry uh prior to the letting of the contract.
Thank you, Senator. My name is Amber Shahid. I'm the illicit tobacco and ecigarette commissioner. Great. >> Uh, and in answer to your question, we did seek uh information on uh through our conflict of interest process and we also uh uh through the process of evaluation uh did an open-source um uh check ourselves for due diligence.
>> And what information was given to you by Deote and what did you surface yourself
through your due diligence? Uh so um Deote Australia uh declared no conflict of interest and no conflict of interest for the um for the personnel that they were um going to engage for this project. Our due diligence on that um uh uncovered uh that Deote uh globally had done work for tobacco companies um and that Deote Australia had previously done uh some work for the Australian Retail Council um uh on plane packaging but that no uh work was being conducted um uh currently by Deote Australia. uh we asked uh Deote to verify that information of which they did uh and um the um the personnel uh that we've engaged have had nothing to do with that previous work of Deote Australia and in considering the conflict of interest the the potential conflict of through the work we have engaged the the three personnel to uh do for us.
>> What's the Australian Retail Council?
>> Uh let me check the exact name. Did I get the name? >> Alex O. Rock, assistant secretary, ITCH Commissioner's Office. I believe they have changed their name over the last uh 16 years >> to the Australian Council of Shopping Centers or >> uh the Australian Retail Council I think is their current name.
>> Um I believe
>> and they're a retail council for all products.
>> Yeah. for um for retailers, shopping centers, convenience stores, uh not there, not um tobacco manufacturers.
>> Sorry, the Alliance of Australian Retailers was the entity at the time.
So Deote declared no conflict of interest but you found through your uh analysis that there were potential conflicts of interest and then you have relied tell me if I have this correct uh on their assurance that there will be no interaction between uh the workers that on the project that you have led to them uh and anyone with any association. I mean is that what the
circumstance here? There is no current uh work being done by the company at the moment. The personnel that uh we've engaged have uh no connection to previous work and given there is no current work they don't have connection to that either.
>> So are you confident that the three people there are three people working on this contract is that correct?
>> Yes.
>> And what's the value of the contract? One point 2.16 million.
>> That's the ceiling value. um that is uh that is not um it's something that we we um are not necessarily going to expend that full amount of the contract. It is uh based on timelmited surge specialist capacity that we will need um uh as our work program evolves. At the moment we are not spending the pro rider rate that would account for that full value of the contract.
>> Are you confident that your deote's disclosures to you include all historic engagement and current contract uh contact or engagement with tobacco manufacturers industry organizations and tobacco related enterprise during the
uh there is no current conflict of interest with the staff engaged uh on the work that they are engaged to be
doing. Did Deote disclose its ongoing work with companies operating within China's tobacco monopoly system?
>> Uh Deote Australia from what we have um found is not involved in that work.
>> Is not involved in that work. Um Deote International who which part of Deote is doing that work in China on tobacco. Uh
I'm not sure the um uh the name of the of the other kind of subsidiary. Um but the Australian uh Deote company is not We have asked them to declare that
>> based on what they tell you
>> and through our open source um uh information that we've done due diligence through the process on
>> what's the nature of the work in the
>> The nature of the work is uh to uh supply specialist skills to the office as needed uh when we need to surge on different u parts of our work program. We uh have an evolving work program as our work uh changes. Um at the moment um we had uh engaged resources from Deote on uh some actuarial and data skills, some uh specialist workforce planning uh tasks and um some um uh technical um writing in terms of uh production of documents that we um that we needed at
the moment. So you have a contract with them for 2.16 million in a s for a year.
>> That is the ceiling value that we
>> the ceiling value. So So tell me how that works. How do you arrive at a ceiling value and then negotiate backwards or forwards exactly how much money you're expending. I I'm not familiar with that mode of working.
>> Uh so we um
>> Why don't you just charge monthto month? Why have you
>> We do charge monthto month.
>> Okay. But you've set a cap of two a maximum. >> Yes. >> Why why isn't the contract um variable according to the work rather than ceiling in that way?
>> Uh the contract is has a ceiling but what we pay is based on uh a you know determination of the work. So in that case it is variable.
>> So why haven't you just contracted them for a variable amount of work month you know as the months pass? I think I think
it's it's normal practice to have a ceiling amount on a contract and that is within our our our budget. Um uh we wanted to allow the flexibility should our work program evolve in a way that I have not anticipated at the moment. um we are um uh I I don't envisage that we will um expend that amount of money with them but allows me the flexibility should something happen uh in this year.
>> Did Deoit's appointment come at the explicit request of you as the
>> The uh it went through a usual process of tender evaluation. Um we went out to seek applicants through a request for quote using a panel an existing panel. Um the evaluation team put to me their recommendations of which I approved.
>> How many um t tender full tender applications did you have?
>> Uh we went to seven uh seven potential tenderers and three applications came
through. And did you uh obtain as is very common independent legal property or ethics advice before engaging deoid?
>> Uh we followed the usual process of our procurement um uh area in the department which involves uh property advice, legal advice. It there was um we followed all uh procurement guidelines of the
department. And did the other six have any association internationally in with the tobacco industry locally [snorts] or internationally?
>> So three of those seven applied. So the um of the three that applied uh no the other two uh did not
>> say that again. Sorry, I was just distracted.
>> Sorry. Uh it wasn't six who we looked at. Uh there was seven people, seven companies that were on the panel and only three um submitted a tender.
>> Okay. Three submitted a tender. Of those three uh one was Deote.
>> One was Deote.
>> The other two did they have any association either domestically or internationally with tobacco? >> Okay. So you chose a company that did have such an association of the two that did not.
>> We chose two of the three. Uh we have a contract with Deote and we have a contract with another one of those tenderers.
>> Can you tell me who it is?
>> Kita.
>> Kita. And are they doing the same kind of work?
>> Uh they uh we've used their expertise particularly on data analysis. So the tender was um the request for quote was written in such a way that um there was a number of different skill sets that we uh opened uh we wanted to test the market for. uh we uh did not require each of the tenderers to have all of those skill sets. Uh so they let us know what was available, how and so that was then our determination of how we draw down on the specific skill sets we needed. We chose two companies out of that um tender process.
>> So you've referred to three people. Are there three employees from Deote that you have within your organization? Three
from Deote, one from Kita,
>> one from And is it the same three all the time so far out of Deote?
>> No, one has um been rolled off already because we had um utilized the skill set that we needed for that particular pro project. Uh and uh we have a uh new person uh who started. So it has been three at any one point in time.