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Auditor attacks privacy clauses
      Selina Mitchell
      31 October 2000



THE Auditor-General has attacked the use of commercial confidentiality
clauses to hinder inquiries into contract performance in the public sector.

This follows his damning audit of the first three Federal Government IT
outsourcing contracts.
Auditor-General Pat Barrett said the issue of commercial-in-confidence
agreements between government departments and the private sector must be
addressed in a "sensible, balanced manner".

Mr Barrett said Australian National Audit Office (ANAO) report responses
were not a negotiation process, but a settling of facts.

He said full private sector co-operation in the process would save time and
money.

In his annual report, Mr Barrett said he had three related concerns: access
to information, including transparent explanations; public accountability
and commercial confidentiality arguments; and the possible consequences for
a firm's reputation.

"The legal issue of defamation has also arisen on a number of occasions,
which can result in the use of language that may be counter to
straightforward and simple explanations," he said.

"The private sector has to understand that the provision of a draft
performance audit report for comment is not a negotiating process, but is a
means of ensuring that the ANAO has an accurate understanding of the facts
and that those facts are correct," Mr Barrett said.

"As well, full co-operation in responding on this basis will save all
parties considerable time and cost and engender confidence in the process.

"While the ANAO will be sensitive to private sector concerns about
commercial reputations, the Parliament will expect full public
accountability, particularly on issues of fair and ethical conduct and
protection of the public interest."

Politicians and corruption watchdogs have noted an increase in the
withholding of information on public expenditure because it is
commercial-in-confidence.

It is understood problems obtaining information deemed to be commercially
sensitive were partly responsible for the the September IT audit report
being seven months late.

The report found the Gov ernment's billion-dollar IT outsourcing project was
triple the budget estimate, two-and-a-half years behind schedule, and
savings had been over-estimated.

The largest of the contracts, Group 1 (which involves Centrelink), is still
being negotiated.

The tender was opened last December and closed in April.

Of the two final bidders, CSC and Siemens, it is rumoured Siemens has the
upper hand.

The office of John Fahey, minister responsible for the Whole of Government
Outsourcing initiative, did not return calls from The Australian.

But in a recent statement he said the Government was "satisfied that good
progress has been made".