• The Senate hearing looked under the bonnet of the redacted ANAO report on Hawkei.
    The Senate hearing looked under the bonnet of the redacted ANAO report on Hawkei. Defence

When the Australian National Audit Office report into Hawkei was released in September, it turned a few heads.

The redacted report, exercised under Section 37 of the Auditor General Act 1997, was the subject of a Senate hearing on Friday last week. All parties were in the room to explain just what was behind the extraordinary redaction measure.

The hearing was to look who knew what, when they knew, and why various players exercised their powers as they did. The issue was the reasoning behind the redaction; national security and commercial interests.

“I'd like to emphasise that the effect of the certificate was not to redact any information from the report that the Department of Defence had advised me would prejudice national security or defence,” Grant Hehir, Auditor-General of ANAO, told the Joint Committee of Public Accounts and Audit.  “The issuing of the certificate has resulted in the Parliament not being fully informed about the operation of government, because Parliament does not gain access to the un-redacted report.

“There is a lack of accountability mechanisms surrounding the decision taken by the executive to issue a certificate. For example, there is limited transparency to Parliament regarding the executive's substantive reasons for issuing a certificate.”

The Auditor-General also admitted that this particular report saw more correspondence than usual with both the Defence Secretary and Chief of the Defence Force.

The whole affair was best summed up by Labour MP Julian Hill: “My concern is the chain of events. There were no outstanding issues according to the Auditor-General on defence and national security matters. Then a private company [Thales Australia] is concerned and upset based on their own commercial interests.

“And then there's this mysterious six-month long process where all of a sudden there's national security concerns. You can understand why that raises concerns that either there's a conspiracy and a cover-up, or you weren't doing your job properly as the Defence Department improperly picking up serious information which was about to be published. I can't understand there's any other possibility, and neither of them are good.

“Now my concern as a parliamentarian here is that the precedent has been set that, if a commercial player doesn't like the impact on their commercial interests because of negative comment, they can run off to the court and try and blackmail the Attorney-General into issuing a certificate which is then cloaked in national security. That's a concerning precedent.”

Senator Rex Patrick was also politely irate in his line of questioning, as his office had been trying to gain access to a number of documents related to the case under Freedom of Information and other channels open to members of government, but to no avail.

ADM Comment: The whole hearing speaks to the future of the Australian National Audit Office as an independent body. Mr Hill raises an important point in terms of precedence; at what point do commercial interests intersect with national security and the government’s drive for exports?

Hehir also commented on the fact that other agencies and departments are now looking closely at how Section 37 can be applied to their audits.

“I would note that one thing that has occurred to us since this issue arose is that, for the first time in the course of our work, agencies are starting to raise issues with us about seeking certificates on matters,” Hehir said.

“While some of the conversation has been about how this has only happened once, one of my concerns around some of the issues and processes here is that, for the first time for us, people are starting to flag this as a course of action early in processes. So that's one issue that has concerned me this time.”

It will be hard for the ANAO to remain frank and fearless in its advice to Parliament if every audit becomes subject to possible Section 37 action.

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