BAE frigate deal referred to National Anti-Corruption Commission

Sep 10, 2023
Hunter Class Frigate program concept model

Referral comes in same week the controversial procurement will face a second parliamentary hearing.

The Defence Department’s $46 billion (and rising) acquisition from BAE Systems of nine warships has been referred to the National Anti-Corruption Commission (NACC).

The referral follows our exclusive two-part investigation into Australia’s second largest naval procurement.

Greens’ defence spokesperson Senator David Shoebridge made the referral. ‘The Greens referred this issue to the NACC because it shows that the culture Coalition and Labor governments have fostered in Defence is not serving the interests of the community,’ said Senator Shoebridge.

‘This isn’t a case of corrupt individuals or bags of cash changing hands, it’s about a public process that has been brought down to produce a predetermined outcome.

‘This is what the NACC was designed for – to uncover systemic breaches of public trust, especially when they have become embedded in the system,’ Senator Shoebridge said.
BAE Systems is Australia’s largest defence contractor and the world’s sixth largest arms corporation.

An Australian National Audit Office report into the procurement, released in May, was scathing in its assessment of the Defence Department’s management of the procurement.

The audit report revealed that numerous critical documents in the procurement process were missing. These included the Defence Secretary’s rationale for putting BAE Systems on the final shortlist of three even though BAE’s ship design existed only on paper, contravening a key project objective that the ship be based on a military off-the-shelf design requiring minimal change.

Despite the significance and cost of the project, the Defence Department was also shown to have sidelined the core rule of government procurement – assessing value for money.

Within 24 hours of the audit report’s release, the Parliamentary Joint Committee of Public Accounts and Audit had launched an inquiry.

The committee’s second hearing on this procurement is scheduled for 9am Friday, 8 September. The chief executive of BAE Systems Australia, Mr Ben Hudson, is due to appear before the committee.

Senator Shoebridge also wants the NACC to look at how the Defence Department manages potential conflicts of interest given that former BAE Systems employees served on government advisory panels relating to this procurement. The senator is not alleging wrongdoing by panel members but has requested the process be examined by the NACC as it may amount to a breach of public trust.

“What we do know about the Hunter frigate procurement is that loud warnings were ignored, key checks and balances bulldozed, critical documents lost, and a small group of powerful insiders got the result they wanted,” he said.


Article first published by Undue Influence on 7 September 2023.

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