Senate Estimates Transcript
Transcripts for the Senate Estimate Economics Legislative Committee have been posted on the Australian Parliament House website. The Transcript is posted below:
Commonwealth Scientific and Industrial Research Organisation
CHAIR: I welcome Dr Clark, Chief Executive of the CSIRO, and also offer the committee’s congratulations to her on the extension of her term of appointment. We will go straight to questions.
Senator COLBECK: Let us start with the reappointment. What was the process for the reappointment of the CEO?
Dr Clark : Under the act, the board, in consultation with the minister, is responsible for the process and timing of my reappointment.
Senator COLBECK: What was the process under this latest circumstance?
Dr Clark : The board resolved in December 2012 for the reappointment, and between January and May the department supported CSIRO in completing the government’s formal consultation obligations around the reappointment.
Senator COLBECK: So the conversation started in December last year?
Dr Clark : Yes.
Dr Russell : The appointment of the CEO is very much a process handled by the department, so it might be helpful if Patricia Kelly actually said a few words about the nature of the process.
CHAIR: That would be fine.
Ms Kelly : The process is where, like all significant appointments, the department submits the paperwork to the Prime Minister. The Prime Minister takes a decision about whether she will agree to this or whether the appointment is put to cabinet. In this case the appointment went to cabinet and was agreed by cabinet.
Senator COLBECK: So it went to the Prime Minister and it also went to the cabinet?
Ms Kelly : A significant appointment can either be approved by the Prime Minister, or the Prime Minister may choose to, and often does choose to, take the significant appointment through cabinet. This is the normal process with all significant appointments, and this is the process that was followed in this case.
Senator COLBECK: I refer to the letter sent to the Prime Minister by Mr Abbott back in April about appointments to be made in the immediate period, or appointments that would expire in the immediate period before the election, where a specific question or request was made in relation to that. In this case, where the appointment was not due to expire until December, has there been no consideration of the letter that was provided to the Prime Minister by the Leader of the Opposition in the context of, as you quite rightly say, such a significant appointment?
Ms Kelly : I think the considerations put forward by the board were around the CSIRO’s strategic plan and the things that needed to be delivered with stability. The board put a case that a limited reappointment, so a one-year reappointment, would provide an opportunity for the key elements of that strategic plan to be continued to be delivered under Dr Clark’s leadership. It is only a one-year reappointment. It also gives the board additional time to mount an international search for Dr Clark’s replacement. It is an important role and an international search can take a significant amount of time by the time the selection process is over and somebody is able to relocate to take up the position.
Senator COLBECK: What is the usual time for an appointment? What is the usual cycle for the appointment?
Ms Kelly : An international search can—
Senator COLBECK: No, this is a different question. What is the usual cycle for the appointment? What is the usual term for the appointment?
Ms Kelly : It is usually, as I understand it, a five-year term.
Senator COLBECK: In the context of the time for a search, that time given to us by the minister in his opening statement this morning was that it would take about six months. The process so far has used six months to get to the stage of deciding whether to extend it for 12 months. I really cannot understand why you are making such a significant appointment at this stage in proceedings, given the request of the Leader of the Opposition. It is a significant appointment—I have to agree with you on that. What was the decision around one year? When was that decision made? And why only a year?
Dr Clark : That was my decision.
Senator COLBECK: When did you decide it should only be one year?
Dr Clark : I commenced consultation with my chair on the matter of re-appointment and the end of my term, which would have been December 2012.
Senator COLBECK: What is the rationale for a year rather than five?
Dr Clark : I was working with the board. I was comfortable to commit to another 12 months, given that we have a significant strategy underway, and to executing that board approved strategy with the support of the board. I was very happy to commit to another 12 months.
Senator COLBECK: When was that decision taken—that you would only commit for another 12 months?
Dr Clark : I communicated my decision to the board in December of 2012.
Senator COLBECK: Given that Dr Clark was only prepared at that stage to commit to another 12 months, what is the rationale, Minister, when the usual term is five years, for going through a process that does not provide that length of stability for the organisation?
Senator Farrell: I thank you, Senator, for the opportunity to say something. The first point to make is a political one. As far as I am aware, Mr Abbott is not the Prime Minister and is not in government at the moment. So whatever view he has about how the government should make appointments is not, I think, relevant to this consideration.
Senator COLBECK: Well it is given that the term was not due to expire until after the next election. I think that is a reasonable—
Senator Farrell: We will have to agree to disagree on that. But it is worth noting that Mr McKeon, the chair of the board, did attempt to advise Ms Mirabella about the decision to re-appoint—
Senator COLBECK: Really?
Senator Farrell: My understanding is that she was not able to be contacted.
Senator COLBECK: Can you tell me when that might have occurred?
Senator Farrell: That was over the last three days, I understand.
Senator COLBECK: That is hardly consultation; that is just telling someone a story.
Senator Farrell: Politeness, I think, dictated that the chair was keen to communicate that information.
Senator COLBECK: But we made a polite request asking you not to make appointments, or to consider carefully appointments—
Senator Farrell: We politely declined.
Senator COLBECK: including appointments that fall due after the election!
Senator Farrell: We politely declined to—
Senator COLBECK: I hardly call that polite, Minister—appointments that fall due after the election.
Senator Farrell: Again, we will have to agree to disagree. I think the significant thing here is that this is not an appointment by the government. The government did approve it—the Prime Minister and cabinet did approve it—but it is a board appointment. The government appoints the members of the board, but the CEO is a decision of the board. You have heard that discussions took place about a 12-month extension. The government accepted the advice of the board that Dr Clark’s appointment should be extended for a further 12 months.
Senator COLBECK: So, Dr Clark—why not another five years?
Dr Clark : I have made my commitment to the board and the board has accepted that commitment.
Senator COLBECK: That does not actually answer my question.
Dr Clark : I have made a commitment, I have been clear about that commitment and I have been clear about why I have made that commitment—and it has been accepted by the board.
Senator COLBECK: Well, you have not been clear with us. I am asking you why you made a commitment to 12 months—not five, which is the usual term.
Dr Clark : I think it is perfectly comfortable to ask why I would commit to another 12 months, and I have answered that question. Beyond that I think is a personal decision, and one which I have taken.
Mr Roy : I might be able to help with one factual point. When Ms Kelly was referring to a five-year term, that is typically an initial term for a Chief Executive at CSIRO. Often it is a shorter term, and that was the case with the previous Chief Executive, Dr Geoff Garrett, when he renewed after his initial five-year period. In his case, I believe it was three years, but I stand to be corrected.
Senator COLBECK: So in the past, has it been usual or unusual for formal conversations about extension of the CSIRO CEO’s position to start more than a year before the expiry of the contract?
Mr Whelan : It is probably worth noting that there were changes to CSIRO’s governing legislation following the Uhrig reforms. Prior to that, the decision to appoint the Chief Executive was the minister’s and the government’s. Following the Uhrig reforms there was clarification of the roles of a number of agencies with respect to the board’s power, and so from those changes on that power sat with the CSIRO board, and the requirement of the act is for the board to consult the minister. In terms of the timeline, it is quite normal to be holding discussions with chief executives and senior officers some distance out from the expiry of their term, to contemplate their intentions and to make judgements about their re-appointment, for a number of reasons: to make sure that the appropriate succession plans are in place, the appropriate development plans are in place, and, if necessary, the appropriate time is available to recruit.
As I think has been discussed with a number of witnesses this morning, the process for selecting a chief executive of a large, complex organisation like CSIRO typically involves a global search. It typically involves testing of the criteria before going to market with a range of stakeholders, including the minister, the departmental secretary, and others. In that sense, it is certainly not unusual, in the context of Dr Clark’s circumstances, for the board to have had those discussions last year and to have taken the position that they did well ahead of the expiry of her current term.
Senator COLBECK: What were the terms and conditions of the reappointment?
Dr Clark : Under the existing terms and conditions.
Senator COLBECK: So it is effectively a rollover for 12 months?
Dr Clark : No change to the conditions.
Senator COLBECK: I think we are saying the same thing.
Dr Clark : I think we are saying exactly the same thing, Senator.
Senator COLBECK: Minister, what was the form of notification that the shadow minister received?
Senator Farrell: I understand it was a telephone call from the chair. When he was unable to contact Ms Mirabella, there was a text message sent.
Senator COLBECK: So it was not actually a consultation; it was just a text message to say, ‘This is what we’ve done’.
Senator Farrell: I did not place it any higher than simply advising Ms Mirabella of the decision to re-appoint before it became public.
Senator COLBECK: When was the attempt to make the phone call?
Dr Clark : The chair had been in contact with the shadow minister’s office and then attempted to have a direct conversation with the shadow minister, so there were several levels of contact.
Senator COLBECK: The question is when, though. When was this phone call?
Dr Clark : I do not have all of the details of the chairman’s contact in it. I was not privy to those, but we will be happy to provide those, and the contact with the office as well.
Senator COLBECK: The initial contact was with whom—the minister’s office or the shadow minister’s office or the minister?
Mr Whelan : My understanding is that, following notification from the department, that the consultation requirements of the act had been met, which we received, I think, last Wednesday. The following day, officers from our ministerial and parliamentary liaison unit made contact with the office of the shadow minister seeking an opportunity for the chairman of the CSIRO to talk to the shadow minister about an important issue. We did not disclose to the office what that issue was. We did not think that was appropriate. The office liaised with the CSIRO to try and bring that about. I understand that it was not possible for the chairman to speak to Ms Mirabella on either Thursday or Friday and I understand that he tried to phone her mobile and then subsequently sent her an SMS, indicating he wanted to talk to her about an important issue. I understand he sought to follow that up over the weekend, but to the best of my knowledge he did not receive a response. We also made further contact with the shadow minister’s office over the weekend.
Senator COLBECK: Can you give me a sense of the rationale behind a one-year extension? From the organisation’s perspective, why are we saying one year?
Dr Clark : It was my decision. When I finish what has been a very rewarding time with CSIRO, I intend to continue to serve the nation through industry, through the community and other aspects. In terms of a year, I think it is very important to make sure that we complete the strategy and that there is a plenty of time to go through the process of the search for the new chief executive and this time frame provided for that. I am very delighted with the announcement and very delighted to continue to serve the nation and to serve what is a very fine organisation.
Senator COLBECK: So the completion of the strategy is dependent on your presence?
Dr Clark : No, Senator. The strategy is set by the board. I am responsible to the board for the execution of the strategy with the team. That strategy continues and we will be setting the guidelines and the foundation for the 15 to 25 strategy. The new chief executive will be asked to deliver on that strategy.
Senator COLBECK: Given that the discussion has been around stability of the organisation and obviously the implementation of the strategy, doesn’t only a one-year term impact on that strategy? Wouldn’t you be better off with a longer term for somebody to complete the work through that strategy?
Dr Clark : I have been clear about the commitment I have made with the board. I will honour that commitment and I will serve up until midnight of that date.
Senator COLBECK: The question is probably not so much about you, Dr Clark; it was more about the organisation. That is what I was thinking of.
Dr Clark : I would assume that the board will go through the process of succession. I will, with the board, take responsibilities along with my leadership team to make sure there is a smooth transition and that there is adequate time for handover. I also take responsibility for a smooth transition of leadership to make sure that the organisation has stability and continues to deliver on its strategy, and continues to execute on that strategy with diligence. It is certainly part of my responsibility, as well as that of the board, to ensure that transition happens smoothly, as happened with the transition of the previous chief executive and myself, where we undertook an extensive transition period. I certainly reflect on that transition being very smooth for the organisation.
Senator COLBECK: In the context of stability, would a longer term commitment or appointment to the organisation not provide more stability? You have said that you told CSIRO back in December that you were only going to do another year. Given that short extension in the broad scheme of things, why not start the search? The minister has, quite rightly, said it will take about six months. That has been reaffirmed again by the department this morning. The organisation could have commenced a process that could very well have run its course, and then the request that Mr Abbott made could very easily have been managed by whoever won the next election.
Dr Clark : I think the clarity of the appointment and the clarity of the reappointment process is there. Obviously, as Mr Whelan outlined, starting this process 12 months out it was very important that my intentions were clear to the board because, as you said, had I not had the intention to continue then we would have commenced a process earlier. So it was very important. I had promised the chair as well to make my intentions clear to the board with 12-months notice, which I did.
Senator COLBECK: Given the current—
Dr Russell : Perhaps I could say something here. The new arrangements do change the balance. They put much greater responsibility on the board and the chairman of the board in particular in the appointment of the CEO. That is reflected in the legislation. Obviously the board needs to consult with the government, and that took place, and obviously the board would not want to appoint someone who was opposed by the government or the cabinet. But the decision is very much with the board. The board is best placed to make judgments about the long-term strengths and purpose of CSIRO. When the discussions did take place a year ago the board could have taken the view that one year’s appointment was not in the best interests of the organisation, but the board took the view that it was the right thing to do in the circumstances. This involved their judgment about what was best for the organisation: to reappoint Meagan Clark for one year. That is the view the board took. They then took that view to the government and the government agreed with it. It is a decision very much in the hands of the board, in the sense of having to come to grips with what is in the best interests of the organisation, and that was the decision the board came to on this occasion.
Senator COLBECK: So the board expressed its views around the 12-months extension of the appointment to the government?
Dr Russell : They took the view that one year’s appointment of Megan, given Megan’s interest and desires in this, was in the best interests of the organisation.
Senator COLBECK: Given the embarrassing revelations around workplace bullying and now the inquiry into the organisation, isn’t that something else that should have been considered about the reappointment? Doesn’t that effectively make the reappointment premature?
Dr Clark : I do not believe so.
Senator COLBECK: Where are those particular matters at? What is the circumstance around those matters?
Dr Clark : As you know, Senator, we have an independent review being undertaken, and we expect to have the results of that of that review by 31 July. In addition to that review, we are continuing on a number of internal elements of our strategy to develop a five-year benchmark strategy around issues of staff health, around mental ill health and around stress. We are working on that and will continue to deliver that. We are continuing to improve our internal incident reporting around those issues to understand the impact on individuals and to make sure that we have both the skills and the tools to be able to resolve such issues as they arise in the workplace and to make sure that every one of our incidents, or issues that are raised, is investigated so that we can learn from each one of those and ensure that failures do not happen again.
This is certainly the basis of our long-term strategy now around injuries and safety, which we have been progressing on, and I am now proud to say we are in the top quartile for public service organisations. We will continue to progress on that. That has been based on continuing to improve our reporting of incidents in safety, making sure that every one is followed through, that the impact is understood, and that we continue to make improvements. Of course, that has seen the continuing lift of our performance in safety. I would expect to see, over the next several years, that we continue to improve in these broader aspects, as all organisations in Australia need to do.
Senator COLBECK: But surely that major review into that workplace culture, which is due on 31 July,—and Minister Farrell, you also have another inquiry going on into another matter in the agency—would have been part of the consideration about the reappointment?
Senator Farrell: Senator, are you asking me or are you asking Dr Clark?
Senator COLBECK: Particularly in respect of the review due by 31 July, I think Dr Clark should answer that.
Dr Clark : I am very comfortable to answer that. Certainly, one of the critical areas of performance of any Chief Executive is the areas of safety and health in the workplace. I am very proud of the progress that we are making. I am not saying we do not have areas to improve, but I am very confident that the organisation can continue to make the improvements in safety, to expand the work that we do in staff health—as I said, particularly mental ill health—and continue to progress that to benchmark levels. So absolutely, Senator, I would be held accountable. I am very proud of the progress the organisation has made in this area under my leadership, and it will continue to be a focus for me. It is a focus for me every day, and it will continue to be so, and one which I would absolutely hold myself accountable. So your question: was it a consideration of the board? Absolutely, Senator.
Senator COLBECK: How can they effectively make an assessment around that without the review, and it is only eight weeks away? It is not as if it is a long time out. Surely that review process should have some chance to report as part of that process and, as you quite rightly say, it is and should be a KPI of the CEO.
Mr Whelan : Senator, just to replay the time series again, the board resolved to reappoint the Chief Executive in December 2012. The independent review process was, I think, formally commissioned in February 2013.
Senator COLBECK: The board resolved to reappoint the CEO in December 2012.
Mr Whelan : Subject to satisfying the government’s consultation requirements—that is correct, Senator.
Senator COLBECK: So it has taken until the beginning of June 2013 for the government to go through that process.
Mr Whelan : I think there were a number of changes of ministers during that period of time which probably complicated that process.
Senator COLBECK: We have already heard that the process was referred to the Prime Minister and then to the cabinet. While there have been some attempts to change the Prime Minister, there has not been a change in Prime Minister. There have been some changes in the cabinet, obviously.
Ms Kelly : Senator, the board writes to the minister and the minister contacts the Prime Minister, so there is a process there that needs to be gone through which involves the minister. The advice in the first instance is to the minister.
Senator COLBECK: How many different ministerial briefings did we have to write before one finally got to the Prime Minister and to the cabinet?
Ms Kelly : I would need to take that on notice to be accurate, Senator, but we did need to go through the process more than once.
Senator COLBECK: There have been three ministers since the board made its decision in December, is that correct?
Ms Kelly : There have been three ministers, yes, that is correct.
Senator COLBECK: Would we have been through that process with each minister?
Ms Kelly : Potentially, that is the case. I would need to double-check to tell you on notice with certainty that that is the case. But we certainly went through it twice and we may have gone through it three times.
Senator COLBECK: That would mean that the ministerial brief did not get through the minister’s office, back to the department or to the Prime Minister within the cycle of that appointment in that circumstance, if that were the case?
Ms Kelly : Yes. That would that the brief did not get to cabinet.
Senator COLBECK: To cabinet or to the Prime Minister? Does it go to the Prime Minister first or to cabinet first? My understanding of the process, as you explained it before, was that it is referred to the Prime Minister and the Prime Minister then decided whether or not it went to cabinet.
Ms Kelly : That is the normal process with all significant appointments. It is normally the Prime Minister who is first written to and then she will refer to cabinet in most cases.
Senator COLBECK: Is that the process that you followed in this circumstance?
Ms Kelly : Yes it is, Senator.
Senator COLBECK: Okay. So when was that reference made, do you know?
Ms Kelly : I would have to check on that and provide that on notice.
Senator COLBECK: I would appreciate having some understanding of that pretty quickly if you can. I am sure there are people listening to us and to what is going on there, so, if you could get back to us in relation to that.
Ms Kelly : So your specific question, Senator, is: when was the matter first refereed to the Prime Minister?
Senator COLBECK: I would be interested in how many time it through a ministerial office, you have said two possible three, and then when it was referred by the Prime Minister to the cabinet and when the cabinet made the decision.
Senator Farrell: I think I can assist you here. My understanding is that the cabinet made it this time last week.
Senator COLBECK: Okay. Well that finishes the process, but there are some other things to go on in the interim.
Senator Farrell: I understand that was the question, and I am trying to assist.
Senator COLBECK: I appreciate that advice, Minister. That was Senator Bushby’s question but there are a couple of others in the interim.
Senator Farrell: I can confirm, if it helps, that the brief did come to me and I supported the reappointment.
Senator COLBECK: So that would indicate three cycles?
Senator Farrell: I am not sure on that. I cannot speak for my predecessors but I certainly supported the appointment and did my best to ensure that the thing was dealt with as speedily as possible.
Senator COLBECK: In mid-April, Dr Clark, you wrote an email to staff in which you specified that the organisation would unavoidably have significantly reduced expenditure. Part of what you said was lower industry funding to the organisation. There was speculation at the time that that would result in hundreds of jobs losses from the organisation. What is the total number of jobs that have been lost or will be as a result of these changes?
Dr Clark : There are around 200 people affected, but, in terms of the final number of redundancies, that needs to wait for the completion of our process of potential redeployment throughout the organisation as well as opportunities for retraining. We will complete that process, and I would be comfortable, at the completion of that, to provide you with further detail.
Senator COLBECK: Just as a matter of personal interest to Senator Bushby and me, how many of those might be in Hobart?
Dr Clark : In terms of the potential locations?
Mr Roy : Senator, I am not seeking to give you a process answer, but I want to update you on what we are doing here. As you indicated, Dr Clark went out to the organisation in April of this year, and that commenced the consultation process with all staff. Following that, our obligation under our enterprise agreement, which is our agreement with staff, is that divisional leaders need to go out to their teams and say what areas are impacted. That has now happened. Where it becomes real for individuals on the ground is that, when those discussions happened across the table to say that you are part of the business now, that needs to be rationalised for whatever reason it happens to be. I am not going to the rationale in this answer. It is fair to say that we have only really commenced that process.
Once that happens you then go through an eight-week to two-month period to look at redeployment opportunities as you go through there. You are correct that we expect a small number of positions to be impacting the Hobart area. At this stage I cannot give you an absolute number because we rely on redeployment and we rely on retraining in other places across the business. As at 12 months ago we were anticipating a few more redundancies than what ended up eventuating. We do work hard to replace people and find other ways to save jobs and roles. Year to date our redundancies are sitting at 64. That was at 30 April and that is well below our long-term trend for redundancies, but we are working it through with staff there, Senator.
Senator COLBECK: How many senior executives will lose or have already lost their jobs involuntarily as part of the process?
Mr Roy : I will take the 12 months from the last annual report—30 June last year right through until where we expect to be on 1 July this year. In Dr Clark’s annual directions setting statement, which was referred to in the e-mail you talk about, she signalled that she would be reducing the number of corporate executives in our executive team, of which Mr Whelan and I are two, from 4 to 3 over that period of time. That is about a 10 per cent reduction across the executive team. We will have had a reduction of about 10 positions across our executive management council, which is the level below that, during that time. Not all of them have, as you put it, lost their jobs. We apply the same principles to a senior executives as we do to everyone else. We seek to redeploy them. It may not be on the same terms they were on before, but I can assure you that, of that cadre of about 50 to 60, as of 1 July, there will be 10 less positions than there were 12 months and one day previously.
Senator COLBECK: Which of all your individual sites has experienced the highest number of job losses as a result of the process?
Mr Roy : We are still going through the process at the moment, so we have not finalised it yet.
Senator COLBECK: You only have four weeks to go.
Mr Roy : Yes, but it is important—we do not necessarily just have four weeks to go, because these will play out throughout the first months of 2013-14. Such is the way that one needs to methodically and carefully work through these processes. You need to identify the fields that you need to reduce first. You then go through an extensive consultation process to see if there is a different answer that will achieve the same objectives. We then have a discussion with staff and then there is an eight-week schedule where you work with staff. It is possible that a staff member may wish to be made redundant and has the same skills as a position that has been identified for redundancy. They can then do what is called a redundancy substitution. We would see these playing out over the course of the first quarter of 2013-14.
Senator COLBECK: But the decision-making process would have to be relatively well advanced, would it not?
Mr Roy : The thinking about the areas we are seeking to change is well advanced and is articulated in the annual directions setting statement. What I am trying to do is not jump from that too quickly to what it means for Mr Smith or Mrs Jones in CSIRO, because that detail across the board is not yet known. In some cases the discussions have commenced. In the vast majority of cases they have not yet commenced.
Senator COLBECK: What was the extent of the drop-off in revenue from industry sources and over what time period did it occur?
Dr Clark : In terms of our external revenue, we are budgeting for FY 2013-14 at $491 million, which compares with the $482 million we are currently expecting for this year. But in terms of our current investment and consulting revenue, we are expecting that to hold quite steady. As you are aware of course, our costs are around 3½ times our staff costs. In some cases our other costs are a little bit higher. So even holding steady in this environment, which is I think a very good endorsement by our external partners, does mean that we need to make some adjustment, which we will be doing.
I do not think that it would be very different to many businesses and organisations around this country. So we are holding and I would expect some weakness, given the weakness that we see in the external markets. We are seeing strength in the agricultural sectors and food sectors. We are seeing some weakness in the minerals and resources sector, as there is a focus on cost cutting. We are expecting other areas to see an increase—we are inspecting an increase in the digital productivity and services area, as service organisations look to take on innovation, and we are expecting the energy sector to hold steady, if a little bit down. We play across a number of sectors. As I said, just holding that level of around 490 is an achievement, but we are seeing some weaknesses that are well known across the sectors.
Senator COLBECK: Are the changes in investment by partner organisations having an impact on key investment areas for your organisation?
Dr Clark : Yes, in that we are only 60 per cent funded by the government. We are 40 per cent funded by our external partners. That is a significant contribution to the CSIRO, so we do reflect the external environment in our forward budgets.
Senator COLBECK: Minister Farrell, we go to the issue that was in the Sydney Morning Herald on 11 April, that CSIRO staff had deliberately defrauded the Swiss pharmaceutical firm Novartis in relation to an anticounterfeiting product that had been sold to them. You said you were going to launch an immediate investigation. What form has the investigation taken, who is conducting it and what has it found?
Senator Farrell: The CSIRO is conducting the investigation. I understand that other parties to that story are also conducting an investigation and that investigation is ongoing.
Senator COLBECK: So you did not launch an investigation; it was CSIRO?
Senator Farrell: Yes, I asked the CSIRO to do it.
Senator COLBECK: So it has not found anything yet? When are you expecting to hear back?
Senator Farrell: I understand that the process is ongoing, so as soon as possible. But I cannot tell you exactly when that will be.
Senator COLBECK: Why would you not ask for an independent investigation?
Senator Farrell: That was one option, but we chose to go down this path and I think that is the appropriate path.
Senator COLBECK: But it is a matter of commercial fraud. Why would you put Dracula in charge of the blood bank, basically? You are asking someone to investigate themselves—
Senator Farrell: Other parties to that story are also conducting inquiries. We will see what comes back from the CSIRO after the investigation is finished.
Senator COLBECK: Have you asked for a timeframe around this? When are we going to see something? This is a fairly serious matter.
Mr Whelan : Indeed it is. We were shocked and distressed when we first read the allegations in the Fairfax press. As the minister has indicated, we immediately commissioned an investigation—under the auspices of our general counsel—to get to the bottom of what was the basis of those allegations; what did we know precisely and fully; when did we know it; and, if we did know something, what did we do about it. There were some initial challenges in getting that investigation going, because aside from interviewing key staff we also wanted to make sure that we had comprehensively gone through all of the CSIRO’s email records and archives from that time. It took a while to get those back. We have now completed the investigation of our materials. As the minister has indicated, we have also been asked to provide assistance to DataTrace and Novartis into their independent investigation of these matters—which is ongoing.
There are some commercial confidences around those that we need to respect, and we also want to make sure that we do not inadvertently compromise the security or the authentication system in use by them. However, we have made some determinations based on our analysis to date, even though the process is ongoing. Firstly, we have identified there is no evidence that CSIRO deceived or wilfully misled DataTrace or Novartis as to the supply of material. Secondly, we have identified no evidence that CSIRO officers deceived or wilfully misled DataTrace or Novartis with respect to the security level of the solution offered by DataTrace to Novartis. Thirdly, the allegation that CSIRO sought to capitalise on the alleged deception of Novartis through the sale of CSIRO’s interest in DataTrace is also false. Finally, with respect to the allegation that DataTrace deceived Novartis and supplied them with a product no fit for purpose, we continue to provide very assistance we can to DataTrace and Novartis in their separate investigations of these matters. Given that is between two separate commercial entities, we do not propose to comment on that at this stage. We do expect to make a comprehensive statement on these matters when those independent investigations are complete. But I can assure you, Senator, that the officers of CSIRO have acted in good faith throughout this process.
Senator COLBECK: So what you are saying to me is that, if there is a case, it is between the two companies and it is nothing to do with CSIRO?
Mr Whelan : What I have said to you is that the investigation into this matter is ongoing. We are currently providing assistance to DataTrace and Novartis as to their assessment of the technology in related matters. What we have identified, from examination of our materials, is that no evidence exists that CSIRO deceived or wilfully misled DataTrace about the supply of the material. No evidence exists that CSIRO officers deceived or wilfully misled DataTrace or Novartis with respect to the security level. The allegation that CSIRO sought to capitalise on an alleged deception of Novartis is false.
Senator COLBECK: Is it true that the scientist who was at the centre of these allegations, Dr Swiegers, has repeatedly raised this case, including his claims of serious corruption and fraud, with senior officers in the Organisation, including with his division chief in 2007 then through the whistleblower complaints process the same year, and with the chairman of directors of CSIRO in 2008?
Mr Whelan : Senator, the time frames you are referring to are correct. Dr Swiegers had made a series of allegations about activities that he was associated with, and others in his research group were associated with, from about 2006 onwards. They were not related to the allegations that were reported in the Fairfax press in April that you referred to earlier. Those events happened in 2009 and 2010, and at that time Dr Swiegers was in fact an employee of DataTrace for most of that period.
Senator COLBECK: So, Minister, why will you not have an independent investigation?
Senator Farrell: It is an ongoing investigation. Other parties are going to reply to that. I think we have taken the right course of action. Just because something appears in a newspaper does not always mean it is right. I am sure you have had that experience, Senator.
Senator COLBECK: I am not talking about what appeared in a newspaper—
Senator Farrell: What are you talking about, Senator?
Senator COLBECK: We are talking about the officers.
Senator Farrell: I thought that was what we were talking about.
Senator COLBECK: Let me finish my question. We are talking about a pattern of misconduct by a particular group of officers.
Senator Farrell: An alleged—
Mr Whelan : Senator, can I just be clear?
Senator COLBECK: There has been a range of issues raised through formal CSIRO processes by a particular officer.
Senator Farrell: They are being investigated.
Senator COLBECK: This is a significant reputational risk for the CSIRO.
Senator Farrell: That is why we want to get it right.
Senator COLBECK: Why you would not go to an independent inquiry—so there is no question about the concerns which sit around this—is, quite frankly, beyond me. Why, when such a serious reputational matter is at stake, would you not go to an independent process so that you do not have an organisation investigating itself? Why would you not do that?
Senator Farrell: We believe that the course of action we are taking is the correct one.
Senator COLBECK: You are not prepared to—
Senator Farrell: What I am saying is—
Senator COLBECK: You are not prepared to take the route of independent investigation to ensure there is no risk of people saying, ‘Of course they have found what they have found—because they have investigated themselves.’ Surely that does not raise a question.
Senator Farrell: We have considered the issue and we have considered the best way to proceed with these investigations. The decision we have made is that it is appropriate, in the first instance, for CSIRO to investigate the issue. There are other third parties who are also conducting investigations. We believe that is the way to best protect—to use your words—the reputation of CSIRO.
Mr Whelan : In the context of the earlier matters you were referring to, Senator, it is true that Dr Swiegers has made a series of complaints, both while he was an employee of CSIRO and since leaving CSIRO. I have details here of at least four instances where Dr Swiegers has raised matters which have been the subject of independent investigation by independent law firms or by the Department of Finance and Deregulation. I understand Dr Swiegers has also referred matters to the Reserve Bank and to ASIC. He has threatened to refer matters to the Australian Federal Police, although we do not have evidence that he has done that. Last month, Dr Swiegers commenced legal proceedings in the District Court of New South Wales against CSIRO regarding claims that largely appear to be associated with his redundancy from CSIRO in February 2009. It is true that Dr Swiegers has, over the last six years, initiated a significant number of investigations.
Senator COLBECK: Did CSIRO sell its 50 per cent share in DataTrace DNA Pty Ltd’s joint venuture partner, DataDot Technology Ltd, in 2010, a few months after the Novartis transaction?
Mr Whelan : CSIRO undertook a share swap with DataTrace’s parent company, DataDot. That was associated with DataTrace acquiring the rights to a wider range of technologies from CSIRO. It had had a limited field licence prior to that. It sought a wider field licence. DataDot engaged PricewaterhouseCoopers to independently assess the value of that additional transfer. But, yes, that share swap took place in December 2010, I believe.
Senator COLBECK: Is it the case that three of the four directors of DataDot Technology who approved that transaction either had close associations with CSIRO or were on the board of DataTrace Pty Ltd which approved the Novartis transaction?
Mr Whelan : It is true that CSIRO, by virtue of its 50 per cent shareholding in DataTrace, did have two director positions. Over the time we held shares in that company, three different officers held those two positions. They were not necessarily officers of CSIRO. In one case, the person who took the director role was an independent individual.
Senator COLBECK: So three of the four had formerly served with CSIRO.
Mr Whelan : No, that is not true. What I said was that, over the period of our shareholding in DataTrace, CSIRO appointed three directors. At any one point in time we had two on the board of DataTrace.
Senator COLBECK: So, did CSIRO sell most of its shares to the inDataDoc technology that it received in that transaction that you spoke of to one of the CSIRO-associated directors in an off-market transaction?
Mr Whelan : Not to my knowledge. I would have to take that on notice.
Senator COLBECK: Perhaps you could also tell us, if that transaction has occurred, whether those terms have been made public.
Mr Whelan : I would have to take that on notice.
Senator COLBECK: And also the timing of that—my understanding is perhaps within a matter of days of being able to do so—and then why.
Mr Whelan : From a policy perspective, CSIRO’s equity interests in companies are held to enable the technology to be transferred, and then we look to sell down. There is nothing unusual about CSIRO selling down its shareholding in a company.
Senator COLBECK: Has anyone in your organisation sought to intimidate or place pressure on anyone in the media not to report matters connected to bullying and workplace harassment in the CSIRO?
Mr Whelan : That is intolerable, that a staff member would be intimidated in CSIRO. It is totally against the culture of the organisation for someone to be intimidated.
Senator COLBECK: The question was about asking the media not to report on matters connected to bullying.
Mr Whelan : Not that I am aware of.
Senator COLBECK: Dr Clark, you would be aware that a strong allegation was made in March this year in the midst of the debate over workplace bullying within CSIRO by radio broadcaster Mike Welsh that he himself was subject to abuse, intimidation and bullying by your media manager, Huw Morgan, just for seeking to talk to you about this issue on 2CC in Canberra.
Mr Whelan : I am aware of an exchange between Mike Welsh and Mr Huw Morgan, who is our media advisor. My understanding is that that exchange was associated with Mike Welsh’s frustration that he had not been able to agree a time when Dr Clark might be able to appear on his talkback show.
Senator COLBECK: So, you have investigated the process, and that is what you found—that it was around a frustration about the time for Dr Clark to appear on the radio program?
Mr Whelan : I would not characterise anything there as an investigation. I understand Mike Welsh indicated to Huw Morgan that he was pretty displeased that Dr Clark had not agreed to go on his radio show. It is not a matter I felt any need to investigate.
Senator COLBECK: So, you would not investigate an allegation that a radio broadcaster was subject to abuse, intimidation and bullying by your media manager?
Senator CAMERON: You do see the irony in this, don’t you!
Mr Whelan : I spoke to Mr Morgan after I had heard that, and I asked him for his record of events. I regarded it as no more than a robust exchange between, as you say, a broadcaster and a media advisor. Mr Morgan is a very experienced media advisor. He has worked in the press gallery. He is familiar with the cut and thrust of broadcasters and journalists trying to get an edge in stories, and he has had to deal with a range of difficult situations over time. I have always regarded his conduct as professional. And, while I understand that his interchange with Mr Welsh was robust, I do not think, having listened to Mr Welsh’s show, that anything that Mr Morgan would have said or done could have intimidated Mr Welsh.
Senator COLBECK: Is this the same Mr Morgan who once wrote an abusive message on a newspaper website in respect of the former CSIRO chief research scientist?
Mr Whelan : I am not aware of that.
Senator COLBECK: You are not aware of that occurring?
Mr Whelan : No, I am not.
Senator COLBECK: Is anyone else in the organisation aware of that?
Mr Whelan : I could take that on notice.
Senator COLBECK: With how many other people in the media has Mr Morgan been in direct contact during 2012-13 in connection with the issues associated with workplace bullying and harassment at CSIRO? And has he sought to place pressure on these people in any way not to report on these issues?
Mr Whelan : With respect to the latter, no. Mr Morgan is well aware that the organisation has sought, through the establishment of an independent review, through its response to a Comcare improvement notice and through its strategic program of cultural reform, to actively encourage staff to talk out and address any situation where they might feel intimidated or harassed. He is well aware of that, and in that regard his interest in interacting with media would be to make sure that any facts of the situation were clarified to make available contact with key staff as required. But no, Mr Morgan—to the best of my knowledge—does not approach those interactions in any way other than professionally. He is an experienced professional journalist. And certainly from people I have interacted with in the media he is held in high regard.
Senator COLBECK: How much in total did the Commonwealth spend on defending the claims last year by former employee Martin Williams?
Mr Whelan : I think, as I indicated to Senator Bushby at the last hearing, that that was a Comcare matter and I would imagine that the bulk of the costs associated with that would have been incurred by Comcare. I will just check whether we took any advice on that matter first—no, we do not believe that CSIRO incurred any legal costs there.
Senator COLBECK: So, in answer to question on notice A1156 that the CSIRO counsel, which you asked to provide advice on any implications of the Williams case—it had potentially had a number of conflicts investigating the matter, including that he previously reported Callum Drummond and worked with closely with Damien Thomas, each of whom were classed as unreliable witnesses in the case. You surely agree that you need to remove even the vaguest perception of conflict of interest and any questions over the integrity of the general counsel’s investigation? Are you open to the idea that you may in fact need to look at this whole issue again, including revisiting whether any action should be taken against CSIRO officers who were found to have provided unreliable testimony before the AAT?
Dr Clark : I can provide the follow-up as a result of the findings and the entire process itself. I had to make a decision. It is a complex case, and certainly when there are findings that the evidence provided by CSIRO witnesses which was taken into consideration by the deputy president, that is a very serious finding. So, from my point of view, I wanted to establish whether there was a basis for misconduct action to be taken against any of the CSIRO officers. So, I did seek both legal and HR advice to review the findings as well as the full transcript of the tribunal. In terms of that review in relation to the officers, whilst there were very important learnings for everyone involved, I do not believe there was a case to pursue a process of misconduct against those officers.
Senator COLBECK: So, what action, if any, has been taken in relation to Nigel Poole’s action in making a statement in an affidavit in the Williams case which he himself later conceded was not accurate? Has he been investigated for misconduct? And, in light of these events—and given that Mr Poole is one of the key people behind CSIRO’s defence of its wi-fi patents, have you now investigated his conduct in relation to that case and any others as well?
Mr Whelan : My understanding is that when the judge indicated to Mr Poole that he might not have been in a position to have made the statement that he had that Mr Poole readily recognised that and indicated and clarified his evidence. There was no suggestion that he provided false evidence under oath in the hearing. And we have taken that as a matter of record. There has been no follow-up to Mr Poole, to the best of my knowledge, with respect to that.
Senator COLBECK: So you saw no need to follow that matter up?
Mr Whelan : The matter was dealt with in cross-examination in the hearing. My understanding is that Mr Poole made an observation to the effect that something would not have happened and on the cross-examination it was recognised that he was not in a position to make that statement. I think he said words to the effect that he was surprised it had happened, or he would not have recommended it happen. But the evidence was clarified immediately in the hearing. There was no suggestion that he provided false evidence under oath during cross-examination.
Senator COLBECK: Dr Clark, you said in your email to staff on 2 May in relation to the Williams case, ‘I regret that a CSIRO colleague left CSIRO feeling mistreated’. Given his circumstance, he was not so much mistreated; he is effectively broken, isn’t he? He is in a pretty bad way. You can understand him being bewildered by that as a statement.
Dr Clark : It was not meant in any way to reflect that sentiment. I completely accept that CSIRO did not provide adequate care for Mr Williams, and I accept and acknowledge that.
Senator COLBECK: Perhaps I could just go back to the issue of the investigation in the Novartis case. Was the general counsel that you have had look at that particular issue the same general counsel that was involved in the Williams case in respect of potential conflicts of interest?
Mr Whelan : I think you will have noted in the response to questions on notice that the acting general counsel was the individual who provided advice to Dr Clark with respect to the Williams matter—Mr Chris Gibson. The substantive and current general counsel is Mr Brett Walker. They are two different people.
Senator URQUHART: I just wondered if you could outline the partnership that has been developed between CSIRO, the University of Tasmania and the DSTO in relation to the Centre for Food Innovation based in Launceston. Perhaps you could give us some overview on why Launceston was chosen as the host venue.
Dr Clark : In relation to the centre for innovation and food processing research, CSIRO is partnering with the University of Tasmania, and of course they have their existing capability at the Newnham campus in Launceston. CSIRO are partners with the DSTO, the Defence Science and Technology Organisation and at the Centre for Food Innovation in Scottsdale. In terms of this particular announcement and this renewed partnership, it is really an opportunity to do a couple of things: (1) to link that Tasmanian activity into national food research and (2) to look at the whole system. So, the sort of work that that centre will be undertaking is, firstly, to increase the export market access, particularly for fresh food produce. We will be looking at the issues that are relevant to Defence, such as extending shelf life. Those research issues obviously extend to export markets as well. We will be looking to investigate key technologies in relation to specialised food. As you can imagine, Defence has requirements for very specialised food and the preservation of that. But those same technologies can be applicable to other markets, such as aged care, the Asia-Pacific market and even the sporting and defence markets.
Let me give you an example of that. We recently worked with a company called Preshafruit to look at pressure processing of juice to preserve the flavours. That has won European awards and is now marketed throughout Australia. Those types of technologies allow you to access new markets. Lastly, we will be looking to characterise and communicate the benefits of regional foods—in particular, the local cultivars in Tasmania—and more deeply understand the supply of that produce into broader supply chains, both for Defence and into the export market.
Senator URQUHART: How will that Centre for Food Innovation work with Tasmanian famers? Will it be a direct relationship between the farmers and the food manufacturers? How will that be structured?
Dr Clark : In terms of engagement, the centre is now headed by Roger Stanley. That was in the recent announcement in April. Roger, as the head of that centre, will be responsible for engagement with the local community. And, as I mentioned, one of the three focuses of this partnership will be to engage with the local producers, not just on the applicability of the produce but into supply chains as well.
Senator MASON: Dr Clark, perhaps I could just bounce off some questions Senator Colbeck asked a little while ago about staff redundancies and so forth. An email that you sent to CSIRO staff was reported in the Sydney Morning Herald. You are quoted as saying that the CSIRO collaborates with more than 2,000 companies and that those companies are now reducing the amount spent on research, which is critical in light of the fact that outside funding accounts for around 40 per cent of the CSIRO’s research budget, and you mentioned that before in your evidence.
Dr Clark : I did.
Senator MASON: In what research area is collaborative efforts with companies suffering the biggest downturn?
Dr Clark : As I outlined, we are seeing pressures in the mining sector, as you have seen many chief executives in that sector look to focus on cost cutting. Having said that, we continue to engage with that sector in areas of productivity such as automation, such as in moving the data and not the people, and such as processing technologies, and also innovative ways of optimising the entire value chain. Much of that activity remains relevant, particularly to improve productivity and reduce costs. So, we are maintaining a very strong investment from that sector. As I mentioned, the agricultural sector is steady and increasing its investment. We would expect to again hold that steady. We do not expect any of the sectors other than, perhaps, the digital productivity area and the services areas, to have compound annual growth rates of our external revenue exceeding three to four per cent. We would be very pleased to hold those steady over the next few years. In some areas—as I said, in the digital productivity area—we are actually seeing significant growth, and we are projecting just under 10 per cent growth in that area. We run a portfolio in the top 10 areas, and that allows us to balance where perhaps one sector is under more pressure than the rest. There is some pressure coming on, but we will hold that relatively steady over the next 12 months.
Senator MASON: Okay, we will see how you go over the next year. Perhaps I could now ask about the impact of financial pressure on CSIRO staff. I have in front of me a recent online survey of 223 CSIRO employees conducted by the CSIRO staff association between 1 and 5 December 2012, and 76 per cent employees reported that their work was being affected by financial pressure—so, about three quarters. Of these employees, 63 per cent nominated internal resource allocation within the CSIRO as the main source of financial pressure. I assume that internal resource allocation is principally the responsibility of the executive. According to the respondents, the most likely effects in the workplace of the financial pressure were heightened stress and heightened anxiety, at 65 per cent; less time for innovation, at 56 per cent; and an increase in workloads and targets, at 55 per cent. I am just reporting from the survey; that is all that I am doing. Is the board aware and are you aware of the results of this survey? If so, what measures might be taken to improve allegedly poor internal resource allocation and to alleviate the stress being endured by these members of staff?
Dr Clark : I am aware that. Going through the annual allocation of resources and also the way that we work with our flagships every year—
Senator MASON: And the survey? Are you aware of that survey?
Dr Clark : I am aware of these issues from my direct discussions and meetings with staff. In terms of the question of how we deal with it, the first step is to make sure that we have the commitment of government. Our quadrennial funding agreement is a very important step to ensure continuity of funding. As we work we external partners, we have also sought to make sure that, rather than have 12-month commitments, we engage in three- or five-year partnerships. They are two of the foundation blocks to enable us to move to a longer budgeting process. This year, we have worked with the finance teams for the first time to have a three-year budget process to try and address that. You will appreciate that we also need to respond to efficiency dividends and make savings and priorities things.
Senator MASON: Isn’t it about being flexible and being nimble? Isn’t what underlies that survey people feeling as though the internal resource allocation isn’t favouring them? Perhaps we all feel that in any organisation. But it is a matter of the executive and the board being nimble about that allocation. In other words, it is not about long-term strategies, necessarily, but about the capacity to restructure and respond to staff.
Dr Clark : I agree. That, as I said, requires certainty in the funding that we have from the government. That certainty allows us to be flexibility. Then there are the partnerships that we have externally. It is one of the reasons that we responded this year with the annual direction statement, which provided that clarity in a multi-year sense of the areas in which we are looking to be steady, the areas in which we are looking to invest more and the areas in which we need to review our expenditure. We have looked to have that approach across the organisation with transparency. That allows the leaders to provide some flexibility. This is an issue is one that I am looking to address with the organisation to provide that greater certainty.
What will always be the case in an organisation such as ours that is responsive to our partners is that that resource allocation will remain part of our flexibility and response. We work together in multidisciplinary teams. We bring together the right resources. We stand ready to be flexible and to respond to the changing needs of the nation. We need a process to allocate resources on that basis.
Senator MASON: I do not dispute that in any large organisation, particularly organisations of the size of the CSIRO, that people feel as though they are missing out on resource allocation. I accept that. But that is quite a high number of people. It is not small. It reflects significant staff discontent. However if you are looking at it and you are aware of it—
Dr Clark : You can certainly sympathise with that. I appreciate that if you have to go through that process on a too short a timeframe it can take up time. That is the other thing. You made some comments about the university sector and the time that it takes for apply for grant dollars. That is something that you are looking at as well. I welcome that. Similar to that, anything that we can do to provide that greater certainty will certainly alleviate that stress and allows us to allocate staff for longer periods. We will work on those aspects.
Mr Roy : As Dr Clark indicated, we are well aware of this being something that we need to pay attention to. You mentioned—
Senator MASON: Are you aware of that survey, Mr Roy?
Mr Roy : Yes. We have a six-monthly formal meeting with the staff association, which Dr Clark and I attend, along with the president and the secretary and a number of other members of the CSIRO staff association. I am aware of the survey. I am aware that we expect to speak more about it at the next one. Preceding that, in March 2012 we opened up a survey to all staff and 4,000 staff responded. We committed to the organisation that we would pay some attention to this area. Since that time, we have introduced a high level document called the annual direction setting statement, which builds on our strategy and says, ‘These are the areas we think are important; these are the areas we believe are less important.’ We have set up some mechanisms. Part of the conflict was about who absorbs the risk when something goes wrong. When a client who you expect to catch does not come through, someone has to take the risk in it. We have put some mechanisms in place so that risk is shared across the flagships and the divisions.
The nimbleness and surety issues can be seen as two different ends of the continuum as well. We certainly seek and strive to be a nimble organisation so that we can respond to emerging demands. But if you are a staff member and we need to shift resources from your area to another area that in fact may create more uncertainty for them. It is not just positives and up sides in this.
My key message—and Dr Clark was indicating this as well—is that through various engagements we have been made aware of the theme that you have raised. We have put some mechanisms in place to seek to address that. You also raised the broader issue of staff discontentment—that is the word that I will use; I think that you used a similar sort of word. In fact, in that same survey to which 4,000 staff responded, 83 per cent indicated high employment engagement. That is higher than we had previously.
Senator MASON: Engagement or satisfaction, Mr Roy? They are different things.
Mr Roy : This was an employee engagement measure that captured a range of indicators. It was conducted independently of us by Towers Watson, a global HR consulting house. They put a basket of questions together and said, ‘The assessed employee engagement of CSIRO is’. In terms of a specific question, 87 per cent of our staff said that they were proud to be associated with CSIRO. That is higher than the Australian national norm as registered by Towers Watson and high than the global research and development as captured by Towers Watson. What I am indicating is that there are two ends to this. There are some areas that we definitely need to work on. Allocation of resources is one of those areas that is getting a lot of attention at the moment.
Senator MASON: They are different things, though. We can be proud of being associated with an organisation—most members of parliament are. But that does not mean that they are always happy, Mr Roy. They are quite different things. However, I will leave that. You mentioned the Towers Watson survey. More than a third of the respondents said that to boost the CSIRO’s capacity to innovate operating efficiency needed to be improved by creating simpler processes and by reducing the administrative burden on scientists. Dr Clark touched on that before. This is an issue that goes to other research aspects of government, including universities, of course. In response, the CSIRO management announced the formation of the enterprise business applications reference group to investigate improved administrative processes. What outcomes have been achieved by that reference group thus far? How are we going with that?
Ms Bennett : The reference group started off by confirming its terms of references, which, as you have said, included a desire to have senior management of the organisation look at the priority changes that other parts of the organisation wish to make to essentially run them through a filter. This will enable them to say that under the criteria of—among other things—lifting the burden that we feel we are now bringing forward the priorities and that therefore, for instance, system changes will be made to address real issues in priority to ones that are seen as second order.
That committee has met for the first time this year. We have asked individuals in the organisation who I would term as process owners to come forward with the things that they believe are good ideas and that are necessary to help the organisation relieve itself of the administration burden. We have run the rule over those and prioritised them. There are four in the top quadrant that include changes to the recruitment process; improvements in reporting, as our current SAP system across a number of areas, be it HR, finance or projects, has very laborious reporting process that is a great irritation to the business, particularly when they know that they have put information in and cannot get it out. We are also embarking now on a concept design to re-examine and significantly simplify the entire process of taking projects from the concept stage in the research arrangement right the way through to project management and to the allocation of staff—which you have already talked about—to try and address this issue of complexity.
Senator MASON: All right. What is the timeline for this? You have those priority issues. I understand that. What is the timeline?
Ms Bennett : I will go project by project. The e-recruitment one—and I will correct myself on the record if I am wrong—is a nine month one. With the one to significantly look at how we support the research model, we are still at the early concept design stage. We believe to the full extent that will take probably two years, but we are looking to do it through a milestone process whereby we can make certain improvements and roll them out and then move out.
Senator MASON: I may have some other questions to put on notice. But I want to ask a very interesting conceptual question. I do not know who sitting on the bench reads Quadrant. I do not know if you read Quadrant, Minister; I do. Dr Russell probably reads Quadrant. This is interesting. In a recent article in Quadrant, the former deputy chairman of the Victorian Energy Networks Corporation, Tom Quirk, said this:
The extension of the CSIRO’s role beyond agriculture was based on the misunderstanding that businesses were co-operative rather than competitive and industrial innovations could be effortlessly created and transferred from a research bench to a business.
… … …
The CSIRO … is, by its very nature, an erratic supplier of innovation and it will seldom do much more than non-competitive industrial research. As the CSIRO has apparently changed the focus of its diverse mission away from industry it should be broken up so that its separate parts can operate effectively.
… … …
Centrally planned science does not fit with either the nature of innovation or the pluralist character of modern Australia industry.
How do you respond to these comments? Is the reduced investment in the CSIRO from industry a reflection of the diminished research relevance or out dated organisational structure of the CSIRO? It is a big question, but a very important one.
Dr Clark : It is a very important one. First of all, let me clear: CSIRO exists to focus on the big and important questions that face the nation and to bring together the resources to address those kinds of questions. That is what we are focused on. We have significantly lifted our engagement with industry since Mr Quirk was familiar with the organisation. We have certainly continued to deliver on that. In agriculture now, 90 per cent of the cotton crop here and some 65 per cent of the cotton crop in the US is based on varieties developed here. We have increased the value of the aquaculture industry by some $400 million by putting sustainable aquaculture plus the modern technologies together. We have supported the effort to produce rust resistant wheat, making $7 billion worth of contribution to that. In the mining and minerals area, we are now looking at new technology that will be commercialised in this country to produce new titanium alloys for aerospace. We have brought jobs with Nissan Australia casting.
Senator MASON: They are good examples, Dr Clark. So the fact that innovation can be cooperative and can have those outcomes that you mentioned, outcomes that create wealth, means that it does not have to be competitive. Is that your view?
Dr Clark : We cover innovation across a number of areas both—
Senator MASON: But you see his point do you not? You do not have to agree with it, as long as you see his argument.
Dr Clark : No. First of all, the engagement by industry is demonstrating the exact opposite. CSIRO won Boeing R&D partner of the year, out of all global R&D suppliers, for the work that we have done on a long-term basis with Boeing. That work led to the jobs we now have in Victoria around production of resin-infused carbon fibre, I think by demonstrating what we are doing. But, more importantly, CSIRO as an organisation is here to work on the very big important issues that face this nation. We will continue to do so and we will continue to bring the best that we can to deliver that, not just for CSIRO but for the nation. In terms of CSIRO being able to do that, this is as much on the global realm as it is on the national. One of the important roles of CSIRO is to bring into this country and with our partners the very best that exists around the world. We can do that because of our reputation and the work the we do around the world. So we are making a difference.
Senator JOYCE: On Anthelmintic resistance and the work at Chiswick in CSIRO Armidale, what work is currently under progress with worm resistance at CSIRO? How are your staffing levels going at CSIRO Chiswick?
Dr Clark : In terms of an update on the parasitology work in general, which is work that is undertaken at Chiswick for both the beef and sheep industry, I would prefer to take that on notice to provide you the detail around all of the work that we are doing. Would you be comfortable with that?
Senator JOYCE: What I want to know is that our work going forward at Chiswick means that Chiswick is in no way under threat or anything like that?
Dr Clark : One of the things we have done in partnership with the University of New England is to develop their work on animal genomics and animal research and put that together with what we are doing and with our field stations to build a centre of global significance in Armidale. That has been additionally supported by the investment we have recently seen into the University of New England. T will see CSIRO putting some of our staff directly into the university and making our facilities and research available to that partnership. Our joint vision is that this will raise the work that we are doing in Armidale and the work that the University of New England is doing by putting the best that we have with the best of the university to national and global importance. It is a very important area for us and consistent with making our regional centres vibrant. It requires that level of collaboration and partnership.
Senator JOYCE: And the budget funding into Chiswick allows that?
Dr Clark : Yes. Chiswick provides into that partnership the strength of the work that we do in a number of areas around animal health: the work we are doing with sheep, and flystrike, for example; the work we are doing with cattle; and the work that we are now doing for the poultry industry. It also provides the use of our field stations, which are vital to the university.
Senator JOYCE: So there is no threat to Chiswick?
Dr Clark : There is certainly no threat to the work we are doing at Armidale. We are investing increasingly in that area.
Senator JOYCE: I know there is no threat to Armidale—to the work of the university—but what about to the actual Chiswick station, the research farm at Chiswick? Is there any threat to that?
Dr Clark : We have a number of field areas that we are looking to contribute as part of that partnership.
Senator JOYCE: Is Chiswick under threat?
Dr Clark : Senator, let me provide for you on notice how we are intending to bring our field stations to bear on that partnership and how we are looking to bring all of those together. Can I provide that on notice for all of the field stations? The reason I say that I was recently in Armidale and met with the University of New England and we are looking at how we use those field stations and what contribute. So I can provide you.
Senator JOYCE: Dr Clark, you are leaving it up in the air.
Dr Clark : No, I am not leaving it up in the air. I simply want to provide you with the most accurate information on the field stations and what we are providing into that. Also, as I said, I was recently in Armidale to have discussions with the vice-chancellor and vice-chancellor of research, the head of research, of the university, in terms of what the needs are going to be around our field stations. My understanding is that there is going to be greater need for our field stations, so I would prefer all of that in detail to you.
Senator JOYCE: When would we get that, Dr Clark?
Dr Clark : We will provide that as a question on notice.
Senator JOYCE: So you cannot give an assurance that Chiswick is not going to be affected and not going to be downgraded?
Dr Clark : What I can give you an assurance of, and which I have given you an assurance of, is that the use of our field stations is a vital part of our partnership with UNE. I have given you assurance that we have had increased funding into that area and that our contribution of our field station work is a pivotal part of what we are doing to build Armidale up. I should leave you in no doubt that the area of animal genomics, the area of the work that we are doing, for all of those industries is an area that we are looking to consolidate and put on both the global and national stages.
Senator JOYCE: So you cannot give an assurance that Chiswick is not going to be downgraded? What you are saying is that your field stations still have an important role but you are, for a direct purpose, not discussing Chiswick, so that issue is remaining in the air, as to what is going to happen to that.
Dr Clark : I have answered your question, Senator. I will provide that on notice.
Senator JOYCE: You have; you definitely have.
Senator COLBECK: Dr Clark, just a quick question before we go to morning tea. You made reference to having received advice from both legal and HR on how to respond to the unreliable witness issues. Is it possible for you to make that advice available to the committee?
Dr Clark : I could certainly provide you with the outcome of that review. In terms of the conclusions of the review process, I could provide that to you now.
Senator COLBECK: I will take that, but I am asking whether you can provide me with the advice that you received on how to respond to the unreliable witness issues.
Mr Whelan : So, Senator, you would be aware that legal advice is protected by legal and professional privilege. We do not believe that it would be in the interest of CSIRO or the Commonwealth for legal and professional privileged to be waived through the tabling of this legal advice. Legal advice of this type will often contain commentary and analysis regarding CSIRO offices and third patties and to the extent may divulge personal information and/or cause distress for those individuals. It has not been the history of CSIRO to table legal advice to a Senate committee.
Senator COLBECK: No, it is not the policy of the government either.
CHAIR: You have asked the question. What can be provided will be provided, but it is not the policy of the government for legal advice to be tabled either. Dr Clark, thank you for your assistance and we look forward to meeting with you over the next 12 months.
Ms Kelly : Senator Colbeck asked some questions about the process for appointment of the chief executive, which I can now answer if that would be appropriate.
Senator COLBECK: Okay. Thank you.
Ms Kelly : The initial brief on this matter went to Minister Evans’s office on 30 January and a letter to the PM was signed by Minister Evans on 1 February. The next brief went to Minister Bowen on 19 February and a letter to the PM was signed on 12 March. The third brief went to Minister Emerson, copied to Minister Farrell, on 22 April. There was consultation between the two ministers. Minister Emerson endorsed that brief on 6 May. The cabinet secretariat agreed that we did not need to get another letter written to the Prime Minister. We copied to them the endorsed brief on 7 May and cabinet endorsed the appointment on 27 May.
CHAIR: Thank you, Ms Kelly.