THE EXAMINERS HAND IN THEIR REPORTS

Three of four significant inquiries concerning security and economic policies ended in the second half of 2003, the reports receiving varying degrees of public attention; in order of publication they were:

· The Defence Procurement Review 2003 - better known as the Kinnaird Review, named after the chairman of the reviewing team. Submitted in August.

· The Independent Review of Australian Shipping - "A Blueprint for Australian Shipping". Submitted in September.

· The Defence Capability Review. Decisions announced in November.

The findings and recommendations of the fourth enquiry, that of the Defence Sub-committee of Parliament's Joint Standing Committee on Foreign Affairs, Defence & Trade into Australia's maritime strategy, was not available in mid-November when this article was compiled; this might be thought surprising as the policy has been a major factor in defence capability for many years.

The Kinnaird Review, commissioned by the Government in late 2002 to examine defence procurement arrangements, not only criticised existing acquisition arrangements but also queried the adequacy of advice given to the Government concerning capability assessments and requirements.
The recommendations of the Review, "largely accepted" by the Government would seem to have an important bearing on the realisation of the acquisition objectives of the Government contained in the capability review. (Further comments on the Kinnaird Review may be found in "Observations ").

The Independent Review of Australian Shipping (IRAS) was commissioned by the Australian Shipowners Association about 12 months ago and carried out by Messrs. Peter Morris and John Sharp, former Transport Ministers in Labor and Coalition ministries respectively: Their report stressed the need for the industry to be independent of:
"Government largesse" but at the same time pointed out the need for Government support, not least in the form of relief; from repressive laws and regulations.

Defence Capability Review: The latest review fulfils the Government's intention to review annually the capability proposals contained in the defence policy White Paper Defence 2000: In that document the Government recognised the importance of long-term planning if ever the Australian Defence Force was to attain the desired level of capability. It is to the Government's credit that despite all manner of distinctions, in two annual reviews it has confirmed the basic capability plans outlined in Defence 2000.
So far as the Navy is concerned its people have reason to be pleased. There are no major 'casualties' in equipment planning and the announced intention to retire two FFGs "from 2006" is reasonable when it is considered the fIrst two FFG's, ADELAIDE and CANBERRA, were launched (in Seattle USA) in 1978 and have been worked hard by the RAN. Two of the six coastal mine hunters will also be laid up, presumably as part of the plan to overcome personnel shortages.
The Government has said it would prefer the planned three air warfare destroyers and two amphibious ships to be built in Australia rather than purchased overseas. While the dimensions of the new ships is unknown (or have not been published) the equipment to be fitted to the destroyers and the purpose of the amphibious ships indicates fairly large vessels; this may cause some problems as Australia has not built large ships for many years and building yards would almost certainly need extensions, e.g. slipways. Also, some of the Kinnaird recommendations could be applied and options such as off the shelf acquisition considered. These are not insuperable problems and it would undoubtedly be in the country's long-term interests to maintain the shipbuilding industry.

Observations - THE KINNAIRD REVIEW - A CRITICAL REPORT by Geoffrey Evans

As has been remarked in THE NAVY before, the Department of Defence has been the subject of numerous reviews and inquiries ever since the separate Service Departments were abolished and their functions merged into a single department 30 years ago. The Kinnaird review into defence acquisition procedures is likely to prove one of the most significant, involving as it does the very large sum of money required to equip a modern defence force.
The Kinnaird recommendations to overcome deficiencies found in the existing acquisition procedures were not confined to the Defence Material Organisation (DMO), but extended to the initial capability assessment process which it contended was failing to provide sufficient advice to enable the government to determine resource needs and priorities in the light of possible options and costs.
The three-man team headed by company director and businessman Malcolm Kinnaird AO made 10 recommendations in all, four of which were referred to by Defence Minister Robert Hill at a press conference launching the review; they were decisions to:

1. Change the structure of the DMO (formed in 2000) and appoint a chief executive officer (CEO) who would be responsible to the Defence Minister for the financial management of the DMO and its 8000 staff,
2. Establish a new capability group within Defence, headed by a very senior official, to assess and cost projects before they proceed to the DMO,
3. Form an 8-member advisory board including four senior private sector representatives to provide outside advice to DMO,
4. Give the new CEO an expanded range of powers to improve the delivery of projects; the powers would include appointments and remuneration.

Other recommendations elaborated on the foregoing. Some impressions of a very comprehensive report follow.
With regard to (1) and (4) the DMO will in effect be 'privatised' and the new CEO - the position was quickly advertised - quite apart from being responsible to the Defence Minister rather than to the Secretary of the Department, will decide if uninformed or civilian members will be appointed as project managers. Service personnel will need to be prepared for much longer than normal appointments or transfer to the public service to be considered. It seems the Service Chiefs, in their capacity as capability managers, may cease to have an input once the acquisition process gets under way.
The recommended establishment of a new capability group (2) headed by a 3-star level serviceman or civilian is intended to relieve pressure on the Vice Chief of the Defence Force (VCDF) who presently has responsibilities for capability definition and assessment as well as numerous other roles. Instead of creating another senior position it would seem preferable to appoint a less senior officer to relieve VCDF of the less-important duties.
With regard to (3) the ADF already has many advisers, both inside and outside the Department; an excess of advice can be confusing rather than helpful.
Probably intentionally the Defence Minister qualified acceptance of the Kinnaird recommendations by saying they had been "largely accepted", thus providing the Government with a way out if some recommendations proved impractical. Cost overruns, such as those reported to have occurred with some items of equipment, are by no means restricted to defence projects, indeed it could be said cost blowouts are a feature of many major civil works. The Kinnaird objectives will not be achieved overnight but hopefully they will be realised in the longer term.

PIRACY ON THE RISE
THE MELBOURNE AGE in November reported a 26% increase in high seas attacks on ships in the first nine months of 2003 compared to the same period in 2002 - a jump from 271 to 344, an almost daily event.
Quoting the director of the International Maritime Bureau, it was stated that Indonesian waters headed the "black list" with 87 attacks, 24 taking place in the Malaccan Straits, one of the most strategically important passages of water in the world.
The bureau director said there had been an alarming increase in violence with pirates using high-tech weaponry including sub-machine guns, rocket propelled grenades and knives. Twenty crew members had been killed and very few of the attackers had been brought to trial; until this happened and the attackers punished, the figures were unlikely to be reduced.
Given the vital importance to Australia of the area in which this violence takes place, in both an economic and a security sense, it might be thought surprising the Government does not put its border protection forces to better use by assisting our neighbours to combat pirates rather than hunting a relatively small number (by international standards) of boat people.
Geoffrey Evans