Wednesday, 12 May 2021
Questions without Notice
My question is to the Minister representing the Minister for Defence. After a two-year FOI battle with the defence department, the Information Commissioner granted public access to the total build and sustainment costs for the future submarines as offered by Naval Group in its tender response. The defence department has appealed that decision in the AAT, and Naval Group have requested to be, and have been, joined to the proceedings. There are now seven lawyers involved, fighting one Rex Patrick. We now find out that the taxpayer is paying the legal costs of Naval Group, a $5.1 billion foreign company. Who approved this? Why was it approved? And are there any caps on the legal fees that we pay for foreign entities?
I thank Senator Patrick for his question. Defence tabled a response to a Senate estimates question from Senator Patrick in relation to this matter. The question, as Senator Patrick has indicated, relates to Defence's application to the AAT against a decision of the Information Commissioner that Defence should provide certain information. Defence considers this information as being confidential information under the terms of the contract for the competitive evaluation process and, accordingly, not for public disclosure. Defence is represented by the Australian Government Solicitor in these proceedings and is co-joined by Naval Group in appealing against the Information Commissioner's decision. Naval Group has engaged its own legal representation. Defence and Naval Group have lodged affidavits and statements of facts, issues and contentions. Both have also lodged responses to the statement of facts, issues and contentions lodged by Senator Patrick. I understand the matter is set for hearing by the AAT on 8 and 9 June.
In regard to the payment of legal costs, Defence has, as indicated in the answer to the question asked by Senator Patrick, assessed that those costs related to these proceedings may be allowable and reasonable under the terms of the Strategic Partnering Agreement between Defence and Naval Group. Naval Group Australia, it should be noted, has been established for the purpose of delivering the Future Submarine program, which is funded by Defence, and the matter before the AAT relates to information provided by Naval Group for the purposes of that Future Submarine program.
The answer to the question on notice advised that the payment of the legal expenses was agreed to in the Strategic Partnering Agreement, yet the disputed material relates to a contract that played out well before Naval Group were even selected as the partner. On what basis would the Commonwealth grant this retrospective cost indemnity, and how far back does that indemnity go?
As I just advised, from the information provided to me by Defence, Defence has assessed that the costs relating to these proceedings may be allowable and reasonable under the terms of the Strategic Partnering Agreement. The documents that are being sought relate to the Future Submarine program, for which Naval Group Australia has been established, which is a program funded by Defence. On those grounds, Defence have assessed that it is consistent with the terms of the SPA.
With regard to the government paying Naval Group's legal bills, is it just a contractual arrangement between Naval Group or is it something that all large defence primes get—the taxpayer paying their legal bills? How many small to medium companies get the benefit of the taxpayer paying their legal bills if a dispute arises?